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Directors Report of Sanco Industries Ltd.

Mar 31, 2015

Dear Members,

On Behalf of the Board of Director of your Company, it is our privilege to present the 25th Annual Report on the business and operations of the company together with the audited statement of accounts for the financial year ended March 31,2015 and Auditor's Report thereon.

1. Financial Highlights

The financial performance of your Company

(Rupees in Lacs)

Particulars 2014-15 2013-14

Turnover 10570.87 6634.44

Profit before finance charges, 829.91 649.57

Tax, Depreciation/Amortization (PBITDA)

Less : Finance Charges 477.88 377.44

Profit before 352.03 272.13

Depreciation/Amortization (PBTDA)

Less : Depreciation 88.38 69.90

Add: Exceptional Items 10.41 0.00

Net Profit before Taxation 274.06 202.23

(PBT)

Provision for taxation 37.44 62.06

Profit/(Loss) after Taxation 236.62 140.17

(PAT)

Provision for proposed - - Dividend

Dividend tax - -

Transfer to General Reserve(Profit for 369.81 140.17 the year and depreciation written back)

On the basis of consolidated financial statements, the performance of the Group (Only Indian Subsidiary Company) appears as follows:

(Rupees in Lacs)

Particulars 2014-15 2013-14

Turnover 10576.91 NA

Profit before finance charges, 834.30 NA

Tax, Depreciation/Amortization (PBITDA)

Less : Finance Charges 477.90 NA

Profit before 356.40 NA

Depreciation/Amortization (PBTDA)

Less : Depreciation 88.38 NA

Add: Exceptional Items 10.41 NA

Net Profit before Taxation 278.43 NA

Provision for taxation 38.27 NA

Profit/(Loss) after Taxation 240.16 NA (PAT)

Share of profit transferred to minority 3.45 NA interest

Profit for the year 236.71 NA

Provision for proposed - NA Dividend

Dividend tax - NA

Transfer to General Reserve(Profit for 499.94 NA the year and depreciation written back)

2. State of Company's affairs and future outlook

The Company began this year by achieving business growth and reduction of finance cost thereby boosting the net margins and cash flows. The business increased marginally as the revenues earned for the current year were Rs. 1, 0541.48 crores as compared to Rs. 6622.68 crores during the previous year.

The business performance and future outlook has been discussed elaborately in the Management Discussion and Analysis Report.

3. Change(s) in the nature of business

During this period there is no change in business of the Company or in the subsidiaries' business or in the nature of business carried on by them.

4. Dividend

Keeping in view the Company's need for capital and its growth plans, the Directors do not recommend any dividend for the year ended March 31, 2015. The Directors believe this would increase shareholder value and eventually lead to a higher return threshold.

5. Transfer to Reserves

The amount to be transferred to reserves during the year is Rs. 369.81 lacs. (Rs. 236.62 is on account of the profit during the year and Rs. 133.19 is on account of change in depreciation policy as per company act, 2013)

6. Changes in Share Capital

There is no change in the Share capital of the company during this financial year.

Details pertaining to shares in suspense account - N.A.

Details relating to material variations - N.A

7. Directors and Key Managerial Personnel

Following are the directors and KMPs of the company as on date:

1 Mr. Sanjay Gupta (Managing Director)

Brief Description Promoter, Graduation from DU,MBA

Expertise Marketing and Finance

Name of other Companies where holds Superlink Polyfab Ltd. directorship Sanco Enterprises Pvt Ltd.

2. Mr. Sidhant Gupta(Whole Time Director)

Brief Description Promoter, B.B.A. from Dibrugarh University, Commercial

Pilot from Eagle Flight Academy, New Zealand

Expertise Strategic Planning and Business Development.

Name of other Companies where holds Superlink Polyfab Ltd. directorship Sanco Enterprises Pvt Ltd.

3. Mrs. Rita Gupta(Whole Time Director)

Brief Description Promoter, Post Graduation from CCS University.

