The Board of Director?s present the Company?s 14th AnnualReport and the Company?s audited financial statements for the financial year endedMarch 31 2022.

FINANCIAL RESULTS

OPERATIONAL PERFORMANCE

During the year under review your Company has achieved turnover ofRs.31338.21 lakh as against Rs.21486.39 lakh in the previous year approx. 45.85% higher ascompared to previous financial year. Increase in the turnover is mainly due to improvedcapacity utilization as compared to last year. In previous FY 2020-21 first half of theyear is adversely impacted on account of the lockdown imposed by the Government of Indiadue to Covid-19 pandemic and restricted operational activities. Accordingly operationaland financial performance of the company for the year under review is not comparable withthe previous year.

An Earnings before Interest Depreciation and Tax (EBITDA) during theyear under review was Rs.2988.59 lakh as compared to Rs.3360.87 lakh in the previous year.During the year under review there was operational profit of Rs.575.58 as against loss ofRs.864.23 lakh for the previous year. Profit after tax for the financial year under reviewwas Rs.317.73 lakh as against Rs.347.07 lakh for the previous year. During the previous FY2020-21 there was Exceptional items include Profit on disposal of Land and Building undercompulsory acquisition by Government of India for Vadodara - Mumbai Express Highway ofRs.1360.23 lakhs.

DIVIDEND

The Board of Directors are pleased to recommend a dividend ofRs.0.06/-(i.e.3.00%) per equity share of Rs.2/- each on the paid-up equity share capitalof company amounting to Rs.53.58 lakh. The dividend payment is subject to approval ofmembers at the ensuing Annual General Meeting. The final dividend once approved byShareholders will be paid within the stipulated time subject to deduction of tax atsource.

DEPOSITS

Your Company has neither accepted nor renewed any deposits within themeaning of the Companies (Acceptance of Deposits) Rules 2014.

SUB-DIVISION OF SHARES

The Board of Directors at their Meeting held on June 29 2021 approvedthe sub-division of each Equity Shares of Rs. 10/- fully paid up into 5 Equity Shares offace value of Rs. 2/- each fully paid up. The same had been approved by the Members at the13th Annual General Meeting (AGM) of the company held on September 30 2021.

Equity Shares of the Company have been subdivided from face value ofRs. 10/- each to Rs. 2/- each from record date November 12 2021.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of section 152 of the Companies Act 2013and in accordance with provisions of Articles of Association of the Company ShriDhirajlal R. Shah (DIN 00010480) Director of the Company retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment. YourDirectors recommend his re-appointment.

Subject to the approval of the Shareholders at the ensuing GeneralMeeting of the Company the Board of Directors have approved the re-appointment of:

Shri Nitin R. Shah as a Whole Time Director of the Company for afurther period of 3 years commencing from October 1 2022.

Shri Arvind Raichand Shah as a Managing Director of the Company fora further period of 3 years commencing from October 1 2022.

Shri Dhirajlal R. Shah as an Executive Chairman of the Company fora further period of 3 years commencing from October 1 2022.

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed both under section 149(6) read with Schedule IV to the Companies Act 2013 andunder Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

NOMINATION AND REMUNERATION POLICY:

The Company has devised the Nomination and Remuneration Policy for theselection appointment and remuneration of Directors Key Managerial Personnel and alsoremuneration of other employees including Senior Management employees who have thecapacity and ability to lead the Company towards achieving sustainable development.

The extract of Nomination and Remuneration Policy is provided in theCorporate Governance Report and forms part of Board?s Report.

PARTICULARS OF EMPLOYEES

The Disclosure required under Section 197(12) of the Companies Act2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as ‘Annexure 1? and forms an integralpart of this Report.

A statement comprising the names of top 10 employees in terms ofremuneration drawn in terms of Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as ‘Annexure 2?and forms an integral part of this report. This Annexure-2 is not being sent along withthis annual report to the members of the company considering the provisions of Section 136of the Companies Act 2013. Members who are interested in obtaining these particulars maywrite to the Company Secretary at the Registered Office of the Company. The aforesaidAnnexure is also available for inspection by Members at the Registered Office of theCompany 21 days before and up to the date of the ensuing Annual General Meeting duringthe business hours on working days.

There were no employees whose remuneration was in excess of the limitsin pursuance of section 197(12) of the Companies Act 2013 read with Rule 5(2) of TheCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

Your Company does not have any Subsidiary Joint Ventures or AssociateCompany.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

As required under section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 the particulars relating toconservation of energy Technology Absorption and foreign exchange earnings and outgo isappended as an ‘Annexure-3? to the Board?s Report.

