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Shah Construction Company Ltd.

BSE: 509870 Sector: Infrastructure
NSE: N.A. ISIN Code: N.A.
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Shah Construction Company Ltd. (SHAHCONSTRUCTN) - Director Report

Company director report

TO THE MEMBERS OF SHAH CONSTRUCTION COMPANY LIMITED

Your directors are pleased to present the Annual Report and the Company's AuditedFinancial Statement for the financial year ended March 31 2017.

FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2017 is summarizedbelow:

Financial Results :

2016-17 2015-16
(Rupees in Lacs)
Total income 497.78 379.08
Profit/ (Loss) before finance costs and Depreciation 170.36 108.47
Less: Finance costs 190.57 152.44
Depreciation 21.70 24.38
Profit/(Loss) after finance cost and depreciation Carried to balance sheet (41.90) (68.35)

RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY

* Total income has increased to Rs. 497.78 Lacs from Rs.379.08 Lacs in the previousyear.

* Loss after finance cost and depreciation has decreased to Rs. 41.90 Lacs for the yearended 31st March 2017 compared to previous year Rs.68.35 Lacs.

There are no material changes and commitments have occurred after the close of thefinancial year till the date of this report which affect the financial position of theCompany.

DIVIDEND AND TRANSFER TO RESERVE

In view of the loss the Directors are unable to recommend any dividend and no amountis transferred to Reserves for the financial year 2016-17.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2017 and of the loss ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis.

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively.

f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties wherein ordinary course of business and on arms length basis andthat the provisions of Section 188 of the Companies Act 2013 are not attracted. Thusdisclosure in Form AOC-2 is not required.

Your Directors draw attention of the members to Note 23 to the financial statementwhich sets out related party disclosures.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions relating to Corporate Social Responsibility (CSR) are not applicable tothis Company.

RISK MANAGEMENT

The Risk Management Policy has been framed implemented and monitored. Major riskidentified by the businesses and functions are systematically monitored through mitigatingactions on continuing basis.

INTERNAL FINANCIAL CONTROLS

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL AND COMMITTEES

In accordance with the provisions of the act and Articles of Association of the CompanyMr. Sanjay Damji Shah and Mr. Mehul Jadavji Shah retire by rotation and being eligibleoffer themselves for re-appointment at the ensuing annual general meeting.

There are no changes in composition of Board of Directors for the year under review.

Audit Committee

The Company has constituted the Audit Committee which comprises of IndependentDirectors viz. Mr. Sachi N Adalja Chairman and Mr. Sanjay P. Shah and Mr. Dinesh Poddaras other members. All the recommendations made by the Audit Committee were accepted by theBoard.

Nomination & Remuneration Committee:

The Company has constituted the Nomination & Remuneration Committee of the Board isconstituted to formulate and recommend to the Board from time to time a compensationstructure for Managing Directors/Whole-time Directors and Managerial Personnel of theCompany.

The nomination and Remuneration Committee comprises Independent Directors viz. Mr.Sachi N Adalja Chairman and Mr. Sanjay P shah and Mr. Dinesh Poddar as other members.

Stakeholders Relationship Committee

The Company has constituted stakeholders Committee comprises of three Directors namelyMr. Sachi N Adalja Chairman and Mr. Sanjay P shah and Mr. Dinesh Poddar as other members.

REMUNERATION AND NOMINATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members.

AUDITORS AND AUDITORS REPORT

Statutory Auditors'

M/s. N. B. Purohit & Co. Chartered Accountants Statutory Auditors of the Companyhold the office till the conclusion of the ensuing Annual General Meeting of the Company.The Board has recommended the appointment of M/s A. C. Modi & Associates CharteredAccountants as Statutory Auditors of the Company in their place for a term of 5consecutive years from the conclusion of the ensuing Annual General Meeting of the Companyscheduled to be held in the year 2017 till the conclusion of the meeting to be held in theyear 2022 for the approval of shareholders of the Company based on the recommendation ofthe Audit Committee. The Company has received a letter from M/s A. C. Modi &Associates Chartered Accountants to the effect that their appointment if made would bewithin the prescribed limits under Section 141(3)(g) of the Companies Act 2013 and theyare not disqualified for appointment.

The observations made in the Auditors' report read together with the relevant notesthereon are self- explanatory and hence do not call for any comments under section 134 ofthe Companies Act 2013.

Secretarial Auditor

The Board has appointed D. Kothari & Associates Practicing Company Secretary toconduct the Secretarial Audit for the financial year ended 2016-17. The Secretarial Auditreport for the financial year ended March 31 2017 is annexed herewith and marked asAnnexure I to this report. Regarding the observations in the Secretarial Audit Reportdirectors wish to clarify that due to financial constraints economic reasons andadministrative difficulties Equity Shares of the Company have not been demated andconsequently the Company is not able to conduct e voting. The management has taken stepsto comply the required compliances within the constraints mentioned herein as soon aspossible.

DISCLOSURES:

Vigil Mechanism

The Vigil Mechanism of the Company which also includes Whistle Blower Policy includesan ethics and compliance task force comprising senior executives of the Company. Protecteddisclosures can be made by Whistle Blower through an email or letter to the Chairman ofthe Audit Committee.

Meetings of the Board

Five meetings of the Board of Directors were held during the year on the followingdates namely 30/5/2016 12/08/2016 01/09/2016 14/11/2016 and 10/02/2017.

Particulars of loans given investments made Guarantees given and Securities provided

The Company has not given any loans or made any investments u/s 186 of the CompaniesAct 2013.

Conservation of Energy technology absorption and foreign exchange earning and outgo.

The particulars related to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the act are provided inAnnexure II to this report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure III to thisreport.

Particulars of employees and related disclosures

The total number of permanent employees as on 31/3/2017 was 18.

The Company has not paid any remuneration to Managing director/ directors hence thequestion of furnishing information regarding ratio of remuneration of each director to themedian remuneration of the employees of the Company percentage increase in remunerationof each director comparison of remuneration of the Key Managerial remuneration againstcompany performance and percentile increase key parameters for variable components notapplicable.

Market Capitalization as on 31/3/2016 Rs.84.66 Lacs
Market Capitalization as on 31/3/2017 Rs. 84.66 Lacs
There is no change in market capitalization
PE ratio as on 31/3/2016 (Rs. 1.24)
PE ratio as on 31/3/2017 ……. (Rs. 2.02)

The Company does not have any employee whose particulars are required to be disclosedin terms of the provisions of Section 197(12) of the act read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 hencefurnishing of the same does not arise.

General

Your Directors take that no disclosure or reporting required in respect of thefollowing items as there were no transactions on these items during the year under review.

1) Details relating to deposits covered under Chapter V of the act.

2) Issue of Equity Shares to differential rights has to dividend voting or otherwise.

3) Issue of shares (including sweat equity shares) to employees of the Company

4) The Company does not have any subsidiaries hence the question of receivingremuneration or commission by the Managing Directors or Whole Time Directors from thesubsidiaries of the Company does not arise.

5) No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operation in the future.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

ACKNOWLEDGEMENT

Your Directors would like to access the sincere appreciation for the assistance andcooperation received from Shareholders Bank Government Authorities and other Businessconstituents during the year under review.

On behalf of the Board of Directors
Mehul J shah Dinesh Keshardeo Poddar
Managing Director Director
DIN : 00933528 DIN : 00158601
Place : Mumbai
Date : 24th August2017