Expertise Fields of Business & Official Management

Name of other Companies where holds Sanco Enterprises Pvt Ltd. directorship

4. Mr. Saurabh Gupta (Independent Director)

Brief Description B.com, CA, DISA

Expertise Audit and Taxation

Name of other Companies where holds NA directorship

5 Mr. Sanjeev Kumar Jain (Independent Director)

Brief Description Graduation from DU,CA

Expertise Audit, Commerce and Taxation

Name of other Companies where holds NA directorship

6 Mr. Deepak Gupta (Independent Director)

Brief Description B.A Graduate and LLB from CCS University

Expertise Advisory and Legal Matters

Name of other Companies where holds NSUS Infotel Private Ltd. directorship

7. Ms. Preeti Gupta (Company Secretary)

Brief Description Graduation from DU, Member of ICSI

Expertise Corporate & Listing Compliances Matters.

Name of other Companies where holds NA directorship

8 Mr. Vipul Singhal (Chief Finance Officer)

Brief Description B.Com from CCS University, MBA Finance from UPTU

University

Expertise Finance

Name of other Companies where holds NA directorship

Mr. Sidhant Gupta, Director of the Company retiring by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends the appointment of the above Director.

During the year Mrs. Shakuntla Gupta has resigned on 29th December 2014 and Mrs. Rita Gupta was appointed as executive director of the Company on the same date.

8. Statement on declaration given by Independent directors under sub- section (6) of Section 149

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

9. Number of meetings of Board of Directors

During the financial year 2014-15, there held 17 meetings of the Board of Directors.

10. Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors

The performance of all the directors during the year was satisfactory and towards the growth prospects.

Personnel relations with all employees remained cordial and harmonious throughout the year. Your Directors wish to place on record their sincere appreciation for the devoted services of all employees of the Company.

11. Managerial Remuneration

* During the year there is considerable increase in remuneration of directors and KMP:

Name of the Director /KMP % in change of remuneration during the year

Sidhant Gupta 60%

* The Board, on the recommendation of the NR Committee, shall also review and approve the remuneration payable to the Key Managerial Personnel of the Company.

* The remuneration structure to the Executive Directors and Key Managerial Personnel shall include the following components:

* Basic Pay

* Perquisites and Allowances

* There are 114 permanent employees on the rolls of company:

Work Place - 100

Corporate Office - 14

* Remuneration to Non-Executive Directors: The Board, on the recommendation of the NR Committee, shall review and approve the remuneration payable to the Non-Executive Directors of the Company within the overall limits approved by the shareholders.

Remuneration to other employees: Employees remuneration shall be determined within the appropriate qualifications and work experience and shall be based on various factors such as job profile, skill sets, seniority, experience and prevailing remuneration levels for equivalent jobs.

12. Details of Subsidiary

Your Company has two Subsidiaries, M/s Sanjita Polymet Ltd. (Company Incorporated in Hong Kong) and M/s Superlink Polyfab Ltd. (earlier Group Company of Sanco Industries)

M/s Sanjita Polymet Ltd. (Wholly Owned Subsidiary)

M/s Sanjita Polymet Ltd. was incorporated in August, 2013 in Hong Kong to promote trading of PVC Raw Materials and Metal Products in International market. However, the Company has made investment of 10,000 USD in the paid up share capital of M/s Sanjita Polymet Ltd. during the year.

M/s Superlink Polyfab Ltd.

M/s Superlink Polyfab Ltd. become subsidiary of the company during the year as company invested in the paid up share capital of above mentioned company 51% and above. M/s Superlink Polyfab Ltd. is the material subsidiary of Sanco Industries Ltd as per the SME listing agreement. And accordingly we have appointed Mr. Saurabh Gupta (Independent Director of the Company) as director in M/s Superlink Polyfab Ltd.

During the year the performance of M/s Sanjita Polymet Ltd. and M/s Superlink Polyfab Ltd. is satisfactory.

13. Statutory Auditors

The Auditors of the Company M/s V.P Aditya & Co., Chartered Accountants, hold office until the conclusion of forthcoming Annual General Meeting has given their resignation and M/s V J M & Associates, Chartered Accountants, Delhi being eligible, offer them for appointment. The Company has also received intimation to the effect that their reappointment, if done, would be within the limits laid down under Section 139(1) of the Companies Act, 2013.

