To The Members M/s. SHAH FOODS LIMITED
Your directors have pleasure in presenting the 39th Director's Report ofyour Company together with the Audited Statement of Accounts and the Auditors' Report ofyour company for the financial year ended 31st March 2021.
The summary of operating results for the year is given below.
1. FINANCIAL HIGHLIGHTS
|Particulars ||Current year (2020-21) ||Previous year (2019-20) |
|Sales ||8.71 ||102.33 |
|Other Income ||1.47 ||(0.99) |
|Total Income ||10.18 ||101.34 |
|Depreciation ||2.54 ||23.21 |
|Tax ||(1.49) ||- |
|Current Tax ||1.61 ||(2.97) |
|Deferred Tax || || |
|Profit/(Loss) after Tax ||(55.28) ||(172.38) |
|Earnings per share (Rs.) : ||(9.25) ||(28.85) |
|Basic Diluted ||(9.25) ||(28.85) |
2. STATE OF COMPANY'S AFFAIRS
As reported in previous annual report of 2019-20 the factory was closed since 30thJune 2019 the management has decided to dispose off the undertaking of the Company. Thecompany is not able to sale/ dispose off the assets during the year due to the Covid 19pandemic situation which is beyond its control. The intention of the management is howeverstill the same to sale/ dispose off the assets. In view of this there is no businesstransected by the Company during the year. During the year under review the total Incomeof the Company was Rs. 10.18 Lakh against Rs. 101.34 Lakh in the previous year. TheCompany has incurred loss after Tax of Rs. (55.28) compared to loss of Rs. (172.38) Lakhin the previous year.
3. IMPACT OF COVID 19
The Company has considered the possible effects that may result from COVID-19 on thecarrying amounts of financial assets inventory receivables loans and advances propertyplant and equipment intangibles etc as well as liabilities accrued. In developing theassumptions relating to the possible future uncertainties in the economic conditionsbecause of this pandemic the Company has used internal and external information. Havingreviewed the underlying data and based on current estimates the Company does not expectany material impact on the carrying amount of these assets and liabilities. The impact ofCOVID-19 on the Company's financial statements may differ from that estimated as at thedate of approval of these financial statements and the Company will continue to closelymonitor any material changes to future economic conditions. As mentioned in point no. 2the Company has closed its factory w.e.f. 30/06/2019.
4. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT2013
There is no proposal to transfer any amount to any reserve.
5. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIALYEAR
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
6. DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES
No company has become or ceased to be Subsidiary Company Joint Venture Company orAssociate Company during the year.
7. CHANGE IN THE NATURE OF BUSINESS
Your Company continues to operate in the same business segment as that of previous yearand there is no change in the nature of the business.
8. CHANGES IN SHARE CAPITAL
Authorized Share Capital
There has been no change in Authorized Share Capital of Company.
Issued Subscribed and Paid-Up Share Capital
There has been no Change in Issued Subscribed and Paid-Up Share Capital ofCompany.
9. MANAGEMENT DISCUSSION & ANALYSIS
A report on Management Discussion and Analysis as required in terms of Regulation34(2) of the Securities Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015 forms part of this report and it deals with the BusinessOperations and Financial Performance Research & Development Expansion &Diversification Risk Management Marketing Strategy
Safety & Environment significant changes in key financial ratios etc. in "Annexure-A".
10. MEETINGS OF THE BOARD OF DIRECTORS
The gap between two Board meetings did not exceed four months. The schedule of Board/Committee meetings is communicated in advance to the directors/ committee members toenable them to plan their schedules and to ensure their meaningful participation in themeetings. The Board met six times in financial year details of which are summarized asbelow:
|S No. Date of Meeting ||Board Strength ||No. of Directors Present |
|1 22/06/2020 ||6 ||5 |
|2 29/06/2020 ||6 ||5 |
|3 06/08/2020 ||6 ||5 |
|4 03/09/2020 ||6 ||5 |
|5 04/11/2020 ||6 ||5 |
|6 04/02/2021 ||6 ||5 |
In addition independent directors met exclusively in the last quarter of the financialyear i.e. on 04/02/2021.
11. CORPORATE GOVERNANCE
As provided under Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith Corporate Governance as specified in Regulation 17 to 27 46 (2)(b) to (i) & parac d & e of Schedule V are not applicable to the Company as paid-up share capitaldoesn't exceed Rs. 10 Crore and Net Worth doesn't exceed Rs. 25 Crore as on the last dayof previous financial year.
