Shangar Decor Ltd Directors Report

The financial performance of the Company for the Financial Year ended on 31^st March, 2025 and for the previous financial year ended on 31^st March, 2025 is given below:

(Rs. In Lakhs)

Total revenue from operations for the FY 2024-25 rose to Rs. 1858.95 Lakhs against Rs. 1299.41 Lakhs during the previous FY 2023-24. The Company has incurred Profit before tax for the FY 2024-25 Rs. 127.54 Lakhs against Rs. 106.45 Lakhs during the previous FY 2023-24. The Net Profit after tax for the Financial Year was Rs. 80.90 Lakhs compared to Rs. 75.26 Lakhs during the previous FY 2023-24. The Directors are continuously looking for the new avenues for future growth of the Company and expect more growth in the future period.

During the Financial Year 2024-25, there was no change in nature of Business of the Company.

Pursuant to Section 92(3) read with Section134(3)(a) of the Act, the Annual Return as on March 31,2025 is available on the Companys website at www.shangardecor.com.

A. AUTHORISED SHARE CAPITAL:

The authorized share capital of the Company as on 31^st March, 2025 is Rs. 50,00,00,000/- (Rupees Fifty Crores Only) divided into 5,00,00,000 (Five Crores) Equity Shares of Rs. 1/- (Rupees One Only) each.

B. PAID-UP SHARE CAPITAL:

The paid-up share capital of the Company as on 31^st March, 2025 is Rs. 48,96,16,000/- (Rupees forty-eight crore ninety-six lakh sixteen thousand only) divided into 4,89,61,600 (Four crores eighty-nine lakhs sixty-one thousand Six hundred) equity shares of Rs. 1/- (Rupees one only).

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 2024-25 (Previous year NIL).

Pursuant to Section 124 of the Companies Act, 2013, the amount of dividend remaining unpaid or unclaimed Fund ("IEPF"). During the year under review, there was no unpaid or unclaimed dividend in the for a period of seven years shall be transferred to the Investor Education and Protection

"Unpaid Dividend Account" lying for a period of 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.

The Profit of the Company for the Financial Year ending on 31^st March, 2025 is transferred to profit and loss account of the Company under Reserves and Surplus.

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:

With view to enhance the liquidity in the capital market and encourage the participation of

("Board") at its Meeting held on 20th January, 2025, considered, and approved the subdivis small investors by making Equity Shares of the Company more affordable, the Board of Directors ion of 1 (One) Equity Share of the Company having face value of Rs. 5/- (Rupees Five only) each fully paid-up into 5 (Five) Equity Shares having face value of Rs. 1/- (Rupees One Only) each fully paid-up subject to the approval of the Members of the Company.

The members of the company approved the sub-division of 1 (One) Equity Share of the Company having face value of Rs. 5/(Rupees Five only) each fully paid-up into 5 (Five) Equity Shares having face value of Rs. 1/- (Rupee One Only) each fully paid-up, in EGM Held on 17^th February,2025.

Details of Sub-division are as follows:

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 Companys operations in future.

12. BOARD MEETINGS:

The two meetings not exceeding 120 days to take a view of the Companys policies and strategies apart from Directors of the Company met at regular intervals at least once in a quarter with the gap between the Board Matters.

During the year under the review, the Board of Directors met 13 (Thirteen) 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 tha

14. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provisions of Section 135 of the Companies Act, 2013 is 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. 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 Companys current working and future outlook as per "Annexure -I" 17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

During the year transaction with related parties referred to in sub-section (1) of section 188 of the2 as " Companies Act, 2013 annexed herewith in Form AOC- Annexure II"

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 opinion forms part of the Independent Auditors report. Financial Controls in accordance with the requisite standards prescribed by ICAI. Their expressed

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 2024-25

22. POLICY ON DIRECTORS 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 Companys Policy on directors 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 Boards Report.

25. STATE OF COMPANYS 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 as Annexure I

26. STATEMENT ON ANNUAL EVALUATION OF BOARDS 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 and Remuneration Committee had one-on-one meetings with each Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors inputs on effectiveness of 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:

Knowledge

Professional Conduct

Comply Secretarial Standard issued by ICSI Duties

Role and functions

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 has established vigil mechanism and framed whistle blower policy for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of Companys Code of Conduct or Ethics Policy.

