Shah Construction Company Ltd Directors Report

Dear members,

The Board of Directors is pleased to present the Companys 77^th annual report and Companys Audited Financial Statements for the financial year ended March 31, 2025.

1. FINANCIAL RESULTS

The Companys financial performance for the year ended March 31, 2025 is summarized below:

Financial Results: (Rupees in Lakhs)

2. RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANYS

The total income is Rs. 613.87 Lakhs in the current year compared to Rs. 456.17 Lakhs in the previous year.

The loss before tax suffered by the company has increased to Rs. 266.14 Lakhs for the year ended March 31, 2025 compared to Rs. 243.82 Lakhs in the previous year.

3. DIVIDEND

In view of the loss suffered, the Directors are unable to recommend any dividend on the equity shares for the Financial Year ended March 31, 2025.

4. TRANSFER TO RESERVES

In view of the loss suffered by the Company for the Financial Year ended March 31, 2025, no amount is proposed to be transferred to any reserves.

5. MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the company between end of the financial year and date of this report. There has been no change in the nature of business of the company.

Pursuant to an order dated 11^th June, 2025, issued by the Economic Offences Wing (EOW) of the Greater Mumbai Police, the Company has been directed not to create any further interest in the Companys property at Andheri until the filing of a charge sheet. This directive is in relation to an ongoing investigation concerning alleged criminal breach of trust and cheating under applicable laws.

The Company clarifies that this development has no impact on its financial position, business operations, or other activities.

6. DEPOSITS

During the year, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 ("Act") and the Companies (Acceptance of Deposits) Rules, 2014.

7. SECRETARIAL STANDARDS

The Directors state that the applicable Secretarial Standards i.e. SS-1 and SS-2 relating to the ‘Meetings of the Board of Directors and ‘General Meetings, respectively have been duly followed by the Company.

8. DIRECTORS RESPONSIBILITY STATEMENT Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards have been followed;

b) they have 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 as at March 31, 2025 and of the loss of the Company for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating; and

f) they had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.

9. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arms length basis and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required.

Members may refer to Note to the financial statement which sets out related party disclosures pursuant to IND AS.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the requirement to constitute a Corporate Social Responsibility Committee and undertake CSR activities is not applicable to the Company for the financial year 2024-25, as the Company does not meet prescribed thresholds under the Act.

11. RISK MANAGEMENT

The Company is not required to comply with the Regulation 21 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 ["SEBI (Listing Regulations)"]. However, the Company makes constant effort to identify, assess, report and monitor the risk associated with the business of the Company. The policy for risk management is updated in the website of the Company and the weblink of the same is https://www.shah-construction.in/.

12. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the financial statements. During the year such controls were tested and no reportable material weakness in the design or operation was observed.

13. PREVENTION OF INSIDER TRADING

Your Company has in place a Code of Conduct for Prohibition of Insider, which lays Down the process for trading in securities of the Company by the Designated Persons and to regulate, monitor and report trading by the employees of the Company either on his/her own behalf or on behalf of any other person, on the basis of Unpublished Price Sensitive Information. The aforementioned amended Code, as amended, is available on the website of the Company.

All Directors on the Board and the designated employees have confirmed compliance with the Code.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Articles of Association, Mr. Dinesh Poddar, retires by rotation and being eligible offers himself for re-appointment at the ensuing annual general meeting. The Board of Directors on recommendation of Nomination & Remuneration Committee have recommended his reappointment.

Mr. Mehul Jadavji Shah was appointed as Managing Director of the Company for a period of five years with effect from 15^th January, 2020, after obtaining due approval of the members of the Company in the Annual General Meeting of the Company held on 30^th September, 2020 without remuneration as recommended by the Nomination and Remuneration Committee. Further, it is proposed to appoint Mr. Mehul Jadavji Shah as Managing Director of the Company for a period of five consecutive years with effect from 13^th August, 2025 to 12^th August, 2030 based on the recommendation of Nomination and Remuneration Committee and subject to the approval of the members at the ensuing Annual General Meeting without remuneration and liable to retire by rotation.

Mrs. Anita Kaushik Vyas has resigned as a Company Secretary and Compliance Officer w.e.f. 10^th July, 2024. The Board places its appreciation on records for the services rendered by her during her tenure.

Mr. Sachi Kumar Nandlal Adalja, Non-Executive & Independent Director, whose two terms of 5 years each had expired on 30^th September, 2024, ceased to be the Director of the Company in terms of Section 149 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 w.e.f. 30^th September, 2024. The Board places its appreciation on records for the services rendered by him during his tenure.

Ms. Apeksha Jenil Shah has been appointed as a Company Secretary Officer w.e.f. 13^th November, 2024 and has been designated as the Personnel of the Company with effect from the appointment date provisions of Section 203 of the Act.

Declaration by Independent Directors:

All Independent Directors have given declarations to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 read with Regulation 16 of SEBI (Listing obligations and Disclosures Requirements), Regulations 2015. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made there under and Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company.

None of the Directors disqualifies for appointment/ reappointment under Section 164 of the Companies Act, 2013.

