shigan quantum technologies ltd share price Directors report


To, The Members,

The Board of Directors (‘Board or ‘Directors) take pleasure in presenting the 15th (fifteenth) Annual Report on the business and operations of Shigan Quantum Technologies Limited (‘Shigan or ‘the Company or ‘your Company) along with the Audited Financial Statements for the financial year ended March 31, 2023 (‘year under review or ‘year or ‘FY 2022-23).

In compliance with the applicable provisions of the Companies Act, 2013, (‘the Act) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations), this Annual Report containing, inter alia, Standalone and Consolidated Audited Financial Statements, Notice of Annual General Meeting (‘AGM), Directors Report, Auditors Report and other important information is circulated to Members and others entitled thereto.

FINANCIAL HIGHLIGHTS AND PERFORMANCE

The financial statements of the Company for the FY 2022-23, have been prepared in conformity with the Accounting Standards prescribed under section 133 of the Act read with the Companies (Accounting Standards) Rules, 2006, as amended and other accounting principles generally accepted in India and relevant provisions of the Act. The financial highlights of the Company for the financial year ended March 31, 2023 are as follows:

Particulars

(Amount in Rs. Lakhs)

FY 2022-23 FY 2021-22

Total Income

16404.85 24238.55

Profit/(Loss) before Interest, Depreciation, Taxation & Exceptional Item

977.73 1702.81

Less: Interest (Net)

251.25 237.54

Less: Depreciation (Net)

199.64 148.08

Profit/(Loss) before Tax & Exceptional Item

526.84 1317.19

Less: Exceptional Item

-

Profit/ (Loss) before Tax (PBT)

526.84 1317.19

Less: Tax Expenses

140.63 330.33

Profit/(Loss) after Tax (PAT)

386.21 986.86

STATE OF COMPANYS AFFAIRS

We are engaged in designing, optimizing, manufacturing, assembling, testing and kit integration of alternate fuel systems / kits including CNG, LNG, Hydrogen Fuel Kit systems to OEMs and others for heavy / light duty commercial vehicles and buses, power generation equipment and industrial equipment viz. forklifts etc. We aim to localize the components of Euro-VI CNG kits in India, which will help to reduce the cost of the total system.

Our Company was incorporated in the year 2008 with an object to manufacture alternate fuel systems in India. Subsequently, we have gained expertise in various products in the alternate fuel systems, especially in CNG and LNG fuel kits within automotive industry through our in-house expertise and technical assistance. Since April 2020, our Company has also ventured into manufacturing of Fire Detection & Alarm System and Fire Detection & Suppression System (FDAS &FDSS).

We source our critical technologies from MNC companies with whom we have long term technology user agreement or manufacturing license. We have entered into technology agreements with companies for developing exclusive products customised to our requirements. We have got exclusive manufacturing rights in India for these products after their development.

With change in technologies, we have plan to acquire the Foreign Suppliers expertise through Joint Venture or by outright purchase of their technologies and localise production of Gaseous Fuel Injection Technology systems.

Such Gaseous Fuel Injection Technology systems will enable the Company to manufacture products that will meet the upcoming emission norms thereby enhancing the performance of the vehicle.

During the year, there is no change in the business activities.

Please also refer to the Management Discussion and Analysis section of the Annual Report for further clarification regarding Companys operations and policies.

GOALS & ACHIEVEMENTS

We take pride in sharing our progress, as each accomplishment signifies a step forward in our ongoing journey to create lasting impact. Guided by our commitment to sustainability and positive societal impact, following are the highlights of our goals, the initiatives we have implemented, and the tangible impact we have made in our communities and beyond.

1. The Company is in the process of setting goals to increase women employees in the workforce.

2. Shigan abides by the Indian labour code to provide fair wages for employees and contractual workers. Shigan has a zero-tolerance policy against discrimination based on gender, religion, caste, or class and is dedicated to advancing the diversity of the workforce and upholding the culture of an inclusive workplace.