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

14. Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Amendment Rules, 2014, Cost Audit has become applicable on your company for the financial year 2015-16 accordingly M/s JMS & co. has been appointed as C os t Au d i tors.

15. Secretarial Audit Report

There were no qualifications, reservations or adverse remarks or disclaimer given by the company secretary in practice in the secretarial audit report.

16. Response to Auditor's Remarks

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

17. Disclosure on Employee Stock Option/ Purchase Scheme

The Company has not provided any Employee Stock Option Scheme or Purchase Scheme to the employees.

18. Audit Committee

The Audit Committee of the company has been dealing with matters prescribed by the Board of Directors on a case to case basis. In general, the primary role/objective of the Audit Committee is to review the financial statements of the Company, strengthen internal controls & look into all transactions having monetary implications on the functioning of the Company. The nomenclature, constitution and terms of reference of the Committee are as per the provisions of the Section 177 of the Companies Act, 2013 and Clause 52 of the Listing Agreement of the Stock Exchange. The audit committee will also do the function required for vigil mechanism of the company.

The Committee consist of three Directors. Out of that two Directors are Non-Executive and Independent Directors in accordance with the prescribed guidelines. Mr. Saurabh Gupta is the Chairman of the Committee. The other members are Mr. Deepak Gupta and Mr. Sanjay Gupta, Managing Director of the Company. The members of the Committee have adequate knowledge in the field of finance, accounting, and law. The Scope of the functioning of the Audit Committee is to review, from time to time, the internal control procedures, the accounting policies of the Company and such other functions, as may be recommended from time to time by SEBI, Stock Exchanges and/or under the Companies Act, 2013, which inter-alia include review of:

1. The recommendation for appointment, remuneration and terms of appointment of auditors of the company.

2. Review and monitor the auditor's independence and performance, and effectiveness of audit process.

3. Examination of the financial statement and the auditor's report thereon;

4. Approval or any subsequent modification of transactions of the company with related parties;

5. Scrutiny of inter-corporate loans and investments;

6. Valuation of undertakings or assets of the company, wherever it is necessary;

7. Evaluation of internal financial controls and risk management systems;

8. Monitoring the end use of funds raised through public offers and related matters.

9. Reviewing with the management, the quarterly financial statements before submission to the Board for approval.

10. Reviewing with the management, performance of statutory and internal auditors, and adequacy of the internal control system.

11. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority to the official heading the department, reporting structure coverage and frequency of internal audit.

12. Discussion with internal auditors any significant findings and follow-up thereon.

13. Reviewing the findings of any internal investigations by the internal auditors into matter where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

14. Discussion with the statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern.

15. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

16. To review the functioning of the Vigil Mechanism. The Chairperson of Audit Committee will act as the chairperson of the vigil mechanism.

19. Vigil mechanism

As per the provisions of Companies Act, 2013 there is a mandatory requirement to establish a mechanism called 'Vigil Mechanism' for the directors and employees of the Company to report concern about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy.

The Vigil Mechanism ("the Policy") has been formulated with a view to provide a mechanism for employees of the Company to approach the Ethics Counsellor / Chairman of the Audit Committee of the Company."

20. Nomination and Remuneration Committee

The Committee has been constituted to recommend/review the remuneration package of the Whole Time Directors apart from deciding other matters. The remuneration policy is directed towards rewarding performance based on review of achievements which are being reviewed periodically which is in consonance with the existing industry practices.

Pursuant to the provisions of Section 178 of the Companies Act, 2013, a Nomination and Remuneration Committee be constituted consisting of -

Mr. Sanjeev Kr. Jain - Non Executive, Independent Director

Mr. Deepak Gupta - Non Executive, Independent Director

CA Saurabh Gupta - Non Executive, Independent Director

As members to carry out such functions set out in Section 178 of the Companies Act, 2013 and that the quorum shall be any two Directors personally present including the Chairman."

21. Stakeholders Relationship Committee

Pursuant to the provisions of Section 178(5) of the Companies Act, 2013 a Stakeholders Relationship Committee be constituted consisting of -

Mr. Deepak Gupta - Non Executive, Independent Director

Mr. Sanjay Gupta - Managing Director

Mr. Sanjeev Kr. Jain - Non Executive, Independent Director

As members to consider and resolve complaints/ grievances of the security holders of the Company so as to ensure that timely relief is extended to stakeholders/investors in respect of their complaints.