In view of loss Directors do not recommend any Dividend for the year under review.
Your Company has not accepted any fixed deposits during the year under review.
14. RISK MANAGEMENT
There is an adequate risk management infrastructure in place capable of addressingrisks that the organization faces such as strategic financial market property ITlegal regulatory reputational and other risks those have been identified and assessed.
The Equity shares of the Company are listed at Bombay Stock Exchange. The Company haspaid listing fees to the Stock Exchange for the year 2021-22.
16. PERFORMANCE EVALUATION OF BOARD
During the year under report Board of Directors evaluated performance of Committeesand all the individual Directors including Independent Directors and concluded byaffirming that the Board summarizing as a whole as well as all of its directorsindividually and the Committees of the Board continued to good governance and contributeits best in the overall growth of the organization. Independent Directors also held aseparate meeting to evaluate annual performance of Chairman and executive directors andexpressed satisfaction on their performance.
17. INDEPENDENT DIRECTORS MEETING
During the year under review the Independent Directors of the Company met on 04thFebruary 2021 discussed inter-alia
a. Evaluation of performance of Non-Independent Director and the Board of Directors ofthe Company as a whole.
b. Evaluation of performance of the Chairman of the Company taking into views ofexecutive and Non-Executive Directors.
c. Evolution of the quality content and timelines of flow of information between themanagement and the board that is necessary for the board to effectively and reasonablyperform its duties.
18. DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013.
19. DIRECTORS & KEY MANAGERIAL PERSONAL
i. Retirement by Rotation:
Shri. Nirav Janakbhai Shah Director (DIN-01880069) retires by rotation and beingeligible offers himself for reappointment. Pursuant to Regulation 17 of the SEBI (LODR)Regulations
2015 details of Director retiring by rotation is provided under explanatory statementof the Notice of the 39th Annual General Meeting.
ii. Appointment of KMP:
Pursuant to provision of section 203 of the Companies Act 2013 (as amended orre-enacted from time to time) Miss Hiral Ishan Dave appointed as Company Secretary andKey Managerial Personnel (KMP) of the Company with effect from 22.06.2020.
20. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment andRemuneration of Managerial
Personnel) Rules 2014 is annexed herewith as "Annexure B" to thisreport. 21. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as "AnnexureC" to this Report. 22. STATUTORY AUDITORS
M/s. Suresh R. Shah & Associates Chartered Accountants Ahmedabad (FirmRegistration No: 110691W) were appointed as Statutory Auditors of the Company with theapproval of members at the 35th Annual General Meeting to hold office till theconclusion of the 39th Annual General Meeting. As per the recent amendmentissued by Ministry of Corporate Affairs ratification of statutory auditors at everyAnnual General Meeting is not required and hence your Directors have not proposed theratification of M/s. Suresh R. Shah & Associates at ensuing Annual General Meeting.
Remuneration to Auditors:
The Statutory Auditor was paid Rs. 80000/- (Rupees Eighty Thousand Only) as Audit feesfor the year 2020-21.
23. AUDITORS' REPORT
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
24. SECRETARIAL AUDITOR
M/s. Pinakin Shah & Co. Practicing Company Secretary has been appointed as theSecretarial Auditor of the Company for the financial year 2020-21 as required underSection 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit Reportfor the financial year ended March 31 2021 is annexed herewith marked as "Annexure-D"to this Report. The Secretarial Audit Report contains certain adverse remarks whichare dealt with as under:
|Sr. No Remarks ||Explanation |
|1. Non-Compliance of Section 138 of the Companies Act 2013 ||The Company does not have Internal Audit department as the factory is closed w.e.f. 30/6/2019. |
|2. Non-Compliance Regulation 46 of SEBI (LODR) Regulations 2015 ||The website was not updated at the time of Secretarial Audit the Company is under financial stress. |
The Board of Directors of your Company has appointed GKV & Associates CompanySecretaries Ahmedabad to carry out Secretarial Audit of your Company for FY 2021- 22.
25. COMMITTEES OF THE BOARD
Currently the Board has constituted three Committees:
a) Audit Committee
b) Stakeholders' Relationship Committee
c) Nomination & Remuneration committee.
