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Shangar Decor Ltd.

BSE: 540259 Sector: Others
NSE: N.A. ISIN Code: INE118R01024
BSE 00:00 | 30 Nov 6.11 -0.18
(-2.86%)
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NSE 05:30 | 01 Jan Shangar Decor Ltd
OPEN 6.48
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VOLUME 30145
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OPEN 6.48
CLOSE 6.29
VOLUME 30145
52-Week high 22.80
52-Week low 5.82
P/E
Mkt Cap.(Rs cr) 7
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shangar Decor Ltd. (SHANGARDECOR) - Director Report

Company director report

To the Members

Shangar Decor Limited Ahmedabad

The Directors have pleasure to present their 25th Annual Report and theAudited Annual Financial Statements for the year ended 31stMarch 2020.

Summary of Financial Results:

Particulars Current Year 2019-20 Previous Year 2018 – 19
INR INR
Total Income 70171208 62218736
Total Expenses 66240616 59629169
Profit Before tax 3930592 2589567
Provision for Tax & Deferred Asset/ Liab.
1. Current tax 621144 651000
2. Deferred tax - 12526
3. Prior Period Adjustment - -
Profit After Tax 3309448 1926041
EPS: Basic & Diluted 1.08 0.63

State of Company Affairs:

During the year under review Company has earned net profit of Rs. 33.09 Lakhs comparedto last years' net profit of Rs. 19.26 Lakhs. Turnover of the Company has increased by Rs.79.52 Lakhs and Net Profit of the Company has also increased by Rs. 13.83 Lakhs. Theperformance of the Company during the year 2019 20 was very progressive and notable.

During the year 2019 20 Company has completed Government Contract for Lok SabhaElection 2019 for Decoration and allied services. Approximate value of contact completedis Rs. 2.50 Crores.

Company has entered into Service Contract for Decoration Business with Dayaji AnavilKedavni Mandal. Dayaji Anavil Kedavni Mandal owns six properties in the city of SuratGujarat.

Dividend:

The company has not proposed any dividend in FY 2019-20. The Board of Directors havedeclared interim Dividend of Rd. 0.10 paisa on 3060100 Equity Shares of Rs. 10/- each.

Reserves:

The Board of Directors do not propose to transfer any amount to Reserves Account duringthe year.

Deposits and long term borrowings:

The Company has not invited or accepted any deposit from the public during the yearunder review.

Particulars of Contracts of Agreements with related party:

In terms of Section 188 of Companies Act 2013 Company has entered in to Related PartyTransaction at Arm's length price in normal course of business with only one relatedparty. Relevant disclosures of Related Party Transaction are given in AOC-2 as Annexure Ito this Director's Report.

Company has not entered in to any transaction "Not at Arm's Length price."

There are no other materially significant transactions with related parties i.e.promoters Directors or the Management their subsidiaries or relatives conflicting withthe Company's interest.

Directors' Responsibility Statement:

In terms of Section 134(3) of the Companies Act 2013 in relation to the FinancialStatements for FY 2019-20 the Board of Directors states that:

a) In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures.

b) The Directors have 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 the 31stMarch 2020 and of the profit and loss account of the company for that period.

c) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets 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 had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

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

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 weakness was observed.

Subsidiaries And Joint Venture:

Company does not have any subsidiary companies. Company has not made any investment inJoint Venture Companies.

Environment Health And Safety:

The Company accords the highest priority to health environment and safety. The Companydoes not carry on manufacturing operations. The Company takes at most care for theemployees and ensures compliance with the applicable rules and regulation applicable tothe Company.

Corporate Governance:

Regulation 17 to 27 of SEBI (LODR) Regulation 2015 is not applicable to the Company asthe Paid up Share Capital and Turnover of the Company are less than the minimum prescribedlimits.

Corporate Social Responsibility:

The provisions of Companies Act 2013 and rules framed there under with regard toCorporate Social responsibility do not apply to the Company and hence no disclosures havebeen made in that regard.

