Dear Members,
Your Directors are pleased to present the 33rd Annual Report of your company
on the operations and performance along with the Audited Standalone and Consolidated
Financial Statements and Auditors Report thereon for the financial year ended on 31st
March, 2023.
FINANCIAL HIGHLIGHTS
The financial performance of your Company for the financial year ended 31st
March, 2023 is summarized below:
Rs in Crores
Particulars |
STANDALONE |
CONSOLIDATED |
|
31st March, 2023 |
31st March, 2022 |
31st March, 2023 |
31st March, 2022 |
Total Revenues |
639.10 |
906.90 |
627.94 |
886.15 |
Less: Total Expenditure |
624.80 |
765.49 |
623.55 |
765.50 |
Profit / (Loss) before interest, depreciation, extraordinary item and
tax |
14.30 |
141.41 |
4.39 |
120.65 |
Less: Depreciation and Interest |
8.95 |
11.29 |
8.95 |
11.29 |
Profit / (Loss) after depreciation and Interest but before
extraordinary item and Tax. |
5.35 |
130.12 |
(4.56) |
109.36 |
Less: Extraordinary item |
- |
- |
- |
- |
Profit after Extraordinary item but before tax |
5.35 |
130.12 |
(4.56) |
109.36 |
Less: Tax Expense / Deferred tax |
(1.34) |
27.25 |
(1.35) |
27.25 |
Net Profit available for Appropriation |
6.69 |
102.86 |
(3.21) |
82.11 |
Balance to be carried forward |
6.69 |
102.86 |
(3.21) |
82.11 |
STATE OF COMPANYS AFFAIRS / PERFORMANCE OVERVIEW
During the year under review Total revenue from Operations and from other operating
income decreased from Rs 906.90 crores in the previous year to Rs
639.10 crores. Company has registered a profit of 6.69 crores in comparison to
the profit of Rs 102.83 crores during previous year.
During the year under review, the Company has made full & final payments to ARCS
as per the terms of settlement agreements with banks & financial institutions.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION AND CHANGE IN BUSINESS
There have been no material change(s) and commitment(s), except elsewhere stated in
this report, affecting the financial position of the Company between the end of the
financial year of the Company i.e., 31st March, 2023, and the date of this
Report. There has been no change in the nature of business of the Company during the
financial year ended on 31st March, 2023.
DIVIDEND
Your Board has not recommended any dividend for the financial year ended 31st
March, 2023 in order to fund companys projects and assignments in its development,
expansion and implementation stages & conservation of funds.
BUSINESS ACTIVITY
The company is engaged in manufacturing of wide range of Stainless Steel, alloy &
Special steel, Carbon/Mild Steel and Armour Steel in Flat and Long products. There has
been no change in the nature of business of the Company.
CHANGES IN AUTHORISED SHARE CAPITAL:
During the financial year 2022-23 there was no change in the Authorised Share Capital
of your Company.
CHANGES IN PAID-UP SHARE CAPITAL:
During the financial year 2022-23 there was no change in the Paid-up Share Capital of
your Company.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The company is not having holding or subsidiary company during the year and no other
company has become holding / subsidiary/ joint venture. However, it has one associate
company, details are as under:
Sr. Name of the Company No. |
CIN/GLN |
Concern |
% of shares held by Company |
Applicable Section of the Companies Act, 2013 |
1. S.A.L. Steel Limited |
L29199GJ2003PLC043148 |
Associate |
35.61% |
2(6) |
The Consolidated Financial Statements of the Company and its Associate, viz., SAL Steel
Limited, has been prepared in accordance with the relevant Ind AS of the Institute of
Chartered Accountants of India, duly audited by the Statutory Auditors and form part of
the Annual Report and are reflected in the Consolidated Accounts.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient
features of the financial statements of the Companys associate in Form AOC-1 is attached
to this report as Annexure - 1.
DEPOSITS
The Company has not accepted/received any deposits during the year under report,
falling within the ambit of Section 73 of the Companies Act, 2013 (the act) and the
Companies (Acceptance of Deposits) Rules, 2014 and no outstanding against the same was
pending at the end of financial year 2022-23.