3. The Company prohibits child labour, and forced labour, including involuntary labour. There have been zero cases in the Company pertaining to child labour, forced labour, including involuntary labour.

4. The Company believes that all accidents and injuries are unacceptable, and they strive to eliminate all such occurrences. Additionally, we conduct annual health and safety training sessions for our employees. These training programs cover various aspects, including safe material handling. Furthermore, we prioritize cleanliness and hygiene in our workplaces. We ensure clean water availability and emphasise cleanliness to enhance hygiene standards. By incorporating these practices, we aim to create a safe and healthy working environment for everyone involved in our operations.

5. Customer-Centric Approach: Customer satisfaction is Shigans top priority. The Company understands their needs, listens to their feedback, provides excellent customer service, and promptly addresses any concerns or complaints through its customer grievance mechanism in place.

ANNUAL REPORT

In compliance of various relaxations provided by the Securities and Exchange Board of India (SEBI) and Ministry of Corporate Affairs (MCA) in the year 2022-23, Annual Report including the Notice of 15th Annual General Meeting (AGM) is being sent in electronic mode to members whose e-mail address were available with its Registrar and Transfer Agent (RTA) or Depositories Participants (DPs). The members are again requested to register their e-mail address with Company or RTA for receiving e-copies of Annual Report, Notice to the AGM and other shareholders communication.

SHARE CAPITAL Authorised Share Capital:

During the FY 2022-23, there is no change in the Authorised Share Capital of the Company. As on March 31, 2023, the Authorised Share Capital of the Company is 180,000,000 consisting of 18,000,000 Equity Shares of 10 each.

Pursuant to the approval of the Board at its meeting held on 26 July 2023 and approval of the members of the Company at their Extra-Ordinary General Meeting (‘EGM) held on 21 August 2023, the Authorised Share Capital of the Company has been increased from 180,000,000 consisting of 18,000,000 Equity Shares of 10 each to 210,000,000 consisting of 21,000,000 Equity Shares of 10 each.

Issued and Paid-Up Share Capital

During the FY 2022-23, there is no change in the Issued and Paid-up Share Capital of the Company. As on March 31, 2023, the total issued and paid-up capital of the Company is Rs. 172,149,000/- comprising of 17,214,900 equity shares of face value of Rs. 10/- each.

UTILIZATION OF IPO FUND

The proceeds of fresh issue are being utilized for the purpose for which it is raised as mentioned in the Prospectus.

DIVIDEND AND APPROPRIATION

The Board of Directors of your Company with a view of ploughing back of profit do not recommend any Dividend for the year ended on March 31, 2023.

AMOUNT TO BE CARRIED TO RESERVES

The Board has recommended transfer of Rs. 386.21 lakhs to General Reserves from the profits during the year under review.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Report referred to in Section 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return is placed on the website of the Company at Shigan Quantum Technologies Pvt. Ltd. : Annual Report (shigan-quantum.com)

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

There was no amount lying with regard to unpaid and unclaimed dividend of earlier years which was required to be transferred or is due to be transferred to the IEPF during the financial year 2022-23, in terms of the applicable provisions of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules), as amended time to time.

No shares on which dividend has not been paid or claimed for seven (7) consecutive years or more, were require to be transferred or is due to be transferred to the IEPF, during the FY 2022-23.

REGISTRAR AND SHARE TRANSFER AGENT

KFin Technologies Limited is the Registrar and Share Transfer Agent (RTA) of the Company.

EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the Employees.