DIRECTORS? RESPONSIBILITY STATEMENT

To the best of their knowledge belief and according to the informationand explanations obtained your Directors make the following statements in terms ofSection 134(3) (c) & 134 (5) of the Companies Act 2013:

a) In the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period; c) The directorshad taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the company andfor preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concernbasis;

e) The directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.

f) The directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

SECRETARIAL AUDITORS:

The Company has appointed Shri Bhairav H. Shukla Practicing CompanySecretary (CP: 5820) Surat to conduct the Secretarial Audit of the Company as required bySection 204 of the Companies Act 2013 and Rules made thereunder. The Company provided allassistance and facilities to the Secretarial Auditors for conducting their audit. ShriBhairav H. Shukla has also conducted the Annual Secretarial Compliance pursuant to SEBIListing Regulations 2015. The Secretarial Audit Report for the financial year ended 31stMarch 2022 is annexed herewith as ‘Annexure- 4?. The report isself-explanatory and does not call for any further explanation / comments as requiredunder Section 134(3)(f) of the Companies Act 2013.

The Company has complied with the applicable Secretarial Standardsissued by the institute of Company Secretaries of India.

STATUTORY AUDITORS AND AUDITOR?S REPORT

Pursuant to Section 139 of the Act and the Rules made thereunder theCompany at its 11th Annual General Meeting re-appointed M/s. RASESH SHAH & ASSOCIATESChartered Accountants (Firm Registration No. 0108671W) as the Statutory Auditors of theCompany for a period of 5 years from the conclusion of 11th AGM until the conclusion of16th AGM of the Company. The Auditors have confirmed that they are not disqualified fromcontinuing as Auditors of the Company.

The Notes on financial statements 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 adverse remark or disclaimer.

No fraud has been reported by the Auditors to the Audit Committee orthe Board.

COST AUDITORS

In terms of the provisions of Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Board ofDirectors on the recommendation of the Audit Committee has appointed M/s. Kannaujiya& Co. Cost Accountants Surat (Firm Registration No: 102990) as Cost Auditor of theCompany for the financial year ending 31st March 2023 on a remuneration as mentioned inthe Notice convening the 14th Annual General Meeting for conducting the audit of the costrecords maintained by the Company.

A Certificate from M/s. Kannaujiya & Co. Cost Accountants has beenreceived to the effect that their appointment as Cost Auditor of the Company if madewould be in accordance with the limits specified under Section 141 of the Act and Rulesframed thereunder.

A resolution seeking Members? approval for remuneration payable toCost Auditors forms part of the Notice of the 14th Annual General Meeting of the Companyand same is recommended for your consideration.

Cost Audit Report for the year 31st March 2021 was filed with theCentral Government within the prescribed time limit AND The Cost Audit Report for theyear ended on 31st March 2022 shall be filed within prescribed time after completion ofCost Audit by Cost Auditors.

The company has made and maintained books of account and recordspursuant to the rules made by the Central Government for the maintenance of cost recordsunder section 148(1) of the Companies Act 2013.

INTERNAL FINANCIAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

The Company believes that Internal Control is one of the key pillars ofgovernance which provides freedom to the management within a framework of appropriatechecks and balances. The Company has a robust internal control framework which has beendeveloped considering the nature size and risks in the business.

The Company has adequate internal control systems in place and also hasreasonable assurance on authorizing recording and reporting transactions of itsoperations. The Company has well-placed proper and adequate internal controlsenvironment commensurate with its size scale and complexities of its operations. TheCompany had already developed and implemented a framework for ensuring internal controlsover financial reporting. This framework includes entity level policies processes andoperating level standard operating procedures (SOP). Internal control systems are anintegral part of your Company?s Corporate Governance structure. InformationTechnology (IT) policies and processes also ensure that they mitigate the current businessrisks. The Company has in placed ERP software system supported by BI tools. The systemsand processes are continuously improved by adopting best in class processes and automationand implementing the latest IT tools which help further for maintaining financial andcommercial discipline. These have been designed to provide reasonable assurance withregard to credibility of data and compliances inter-alia:

a) Recording and providing reliable financial and operationalinformation;

b) Complying with the applicable statutes; c) Safeguarding assets fromunauthorized use;

d) Executing transactions with proper authorization and ensuringcompliance with corporate policies;

e) Prevention and detection of Frauds / errors;

f) Continuous updating of IT software/systems.

These are aimed at giving the Audit Committee a reasonable assurance onthe reliability of financial reporting and statutory & regulatory complianceseffectiveness and efficiency of your Company?s operations. The Internal FinancialControl Systems are reviewed periodically and revised to keep in tune with the changingbusiness environment.

Statutory Auditors of the company has conducted audit of internalfinancial control system over financial reporting and operating effectiveness of suchcontrols. Separate audit report on internal financial control is annexed to AuditorsReport and forming part of this report.

AUDIT COMMITTEE

Audit Committee presently consists of three Directors. The compositionof Audit Committee is as follows.

There are no instances where the Board has not accepted anyrecommendation of the Audit Committee.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In pursuance of the provisions of section 177(9) & (10) of theCompanies Act 2013 and rules made thereunder and SEBI Listing Regulations a VigilMechanism for directors and employees to report genuine concerns or grievances aboutunethical behavior actual or suspected fraud or violation of the company?s code ofconduct has been established. Adequate safeguards have been provided against victimizationof persons who use the vigil mechanism. The Vigil Mechanism Policy has been uploaded onthe website of the Company.

