To,
The Members,
Your Directors are pleased to present the 29th Annual Report on the business and operations of the Company along with the Audited Financial Statement for the Financial Year ended on 31st March, 2024.
1. FINANCIAL RESULTS:
The financial performance of the Company for the Financial Year ended on 31st March, 2024 and for the previous financial year ended on 31st March, 2023 is given below:
(Rs. In Lakhs)
2. OPERATIONS:
Total revenue from operations for the FY 2023 24 rose to Rs. 1299.41 Lakhs against Rs. 966.72 Lakhs during the previous FY 2022 23. The Company has incurred Profit before tax for the FY 2023 24 Rs. 106.45 Lakhs against Rs. 27.76 Lakhs during the previous FY 2022 23. The Net Profit after tax for the Financial Year was Rs. 75.26 Lakhs compared to Rs. 20.19 Lakhs during the previous FY 2022-23. The Directors are continuously looking for the new avenues for future growth of the Company and expect more growth in the future period.
3. CHANGE IN NATURE OF BUSINESS, IF ANY:
During the Financial Year 2023-24, there was no change in nature of Business of the Company.
4. WEBLINK OF ANNUAL RETURN:
Pursuant to Section 92(3) read with Section134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the Company's website at www.shangardecor.com.
5. SHARE CAPITAL:
A. AUTHORISED SHARE CAPITAL:
The authorized share capital of the Company as on 31st March, 2024 is Rs. 7,00,00,000/- (Rupees Seven Crores Only) divided into 1,40,00,000 (One Crores Forty Lakhs) Equity Shares of Rs. 5/- (Rupees Five Only) each.
B. PAID-UP SHARE CAPITAL:
The paid-up share capital of the Company as on 31st March, 2024 is Rs. 6,12,02,000/- (Rupees six crores twelve lakhs two thousand only) divided into 1,22,40,400 (one crores twenty-two lakhs forty thousand four hundred) equity shares of Rs. 5/- (Rupees five only).
6. DIVIDEND:
To conserve the resources for future prospect and growth of the Company, the Board of Directors do not recommend any dividend for the Financial Year 2023-24 (Previous year NIL).
7. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to Section 124 of the Companies Act, 2013, the amount of dividend remaining unpaid or unclaimed for under review, there was no unpaid or unclaimed dividend in the "Unpaid Dividend Account" lying for a period of period of seven years shall be transferred to the Investor Education and Protection Fund ("IEPF"). During the year seven years from the date of transfer of such unpaid dividend to the said account. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund.
8. TRANSFER TO RESERVES:
The Profit of the Company for the Financial Year ending on 31st March, 2024 is transferred to profit and loss account of the Company under Reserves and Surplus.
9. DISCLOSURES RELATING TO HOLDING, SUBSIDIARY, ASSOCIATE COMPANY AND JOINT VENTURES:
The Company does not have any Holding / Subsidiary / Associate Company and Joint Venture.
10. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY
WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATES AND THE DATE OF THE REPORT:
There have been no material changes and commitments, which affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report except the following:
1. The Board of Directors in their Board Meeting held on 03.09.2024 have approved the resolution for further issue of shares through Rights Issue.
11. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
No significant material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future.
12. BOARD MEETINGS:
The Directors of the Company met at regular intervals at least once in quarter with the gap between two meetings not exceeding 120 days to take a view of the Company's policies and strategies apart from the Board Matters. During the year under the review, the Board of Directors met 6 (Six) times. The details of Board Meetings and attendance therein are as under:
13. DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134 (3)(c) and Section 134(5) of the Companies Act, 2013, to the best of their knowledge and belief the Board of Directors hereby submit that:
a. In the preparation of the Annual Accounts, for the year ended on 31st March, 2024 the applicable accounting standards have been followed and there are no material departure from the same; b. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year and of the profit of the company for the financial year ended on 31st March, 2024; c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d. The Directors had prepared the Annual Accounts on a going concern basis; e. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively and; f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14. CORPORATE SOCIAL RESPONSIBILITY (CSR):
The provisions of Section 135 of the Companies Act, 2013 is not applicable to the Company as the Company does not fall under the criteria limits mentioned in the said section of the Act.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE
COMPANIES ACT,2013:
The Company has not given any loans, guarantees, securities covered or investments made under the provisions of section 186 of the Companies Act, 2013.