Directors and Key Managerial Personnel:

Composition:

As on date of this Board Report the Board comprises of 6 (six) Directors of which 3(three) are Independent Directors.

Directors Retiring By Rotation

Mr. Saumil Shah (holding DIN: 01601299) a Director whose terms of office is liable todetermination by retirement of Directors by rotation under section 152 of Companies Act2013 and being eligible offers himself for reappointment. Directors recommend his reappointment. Profile of Saumil Shah is attached herewith as Annexure I.

Resignation of Directors:

During the year none of the Directors of the company have resigned from Board. Aftercompletion of financial year

1) Mr. Ashok kumar Shah Independent Director due to his pre occupation in business

2) Ms. Parul Samir Shah Promoter Director have resigned from the Board due to herhealth issue.

Declaration of Independent Directors:

Pursuant to provisions of section 149(7) of Companies Act 2013 the Company hasreceived declaration from Independent Directors for FY 2019-20 confirming that they meetthe criteria of independence as prescribed under the Act and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.

Policy on Directors' Appointment:

Pursuant to provisions of section 178 read with 134(3)(e) of Companies Act 2013 TheNomination and Remuneration Committee (NRC) has approved the criteria and process foridentification / appointment of Directors. Directors of the Company strictly follow theprocess and criteria as prescribed by the committee.

Manner of Evaluation of Board Its Committees and Individual Directors:

The Evaluation of Board its Committees and Individual Directors was carried out as perprocess and criteria laid down by the Board of Directors based on the recommendation ofthe Nomination and Remuneration Committee.

The obtaining and consolidation of feedback from all Directors in this regards wascoordinated by the Chairman of Independent Directors' meeting for Board while the processof evaluation of the Independent Directors was coordinated by the Chairman of the Company.Based on this Chairman of the Company briefed the Board and each of the IndividualDirectors as applicable.

Number of Meetings of the Board:

The Board meets at regular interval with gap between two meetings not exceeding 120days. Additional meetings were held as and when necessary. During the year under reviewthe Board met eight times and the proceeds of the Board Meeting have been duly recorded inminute book. During the year total eight Board Meetings were held respectively on29.04.2019 15.06.2019 27.06.2019 14.08.2019 14.11.2019 03.01.2020 03.02.202014.02.2020.

Remuneration:

Remuneration Policy:

The Company has formulated the policy relating to the remuneration of the DirectorsKey Managerial Personnel and other employees of the Company which is as under:

A) Components of Remuneration :

- Fixed Pay comprising Basic Salary HRA Car Allowance (applicable to GeneralManagers & above employees) Conveyance Allowances / Reimbursement Company'scontribution to Provident Fund Superannuation Fund Gratuity etc.

- Variable Pay which is either in the form of:

Commission to Managing Directors and Commission to Whole-time Directors

B) Annual Appraisal process:

Annual Appraisals are conducted following which annual increments and promotions indeserving cases are decided once in a year based on:

- Employees self-assessment;

- Assessment by Immediate Superior;

- Assessment by Head of Department;

Annual Increment leading to an increase in Fixed Pay consists of:

- Economic Rise based on All India Consumer Price Index published by theGovernment of India or Internal Survey wherein inflation on commonly used items iscalculated.

Remuneration of Independent Directors:

The Company has formulated a policy for the remuneration of Independent Directors asfollows:

- Sitting Fees of maximum Rs. 2500/- for each meeting of the Board or anyCommittee thereof attended by them;

- Reimbursement of Expenses incurred by Independent Directors for attending anymeeting of the Board.

Particulars of Employees and Related Disclosures:

There are no employees in the company whose salary exceed the prescribed limit underthe Act hence disclosure of employees is not provided.

Disclosure under provisions of Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2015is given here under.