BUSINESS RISK MANAGEMENT

The Company has laid down a Risk Management Policy and identifiedthreat of such events which if occur may adversely affect either or value to shareholdersability of Company to achieve objectives ability to implement business strategies. Suchinherent risks are categorized into Strategic risk Operating risk and Regulatory risk.Managing Director and other Director of the Company in consultation with Audit Committeewill review from time to time the risk and suggest steps to be taken to control andmitigate the same through a properly defined framework. It may be noted that none of theidentified risks is of a nature which would threaten the existence of the Company. Weconsistently and periodically review our systems and policies in order to establish soundrisk management and internal control systems.

ANNUAL RETURN:

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read withCompanies (Management and Administration) Rules 2014 the Annual Return of the Company inForm MGT-7 has been placed on the Company?s website (www.shahlon.com).

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

During the year under review the company has not advanced any loansgiven any guarantees or provided any security or made any investments covered under theprovisions of section 185 and 186 of the Companies Act 2013. The company has compliedwith the provisions of the Companies Act 2013 with respect to Investments made guaranteegiven and security provided in previous years. Necessary disclosure has been made in thenotes to the financial statements.

RELATED PARTY TRANSACTIONS:

All the related party transactions are entered on arm?s lengthbasis in the ordinary course of business and are in compliance with the applicableprovisions of the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. There are no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel etc.which may have potential conflict with the interest of the Company at large or whichwarrants the approval of the shareholders. Accordingly no transactions are being reportedin Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies(Accounts) Rules 2014. However the details of the transactions with Related Parties areprovided in the Company?s financial statements in accordance with the AccountingStandards.

All Related Party Transactions are presented to the Audit Committee andthe Board. Omnibus approval is obtained for the transactions which are foreseen andrepetitive in nature. A statement of all related party transactions is presented beforethe Audit Committee on a quarterly basis specifying the nature value and terms andconditions of the transactions.

EVALUATION OF THE BOARD?S PERFORMANCE

The Company has devised a Policy for performance evaluation of theBoard Committees and other individual Directors (including Independent Directors) whichinclude criteria for performance evaluation of Non-executive Directors and ExecutiveDirectors. The exercise was carried out through a structured evaluation process coveringvarious aspects of the Boards functioning such as composition of the Board &committees experience & competencies performance of specific duties &obligations governance issues etc. Separate exercise was carried out to evaluate theperformance of individual Directors including the Board Chairman who were evaluated onparameters such as attendance contribution at the meetings and otherwise independentjudgment safeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by theentire Board and that of the Chairman and the Non-Independent Directors were carried outby the Independent Directors.

The Directors were satisfied with the evaluation results whichreflected the overall engagement of the Board and its Committees with the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulatorsor Courts or tribunals which would impact the going concern status of the Company and itsfuture operations.

MATERIAL CHANGES AFFECTING THE COMPANY

The Company has received a balance sum of Rs. 5.80 crores from NationalHighway Authorities of India towards additional compensation against the property (landarea admeasuring 22619 sq. mtrs. and part of 1 constructed factory premises) earlier ownedby the Company situated at land bearing Block no. 74 75 76 and 81 at Village: KaranjTaluka: Mandvi Dist.: Surat already acquired by the Government of India for VadodaraMumbai Express Highway in the Financial year 2020-21.

The Company exited as a partner (holding 19% share) from ShahlonEnterprises LLP a related party w.e.f. 01.07.2022. At the request of Shahlon EnterprisesLLP its Banker the Surat People?s Co-operative Bank Ltd. has agreed to releaseguarantee of the Company and one of the immovable properties of the Company provided ascollateral security to the said Bank for the credit facilities availed by the said firm.

Except above there have been no other material changes and commitmentsaffecting the financial position of the Company between the end of the financial year anddate of this report. There has been no change in the nature of business of the Company.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at work place andhas adopted a policy against sexual harassment in line with the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and therules framed thereunder. An Internal Complaints Committee (ICC) has been set up incompliance with the said Act.

During the year under review no complaints of sexual harassment werereceived by the committee.

TRANSFER TO RESERVES

During the year under review the Company has not transferred anyamount to Reserves.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance pursuant to Regulation 34(3)of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 read with Part C of Schedule V thereof along with acertificate from Shri Bhairav H. Shukla Practicing Company Secretary (CP: 5820) Suratconfirming compliance of the conditions of Corporate Governance are annexed to this Reportas ‘Annexure- 5?.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2)(e) of Listing Regulations 2015Management Discussion and Analysis Report is given in ‘Annexure- 6? tothis Report.

Acknowledgment

Your Directors express their grateful appreciation for the assistanceand co-operation received from the Banks Financial Institutions Government AuthoritiesCustomers Suppliers and Shareholders during the year under review. Your Directors alsowish to place on record their deep sense of appreciation for committed services ofemployees of the Company at all the levels.