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Shah Construction Company Ltd.

BSE: 509870 Sector: Infrastructure
NSE: N.A. ISIN Code: INE02C301011
BSE 00:00 | 16 Jul Shah Construction Company Ltd
NSE 05:30 | 01 Jan Shah Construction Company Ltd
OPEN 55.10
PREVIOUS CLOSE 55.10
VOLUME 20
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P/E
Mkt Cap.(Rs cr) 1
Buy Price 55.10
Buy Qty 680.00
Sell Price 0.00
Sell Qty 0.00
OPEN 55.10
CLOSE 55.10
VOLUME 20
52-Week high 55.10
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 1
Buy Price 55.10
Buy Qty 680.00
Sell Price 0.00
Sell Qty 0.00

Shah Construction Company Ltd. (SHAHCONSTRUCTN) - Director Report

Company director report

Dear members

The Board of Directors is pleased to present the Company's 72nd annualreport and Company's Audited Financial Statements for the financial year ended March 312020

1. FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2020 is summarizedbelow: Financial Results:

(Rupees in Lakhs)

2019-20 2018-19
Revenue from operations 437.33 547 .51
Other Income 268.98 22.42
Total Income 706.31 569.92
Project Expenses 45.87 49.98
Changes in inventories of Stock-in-Trade (45.87) (49.98)
Employee Benefits Expense 53.87 54.73
Finance Costs 269.33 242.79
Depreciation and Amortization Expense 27.59 24.09
0ther Expenses 1432.06 356.85
Total Expenses 1782.85 678.46
Profit/ (Loss) before tax (1076.54) (108.53)
Less Income tax for earlier years 02.30 0.29
Profit/ (Loss) after tax (1078.84) (108.82)

2. RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY

The total income has increased to Rs.706.31 Lakhs from Rs.569.62 Lakhs in the previousyear.

The loss before tax incurred to the company has increased to Rs. 1076.54 Lakhs for theyear ended 31st March 2020 compared to previous year Rs. 108.53 Lakhs.

3. MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position ofthe company between end of the financial year and date of this report. There has been nochange in the nature of business of the company.

4. SECRETARIAL STANDARDS

The Directors state that the applicable Secretarial Standards i.e. SS-1 and SS-2relating to the ‘Meetings of the Board of Directors' and ‘General Meetings'respectively have been duly followed by the Company.

5. DIRECTOR'S RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31 2020 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 2020 and of the profitand loss of the 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 operating; and

f) the Directors have revised proper systems to ensure compliance with the provisionsof all applicable laws were in place and that such systems are adequate and operatingeffectively.

6. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in ordinary course of business and on arm's length basisand that the provisions of Section 188 of the Companies Act 2013 are not attracted. Thusdisclosure in Form AOC-2 is not required.

Members may refer to Note No 32 to the financial statement which sets out related partydisclosures pursuant to IND AS.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The provisions relating to Corporate Social Responsibility (CSR) under section 135 ofthe Companies Act 2013 are not applicable to the Company.

8. 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.

The development and implementation of Risk Management Policy has been covered inManagement Discussion & Analysis which forms part of this report.

9. 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.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and Articles of Association of theCompany Mr Dinesh K Poddar retires by rotation and being eligible offers themselves forre-appointment at the ensuing annual general meeting.

The Board of Directors on recommendation of Nomination & Remuneration Committee hasrecommended their re-appointment.

As per the provisions of the Companies Act 2013 Independent Directors have beenappointed for a period of 5 years and shall not be liable to retire by rotation. TheCompany has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the act and thelisting regulations.

The board comprises of the following directors and key managerial personnel of thecompany The Chairman and Managing Director of the company is Mehul Jadavji Shah. Mr MehulJadavji Shah is eligible for reappointment at this Annual General Meeting whose termexpired on 14th January 2020 On recommendation of Nomination and RemunerationCommittee and subject to the approval of members of the company the board at its meetinghas approved the re-appointment of Mr Mehul Jadavji Shah as Managing Director of theCompany for a further period of five consecutive years with effect from 15thJanuary 2020 to 15th January 2025 .The Board has taken the decision of thesaid re-appointment based on the recommendation of Nomination and Remuneration Committeeand subject to the approval of the members of the company. Independent Directors viz MrSanjay Premji Shah Mr Yogesh Janakrai Shah and Mr Sachikumar Adalja. Based on theperformance evaluation carried out by the Nomination and Remuneration Committee and ontheir recommendation and subject to the approval of members of the company Mr SanjayPremji Shah Mr Yogesh Janakrai Shah and Mr Sachikumar Adalja the Independent Directorsare proposed to be reappointed for second term as Independent Directors pursuant to theprovisions of Companies Act 2013 and Listing Regulations. The Board of Directorsrecommends their re-appointment by the way of special resolution and attention of themembers is invited to the relevant items in the Notice convening the 72nd AGMand the explanatory statement thereto.