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
The Company has not entered into any related party transaction, as provided in Section 188 of the Companies Act, 2013, with the related party. Hence, Disclosure as required under Section 188 of the Companies Act, 2013 is not applicable to the Company.
17. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required under Regulation 34 and Schedule V of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report, and provides the Company's current working and future outlook as per Annexure - 1.
18. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has in place adequate internal financial controls with reference to financial statement across the organization. The same is subject to review periodically by the internal audit cell for its effectiveness. During the financial year, such controls were tested and no reportable material weaknesses in the design or operations were observed. The Statutory Auditors of the Company also test the effectiveness of Internal Financial Controls in accordance with the requisite standards prescribed by ICAI. Their expressed opinion forms part of the
Independent Auditor's report.
Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitized and embedded in the business processes.
Assurance on the effectiveness of internal financial controls is obtained through management reviews, control self-assessment, continuous monitoring by functional experts. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.
During the year, no reportable material weakness was observed.
19. RESERVES & SURPLUS:
20. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF THE RISK MANAGEMENT POLICY
OF THE COMPANY:
The Company has framed formal Risk Management framework for risk assessment and risk minimization for Indian operation which is periodically reviewed by the Board of Directors to ensure smooth operations and effective management control. The Audit Committee also reviews the adequacy of the risk management frame work of the Company, the key risks associated with the business and measures and steps in place to minimize the same.
21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy, technology absorption etc. as required to be given under section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014, is not given as the Company has not taken any major step to conserve the energy etc. Further, there was no foreign exchange earnings and outgo during the financial year 2022-23.
22. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION:
The Remuneration policy is directed towards rewarding performance based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice and is designed to create a high-performance culture. It enables the Company to attract, retain and motivate employees to achieve results. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time. The Company's Policy on director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178 (3) of the Act is available on the website of the Company at www.shangardecor.com.
23. SECRETARIAL STANDARDS:
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI). The Company has devised proper systems to ensure compliance with its provisions and is in compliance with the same.
24. REPORTING OF FRAUDS BY THE AUDITORS:
During the year under review, neither the Statutory nor the Secretarial Auditors has reported to the Audit Committee under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's Report.
25. STATE OF COMPANY'S AFFAIRS:
Management Discussion and Analysis Report for the year under review, as stipulated in Regulation 34(2)(e) of SEBI Listing Regulations is given as a separate part of the Annual Report. It contains a detailed write up and explanation about the performance of the Company.
26. STATEMENT ON ANNUAL EVALUATION OF BOARD'S PERFORMANCE:
The Board evaluated the effectiveness of its functioning, that of the Committees and of individual Directors, pursuant to the provisions of the Act and SEBI Listing Regulations. The Board sought the feedback of Directors on various parameters including:
? Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); ? Structure, composition, and role clarity of the Board and Committees; ? Extent of co-ordination and cohesiveness between the Board and its Committees; ? Effectiveness of the deliberations and process management; ? Board / Committee culture and dynamics; and ? Quality of relationship between Board Members and the Management.
The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The Chairman of the Board had one-on-one meetings with each Independent Director and the Chairman of Nomination Independent Directors. These meetings were intended to obtain Directors' inputs on effectiveness of and Remuneration Committee had one-on-one meetings with each Executive and Non-Executive, Non- the Board / Committee processes.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole, and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.
The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.
In the Board meeting that followed the meeting of the independent directors and the meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was discussed.
The evaluation process endorsed the Board Members' confidence in the ethical standards of the Company, the resilience of the Board and the Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management, and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities and fiduciary duties. The Board carried out an annual performance evaluation of its own performance and that of its committees and individual directors as per the formal mechanism for such evaluation adopted by the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee.
The performance evaluation of the Chairman, the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The exercise of performance evaluation was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board by way of individual feedback from directors.
The evaluation frameworks were the following key areas:
a) For Non-Executive & Independent Directors:
? Knowledge
? Professional Conduct
? Comply Secretarial Standard issued by ICSI Duties ? Role and functions b) For Executive Directors: ? Performance as leader
? Evaluating Business Opportunity and analysis of Risk Reward Scenarios ? Key set investment goal ? Professional conduct and integrity ? Sharing of information with Board. ? Adherence applicable government law
The Directors expressed their satisfaction with the evaluation process.