DETAILS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT,
2013
During the year under review the Company has not made any inter corporate loans,
investments, given any corporate guarantee to any other body corporate, subsidiary,
associate or any other company.
LISTING OF SHARES
The equity shares of the Company are listed on the National Stock Exchange of India
Ltd. (NSE) and BSE Limited (BSE). The listing fee for the year 2023-24 has already been
paid to the credit of both the Stock Exchanges.
DETAILS OF DIRECTORS OR KMPS APPOINTMENT OR RESIGNATION
The Board of Directors consists of 8 members, of which 4 are Independent Directors
including one Women Independent Director.
Directors:
During the financial year 2022-23, there were no changes in the composition of Board.
However, post 31st March, 2023 and before the date of signing of this report,
Shri G.M. Shaikh (DIN: 00367186), Independent Director resigned w.e.f. close of business
hours on 25th August, 2023 due to personal reasons. To fill the casual vacancy,
the Board of Directors based on the approval and recommendation of members of Nomination
and Remuneration Committee has appointed Shri Ambalal Chhitabhai Patel, (DIN: 00037870) as
Additional Director (Independent Director, Non-Executive) w.e.f. 25th August,
2023. The Board of Directors in the Board Meeting dated 25th August, 2023, have
considered Shri Ambalal Chhitabhai Patel, (DIN: 00037870), diverse skills, leadership
capabilities, accounting and financial expertise, general management and Industry
knowledge. Shri Ambalal Chhitabhai Patel has done Bachelors Degree in Metallurgical
Engineering, Bachelor of Science (Chemistry) and on the recommendation of the Nomination
and Remuneration Committee, proposes the name of Shri Ambalal Chhitabhai Patel, (DIN:
00037870), to the Members to appoint as an Independent Director (Non-Executive) of the
Company by way of Special Resolution at the ensuing 33rd Annual General Meeting
of the Company for the period of 5 (five) consecutive years commencing from 25th
August, 2023 up to 24th August, 2028. The Independent Director shall not be
liable to retire by rotation.
Key Managerial Person:
During the year under review there was no change with respect to appointment or
resignation of Key Managerial Persons. However, post 31st March, 2023, Shri
Vinay Kumar Mishra (M. No. F 11464), has resigned w.e.f. 20th April, 2023 from
the post of Company Secretary & Compliance Officer (Key Managerial Person) and Shri
Mayank Chadha (M. No. A 54288), has appointed w.e.f. 29th May, 2023 on the
position of Company Secretary & Compliance Officer (Key Managerial Person) of the
Company in terms of Section 203 of Companies Act ,2013 and Regulation 6 of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
MEETINGS OF THE BOARD AND COMMITTEES
The Board met 5 (Five) times during the financial year were held on the following dates
28th May, 2022, 28th June, 2022, 09th August, 2022, 11th
November, 2022 & 06th February, 2023. The details of meetings of the Board
and various Committees of the Board of your Company are given in the Corporate Governance
Report annexed herewith and forms part of this report. The intervening gap between the
Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from each of the Independent Directors that they,
respectively, meet the criteria of independence prescribed under Section 149 read with
Schedule IV of the Act and rules made thereunder, as well as Regulations 16 and 25(8) of
the Listing Regulations. Based on the declarations received, the Board considered the
independence of each of the Independent Directors in terms of above provisions and is of
the view that they fulfil the criteria of independence and are independent from the
management.
In the opinion of the Board, there has been no change in the circumstances which may
affect their status as Independent Directors of the Company and the Board is satisfied of
the integrity, expertise, and experience (including proficiency in terms of Section 150(1)
of the Act and applicable rules thereunder) of all Independent Directors on the Board. The
Board of Directors of your Company confirms that the Independent Directors have given
their confirmation / declaration to your Company, that in terms of Rule 6(3) of the
Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, they have
registered themselves with the Independent Directors database maintained by the Indian
Institute of Corporate Affairs and will undergo the online proficiency self-assessment
test within the specified timeline, unless exempted under the aforesaid Rules.
BOARD DIVERSITY
A diverse Board enables efficient functioning through differences in perspective and
skill, and also fosters differentiated thought processes at the back of varied industrial
and management expertise, gender, knowledge and geographical background. The Company
follows diverse Board structure.
