Shangar Decor Ltd Directors Report.
To the Members of, Shangar Decor Limited Ahmedabad
The Directors have pleasure to present their 24th Annual Report and the Audited Annual Financial Statements for the year ended 31stMarch, 2019.
Summary of Financial Results:
|Particulars||Current Year||Previous Year|
|2018 - 19||2017 - 18|
|Profit Before tax||25,89,567||22,08,936|
|Provision for Tax & Deferred Asset/ Liab.|
|1. Current tax||651,000||333,927|
|2. Deferred tax||12,526||-|
|3. Prior Period Adjustment||-||-|
|Profit After Tax||19,26,041||18,75,009|
|EPS: Basic & Diluted||0.63||0.61|
State of Company Affairs:
During the year under review, Company earned net profit of Rs. 19.26 Lakhs compared to last years net profit of Rs. 18.75 Lakhs. Though the Turnover of the Company declined, Net Profit of the Company has increased marginally.
During the year 2019, Company has completed a major contract of Rs. 2.50 Cr. of Lok Sabha Election of Government of India. During the year, Company has entered into a New Service Agreement for Decoration Business with Dayaji Anavil Kedavni Mandal which owns Six properties in the City of Surat, Gujarat. Company is likely to have major impact on the financial performance in the coming years.
Considering the performance of Company and increase in Net Profit, the Board of Directors recommends Dividend of Rs. 0.05 paisa per share for FY 2018 19 viz 0.5% of face value of Rs. 10/- each.
The Board of Directors do not propose to transfer any amount to Reserves Account.
Management Discussion and Analysis Report:
A detailed discussion on the Companys operations is presented in the chapter on Management Discussion and Analysis, which forms part of this Annual Report.
Deposits and long term borrowings:
The Company has not invited or accepted any deposit from the public during the year under review.
Particulars of Cntracts of Agreements with related party:
In terms of Section 188 of Companies Act 2013, Company has entered in to Related Party Transaction at Arms length price in normal course of business with only one related party. Relevant disclosures of Related Party Transaction are given in AOC-2 as Annexure I to this Directors Report.
Company has not entered in to any transaction Not at Arms Length price.
There are no other materially significant transactions with related parties i.e., promoters, Directors or the Management, their subsidiaries or relatives conflicting with the Companys interest.
Directors Responsibility Statement:
In terms of Section 134(3) of the Companies Act, 2013, in relation to the Financial Statements for FY 2018-19, the Board of Directors states that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
b) The Directors 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 at the end of the 31st March, 2019 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 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 have 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.
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.
Internal Financial Controls:
The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness was observed.
Subsidiaries And Joint Venture:
Company does not have any subsidiary companies. Company has not made any investment in Joint Venture Companies.
Environment, Health And Safety:
The Company accords the highest priority to health, environment and safety. The Company does not carry on manufacturing operations. The Company takes at most care for the employees and ensures compliance with the applicable rules and regulation applicable to the Company.
Regulation 17 to 27 of SEBI (LODR) Regulation 2015 is not applicable to the Company as the Paid up Share Capital and Turnover of the Company are less than the minimum prescribed limits. Certificate of the Auditors in this regard is annexed to the Boards Report as Annexure II.
Corporate Social Responsibility:
The provisions of Companies Act 2013 and rules framed there under with regard to Corporate Social Responsibility do not apply to the Company and hence no disclosures have been made in that regard.
Directors and Key Managerial Personnel: Composition:
The Board comprises of 5 (five) Directors, of which 2 (two) are Independent Directors.
Directors Retiring By Rotation
Mr. Saumil Shah (holding DIN: 01601299), a Director, whose terms of office is liable to determination by retirement of Directors by rotation under section 152 of Companies Act 2013 and being eligible offers herself for reappointment. Directors recommend his re appointment. 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. After completion of financial year, Mr. Rajesh Dharajiya
Declaration of Independent Directors:
Pursuant to provisions of section 149(7) of Companies Act 2013, the Company has received declaration from Independent Directors for FY 2018-19 confirming that they meet the criteria of independence as prescribed under the Act and erstwhile Listing Agreement and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
Policy on Directors Appointment:
Pursuant to provisions of section 178 read with 134(3)(e) of Companies Act 2013, The Nomination and Remuneration Committee (NRC) has approved the criteria and process for identification / appointment of Directors. Directors of the Company strictly follow the process 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 per process and criteria laid down by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee.