27. MANAGING THE RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS PRACTICES:
A. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The report concerns about unethical behavior, actual or suspected fraud or violation of Company'sCompany has established vigil mechanism and framed whistle blower policy for Directors and employees to Code of Conduct or Ethics Policy.
B. The Company has framed "Business Conduct Policy". Every employee is required to review and sign the policy at BUSINESS CONDUCT POLICY: the time of joining and an undertaking shall be given for adherence to the policy. The objective of the policy is to conduct the business in an honest, transparent and in an ethical manner. The policy provides for anti-bribery and avoidance of other corruption practices by the employees of the Company.
28. LOANS FROM DIRECTOR / RELATIVE OF DIRECTOR:
During the year under review, the Company has not entered into any materially significant related party transactions which may have potential conflict with the interest of the Company at large. Suitable disclosures as required are provided in AS-18 which is forming the part of the notes to financial statement.
29. PARTICULARS OF EMPLOYEES:
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are not applicable to the Company as none of the Employees of the Company has received remuneration above the limits specified in the Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 during the Financial Year 2023- 24.
30. DETAILS OF APPLICATION MADE OR PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE
2016:
During the year under review, there were no applications made or proceedings pending in the name of the Company under the Insolvency and Bankruptcy Code 2016.
31. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND
VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS:
During the year under review, there has been no onetime settlement of Loans taken from Banks and Financial Institutions.
32. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Directors and Key Managerial Personnel of the Company as on 31.03.2024 are summarized below:
* Mr. Manish Bachani was appointed as Independent Director w. e. f. 19.10.2023 * Mr. Chinu Kalal was appointed as Independent Director w. e. f. 19.10.2032 * Mr. Prasanna Pandya resigned from the Company w. e. f. 21.12.2023.
Ms. Gitika Mishra, Company Secretary and Compliance officer resigned from the Company w. e. f. 19th December, 2023.
33. DECLARATION BY INDEPENDENT DIRECTORS:
Independent Directors of the Company have confirmed to the Board that they meet the criteria of Independence as specified under Section 149 (6) of the Companies Act, 2013 and are qualified to be Independent Director. They also confirmed that they meet the requirements of Independent Director as mentioned under Regulation 16(1)(b) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015. The confirmations were noted by the Board.
34. CORPORATE GOVERNANCE:
As per Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, quarterly compliance report on requirement Corporate Governance is not applicable to the Company.
35. DEPOSITS:
As per Section 73 of the Companies Act, 2013, the Company has neither accepted nor renewed any deposits during the financial year. Hence, the Company has not defaulted in repayment of deposits or payment of interest during the financial year.
36. FORMAL ANNUAL EVALUATION PROCESS BY BOARD:
Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, the Board has carried the evaluation of its own performance, performance of Individual Directors, Board Committees, including the Chairman of the Board on the basis of attendance, contribution towards development of the Business and various other criteria as recommended by the Nomination and Remuneration Committee of the Company. The evaluation of the working of the Board, its committees, experience and expertise, performance of specific duties and obligations etc. were carried out. The Directors expressed their satisfaction with the evaluation process and outcome.
In a separate meeting of Independent Directors, the performances of Executive and Non - Executive Directors were evaluated in terms of their contribution towards the growth and development of the Company. The achievements of the targeted goals and the achievements of the expansion plans were too observed and evaluated, the outcome of which was satisfactory for all the Directors of the Company.
37. AUDITORS:
A. Statutory Auditor:
M/s. S. D. Mehta & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 137193W), were appointed as the Statutory Auditors of the Company from the conclusion of 24th Annual General Meeting held in the year 2019 till the conclusion of 29th Annual General Meeting of the Company. As their tenure is completing in ensuing AGM. The Board has proposed reappointment of M/s. S. D. Mehta & Co., as a statutory auditor of the company from the conclusion of 29th Annual General Meeting till the 34th annual general meeting to be held in year 2029. The Auditor's report for the financial year ended on 31st March, 2024 has been issued with an unmodified opinion by the Statutory Auditors and the report is part of the Annual Report.