Evaluation of Boards Performance:

The Company has devised a Policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors. The evaluation process inter alia considers attendance of Directors at Board and committee meetings, acquaintance with business, communicating inter se board members, effective participation, domain knowledge, compliance with code of conduct, vision and strategy.

Your Company has established well defined familiarization and induction program. Further, at the time of the appointment of an Independent Director, the Company issues a Letter of appointment outlining his / her role, function, duties and responsibilities.

The Board carried out an annual performance evaluation of the Board, Committees, Individual Directors and the Chairman. The Chairman of the respective Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees.

The report on performance evaluation of the Individual Directors was reviewed by the Chairman of the Board and feedback was given to Directors. Pursuant to the provisions of the Companies Act, 2013 read with the Rules issued there under and the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force), the process for evaluation of the annual performance of the Directors / Board / Committees was carried out.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the view of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors at which the performance of the Board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board excluding the independent directors being evaluated.

15. AUDITORS AND AUDITORS REPORT

Statutory Auditors

In accordance with provisions of Companies Act, 2013 the members at the 73^rd Annual General Meeting held on September 30, 2021 had approved appointment of M/s. Mittal & Associates (Firm Registration No - 106456W) for 5 years, till the conclusion of the 78^th Annual General Meeting to be held in the year 2026, As per the provisions of Section 139 of the Act, they have not disqualified from continuing as Auditors of the company.

The Auditors of the Company have not reported any instance of fraud committed against the company by its officers or employees under Section 143(12) of the Companies Act, 2013. The Auditors Report for FY 2024-25 is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

The Board has appointed M/s. D. Kothari & Associates, Practicing Company Secretary to conduct the Secretarial Audit for the period of five years. The Secretarial Audit report for the financial year ended March 31, 2025 is annexed herewith and marked as Annexure to this report. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Audit Report: As required by Section 204 of the Act, 2013, the Secretarial Audit Report for the year 2024-25 is given by M/s. D. Kothari & Associates, practicing Company Secretary for auditing the Secretarial and related records is attached herewith in "Annexure I" to the Boards Report.

They have made above comment which includes our response to them.

1. The Company is non-Compliant for dematerialization of Promoters shareholding under Regulation 31(2) of SEBI (LODR)Regulations, 2015

Our response to the above comment is that we will shortly comply with the above requirement.

2. The Company is non-compliant for Non-submission of the Annual Report within the period prescribed under the Regulation 34 of SEBI (LODR)Regulations, 2015

Our response to the above comment is that the same was due to oversight and it was rectified on immediate basis.

Cost Auditor:

The Company is primarily engaged in construction activities, hence, provisions related to maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the Company.

16. DEMATERIALISATION OF SHARES

The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid.

17. PREFERENCE SHARES

Your Company had issued privately placed unlisted 48,20,000 - 0.1% Cumulative Redeemable Preference Shares of the face value of Rs. 100/- each, aggregating to Rs. 48,20,00,000 which were due for redemption on 14^th May, 2025.

However, since the Company currently does not have sufficient profits to redeem the said preference shares, the period of redemption was extended for further period of 6 years i.e. from 14^th May, 2025 to 14^th May, 2031

18. CORPORATE GOVERNANCE

Pursuant to Chapter IV of the SEBI Listing Regulations, the provision with regard to Corporate Governance is not applicable to the Company as the paid up equity capital does not exceed 10 crores and net worth does not exceed 25 crores as on the last day of the previous financial year. Further your Company aims and constantly strives in maintaining the highest standards of Corporate Governance practices.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34 of the SEBI Listing Regulations, top one thousand listed entities based on market capitalization shall provide Business Responsibility and Sustainability Report. The Company is outside the purview of top one thousand listed entities. In view of this Business Responsibility and Sustainability Report is not applicable.

20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34(2) read with the Schedule V of the SEBI Listing Regulations, it is required to annex Management Discussion and Analysis Report of the Company to the Annual Report. In compliance of the above mentioned provisions, said report for the financial year ended March 31, 2025 is annexed herewith and marked as Annexure to this report in "Annexure II".

21. MEETINGS OF THE BOARD AND THEIR COMMITTEES

(a) Meetings of the Board:

Six meetings of the Board of Directors were held during the year on the following dates i.e. 30^th May, 2024, 27^th June, 2024, 14^th August, 2024, 13^th November, 2024, 14^th February, 2025 and 25^th March, 2025.

(b) Constitution of Committees:

(1) Audit Committee:

The Company has constituted Audit Committee which comprises of following directors namely:

Four Meetings of Audit Committee were held on 30^th May, 2024, 14^th August, 2024, 13^th November, 2024 and 14^th February, 2025.

All the recommendations made by the Audit Committee were accepted by the Board.

(2) Nomination & Remuneration Committee:

The Company has constituted the Nomination & Remuneration Committee of the Board is constituted to formulate and recommend to the Board from time to time, a compensation structure for Managing Directors / Whole-time Directors and Managerial Personnel of the Company.

The nomination and Remuneration Committee comprises following directors namely:

Two Meeting of Nomination and Remuneration Committee were held on 14^th August, 2024 and 13^th November, 2024.