Mr Sanjay Premji Shah Mr Yogesh Janakrai Shah and Mr Sachikumar Adalja theIndependent Directors shall hold office for the second term for the period of fiveconsecutive years with effect from 71st Annual General Meeting held for the financial yearended 31st March 2019 up to the conclusion of the Annual General Meeting to be held forthe financial year ended 31st March 2024.

Non Independent Directors viz Mr Dinesh Poddar Mr Sanjay Damji Shah and Mrs JaywantiJadavji Shah.

Mr Dinesh Poddar who retires by rotation at this meeting be and is hereby appointed asa Director of the company liable to retire by rotation. Mr Mahendra Savaliya has beenappointed as Chief Financial Officer of the Company with effect from 14th February 2019.

Ms Anita Vyas continues to be the Company Secretary of the Company with effect from25th May 2018.

Declaration by Independent Directors:

All Independent Directors have given declarations to the effect that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 readwith Regulation 16 of SEBI (Listing obligations and Disclosures Requirements) Regulations2015. In the opinion of the Board Independent Directors fulfil the conditions specifiedin the Act Rules made there under and Listing Regulations.

Evaluation of Board's Performance:

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategy.

The detailed programs for familiarization of Independent Directors with the Companytheir roles rights and responsibilities in the Company nature of the industry in whichthe Company operates business model of the Company are being discussed.

The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on report on evaluation received fromrespective Committees.

The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors. Pursuant to the provisions ofthe Companies Act 2013 read with the Rules issued there under and the Listing Regulations(including any statutory modification(s) or re–enactment(s)

for the time being in force) the process for evaluation of the annual performance ofthe Directors / Board / Committees was carried out.

In a separate meeting of Independent Director's performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the view of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the Board its committees and individualdirectors was also discussed. Performance evaluation of independent directors was done bythe entire board excluding the independent directors being evaluated.

11. AUDITORS AND AUDITORS' REPORT

Statutory Auditors

M/s. A. C. Modi & Associates Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 29th September 2017 for aterm of five consecutive years. They have confirmed that they are not disqualified fromcontinuing as Auditors of the Company.

As per the provisions of Section 139 of the Companies Act 2013the appointment ofAuditors is required to be ratified by the members at every Annual General Meeting. Inaccordance with Companies Amendment Act 2017 enforced on 7th May 2018 by the Ministry ofCorporate Affairs the appointment of Statutory Auditors is not required to be ratified atevery Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part ofthis report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.

Secretarial Auditor

The Board has appointed M/s. D. Kothari & Associates Practicing Company Secretaryto conduct the Secretarial Audit for the financial year ended 2019-20. The SecretarialAudit report for the financial year ended March 31 2020 is annexed herewith and marked asAnnexure to this report. The said report does not contain any qualification reservationadverse remark or disclaimer.

DISCLOSURES

(a) Meetings of the Board:

Four meetings of the Board of Directors were held during the year on the followingdates i.e. 15/5/2019 13/08/2019 12/11/2019 and 12/02/2020.

(b) Constitution of Committees: (1) Audit Committee:

The Company has constituted Audit Committee which comprises of following directorsnamely:

Mr. Yogesh Janakrai Shah Chairman & Independent Director Mr. Sanjay Premji ShahIndependent Director Mr. Dinesh Poddar Non Independent Director

All the recommendations made by the Audit Committee were accepted by the Board.

(2) 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 following directors namely:

Mr. Yogesh Janakrai Shah Chairman & Independent Director Mr. Sanjay Premji ShahIndependent Director Mr. Dinesh Poddar Non Independent Director

(3) Stakeholders Relationship Committee:

The Company has constituted stakeholders Committee comprises of following directorsnamely:

Mr. Yogesh Janakrai Shah Chairman & Independent Director Mr. Sanjay Premji ShahIndependent Director Mr. Dinesh Poddar Non Independent Director

(c) 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.

