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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 74th annualreport and Company’s Audited Financial Statements for the financial year ended March31 2022.

1. FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31 2022 issummarized below:

Financial Results:

 

(Rupees in Lakhs)

Particulars 2021-22 2020-21
Revenue from operations 270.01 172.77
Other Income 26.43 15.64
Total Income 296.44 188.41
Project Expenses 35.10 27.27
Changes in inventories of Stock-in-Trade (35.10) (27.27)
Employee Benefits Expense 57.24 43.34
Finance Costs 328.53 297.67
Depreciation and Amortization Expense 18.37 23.59
0ther Expenses 301.50 298.91
Total Expenses 705.65 663.51
Profit/ (Loss) before tax (409.21) (475.11)
Less Income tax for earlier years - 06.35
Profit/ (Loss) after tax (409.21) (481.46)

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

The total income has increased to Rs. 296.44 Lakhs from Rs. 188.41 Lakhs in theprevious year.

The loss before tax incurred to the company has decreased to Rs. 409.21 Lakhs for theyear ended 31st March 2022 compared to previous year Rs. 475.11 Lakhs.

3. DIVIDEND

In view of the loss incurred the Directors have not recommended any dividend on theequity shares for the Financial Year ended 31st March 2022.

4. TRANSFER TO RESERVES

In view of the loss incurred for the Financial Year ended 31st March 2022no amount is proposed to be transferred to any reserves.

5. 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.

6. DEPOSITS

During the year the Company has not accepted deposits from the public falling withinthe ambit of Section 73 of the Companies Act 2013 ("Act") and the Companies(Acceptance of Deposits) Rules 2014.

7. 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 ‘GeneralMeetings’ respectively have been duly followed by the Company.

8. DIRECTOR’S RESPONSIBILITY STATEMENT Your Directors state that:

a) in the preparation of the annual accounts for the year ended 31st March2022 the applicable accounting standards have been followed;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2022 and of the lossof the Company for the year ended on that date;

c) they 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) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating; and

f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems are adequate and operatingeffectively.

9. 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 lengthbasis and that the provisions of Section 188 of the Companies Act 2013 are not attracted.Thus disclosure in Form AOC-2 is not required.

Members may refer to Note to the financial statement which sets out related partydisclosures pursuant to IND AS.

10. 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.

11. 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.

12. 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.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and Articles of Association of theCompany Mr. Dinesh Keshardeo Poddar and Mr. Mehul Jadavji Shah retire by rotation andbeing eligible offers themselves for re-appointment at the ensuing annual general meeting.The Board of Directors on recommendation of Nomination & Remuneration Committee hasrecommended their re-appointment.

Mr. Sanjay Premji Shah has resigned from the directorship of the company with effectfrom 14th June 2022. The board of directors has placed on record theappreciation for the services rendered by him during his association with the Company.

The board of directors on the recommendation of the Nomination and RemunerationCommittee has appointed Mr. Ravindra Kanji Myatra as an Additional and Non-executiveIndependent Director of the company with effect from 10th August 2022 subjectto the approval of members of the company in ensuing Annual General Meeting for the termupto five consecutive years commencing from 10th August 2022 to 9thAugust 2027 and not liable to retire by rotation.

The Board of Directors recommends his appointment by the way of special resolution.

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 of the Directors / Board / Committeeswas 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 nonexecutive directors.The same was discussed in the board meeting that followed the meeting of the independentdirectors at which the performance of the Board its committees and individual directorswas also discussed. Performance evaluation of independent directors was done by the entireboard excluding the independent directors being evaluated

14. AUDITORS AND AUDITORS’ REPORT

Statutory Auditors

In accordance with provisions of Companies Act 2013 the members at the 73rd AnnualGeneral Meeting held on 30th September 2021 had approved appointment of M/s.Mittal & Associates (Firm Registration No - 106456W for 5 years till the conclusionof the 78th Annual General Meeting to be held in the year 2026 As per theprovisions of Section 139 of the Act they have not disqualified from continuing asAuditors of the company.

The Auditors of the company have not reported any instance of fraud committed againstthe company by its officers or employees under Section 143(12) of the Companies Act 2013The Auditors report does not contain any qualification reservation adverse remark ordisclaimer.

Secretarial Auditor

The Board has appointed M/s. D. Kothari & Associates Practicing Company Secretaryto conduct the Secretarial Audit for the period of five years. The Secretarial Auditreport for the financial year ended 31st March 2022 is annexed herewith andmarked as Annexure to this report. The said report does not contain any qualificationreservation adverse remark or disclaimer.

Secretarial Audit Report: As required by Section 204 of the Act 2013 the SecretarialAudit Report for the year 2021-22 is given by M/s. D. Kothari & Associates practicingCompany Secretary for auditing the Secretarial and related records is attached herewith in"Annexure I" to the Board’s Report.

They have made above comment which includes our response to them.

1. The Company is non-Compliant for dematerialization of Promoters shareholding.

Our response to the above comment is that we will shortly comply with the aboverequirement.

2. The Company has yet to comply with the provisions of Regulation 3(5) and 3(6) ofSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations 2015(PIT Regulations) and as per the representation made by the company it is in the processof implementation of maintaining a Structured Digital Database (SDD).

Our response to the above comment is that we will shortly comply with the aboverequirement.