(3) Stakeholders Relationship Committee:

The Company has constituted stakeholders Committee comprises of following directors namely:

One Meeting of Stakeholders Relationship Committee was held on 14^th August, 2024.

(4) Independent Directors Meeting:

Independent Committee comprises of following directors namely:

In compliance with the provisions of Secretarial Standards, Companies Act, 2013 and the SEBI Listing Regulations, separate meeting of Independent Directors was held and the following agenda item were considered at the meeting:

a) Review the performance of Non - Independent Directors and the Board of Directors as a whole;

b) Review performance of the Chairman, taking into account the views of the Executive Directors and Non - Executive Directors;

c) Assess the quality, quantity and timelines of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

One Independent Committee Meeting was held on was held on 14^th August, 2024.

22. REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES:

The Company has in place appropriate policy on Directors appointment and remuneration as required under Section 178(3) of the Act, which has been uploaded on the Companys website and weblink of the same is https: //www. shah-construction. in/

23. CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF AN INDEPENDENT DIRECTOR AND CRITERIA FOR EVALUATION :

The Company has in place appropriate policy for determining qualifications, positive attributes, independence of an Independent Director, which has been uploaded on the Companys website and weblink of the same is https://www.shah-construction.in/.

24. VIGIL MECHANISM:

The Company has established a vigil mechanism and oversees through the Audit Committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of Employees and Directors who express their concerns. The Company has also provided direct access to the Chairman of the Audit Committee on reporting issues concerning the interests of Companys employees and the Company. The Vigil Mechanism Policy is available on Companys website https://www.shah-construction.in/.

25. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:

The Company has not made any investments, provided any guarantees or security or granted any loans or advances.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUT GO:

The Statement on conservation of Energy, technology absorption foreign exchange earnings and out go is given in the "Annexure III" to this report.

27. EXTRACT OF ANNUAL RETURN:

The Annual Return of the Company for the year ended March 31, 2025 prepared in compliance with Section 92 of the Companies Act, 2013 and related Rules in prescribed Form No. MGT 7 is placed on the website of the Company and can be accessed at the web link: www.shah-construction.in.

28. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The Company does not have any employee whose particulars are required to be disclosed in terms of the provisions of Section 197(12) of the act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, hence furnishing of the same does not arise, Having regard to the provisions of the first proviso to Section 136(1) of the act, the annual report excluding the information regarding the top ten employees is being sent to the members of the Company. The said information is available for inspection on all working days during the business hours at the registered office of the Company. Any member interested in obtaining such information, may write to the Company Secretary and the same shall be furnished on request.

29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

The Collector, Mumbai has raised demand notice dated September 22, 2022 for transfer of the user from industrial purpose to commercial and residential purpose in regard to the Companys land. The total amount payable for the change of user is Rs. 44,59,26,500/-. Out of which the Company has already paid Rs. 9,40,29,060/- and the balance outstanding payment is Rs. 35,18,97,440/- payable along with interest. If unpaid, the said amount would be recovered through the compulsory remedy scheme as per Maharashtra Land Revenue Act 1996. As a part of recovery action, the collector has already attached some of the properties of the Company and Companys current bank account.

30. REPORTING OF FRAUDS:

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

31. PREVENTION OF SEXUAL HARASSMENT IN THE COMPANY:

The Company values the dignity of individuals and strives to provide a safe and respectable work environment to all its employees. The Company is committed to providing an environment, which is free of discrimination, intimidation and abuse. All employees are covered under this policy.

In terms of Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, we report that, during 2024-25, no case has been reported under the said act.

32. MARKET CAPITALIZATION AND PE RATIO:

Market Capitalization as on March 31, 2024 Rs. 93.28 Lacs Market Capitalization as on March 31, 2025 Rs. 97.94 Lacs

PE ratio as on March 31, 2025 Rs. (0.36)

The shares of the Company are not ordinarily traded on BSE.

33. GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as the provisions were not applicable to the company or there were no transactions on these items during the year under review:- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- The Company does not have any scheme of provision of money for the purchase of its own shares by the employees or by trustees for the benefit of employees.

- The Company does not have any subsidiaries, hence, the question of receiving remuneration or commission by the Managing Directors or Whole Time Directors of the Company from subsidiary does not arise.

- The details of the top ten employees and employees who were drawing remuneration in excess of limits prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Section 197 of the Companies Act, 2013.

- The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

-The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

- Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable and not required by the Company.

34. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC, 2016) DURING THE YEAR ALONG WITH STATUS AT THE END OF THE FINANCIAL YEAR:

During the Financial year no application has been made and no proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

35. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS ALONG WITH REASONS THEREOF

During the year under review, there were no instance of one-time settlement with banks or financial institutions and hence the differences in valuation as enumerated under Rule 8(5)(xii) of Companies (Accounts) Rules, 2014, as amended, do not arise.

36. ACKNOWLEDGEMENT

The Board of Directors would like to express the sincere appreciation for the assistance and cooperation received from banks, government authorities and members during the year under review.

The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Companys executives, staff and workers.

For and on behalf of the Board of Directors

Dinesh Keshardeo Poddar

Director

DIN: 00158597

Place: Mumbai

Date: 13^th August, 2025