BOARD EVALUATION
As per the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and
Disclosure Requirements) Regulations 2015, the formal annual evaluation was carried out
for the Boards own performance, its committee & Individual Directors. The manner and
detail in which evaluation was carried out is stated in the Corporate Governance Report
which is annexed and forms a part of this report.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has in place adequate internal financial controls with reference to
financial statements and such internal financial controls are operating effectively. Your
Company has adopted policies and procedures for ensuring the orderly and efficient conduct
of its business, including adherence to the Companys policies, safeguarding of its
assets, prevention and detection of frauds and errors, accuracy and completeness of the
accounting records, and timely preparation of reliable financial disclosures.
The details in respect of internal financial control and their adequacy are included in
Management Discussion and Analysis Report, which forms part of this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars related to conservation of energy, technology absorption and foreign
exchange earnings and outgo as required to be disclosed under Section 134(3) (m) of the
Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure
- 2 to this Report.
RISK MANAGEMENT
The Company has in place a robust risk management framework which identifies and
evaluates business risks and opportunities. The Company recognises that the applicable
risks need to be managed and mitigated to protect the interest of the shareholders and
stakeholders, to achieve business objectives and enable sustainable growth. The Audit
committee ensures that the Company is taking appropriate measures to achieve prudent
balance between risk and reward in both ongoing and new business activities. The Committee
reviews strategic decisions of the Company and on regular basis, reviews the Companys
portfolio of risks and considers it against the Companys Risk Appetite. The Committee
also recommends changes to the Risk Management Technique and / or associated frameworks,
processes and practices of the Company.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company had implemented a vigil mechanism, where by employees, directors and other
stakeholders can report matters such as generic grievances, corruption, misconduct, fraud,
misappropriation of assets and non-compliance of code of conduct to the Company. The
policy safeguards the whistleblowers to report concerns or grievances and also provides a
direct access to the Chairman of the Audit Committee. During the year under review none of
the personnel has been denied access to the Chairman of Audit Committee.
DIRECTORS RESPONSIBILITY STATEMENT
In Compliance with Section134(3) (c) and Section 134(5) of the Companies Act, 2013, the
Board of Directors to the best of their knowledge and hereby confirm the following:
a) in the preparation of the annual accounts for the financial year ended 31st
March, 2023, as far as possible and to the extent, if any, accounting standards mentioned
by the auditors in their report as not complied with, all other applicable accounting
standards have been followed along with proper explanation relating to material departure;
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 the financial year and
profit and loss account of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act 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 were 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.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The policy of the Company on Directors appointment and remuneration, including
criteria for determining qualifications, independence and other matters as provided under
sub-section (3) of Section 178 of the Companies Act, 2013 is available on the Companys
website at www.shahalloys.com.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE {DISCLOSURE AS REQUIRED UNDER SECTION 22
OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT,
2013}
In accordance with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, a committee has been established at the
offices for this purpose. There were no complaints pending for the redressal at the
beginning of the year and no complaints received during the financial year.
PARTICULARS OF THE EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure
- 3. Further, particulars of employees remuneration, as required under section 197(12)
of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are not applicable since there was no
employee of the Company including Executive Directors who was in receipt of remuneration
in excess of the limits set out in the said rules.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by your Company during the financial
year under review with related parties were in the ordinary course of business and on an
arms length basis and is in compliance with the applicable provisions of the Act and the
Listing Regulations.
All related party transactions are placed before the Audit Committee and before the
Board for their approval. Prior omnibus approval of the Audit Committee is obtained for
the transactions which are of a foreseen and repetitive nature. The transactions entered
into pursuant to the omnibus approval so granted are audited and a statement giving
details of all related party transactions is placed before the Audit Committee and to the
Board of Directors at their Board Meetings for their approval on a quarterly basis.
There are no material related party transactions which are not in ordinary course of
business or which are not on arms length basis and hence there is no information to be
provided as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule
8(2) of the Companies (Accounts) Rules, 2014. The details of transactions with related
parties as required are provided in Form AOC-2 annexed as Annexure - 4. The policy
on Materiality on Related Party Transactions and manner of dealing with Related Party
Transactions as approved by the Board is uploaded on your Companys website www.shahalloys.com.
None of the Independent Directors has any pecuniary relationships or transactions
vis-a-vis your Company.