15. CORPORATE GOVERNANCE

Pursuant to Chapter IV of the SEBI Listing Regulations the provision with regard toCorporate Governance is not applicable to the Company as the paid up equity capital doesnot exceed 10 crores and net worth does not exceed 25 crores as on the last day of theprevious financial year. Further your Company aims and constantly strives in maintainingthe highest standards of Corporate Governance practices.

16. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34 of the SEBI Listing Regulations top one thousand listedentities based on market capitalization shall provide Business Responsibility andSustainability Report. The Company is outside the purview of top one thousand listedentities. In view of this Business Responsibility and Sustainability Report is notapplicable.

17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2) read with the Schedule V of the SEBI Listing Regulationsit is required to annex Management Discussion and Analysis Report of the Company to theAnnual Report. In compliance of the above mentioned provisions said report for thefinancial year ended 31st March 2022 is annexed herewith and marked asAnnexure to this report in "Annexure II".

18. MEETINGS OF THE BOARD AND THEIR COMMITTEES

(a) Meetings of the Board:

Six meetings of the Board of Directors were held during the year on the following datesi.e. 12/05/2021 28/05/2021 30/06/2021 14/08/2021 12/11/2021 and 14/02/2022.

(b) Constitution of Committees:

(1) Audit Committee:

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

Name of Member Category Status No. of Meeting entitled to attend No. of Meeting entitled to attend
Mr. Yogesh Shah (Resigned with effect from 30th June 2021) Non-Executive & Independent Director Chairman 1 1
Mr. Hitesh Popatlal Sanghoi (with effect from 30th June 2021) Non Executive & Independent Director Chairman 3 3
Mr. Dinesh Keshardeo Poddar Non Executive Director Member 4 4
Mr. Sanjay Premji Shah Independent Director (Resigned with effect from 14th June 2022) Non Executive & Independent Director Member 4 4

Five Meetings of Audit Committee were held on 12/05/2021 30/06/2021 14/08/202112/11/2021 and 14/02/2022.

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:

Name of Member Category Status No. of Meeting entitle d to attend No. of Meeting entitled to attend
Mr. Yogesh Shah (Resigned with effect from 30th June 2021) Non-Executive & Independent Director Chairman 1 1
Mr. Hitesh Popatlal Sanghoi Non Executive & Chairman 1 1
(with effect from 30th June 2021) Independent Director
Mr. Dinesh Keshardeo Poddar Non Executive Director Member 2 2
Mr. Sanjay Premji Shah Independent Director (Resigned with effect from 14th June 2022) Non-Executive & Independent Director Member 2 2

Three Meetings of Nomination and Remuneration Committee were held on 30/06/202114/08/2021 and 14/02/2022.

(3) Stakeholders Relationship Committee:

The Company has constituted stakeholders Committee comprises of following directorsnamely:

Name of Member Category Status No. of Meeting entitled to attend No. of Meeting entitled to attend
Mr. Yogesh Shah (Resigned with effect from 30th June 2021) Non-Executive & Independent Director Chairman 0 0
Mr. Hitesh Popatlal Sanghoi (with effect from 30th June 2021) Non Executive & Independent Director Chairman 1 1
Mr. Dinesh Keshardeo Poddar Non Executive Director Member 1 1
Mr. Sanjay Premji Shah Independent Director (Resigned with effect from 14th June 2022) Non-Executive & Independent Director Member 1 1

One Meeting of Stakeholders Relationship Committee was held on 14/02/2022.

(4) Independent Directors Meeting:

In compliance with the provisions of Secretarial Standards Companies Act 2013 and theSEBI Listing Regulations separate meeting of Independent Directors was held and thefollowing agenda item were considered at the meeting:

a) Review the performance of Non - Independent Directors and the Board of Directors asa whole;

b) Review performance of the Chairman taking into account the views of the ExecutiveDirectors and Non - Executive Directors;

c) Assess the quality quantity and timelines of flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

One Independent Committee Meeting was held on 14/02/2022.

(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 2021-22 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 2022.The Company has not provided any security during the year.

(f) Conservation of Energy technology absorption foreign exchange earnings and out go:

The Statement on conservation of Energy technology absorption foreign exchangeearnings and out go is given in the "Annexure III" to this report.

(g) Extract of Annual Return:

The Annual Return of the Company for the year ended 31st March 2022 prepared incompliance with Section 92 of the Companies Act 2013 and related Rules in prescribed FormNo. MGT 7 is 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 to the Sexual Harassment of Women at Workplace (ProhibitionPrevention and Redressal) Act 2013 during 2020-21.

(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.

- The Company does not have any scheme of provision of money for the purchase of itsown shares by 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.

- The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014 is furnished.

-The Company has not issued any equity shares under Employees Stock Option Schemeduring the year under review and hence no information as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014 is furnished.

- Maintenance of cost records as specified by the Central Government under subsection(1) of section 148 of the Companies Act 2013 is not applicable and not required by theCompany.

-During the Financial year no application has been made and no proceeding is pendingunder the Insolvency and Bankruptcy Code 2016.

-During the year under review there were no instance of one-time settlement with banksor financial institutions and hence the differences in valuation as enumerated under Rule8(5)(xii) of Companies (Accounts) Rules 2014 as amended do not arise.

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: 10th August 2022
Place: Mumbai For and on behalf of the Board of Directors
Mehul Jadavji Shah Dinesh Keshardeo Poddar
Managing Director Director
DIN:00933528 DIN: 00158597

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