I) Disclosure under provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given herein below:

Sr. No. Name and Designation Ratio of Remuneration of Director to Median Remuneration of Employee Sub Clause (i) of Rule 5(1) % Increase in remuneration for FY 2018 19 Sub Clause (ii) of Rule 5(1)
1 Samir Rasiklal Shah Managing Director 4.24 4.24
2 Saumil Shrenik Shah CFO & Director 4.89 4.89
3 Utsavi Bhatia Company Secretary 0.21 0.85
4 Rinni Soni 0.94 0.00

II) Sub Clause (iii) of Rule 5(1): There is no change in the Median remunerationof employees compared to previous year 2018 19. Such percentage increase in medianremuneration may not reflect correct increase due to change in the employees increaseduring the year as compared to 2018-19.

III) Sub Clause (iv) of Rule 5(1): There are 14 employees on the pay roll of theCompany other than Directors on the Board of Company.

IV) Sub Clause (viii) of Rule 5(1): Average percentile increase already made inthe employees of the Company during the FY 2019 20 is NIL. Remuneration of ManagerialPersonnel has not been increased hence no comparison thereof is provided.

V) Sub Clause (x) of Rule 5(1): No Director has availed of any variablecomponent of remuneration.

VI) Sub Clause (xii) of Rule 5(1): it is hereby affirmed that the remunerationpaid is as per the Remuneration Policy of the Company.

VII) Sub Clause (i) to (iii) of Rule 5(2): There are no employees on the payrollof Company who receive remuneration in excess of limits prescribed under Rule 5 (2) henceno details are provided under Rule 5(3).

Management Discussion and Analysis Report:

A detailed discussion on the Company's operations is presented in the chapter onManagement Discussion and Analysis which forms part of this Annual Report as Annexure II.

Auditors:

Report of Statutory Auditors

The Board of Directors in their Board Meeting held on 15th June 2019 haveappointed M/s S. D. Mehta & Co Chartered Accountants Ahmedabad as the StatutoryAuditor of the Company. The Auditors' report for financial year 2019 20 isself-explanatory and forms part of this Annual Report and does not contain anyqualification reservation or adverse remark.

Report of Secretarial Audit:

Viral Ranpura Company Secretary in practice was appointed as Secretarial Auditor ofthe Company and they have issued a Report under provisions of Section 204 of Companies Act2013 and is placed as Annexure III to this report.

Response to the Auditors qualification is as under:

- Late submission of E Forms pertaining to FY 2018 19.

The Company Secretary of the Company resigned during April 2019 hence some of the formswere filed with late fees. The Management has adopted proper compliance system for timelysubmission of compliances.

- Non Compliance with SEBI Circular.

Company has already appointed CDSL as its Designated Depository. The circular has beencomplied with.

Report of Cost Auditor:

Provisions of Section 148 of Companies Act 2013 are not applicable to the Company andhence no disclosures are required in that regard.

Audit And Risk Management:

The Board of Directors have duly constituted Audit Committee. This Committee of theBoard also plays the role of Risk Management Committee and is called as Audit and RiskManagement Committee. The role and responsibilities of the Committee have beenspecifically defined. The Audit Committee consists of following members:

Composition of Audit Committee:

Name of Members of Audit Committee Designation
Ashokkumar Amratlal Shah Chairman
Saumil Shrenikbhai Shah Member
Prasanna Narendra Pandya Member

Vigil Mechanism:

The Company has adopted a Whistle Blower Policy since March 2015 in compliance withListing Regulations and Companies Act 2013. The Policy empowers all the Stakeholders toraise concerns by making Protected Disclosures as defined in the Policy. The Policy alsoprovides for adequate safeguards against victimization of Whistle Blower who avail of suchmechanism and also provides for direct access to the Chairman of the Audit Committee inexceptional cases. The functioning of the Whistle Blower mechanism is reviewed by theAudit Committee on a quarterly basis. As on date none of the stakeholders have raised anyWhistle Blower concern.