A statement of related party transactions pursuant to Indian Accounting Standard (Ind
AS) - 24 forms a part of notes to accounts.
DISCLOSURE OF ACCOUNTING TREATMENT
The financial statements have been prepared in accordance with Indian Accounting
Standards (Ind AS). The Company has prepared these financial statements to comply in all
material respects with the Ind AS, notified under section 133 of the Companies Act, 2013
("the Act") read together with paragraph 7 of the Companies (Accounts) Rules
2014.
CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 of the Companies Act, 2013 and Rules made
thereunder, the amount required to be spent on CSR activities during the year under
review, is 1,27,58,687/- and the Company has spent 1,27,60,000/- during
the Financial Year ended 31st March, 2023. The requisite details of CSR
activities carried by the Company pursuant to Section 135 of the Companies Act, 2013 is
annexed as Annexure - 5. The composition and other details of the CSR Committee is
included in the Corporate Governance Report which form part of the Boards Report. The
Board in its meeting held on 29th May, 2023, revised the existing CSR Policy of
the company to harmonise with the amended carried out by the Ministry of Corporate Affairs
in the Companies (CSR Policy Rules), 2014.
AUDITORS AND AUDIT REPORTS
a) Statutory Auditors
Members at its 32nd Annual General Meeting held on 23rd
September, 2022 approved the re-appointment of M/s. Parikh & Majmudar, Chartered
Accountants, as statutory auditors for a terms of five years as per provisions of the
Companies Act, 2013.
Statutory Auditors Report
The observations of Statutory Auditor in its reports on standalone and consolidated
financials are self-explanatory and therefore do not call for any further comments.
Details in respect of frauds reported by auditors
There were no instances of fraud reported by the auditors.
b) Cost Auditors
In terms of sub-section (1) of Section 148 of the Act read with Companies (Cost Records
and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain
the cost records. Accordingly, such accounts and records have been maintained by the
Company. M/s. Ashish Bhavsar & Associates, Cost Accountants (Firm Regn. No. 000387),
were appointed as the Cost Auditors of the Company for auditing the cost records of the
Company for the financial year 2023-24, subject to ratification of their remuneration by
the Shareholders of the Company in the 33rd AGM of the Company. Accordingly, an
appropriate resolution seeking ratification of the remuneration for the financial year
2023-24 of M/s. Ashish Bhavsar & Associates, Cost Auditors, is included in the Notice
convening the 33rd AGM of the Company.
Disclosure on maintenance of Cost Records.
The Company made and maintained the Cost Records under Section 148 of the Companies
Act, 2013 (18 of 2013) for the Financial Year 2022-23.
c) Internal Auditor
The Company has appointed an Independent firm of Chartered Accountants to act as an
Internal Auditor as per suggestion of auditors and recommendation of the Audit Committee
in order to strengthen the internal control system for the Company.
d) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules
made thereunder, the Board of Directors has appointed M/s Kamlesh Shah & Co.,
Practicing Company Secretaries, as Secretarial Auditor to conduct Secretarial Audit of the
Company for the Financial Year 2023-24.
Secretarial Audit Report
In terms of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, a Secretarial Audit
Report given by the Secretarial Auditors in Form No. MR-3 is annexed with this Report as Annexure
- 6. There are no qualifications, reservations or adverse remarks made by Secretarial
Auditors in their Report.
Annual Secretarial Compliance Report
A Secretarial Compliance Report for the financial year ended 31st March,
2023 on compliance of all applicable SEBI Regulations and circulars/ guidelines issued
thereunder, was obtained from M/s Kamlesh Shah & Co., Practicing Company Secretaries,
Secretarial Auditor.
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
A certificate of Non-Disqualification of Directors for the Financial Year 2022-23,
pursuant to Regulation 34(3) and Schedule V Para C clause (10)0 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015) issued by Practicing Company
Secretary is annexed to this report as Annexure - 7.
CORPORATE GOVERNANCE REPORT
The Company is committed to observe good corporate governance practices. The report on
Corporate Governance for the financial year ended 31st March, 2023, as per
regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 forms part of this Annual Report. The requisite
Certificate from the Practicing Company Secretary of the Company confirming compliance
with the conditions of Corporate Governance is annexed to this Report as Annexure - 8.