The Policy broadly lays down the guiding principles philosophy and the basis forpayment of remuneration to Executive and Non-executive Directors Key Managerial PersonnelSenior Management and other employees. The policy also provides the criteria fordetermining qualifications positive attributes and Independence of Director and criteriafor appointment of Key Managerial Personnel / Senior Management and performance evaluationwhich are considered by the Nomination and Remuneration Committee and the Board ofDirectors while making selection of the Annual Report 2019-20 Directors' Reportcandidates.

(d) Vigil Mechanism:

The Company has a robust Vigil Mechanism Policy of the Company which also includesWhistle Blower Policy in accordance with provisions of the Act and Listing Regulations.The Vigil Mechanism is supervised by an Ethics and Compliance Task Force comprising seniorexecutives of the Company. Protected disclosures can be made by a whistle-blower throughan email or dedicated telephone line or a letter to the Task Force or to the Chairman ofthe Audit Committee.

(e) Particulars of Loans given Investments made Guarantees given and Securitiesprovided:

The full details of loans given investments made guarantees given have been providedin the notes to the financial statement for the year ended 31st March 2020. The Companyhas not provided any security during the year.

(f) Conservation of Energy technology absorption:

The Company is not engaged in manufacturing process. Wherever possible the Company hastaken steps to conserve energy. The Company has not taken any technology domestically norimported any technology and hence furnishing the details required doesn't arise.

(g) Foreign Exchange Earnings and Outgo

1) Foreign exchange earnings: NIL

2) Foreign exchange outgo : NIL

(h) Extract of Annual Return:

Pursuant to section 92(3) of the Companies Act 2013 (‘the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return inprescribed Form No. MGT - 9 is annexed as Annexure III and forms part of this report. TheAnnual Return of the Company for the year ended 31st March 2020 prepared in compliancewith Section 92 of the Companies Act 2013 and related Rules in prescribed Form No. MGT 7is placed on the website of the Company and can be accessed at the web link:www.shah-construction.in.

(i) Particulars of employees and related disclosures:

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 Having regard to the provisions of the firstproviso to Section 136(1) of the act the annual report excluding the informationregarding the top ten employees is being sent to the members of the Company. The saidinformation is available for inspection on all working days during the business hours atthe registered office of the Company. Any member interested in obtaining such informationmay write to the Company Secretary and the same shall be furnished on request.

(j) Significant and Material Orders Passed By The Regulators Or Courts:

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.

(k) Reporting of Frauds:

There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.

(l) Prevention of Sexual Harassment in the Company:

The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to providingan environment which is free of discrimination intimidation and abuse. All employees arecovered under this policy. Your Directors state that during the year under review therewere no cases filed pursuant Shah Construction Company Limited Annual Report 2018 - 20 tothe Sexual Harassment of Women at Workplace (Prohibition Prevention and Redressal) Act2013.

(m) General:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as the provisions were not applicable to the company or there were notransactions on these items during the year under review: -

- Issue of Equity Shares with differential rights as to dividend voting or otherwise.- Issue of shares (including sweat equity shares) to employees of the Company. - TheCompany does not have any scheme of provision of money for the purchase of its own sharesby the employees or by trustees for the benefit of employees.

- The Company does not have any subsidiaries hence the question of receivingremuneration or commission by the Managing Directors or Whole Time Directors of theCompany from subsidiary does not arise.

- The details of the top ten employees and employees who were drawing remuneration inexcess of limits prescribed under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 read with Section 197 of the Companies Act 2013.

ACKNOWLEDGEMENT

The Board of Directors would like to express the sincere appreciation for theassistance and cooperation received from banks government authorities and members duringthe year under review.

The Board of Directors also wish to place on record its deep sense of appreciation forthe committed services by the Company's executives staff and workers

Date: 19th August 2020
Place: Mumbai For and on behalf of the Board of Directors
Mr Mehul Jadavji Shah Mr Dinesh Keshardeo Poddar
Managing Director Director
DIN:00933528 DIN: 00158597
Sanjay Damji Shah
Director
DIN:00292226

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