Risk Management Policy:

The Board of Directors has developed and implemented Risk Management Policy for theCompany. It has identified and assessed various risks factors with potential impact onthe Company in achieving its strategic objectives or may threaten its existence. ThePolicy lays down procedures for risk identification assessment monitoring review andreporting. The Policy also lists the roles and responsibilities of Board and RiskManagement Committee.

Conservation Of Energy Technology Absorption Foreign Exchange Earnings And Outgo:

During the year Company has neither spent nor earned any foreign exchange.

Since the company does not carry on any manufacturing activity the other particularsin the Companies (Disclosure of Particulars in the Report of the Board of Directors)Rules 1988 are not applicable.

Extracts of Annual Return and other Disclosures Under Companies (Appointment &Remuneration) Rules 2014:

The Extract of Annual Return in form No. MGT-9 as per Section 134 (3)(a) of theCompanies Act 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 ofCompanies(Management & Administration) Rules 2014 duly certified is annexed hereto asAnnexure IV and forms part of this report.

Share capital:

During the year under review there has been no change in the paid up share capital ofthe Company. Paid Up Share Capital of the Company consists of 3060100 Equity Shares ofINR 10/- each.

After completion of financial year 2019 20 the following changes have taken place inthe share capital of the Company:

i) 3060100 Equity Shares of Rs. 10/- were sub divided into 6120200 EquityShares of Rs. 5/- each fully paid up. ii) Issue of Bonus Shares in the ratio of 1:1i. e. every shareholder holding 1 equity share of Rs. 5/- each was issued and allotted 1equity share of Rs. 5/- each fully paid up. Thereby the post issue subscribed and paid upcapital of the Company is Rs. 61202000/- divided into 12240400 Equity Shares of Rs.5/- each fully paid up.

Change of management:

During the year there is no change in the management of the company.

Change in Nature of Business:

There was no change in the nature of business of the Company during the year underreview.

Particulars of Loans Guarantees Or Investments:

The particulars of Loans Guarantees or investments as covered under provision ofsection 186 of the Companies Act 2013 made by the company during financial year 2019-20are given under the respective head of Financial Statements and the same is furnished inthe notes to the Financial Statements.

Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year to which the financialstatements relates and the date of the report:

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year to which this financial statement relatesand up till the date of Report except following:

- 3060100 Equity Shares of Rs. 10/- were sub divided into 6120200 EquityShares of Rs. 5/- each fully paid up.

- Issue of Bonus Shares in the ratio of 1:1 i. e. every shareholder holding 1equity share of Rs. 5/- each was issued and allotted 1 equity share of Rs. 5/- each fullypaid up. Thereby the post issue subscribed and paid up capital of the Company is Rs.61202000/- divided into 12240400 Equity Shares of Rs. 5/- each fully paid up.

Transfer of funds to Investor Education and Protection Fund:

The Company is not required to transfer any amount to the Investor Education andProtection Fund (IEPF) established by the Central Government pursuant to the provision ofSection 125 (e) of the Companies Act 2013 as there is no amount unclaimed for a period of7 years from the date it became due for payment.

Details of material and significant orders passed by the regulators or courts ortribunals:

There were no significant and material orders issued against the Company by anyregulating authority or court or tribunal that could affect the going concern status andCompany's operation in future except fine imposed for late submission of Compliance underSEBI (LODR) Regulation 2015 by BSE Limited.

Disclosure under the sexual harassment of women at workplace (prevention prohibitionand 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 Sexual Harassment at Workplace (Prevention Prohibition andRedressal) Act 2013 and the rules framed there under. During the financial year 2019-20the Company has not received any complaint on sexual harassment.

Acknowledgment:

The Board of Directors wishes to place on record its appreciation for the cooperationextended by Banks Government Authorities Customers Shareholders and Employees of theCompany and looks forward to a continued mutual support and co-operation.