The terms of reference of the Stakeholders Relationship Committee include the following:

1. It shall have the authority to investigate into any matter in relation to transfer of securities or referred to it by the Board and for this purpose, shall have full access to information contained in the records of our Company and external professional advice, if necessary.

2. To investigate any activity within its terms of reference.

3. To seek any information from any employee.

4. To seek information from share transfer agents.

5. To obtain outside legal or other professional advice.

6. To secure attendance of outsiders with relevant expertise, if it consider necessary.

7. To approve issue of duplicate share certificates and to oversee and review all matters connected with the transfer, transmission and issue of securities.

8. To approve share transfer / transmission securities periodically, whether by circular resolution or otherwise.

9. To look into redressing of shareholders' complaint like transfer of shares, non-receipt of balance sheet, non receipt of declared dividends etc.

10. To oversee the performance of the Registrar and transfer Agents an recommended measures or overall improvement in the quality of investors services.

22. Risk Management Policy

The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors.

23. Extract of the annual return

The extract of annual return as on the financial year ended March 31, 2 01 5in Form No. MGT-9 is attached with this report.

24. 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 changes occurred subsequent to the close of the financial year ended 31.03.2015 affecting the financial position of the Company.

25. Details of significant and material orders passed by the regulators / courts / tribunals impacting the going concern status and the Company's operations in future

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

26. Statement in respect of adequacy of internal financial controls with reference to the Financial Statements

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

27. Deposits

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet.

28. Particulars of loans, guarantees or investments under section 186

* Details of loans, guarantee/security provided :

There were no loans, guarantees or security made by the Company under Section 186 of the Companies Act, 2013 during the year under review.

* Details of investments:

SL No. Date of Name of investee Purpose for which the investment proceeds

1 12/09/2014 Superlink Polyfab Ltd For Making it a subsidiary

2 14/10/2014 Sanjita Polymet Ltd For Making investment in

3 12/03/2015 Superlink Polyfab Ltd. For Making it a subsidiary

SL No. Date of Equity Amount investment Shares

1 12/09/2014 75000 7,50,000

2 14/10/2014 10000USD 6,12,025

3 12/03/2015 1452596 1,45,25,960

29. Particulars of contracts or arrangements with related parties

Date and No. Contract or Name of Particulars of Contract Arrangement Parties to Contract

12th September 2014 Sanco Co. Invested in shares of Industries Superlink Polyfab Ltd for Ltd & Rs. 7,50,000 Superlink Polyfab Ltd

14th October 2014 Sanco Co. Invested in shares of Industries M/s Sanjita Polymet Ltd for Ltd & rs.612025 Sanjita Polymet Ltd

12th March 2015 Sanco Co. Invested in shares of Industries Superlink Polyfab Ltd for Ltd & Rs. 14525960 Superlink Polyfab Ltd

1st April 2014- 31st March, Shakuntla Rent paid to Mrs. Shakuntla 2015 Gupta Gupta of Rs. 4.50 lacs

1st April 2014- 31st March, Rita Gupta Rent paid to Mrs. Rita Gupta 2015 of Rs. 1.50 lacs



Date and No. Contract or Name of Arrangement Directors Interested

12th September 2014 Sidhant Gupta

Sanjay Gupta

Shakuntla

Gupta

14th October 2014 Sidhant Gupta

12th March 2015 Sidhant Gupta

Sanjay Gupta

1st April 2014- 31st March, Shakuntla 2015 Gupta

1st April 2014- 31st March, Rita Gupta 2015

31. Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. The Company adheres to the requirements set out by the Securities and Exchange Board of India's Corporate Governance practices and the requirements of the SME Listing Agreement and has implemented all the mandatory stipulations prescribed there under. Report on Corporate Governance for the year ended March 31,2015 in terms of Clause 52 of the SME Listing Agreements entered into with the Stock Exchanges in India forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

32. Management Discussion and Analysis Report

Management Discussion and Analysis Statement on the Company's performance, industry trends and other material changes with respect to the Company is presented in a separate section forming part of annual Report.