The obtaining and consolidation of feedback from all Directors in this regards, was coordinated by the Chairman of Independent Directors meeting for Board, while the process of 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 Individual Directors, as applicable.
Number of Meetings of the Board:
The Board meets at regular interval with gap between two meetings not exceeding 120 days. Additional meetings were held as and when necessary. During the year under review, the Board met Five times and the proceeds of the Board Meeting have been duly recorded in minutes book. During the year total 5 Board Meetings were held respectively on 30.05.2018, 14.08.2018, 05.09.2018, 14.11.2018 and 13.02.2019.
Remuneration: Remuneration Policy:
The Company has formulated the policy relating to the remuneration of the Directors, Key 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 General Managers & above employees), Conveyance Allowances / Reimbursement, Companys contribution 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 in deserving 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 the Government of India or Internal Survey wherein inflation on commonly used items is calculated.
Remuneration of Independent Directors:
The Company has formulated a policy for the remuneration of Independent Directors as follows:
- Sitting Fees of maximum Rs. 2500/- for each meeting of the Board or any Committee thereof, attended by them;
- Reimbursement of Expenses incurred by Independent Directors for attending any meeting of the Board.
Particulars of Employees and Related Disclosures:
There are no employees in the company whose salary exceed the prescribed limit under the Act hence disclosure of employees is not provided.
Disclosure under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2015 is given here under.
I) Disclosure under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given herein below:
II) Sub Clause (iii) of Rule 5(1): Median remuneration of employees increased by 30.93% compared to previous year 2016 17. Such percentage increase in median remuneration may not reflect correct increase due to increase in number of employees during the year as compared to 2017-18.
III) Sub Clause (iv) of Rule 5(1): There are 14 employees on the pay roll of the Company other than Directors on the Board of Company.
IV) Sub Clause (viii) of Rule 5(1): Average percentile increase already made in the employees of the Company during the FY 2018 19 is 4.71. Remuneration of Managerial Personnel has not been increased, hence no comparison thereof is provided.
V) Sub Clause (x) of Rule 5(1): No Director has availed of any variable component of remuneration.
VI) Sub Clause (xii) of Rule 5(1): it is hereby affirmed that the remuneration paid 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 payroll of Company who receive remuneration in excess of limits prescribed under Rule 5 (2), hence no details are provided under Rule 5(3).
Report of Statutory Auditors
Niral Parikh & Associates. Chartered Accountant, Ahmedabad have submitted their resignation on 15th June 2019 due to their preoccupation. The Board of Directors in their Board Meeting held on 15th June 2019 have appointed M/s S. D. Mehta & Co, Chartered Accountants, Ahmedabad as the Statutory Auditor of the Company. The Auditors report for financial year 2018 19 is self explanatory and forms part of this Annual Report and does not contain any qualification, reservation or adverse remark.
M/s S. D. Mehta & Co, Chartered Accountants, Ahmedabad are entitled to hold the office of Auditor till the ensuing Annual General Meeting as they have been appointed in Casual vacancy. The Board of Directors recommend to appoint M/s S D Mehta & Co, Chartered Accountants, Ahmedabad (FRN 137193W) for the term of five years expiring on the date of Annual General Meeting to be held for FY 2023-24.
Brief profile of statutory auditors is herewith attached as Annexure III Report of Secretarial Audit:
Viral Ranpura, Company Secretary in practice was appointed as Secretarial Auditor of the Company and they have issued a Report under provisions of Section 204 of Companies Act 2013 and is placed as Annexure II to this report.
The Secretarial Audit Report is self explanatory and does not contain any qualification.
Report of Cost Auditor:
Provisions of Section 148 of Companies Act 2013 are not applicable to the Company and hence no disclosures are required in that regard.