A. AUDIT COMMITTEE
All Members of the Audit Committee have accounting and financial management expertise.The role of Audit Committee the powers exercised by it pursuant to the terms ofreference and the information reviewed by it are in accordance with the requirements asspecified in the Regulation 18 of SEBI (LODR) Regulations 2015 Companies Act 2013 andother applicable laws if any. Apart from the above the Audit Committee also exercisesthe role and powers entrusted upon it by the Board of Directors from time to time. TheVice-Chairman & Whole-time Director and Statutory Auditors are the invitees to theAudit Committee meetings. During the period under review the Audit Committee met fourtimes on 22/06/2020 06/08/2020 04/11/2020 and 04/02/2021 and was attended by thefollowing members.
|Name ||Designation ||No of meetings attended |
|Shri Sunil Gautambhai Parikh ||Chairman ||4 |
|Shri Kunal Asarpota ||Member ||4 |
|Shri Malav Jashwantlal Shah ||Member ||4 |
B. NOMINATION AND REMUNERATION COMMITTEE
The roles and responsibilities of the Committee are in accordance with the requirementsas specified in the Regulation 19 of SEBI (LODR) Regulations 2015 Companies Act 2013and other applicable laws if any. Apart from the above the Committee also exercises therole and powers entrusted upon it by the Board of Directors from time to time. All Membersof the Nomination and Remuneration Committee have accounting and financial managementexpertise. The role of Audit Committee the powers exercised by it pursuant to the termsof reference and the information reviewed by it are in accordance with the requirementsas specified in the Regulation 19 of SEBI (LODR) Regulations 2015 Companies Act 2013and other applicable laws if any. Apart from the above the Committee also exercises therole and powers entrusted upon it by the Board of Directors from time to time. During theperiod under review the Committee met four times on 22/06/2020 06/08/2020 04/11/2020and 04/02/2021 and was attended by the following members.
|Name ||Position ||Category |
|Shri Sunil Gautambhai Parikh ||Chairman ||Non Executive Independent Director |
|Shri Kunal Asarpota ||Member ||Non Executive Independent Director |
|Shri Malav Jashwantlal Shah ||Member ||Non Executive Independent Director |
Remuneration to Directors: a. The Whole Time Director/ Managing Directors/ Manager/and/ or Directors get salary and perquisites. Remuneration paid for the year ended 31stMarch 2021 was as under:
|Name of the director ||Period of appointment ||Designation ||Remuneration |
|Shri Nirav Shah ||Five years with effect from 01/07/2017 ||Managing Director ||8.64 lakhs |
| ||TOTAL || ||8.64 lakhs |
b. The criteria for making payments to the Whole time Directors are:
Salary as recommended by the Nomination and Remuneration Committee and approved by theBoard and the shareholders of the Company. Perquisites retirement benefits andperformance pay are also paid/ provided in accordance with the Company's compensationpolicies as applicable to all employees and the relevant legal provisions. Remunerationis determined keeping in view the industry benchmarks.
c. The Non-Executive Directors are not paid sitting fees for attending the meetingsof the
Board and Committees.
The Company has not paid sitting fees to any director of the Company.
C. STAKEHOLDER RELATIONSHIP COMMITTEE
The terms of reference of the Committee include reviewing and redressing complaintsfrom shareholders such as non-receipt of annual report transfer of shares issue ofduplicate share certificates etc.; to oversee and review all matters connected withtransfers transmissions dematerialization re-materialization splitting andconsolidation of securities; to oversee the performance of the Registrar and TransferAgent and recommends measures for overall improvement in the quality of investor services;and to perform any other function duty as stipulated by the Companies Act Securities& Exchange Board of India BSE and any other regulatory authority or under anyapplicable laws as amended from time to time. Committee met four times during FY 2020-21i.e. 22/06/2020 06/08/2020 04/11/2020 and 04/02/2021 and was attended by followingmembers:
|Name ||Position ||No of meetings attended |
|Shri Sunil Gautambhai Parikh ||Chairman ||4 |
|Shri Kunal Asarpota ||Member ||4 |
In addition Details of Shareholders' Complaints received during the year are asfollows:
|Particulars ||No. of Complaints |
|Investor complaints pending as at April 1 2020 ||0 |
|Investor complaints received during the year ended on March 31 2021 ||0 |
|Investor complaints resolved during the year ended March 31 2021 ||0 |
|Investor complaints pending as on March 31 2021 ||0 |
Share transfer committee
The Stakeholder relationship committee has delegated power of approving transfer ofsecurities to Shri Nirav Shah and Shri Sunil Parikh. The Committee inter alia reviewsand approves the transfer/ transmission/ D-mat of equity shares as submitted by M/s. BigShare Services Private Limited. the Registrar & Transfer Agent of the Company. Thereis no physical transfer during the year.
26. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND
The Company has not given any loan made any investment or given any guarantee henceinformation is nil.
27. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (3)(c) of the Companies Act 2013 the Boardof Directors hereby confirms that;
I. In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures.
II. It has in the selection of the accounting policies consulted the StatutoryAuditors and has applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at 31st March 2021 and of the profits of the company for thatperiod.
III. It has taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities to the best ofits knowledge and ability. There are however inherent limitations which should berecognized while relying on any system of internal control and records. IV. It hasprepared the annual accounts on a going concern basis.
V. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operationefficiently. VI. The Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
28. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year the Company has transferred unclaimed dividend of Rs. NIL to theInvestor Education and Protection Fund in compliance with provisions of the Companies Act2013.
All inventories including Buildings Machinery etc. are adequately insured.
30. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2020-21 your Company has not entered into any materialrelated party transaction as per the SEBI Listing Regulations with any of its relatedparties. Disclosures pursuant to the Accounting Standards on related party transactionshave been made in the notes to the Financial
Statements. As there were no related party transactions which were not in the ordinarycourse of the business or not on arm's length basis and also since there was no materialrelated party transaction as stated above disclosure under Section 134(3) (h) in FormAOC-2 of the Companies Act 2013 is not applicable.
31. DECLARATION BY INDEPENDENT DIRECTORS
The Board of Directors of the Company hereby confirms that independent directors havegiven the declaration and they meet the criteria of independence as provided under Section149(6) of the Companies Act 2013.
32. FAMILIARIZATION PROGRAMME
The company has not conducted familiarization program for independent director.
33. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism/ Whistle Blower Policy to deal withinstances of fraud and mismanagement if any. The Policy has a systematic mechanism fordirectors and employees to report concerns about unethical behavior actual or suspectedfraud or violation of the Company's
Code of Conduct or policy.
34. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
A. Conservation of Energy
The Company has not made any investment for (energy conservation) and taken anyspecific measures to reduce energy cost per unit. However it intends to conserve energyfor future generation.
B. Technology Absorption
There is no research and development activity carried out by the Company.
35. FOREIGN EXCHANGE EARNINGS AND OUT GO
There were no foreign exchange earnings and outgo during the year under review.
a) BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b) SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
c) BONUS SHARES
No Bonus Shares were issued during the year under review.
d) EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
e) EQUITY SHARES WITH DIFFERENTIAL RIGHTS
The company has not issued equity shares with differential rights as to dividendvoting or otherwise.
36. SHARES IN SUSPENSE ACCOUNT
Aggregate number of shareholders and the outstanding shares in the Suspense Accountlying at the beginning of the year: NIL
Number of shareholders who approached issuer for transfer of shares from SuspenseAccount during the year: Not Applicable
Number of shareholders to whom shares were transferred from Suspense Account duringthe year: Not Applicable
Aggregate number of shareholders and the outstanding shares in the Suspense Accountlying at the end of the year: NIL
That the voting rights on these shares shall remain frozen till the rightful owner ofsuch shares claims the shares: Not Applicable
37. SHARES IN UNCLAIMED SUSPENSE ACCOUNT
Aggregate number of shareholders and the outstanding shares lying in the UnclaimedSuspense Account lying at the beginning of the year: NIL
Number of shareholders who approached issuer for transfer of shares from the UnclaimedSuspense Account during the year: Not Applicable
Number of shareholders to whom shares were transferred from the Unclaimed SuspenseAccount during the year: Not Applicable
Aggregate number of shareholders and the outstanding shares lying in the UnclaimedSuspense Account lying at the end of the year: NIL
38. ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR
No orders were passed by the regulators or courts or tribunals impacting the goingconcern status and company's operation in future.
39. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
40. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and no complaint has been received on sexualharassment during the financial year 2020-21.
41. DETAILS OF FRAUDS REPORTED BY THE AUDITORS
During the year under review neither the Statutory Auditor nor the secretarial auditorhave reported to the Audit Committee under Section 143(12) of the Companies Act 2013 anyinstances of fraud committed against the Company by its officers or employees.
Your directors wish to express the continued co-operation received from all theStakeholders.
|Date : 28.08.2021 ||For Shah Foods Limited |
|Place : Ahmedabad ||Sd/- |
| ||Mr. Nirav J. Shah |
| ||Managing Director |
| ||DIN: 01880069 |