33. Fraud Reporting

During the year, the company has reported no frauds.

34. Revision of financial statements or Board's Report

No revision of financial statements or Board's Report.

35. Details of debenture trustees

The provisions related to debenture trustees are not applicable for the company.

36. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013

During the Period no cases has been reported under Sexual Harassment of Women at Workplace

37. Details of unclaimed NCDs

The provisions related to unclaimed NCDs are not applicable for the company.

38. Details of Downstream Investment

The provisions related to downstream investment is not applicable for the company.

39. Details of Voluntary Delisting

The provisions related to voluntary delisting is not applicable for the company.

40. Conservation of energy, technology absorption, foreign exchange earnings and outgo and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

A. CONSERVATION OF ENERGY

I. Energy conservation measures taken

Conservation of energy is given top priority by the Company. During the year, the Company has taken following measures towards energy conservation:

Organizing the operating procedures in such a way that energy losses are minimized by eliminating idle running. This has helped in reducing Energy per unit.

Optimization of electrical load by matching motor power capacity to the exact operational requirements.

II. Additional Investment and proposals, if any, being implied for reduction of consumption energy.

At present the company has no proposal for additional investment for reduction of consumption of energy.

III. Impact of measures at (I), (II) above for reduction of energy consumption impacting the cost of production of goods.

The measures adopted by the company for energy conservation have been instrumental in bringing down the cost of energy per unit of production in addition to improving quality.

B. TECHNOLOGY ABSORPTION

Effects made in technology absorption in prescribed form-B Research & Development (R & D)

The company is carrying research & development in routine manufacturing activities. There is no specific expenditure in research & development.

TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION

The company has already absorbed technology fully

C. FOREIGN EXCHANGE EARNING & OUTGO (In Rs.)

Foreign Exchange Out goes NIL

Foreign Exchange earning NIL

41. Corporate Social Responsibility (CSR) and its terms of reference

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

42. Directors' Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors state that:

(i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) 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 and loss of the company for that period;

(iii) 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;

(iv) the directors had prepared the annual accounts on a going concern basis; and

(v) 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.

(vi) The directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

43. Acknowledgements

Your Directors would like to express their sincere appreciation for significant contribution made by the Company's executives, staff and workers through their deep sense of dedication, hard work and commitment, and the trust reposed on us by our customers, in the overall growth and prosperity of the Company.

We also acknowledge the support and wise counsel extended to us by the analysts, financial institutions, bankers, Government authorities, customers, vendor, shareholders, investors and members at large. We look forward to having the same support in our future endeavours.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

For and on behalf of the Board of Directors

Sd/- Sd/-

Mr. Sanjay Gupta Mr. Sidhant Gupta

(Managing Director) (Director)

Place: Delhi Date: 08.07.2015


Mar 31, 2014

Dear Members

M/s Sanco Industries Ltd

On Behalf of the Board of Director of your Company, it is our privilege to present the 24th Annual Report on the business and operations of the company together with the audited statement of accounts for the financial yearended March 31, 2014andAuditor''s Report thereon.

FINANCE:

The Company''s authorised share capital is Rs. 1400.00 lacs. The issued and subscribed capital at the endofperiod was Rs. 857.00 lacs.

RESULT OF OPERATIONS:

The overall result of the company during the year of its working has been satisfactory. The financial results were as follows (Rs. In lacs, except per share data)

Year ended March, 31 2014 2013

Gross Income from operations 6622.68 5853.34

Other Incomes 11.76 5.15

Net Profit before Tax 202.23 402.81

Provision for Taxation (including Deferred Tax) 62.06 103.25

Net Profit after Tax 140.17 299.56

Amount transferred to General Reserve 140.17 299.56

Earning per Share (Basic & Diluted) 1.64 4.83

PERFORMANCE

During the year under review witnessed an improved Turnover as compared to the previous year figure and the Profit after tax and consequently, Earning per share (EPS) of the Company has decreased as compared to previous year.Abrief comparison of year on year (YOY) is as under:

Consolidated Results

Not Applicable

Standalone Results

Total income of the Company was Rs. 6634.44 lacs (previous year Rs. 5858.49 lacs) and the Net Profit after Tax was Rs. 140.17 lacs (previous year Rs. 299.56 lacs). The financials under review witnessed an improved turnover as compared to the previous year figure and the profit after tax has decreased as compared to the previous year. The Company do expects to achieve better results in near future. Earning per share (EPS) decreased from Rs. 4.86/- per share in March 31, 2013 to Rs. 1.64 per shareinMarch 31, 2014.