AUDIT AND RISK MANAGEMENT:
The Board of Directors have duly constituted Audit Committee. This Committee of the Board also plays the role of Risk Management Committee and is called as Audit and Risk Management Committee. The role and responsibilities of the Committee have been specifically 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|
The Company has adopted a Whistle Blower Policy since March 2015 in compliance with erstwhile Listing Agreement and Companies Act 2013. The Policy empowers all the Stakeholders to raise concerns by making Protected Disclosures as defined in the Policy. The Policy also provides for adequate safeguards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Whistle Blower mechanism is reviewed by the Audit Committee on a quarterly basis. As on date, none of the stakeholders have raised any Whistle Blower concern.
Risk Management Policy:
The Board of Directors has developed and implemented Risk Management Policy for the Company. It has identified and assessed various risks factors, with potential impact on the Company in achieving its strategic objectives or may threaten its existence. The Policy lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board and Risk Management 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 activitiy, the other particulars in 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 the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 of Companies(Management & Administration) Rules, 2014 duly certified is annexed hereto as Annexure III and forms part of this report.
During the year under review, there has been no change in the paid up share capital of the Company. Paid Up Share Capital of the Company consists of 30,60,100 Equity Shares of INR 10/- each.
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 under review.
Particulars of Loans, Guarantees Or Investments:
The particulars of Loans, Guarantees or investments as covered under provision of section 186 of the Companies Act, 2013 made by the company during financial year 2018-19 are given under the respective head of Financial Statements and the same is furnished in the notes to the Financial Statements.
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:
No material changes and commitments, affecting the financial position of the Company occurred between the end of the Financial Year to which this financial statement relates and up till the date of Report except following:
- M/s Niral Parikh & Co, Chartered Accountants, Ahmedabad being the Statutory Auditors of the Company have resigned as Statutory Auditors due to their preoccupation.
- M/s S. D. Mehta & Co, Chartered Accountants, Ahmedabad have been appointed as Statutory Auditors in casual vacancy.
- Mr. Rajesh Dharajiya, Independent Director of the Company has resigned from the Board due to his preoccupation.
- Company has entered into a major service agreement with Dayaji Anavil Kedavni Mandal for its six properties in the city of Surat, Gujarat for Decoration Business. This agreement is likely to have major impact on the performance of the Company.
Transfer of funds to Investor Education and Protection Fund:
The Company is not required to transfer any amount to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to the provision of Section 125 (e) of the Companies Act, 2013 as there is no amount unclaimed for a period of 7 years from the date it became due for payment.
Details of material and significant orders passed by the regulators or courts or tribunals:
There were no significant and material orders issued against the Company by any regulating authority or court or tribunal that could affect the going concern status and Companys operation in future except fine imposed for late submission of Compliance under SEBI (LODR) Regulation 2015 by BSE Limited.
Disclosure under the sexual harassment of women at workplace (prevention, prohibition and redressal) act, 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2018-19, the Company has not received any complaint on sexual harassment.
The Board of Directors wishes to place on record its appreciation for the cooperation extended by Banks, Government Authorities, Customers, Shareholders and Employees of the Company and looks forward to a continued mutual support and co-operation.
|For Shangar Decor Limited|
|By Order of the Board|
|Date: 05st September 2019||Sd/-||Sd/-|
|Place: Ahmedabad||Samirbhai R. Shah||Saumil Shah|
|DIN 00787630||DIN: 01601299|
Annexure I Director Profile
|Name||Saumil Shrenikbhai Shah|
|Brief Resume||Mr Saumil Shah is Non Executive Director of the Company having wide range of Experience in the industry. He associated with the Company since 2006.|
|Date of First Appointment||01.11.2006|
|Directorship held in other Companies||NIL|
|Membership or Chairmanship of other Companies||NIL|
|Inter-se Relationship with Director||Related to Managing Director of the Company. He is also a promoter member.|
|Shareholding in Company||300,000 Equity Share representing 9.80% of Shareholding of the Company.|