For Shangar Decor Limited
By Order of the Board
Sd/- Sd/-
Samirbhai R. Shah Saumil Shah
Managing Director Director
DIN 00787630 DIN: 01601299

Date: 05th December 2020 Place: Ahmedabad

Annexure I Director Profile

Name Saumil Shrenikbhai Shah
DIN 01601299
Age 43 Years
Brief Resume Mr Saumil Shah is Non Executive Director of the Company having wide range of experience in the industry. He is associated with the Company since 2006.
Date of First Appointment 01.11.2006
Directorship held in other Companies NIL
Membership or NIL
Chairmanship Inter-se Related to Managing Director of the Company. He is also a promoter member.
Relationship with Director
Shareholding in Company 1200000 Equity Shares of Rs. 5/- each representing 9.80% of Shareholding of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Overview of the Indian Economy:

India saw a decline in its growth rate from 6.1% in FY2018-19 to 4.2% in FY 2019-20.The slowdown was attributed to weakened investments slow domestic consumer demand. Earlysigns of improvement were visible at the end of 2019 and momentum was building up inJanuary and February 2020 following good harvest and positive trends in consumption. Thiswas engulfed by the Covid-19 pandemic and consequent nationwide lockdown measuresimplemented by the end of March 2020. The virus not just affected human health but alsoseverely impacted businesses and the society at large. With a prolonged countrywidelockdown global economic downturn and associated disruption of demand and supply chainsthe economy is likely to face a protracted period of slowdown.

In response to combat the Covid-19 impact various measures have been initiated by theGovernment announced a financial stimulus of about 20 trillion accounting for 10% of GDP.The package aims at promoting self-reliance in India through the ‘Atmanirbhar BharatAbhiyan and urges the country to choose ‘Made-in-India' products and brands overtheir foreign made counterparts. This is expected to provide support to national consumerfacing brands providing value products additionally initiatives were also taken tosupport the banking system ease credit availability and revive consumption throughreforms in corporate and personal tax norms. Along with this the recent decline in oilprices will help in lowering the import bill and provide a cushion to various industrieshaving oil as their raw material.

Outlook:

India's GDP is expected to contract in FY 2020-21 attributing the downward revision toCovid-19 induced supply demand shocks. Although the Government's commitment towardstructural reforms and social welfare measures will help in economic recovery. Furtherresolution for Atmanirbhar Bharat along with collective effort of all stakeholders willcontribute to rebuilding a strong economy.

Industry Structure and Development:

The growth of Company's Services is based on the push-and-pull effects of Demand andSupply determinants like the economic trends in India & Outside growth ofinfrastructure. It always remains key area of the Company to provide innovative Service indesign and finishing to the customers without compromising with quality. Today the perhead income in India is increased which converted into purchasing power of a person.However looking to the stability of Central Government clear vision and mission ofGovernment to provide Stable income to every family at possible level etc. the growth rateof this industry is expected around 7 to 8% in coming year. The population in India hasthe youngest persons in the world. The mixture of newness and economic productivity isresult into investments in interior as well as exterior decoration. In India urbanizationis the big matter which may generate more demand for Decoration Services and will resultinto increase in demand of associated products.

Opportunities and Threats: Opportunities:

_ Good Brand Image: Company has good brand image and quality Services in theIndian market.

_ Wide Service range: Company has very wide service coverage for social andcultural events.

_ Superiority over its competitors: Company remains eager in providing latestdesigns and Service to its customers.

_ Online Services: Company Provide Online Services to its Customer. The companywill take effective steps to take benefit of this opportunity.

_ Expand Market Network: The Company continues to expand its marketing networksby appointing Consignment Agent branches distributors dealers etc. in various states inall over the country.

Threats:

_ High Competition Era: The Decor Industry has entered into the orbit of thehigh competition. The market fights are set to intensify with unstoppable capacity buildup. The Competition from both unorganized and other organized players leading todifficulties in improving market share.

_ Manpower: The one of the common problem emerged for finding talent withcompetence or even skilled man power for Decor industries irrespective of the companyBrand or Size.