BUSINESS OVERVIEW

Your Company achieved important mile stones in the year 2013-14. During the year, the Company has scaled new heights and set several bench marks in terms of net worth and turnover.

In Order to meet the capital requirements for various expansions in business, your company has made an allotment of 24,00,000 equity shares of Rs. 10/- each for cash at a premium of Rs. 8/- per share by Initial Public Offering (IPO).And finally your company got liste do n" NSE EMERGE"

Company is a recipient of "Certificate ofAppreciation" for exemplary and outstanding achievement & is adjudged as one among the top 100 SMEs of India for the period 2012-13. We were conferred with the said award by India SME Forum in April 2013 which was sponsored by Bank of India.

Company has been chosen as one of the India''s Small Giants across India and amongst the top 40 companies awarded by India SME Forum in the month of July 2014.

The Management Discussion and Analysis Section of the Annual Report present a detailed business reviewofthe Company.

SUBSIDIARIES

Your Company has one Wholly-Owned Subsidiary, M/s Sanjita Polymet Ltd. (Company Incorporated in HongKong)

M/s Sanjita Polymet Ltd.

M/s Sanjita Polymet Ltd. was incorporated in August, 2013 in Hong Kong to promote trading of PVC Raw Materials and Metal ProductsinInternational market. However, the Companyisyettointroduce its capital and start its business operations. That is why no Consolidated Accounts are made by the Statutory Auditor of your Company.Anote of regarding the same has been given by theAuditor of your Company under the heading "NOTES ON ACCOUNTS in the financials for the year ending 2014.

PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT,1956

As per section 212of the Companies Act, 1956 and in accordance to the General Circular No: 2/2011 issued by Ministry of Corporate Affairs, Government of India the Annual Accounts of the subsidiary companies and the related detailed information shallbemade available for inspectionatthe Registered Office of the Company. The Consolidated Financial Statements presented by the Company shall include financial results of its subsidiary company and a statement in respect of the subsidiary company shall be attached to this report.

However the same has not been done since the business operations have not been started so far as well as capital is yet to be introduced in Subsidiary Company hence no accounts has been maintained for the same. A note regarding the same has been given by the Auditor of your Company under the heading NOTES ON ACCOUNTS in the financials forthe year ending 2014.

DIVIDEND

Keeping in view the Company''s need for capital and its growth plans, the Directors do not recommend any dividend for the year ended March 31, 2014. The Directors believe this would increase shareholder value and eventually lead to a higher return threshold.

DIRECTORS

The following are the directors of the company.

1. Mr. Sanjay Gupta

2. Ms. Shakuntla Gupta

3. Mr. Sidhant Gupta

4. Mr. Saurabh Gupta

5. Mr. Sanjeev Kumar Jain

6. Mr. Deepak Gupta

Ms. Shakuntla Gupta, Director of the Company retiring byrotation at the forthcomingAnnual General Meeting and being eligible, offers herself for re-appointment. The Board recommends the appointment of the above Director.

During the year thereisnoany other changeinthe directorship of the company.

DIRECTORS RESPONSIBILTY STATEMENT

As required under section 217(2AA)ofthe companiesAct 1956, yours directors state that:

(i) In this preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures in the financial statement;

(ii) The accounting policies have been selected and applied consistently and judgments and estimates have been reasonably and prudently made when required so as to give a true and fair view of the state of affairs of the company at the end of the financial year.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(iv) The annual accounts for the financial year have been prepared on a going concern basis.

PARTICULARS OF EMPLOYEES

None of the employees was inreceipt of remuneration exceeding the amount prescribed u/s 217 (2A) of the CompaniesAct, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

Personnel relations with all employees remained cordial and harmonious through out the year. Your Directors wish to place on record their sincere appreciation for the devoted services of all employees of the Company.