B. Secretarial Auditor:
The Board of Directors pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has appointed Ms. Bhumika Ranpura, Proprietor of M/s. Bhumika Ranpura & Associates, Company Secretaries, Ahmedabad as a Secretarial Auditor of the Company to conduct Secretarial Audit for the Financial Year 2023-24. The Secretarial Audit Report for the Financial Year 2023-24 is annexed herewith as Annexure 2 in Form MR-3. The Secretarial Audit Report contains the qualification which calls for explanation. The comments of the Board on the qualification are as under.
C. Cost Auditor:
Maintenance of cost records as specified under Companies Act, 2013 is not applicable to the Company.
Comment On Secretarial Auditors' Report:
The Secretarial Auditor of the Company has qualified the Secretarial Audit Report for the year 2023 24. The Comments of the Board are as under:
1) Submission of Reconciliation of Share Capital Audit Report as per Regulation 76 of SEBI (Depository and Participant) Regulations, 2018 for the quarter Ended on 30th June, 2023 was not submitted.
The Company has not submitted the reports on time. However, the Company has made the compliance good now. The Board assures the due compliance from now onwards.
2) Company has not appointed Internal Auditor during the FY 2023 24.
The Company has appointed the internal auditor. However, the relevant disclosure for appointment of Internal Auditor and relevant E form MGT 14 has not been filed for the same. The Company will make the good compliance thereof.
3) Installation of SDD Software as per SEBI (PIT) Regulations, 2015 during the year FY 2023 24.
The Company has purchased and installed the SDD Software now. The Company makes regular relevant entries in the SDD Software.
4) During the year under review, following forms were not filed by the Company on time: E-form MGT-14 for (1) approval of financial statement, and (2) the Board's report for the Financial Year ended on 31st March, 2023 (3) for appointment of internal auditor and (4) secretarial auditor was not filed as per Section 179(3) of the Companies Act, 2013.
The Company will make the good compliance now. The pending e forms will be filed now.
The Board had assigned the secretarial work the professional member. However, due to their failure to comply with the requirements, the Board has appointed new Professional member for looking after all the compliances.
38. DISCLOSURES:
A. Audit Committee:
During the year under review, 4 meetings of members of the Audit Committee were held. The details of the Audit Committee are as tabulated below:
* Mr. Prasanna Pandya resigned from the Audit Committee w. e . f. 19.10.2023. * Mr. Manish Bachani was appointed as Chairman w.e .f. 19.10.2023. * Mr. Chinu Kalal was appointed as Member w.e .f. 19.10.2023. * Mr. Saumil Shah resigned from the Committee w.e .f. 19.10.2023.
B. Nomination and Remuneration Committee:
During the year under review, 4 meetings of members of the Nomination and Remuneration Committee were held. The details of the Nomination and Remuneration Committee are as tabulated below:
* Mr. Prasanna Pandya resigned from the NRC Committee w. e . f. 19.10.2023. * Mr. Manish Bachani was appointed as Member w. e .f. 19.10.2023. * Mr. Chinu Kalal was appointed as Chairman w.e .f. 19.10.2023. * Mr. Saumil Shah resigned from the Committee w.e .f. 19.10.2023.
C. Stakeholders Relationship Committee:
During the year under review, 2 meetings of members of the Stakeholders Relationship Committee were held. The details of the Stakeholders Relationship Committee are as tabulated below:
* Mr. Prasanna Pandya resigned from the Committee w.e .f. 19.10.2023
* Mr. Manish Bachani was appointed as Member of the committee w.e .f. 19.10.2023
39. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013:
The Company has always been committed to provide a safe and conducive work environment to its employees. Your Directors further state that during the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 as confirmed by the Internal Complaints Committee as constituted by the Company.
40. INDUSTRIAL RELATIONS:
The Directors are pleased to report that the relations between the employees and the management continued to remain cordial during the year under review.
41. MAINTENANCE OF COST RECORDS:
The provisions relating to maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, are not applicable to the Company and accordingly such accounts and records are not required to be maintained.
42. ACKNOWLEDGEMENTS:
Your Directors would like to express their sincere appreciation for the co-operation and assistance received from the Bankers, Regulatory Bodies, Stakeholders including Financial Institutions, Suppliers, Customers and other business associates who have extended their valuable sustained support and encouragement during the year under review.
Your Directors take this opportunity to recognize and place on record their gratitude and appreciation for the commitment displayed by all executives, officers and staff at all levels of the Company. We look forward for the continued support of every stakeholder in the future.