_ Under cutting of price: Due to high competitions in market the competitorsare doing price cutting of Services to compete or keep their existence in markets which isultimate big problems for the industries.

15

_ New Entrance: More and more new organized players are entering into marketwhich will increase competition in organized sector also.

Segment–wise Financial Performance:

Decorative commercial and other Service division is acting very soundly. The companyis also focusing to capture rural market along with urban market. Turnover of the companyincreased significantly from Rs. 6.22 Cr to Rs. 7.02 Cr as compared to previous financialyear.

During the year Company has entered into a major service agreement with Dayaji AnavilKedavni Mandal for its six properties in the city of Surat Gujarat for DecorationBusiness. This agreement is likely to have major impact on the performance of the Company.

The company has also planned course of action for achieving more improved margins bybetter control over fixed overheads and better resource management in the next year.Directors are hopeful for higher turnover and improved margins for the next year.

Future Outlook:

The Company's outlook for the year 2020-21 is to add more products in the product rangeas per requirement in the market. Due to unexpected effects of Covid 19 pandemic allsocial and cultural events have been restricted and a results FY 2020-21 may prove to bevery tough for the Company.

After at the time the strict actions taken by the government for restricting thespread of COVID 19 may result in normalcy.

Internal Control Systems and their Adequacy:

Company has an adequate Internal Controls system aimed at achieving efficiency inoperations optimum utilization of resources and compliance with all applicable laws andregulations. Your company has internal control Department which carried followingactivities on regular basis.

_ Reviewing accounting system and related controls.

_ Examining management of financial and operating information.

_ Examining the economy efficiency effectiveness and proprietary ofoperations.

_ Identifying the risks in relation to key business processes and verify whetheran effective control exists to mitigate these risks.

_ Suggesting measures for optimizing the Business Process Controls.

_ Reviewing adherence to corporate policies.

_ To examine and audit the areas in consultation with the management and toreport on critical issues the internal controls Department headed by Internal Auditor ofthe company. The Company's internal control system is designed to ensure managementefficiency measurability and verifiability reliability of accounting and managementinformation compliance with all applicable laws and regulations and the protection ofthe Company's assets and so that the main company risks (operational compliance-relatedeconomic and financial) are properly identified and managed over time. The Board ofDirectors responsible for the internal control system sets the guidelines verifying itsadequacy effectiveness and application.

Material Developments in human resources / industrial relations front including numberof people employed:

The Company always recognizes the importance of manpower. Company promotes employees toattend outside seminars or programs related to their fields and motivational whichencourage them to make contribution toward company family and nation at large. Companyalso encourages to the employees to offer their creative suggestions for development intheir respective areas which are thoroughly discussed in periodical meetings. The companyenjoyed excellent relationship with workers and staff at its manufacturing plants andadministrative office. The Company has been maintaining cordial and healthy IndustrialRelations which has helped to a great extent in achieving the upper growth.

Discussion on Financial Performance with respect to operational performance:

During the year under review Company earned net profit of Rs. 33.09 Lakhs compared tolast years' net profit of Rs. 19.26 Lakhs.

During the year 2019-20 Company has completed a major contract of Rs. 2.50 Cr. of LokSabha Election of Government of India. During the year Company has entered into a NewService Agreement for Decoration Business with Dayaji Anavil Kedavni Mandal which owns Sixproperties in the City of Surat Gujarat. Company is likely to have major impact on thefinancial performance in the coming years.

Caution Statement:

Statements made in the Management Discussion and Analysis describing the various partsmay be "forward looking statement" within the meaning of applicable securitieslaws and regulations. The actual results may differ from those expectations depending uponthe economic conditions changes in Govt. Regulations and amendments in tax laws and otherinternal and external factors.

For Shangar Decor Limited
By Order of the Board
Sd/- Sd/-
Samirbhai R. Shah Saumil Shah
Managing Director Director
DIN 00787630 DIN: 01601299

Date: 05th December 2020

Place: Ahmedabad

.