NOTES ON ACCOUNTS

The auditor''s observations are on an informative nature and have been explained in the respective notestothe accounts.

AUDITORS AND AUDITOR''SREPORT

The Auditors of the Company M/s Vijay Mukesh & Co., Chartered Accountants, hold office until the conclusion of forthcoming Annual General Meeting has not offer themselves for re-appointment as they have already submitted their resignation with the company. The Company has proposed M/s V.P. Aditya & Co., Chartered Accountants, 15/198 A, Civil Lines, Kanpur-208001 to appoint as Statutory Auditor of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the Fourth consecutive Annual General Meeting of the Company (subject to ratification of their appointment at each Annual General Meeting). The Company has received intimation to the effect that their reappointment, if done, would be within the limits laid down under Section 224(1B)ofthe CompaniesAct, 1956.

The notes to the accounts referred to in the Auditors'' report are self-explanatory and therefore do not call for any further comments.

AUDIT COMMITTEE

The Audit Committee of the company has been dealing with matters prescribed by the Board of Directors on a case to case basis. In general, the primary role/objective of the Audit Committee is to review the financial statements of the Company, strengthen internal controls & look into all transactions having monetary implications on the functioning of the Company. The nomenclature, constitution and terms of reference of the Committee are as per the provisions of the Section 177 of the CompaniesAct, 2013 and Clause 52 of the Listing Agreement of the Stock Exchange. The audit committee will also do thefunction required for vigilmechanismofthe company.

The Committee consist of three Directors. Out of that two Directors are Non-Executive and Independent Directors in accordance with the prescribed guidelines. Mr. Saurabh Gupta, is the Chairman of the Committee. The other members are Mr. Deepak Gupta and Mr. Sanjay Gupta, Managing Director of the Company. The members of the Committee have adequate knowledge in the field of finance, accounting, and law. The Scope of the functioning of the Audit Committee is to review, from time to time, the internal control procedures, the accounting policies of the Company and such other functions, as may be recommended from time to time by SEBI, Stock Exchanges and/or under theCompaniesAct, 2013,

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance. The Company adheres to the requirements set out by the Securities and Exchange Board of India''s Corporate Governance practices and the requirements of the SME Listing Agreement and has implemented all the mandatory stipulations prescribed there under. Report on Corporate Governance for the year ended March 31, 2014 in terms of Clause 52 of the SME Listing Agreements entered into with the Stock Exchanges in India forms part of the Annual Report. Certificate from the Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance asstipulated under Clause52ofthe Listing Agreement,is attached to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Management Discussion andAnalysis Statement on the Company''s performance, industry trends and other material changes with respecttothe Company is attached to this Report.

CODE OF CONDUCT

In terms of Clause 52 of the ListingAgreement, the Company has formulated a Code of Conduct for the Directors and Senior Managerial Personnel.All the Board Members and Senior Managerial Personnel have given their consent to adhere to the Code of Conduct to the Compliance Officer of the Company. As per the requirement of Listing Agreement, the Code of Conduct is also available on Company''s website www.sancopipes.com.

LISTING INFORMATION

Your Company is listed on the NSE EMERGE Stock Exchange (Symbol: SANCO). The Listing Fee for theyear2014-15 hasbeen paidtothe Stock Exchange.

CONSERVATION OF ENERGY,TECHNOLOGY,ABSORPTION ETC.

The particulars required under section 217 (i) (a) of the companies Act, 1956 read with the companies (Discloser of particulars in the report of the Board of Directors) Rules, 1988 are attached of this report asAnnexure-I

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any public deposit within the meaning of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975 as amendedup to date.

ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for significant contribution made by the employees through their dedication, hard work and commitment, and the trust reposed on us by our customers,inthe overall growth and prosperityofthe Company.

We also acknowledge the support and wise counsel extended to us by the analysts, bankers, government agencies, shareholders and investors at large. We look forward to having the same supportinour future endeavors.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

For and on Behalf of the Board of Directors of SANCO INDUSTRIES LTD. Sd/- Sd/- Date: 19th June, 2014 (Sidhant Gupta) (Sanjay Gupta) Place: New Delhi Whole Time Director Managing Director

 
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