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
A certificate of Non-Disqualification of Directors for the Financial Year 2022-23,
pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations
2015 issued by Practicing Company Secretary is annexed to this report as Annexure - 9.
BOARDS RESPONSE ON THE REMARKS MADE BY STATUTORY AUDITORS
The Directors submit their explanations to various observations made by the Auditors in
their report for the year 2022-23. Para nos. of Auditors Report and reply are us under:
Para 1 of Standalone and Consolidated Independent Auditors Report
On account of non-payment of principle and interest to the Banks, debts were declared
NPA by the Banks. Since Company has entered into onetime settlement with banks and
financial institutions (FI) and actively negotiating to settle the dues amicably with the
remaining Banks and FI, hence it did not provide for interest.
Para 2 of Standalone and Consolidated Independent Auditors Report
It is expected that the impact of "Effective Interest Method" to the Finance
Cost as per the Requirements of IND AS 109 on the financial Results will not be material
enough and hence, the Management has not given effect of the same in the consolidated
financial results.
Annexure A to Standalone Independent Auditors Report - Para viii
The disputed matter is subjudiced & pending with the authorities.
Para 3 of Consolidated Independent Auditors Report
It is expected that the loss of allowance if any as per Expected credit loss Method on
the financial assets will not be material enough and hence, the Management has not given
effect of the same in the consolidated financial results.
Any outstanding shown in the audited financial statement/audit report is not the
confirmation of debt.
DISCLOSURE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
The application was filed by one of the applicants against the Company under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016), but the company has disputed the
veracity of the application filed by the applicant as Financial Creditor of the Company
and the applicant has also failed to produce sufficient proof in respect of its claim.
The Company has filed an application under Section 65 of Insolvency and Bankruptcy
Code, 2016 against the application filed by the said applicant for investigation.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material order(s) were passed by the regulators/ courts which would
impact the going concern status of the Company and its future operations during the year
under review.
ANNUAL RETURN
In accordance with the provisions of Sections 92 and 134(3)(a) of the Act read with the
Companies (Management and Administration) Rules, 2014, the Annual Return in e-form MGT-7
for the financial year ended 31st March, 2023 has been uploaded on the website
of the Company at www.shahalloys.com.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the
following matters as there were no transactions on these matters during the year under
review:
• Details relating to deposits covered under Chapter V of the Act.
• Issue of equity shares with differential rights as to dividend, voting or
otherwise.
• Issue of shares (including sweat equity shares) to employees of the Company
under any scheme save and except Employees Stock Options Schemes referred to in this
Report.
• Neither the Managing Director nor the Whole-time Directors of the Company
receive any remuneration or commission from any of its subsidiaries.
• No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and Companys operations in future.
• No fraud has been reported by the Auditors to the Audit Committee or the Board.
• There has been no change in the nature of business of the Company.
• There was no instance of onetime settlement with any Bank or Financial
Institution during the Financial Year 2022-23.
APPRECIATION
Your Directors place on record its appreciation for the support and co-operation your
Company has been receiving from its investors, customers, vendors, bankers, financial
institutions, business associates, Central & State Government authorities, Regulatory
authorities and Stock Exchanges. Your Board looks forward for the long-term future with
confidence, optimisms and full of opportunities.
CAUTIONARY STATEMENT
Statement in the Boards Report and the Management Discussion and Analysis describing
your Companys objectives, expectations or forecasts may be forward-looking within the
meaning of applicable securities laws and regulations. Actual results may differ
materially from those expressed in the statement. Important factors that could influence
your Companys operations include global and domestic demand and supply conditions
affecting selling price of finished goods, input availability and prices, changes in
government regulations, tax laws, economic developments within the country and other
factors such as litigation and industrial relations
By order of the Board of Directors For Shah Alloys Limited
|
Sd/- |
|
Rajendra V. Shah |
Date: 25th August, 2023 |
Chairman |
Place: Santej, Gujarat |
(DIN: 00020904) |
Registered Office:
5/1 Shreeji House,
B/h M.J. Library,
Ashram Road,
Ahmedabad-380 006 CIN: L27100GJ1990PLC014698
+91-9892691696