B. The Company has framed "Business Conduct Policy". Every employee is required to review and sign BUSINESS CONDUCT POLICY: the policy at 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 2024-25

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 31.03.2025 are summarized below:

* Mr. Bhavinkumar Arvindkumar Patel was appointed as Independent Director w. e. f. 03.09.2024. * Mrs. Aanal Milankumar Satyawadi was appointed as Independent Director w. e. f. 03.09.2024. * Mr. Manish Srichand Bachani was resigned from the post of Independent Director w.e.f 03.09.2024. * Mrs.Chinu Kalal was resigned from the post of Independent Director w.e.f 03.09.2024. Ms. Subhangi Chourasia, Company Secretary and Compliance officer resigned from the Company w. e. f. 2^nd July,2025 Ms Shagun Rathi, was appointed as Company Secretary and Compliance Officer w.e.f 21^st July,2025

The Company has obtained a certificate from M/s , Practising Company Secretary, Ahmedabad stating that none of the Directors on the board of the Company have been debarred /disqualified from being appointed /continuing as directors of any Company by the SEBI and Ministry of Corporate Affairs or any such Statutory Authority under Annexure -III

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 applicable to the Company attached to Annexure IV

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. K Bhavsar & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 145880W)), were appointed as the Statutory Auditors of the Company as per the terms of four years by the members at the 30^th Annual General Meeting held on 30^th September,2025 and they hold office upto the conclusion of the Annual General Meeting to be conducted in 2029-30. Accordingly, they continue be the Statutory Auditors of the Company.

The Auditors Report for the financial year ended on 31^st March,2025 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 Mr.Anuj Bharatbhai Udani, Proprietor of M/s. A B Udani & Associates, Company Secretaries, Ahmedabad as a Secretarial Auditor for a term of five consecutive years, from the conclusion of this 30th Annual General meeting till the conclusion of the 35th Annual General Meeting of the Company. to conduct Secretarial Audit .

The Secretarial Audit Report for the Financial Year 2024-25 is annexed herewith as Annexure V 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:

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.

The Company has purchased and installed the SDD Software now. The Company makes regular relevant entries in the SDD Software.

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, 5 meetings of members of the Audit Committee were held. The details of the Audit Committee are as tabulated below:

.

* Mr.Bhavinkumar Patel was appointed as Chairman w.e .f. 03.09.2024 * Ms. Aanal Satyawadi was appointed as Member w.e .f. 03.09.2024.. *Mr. Manish Bacchani resigned from the Audit Committee w.e.f 03.09.2024. *Ms. Chinu Kalal resigned from the Audit Committee w.e.f 03.09.2024.

During the year under review, 2 meetings of members of the Nomination and Remuneration Committee were held. The details of the Nomination and Remuneration Committee are as tabulated below:

* Mr.Bhavinkumar Patel was appointed as Chairman w.e .f. 03.09.2024 * Ms. Aanal Satyawadi was appointed as Member w.e .f. 03.09.2024..

*Mr. Manish Bacchani resigned from the Nomination and Remuneration Committee w.e.f 03.09.2024. *Ms. Chinu Kalal resigned from the Nomination and Remuneration Committee w.e.f 03.09.2024.

C.Stakeholders Relationship Committee:

During the year under review, 4 meetings of members of the Stakeholders Relationship Committee were held. The details of the Stakeholders Relationship Committee are as tabulated below:

* Mr.Bhavinkumar Patel was appointed as Chairman w.e .f. 03.09.2024 * Ms. Aanal Satyawadi was appointed as Member w.e .f. 03.09.2024.. *Mr. Manish Bacchani resigned from the Audit Committee w.e.f 03.09.2024. *Ms. Chinu Kalal resigned from the Audit Committee w.e.f 03.09.2024.

38. 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.

39. ^{INDUSTRIALRELATIONS:} The Directors are pleased to report that the relations between the employees and the management continued to remain cordial during the year under review. 40. ^{MAINTENANCEOFCOSTRECORDS:} 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} 41. ^{ACKNOWLEDGEMENTS:} Your Directors would like to express their sincere appreciation for the co-operation and assistance receivedSuppliers, Customers and other business associates who have extended their valuable sustained from the Bankers, Regulatory Bodies, Stakeholders including Financial Institutions, support and encouragement during the year under review. Yourappreciation for the commitment displayed by all executives, officers and staff at all levels of the Directors take this opportunity to recognize and place on record their gratitude and Company. We look forward for the continued support of every stakeholder in the future.