SUBSIDIARY, HOLDING, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company does not have any joint venture entities. However, a subsidiary Company in present in Singapore. As per the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a separate statement containing salient features of the Financial Statements of the subsidiary is provided under Annexure-A of this Report. The annual accounts of Subsidiary are available for inspection by the Members at the Corporate office of the Company. Please refer Annexure-D and Financial Statements for details of Associate Companies as defined under the Act.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Board of Directors and Committees

The Company has eminent individuals from diverse fields as Directors on its Board, representing a judicious mix of skills, integrity, professionalism, knowledge, competence and experience. A brief profile of each Director(s) is also available on website of the Company at Shigan Quantum Technologies Pvt. Ltd : Board of Directors (shigan-quantum.com)

Board & Key Managerial Personnel

During the FY 2022-23, no changes took place in the composition of the Board of Directors and Key Managerial Personnel of the Company.

As on March 31, 2023, the Board constitutes of the following Directors:

S. No.

Name of the Director

DIN

Designation

1

Shishir Agrawal

00054871

Managing Director

2

Gagan Agrawal

00054879

Joint Managing Director

3

Balraj Bhanot

00993431

Independent Director

4

Shubhangi Agarwal

08135535

Independent Director

5

Vijay Lal Toshavda

09307539

Independent Director

Retirement by Rotation

Pursuant to the Section 152(6) of the Act, Mr. Gagan Agrawal (DIN 00054879), will retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. The Board recommends the re-appointment of Mr. Gagan Agrawal.

The brief profile accompanying terms and conditions including remuneration and information as required to be disclosed under Regulation 36(3) of the Listing Regulations and Secretarial Standard are provided in the Notice convening the AGM.

Declaration of Independence by Directors and statement on compliance of Code of Conduct

The Independent Directors of the Company have submitted a declaration meeting the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 25(8) of SEBI (LODR) Regulations, 2015. The above Declaration has been taken on record. Further, All the Independent Directors of the Company have also complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act.

Relationship between Directors

Mr. Shishir Agrawal and Mr. Gagan Agrawal are related to each other. None of the Directors other than above are inter-se related to each other as defined under the Act and Listing Regulations.

Independent Directors Databank and Online Proficiency Self-Assessment Test

The Independent Directors of the Company have been registered and are members of the Indian Institute of Corporate Affairs (‘IICA) as required under Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014. Mr. Balraj Bhanot has been exempted by Indian Institute of Corporate Affairs, from appearing for the online proficiency self-assessment test, as he has fulfilled the conditions for seeking exemption from appearing for the online proficiency self-assessment test. Mr. Vijay Lal Toshavda and Ms. Shubhangi Agarwal have appeared and passed the online proficiency self-assessment test conducted by the IICA.

Key Managerial Personnel (KMP)

Mr. Nathu Singh Tawar, Chief Financial Officer and Ms. Gunjan Gupta, Company Secretary and Compliance Officer continued as KMPs during the financial year under review.

SEPARATE MEETINGS OF THE INDEPENDENT DIRECTORS

In compliance with the provisions of the Act and the Listing Regulations, a separate meeting of Independent Directors of the Company was held on 13 February 2023, inter alia, to discuss the following: a) To review the performance of Non-Independent Directors, the various Committees of the Board and the Board as a whole; b) To review the performance of the Chairperson of the Company; c) To assess the quality, quantity and timeliness of flow of information between the Companys Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Performance Evaluation is based on their contribution to Companys objectives and plans, efficient discharge of their responsibilities, participation in Board / Committee meetings and other relevant parameters. The performance evaluation of all the Independent Directors was conducted by the entire Board, excluding the Director being evaluated.

The Independent Directors expressed their overall satisfaction towards the performance of other Directors and also expressed their satisfaction over the quality, quantity and timeliness of flow of information between the Companys Management and the Board, which includes its Committees and performance of Chairperson of the Company. The performance evaluation of Independent Directors was carried out by the entire Board, excluding the Director being evaluated.

Familiarization programme for Independent Directors

The Company familiarizes its Independent Directors with their roles, rights, responsibilities, liabilities, nature of the industry in which the Company operates, business model of the Company, risks and opportunities, through various presentations and programmes. The Board members including Independent Directors are also updated, from time to time with any significant changes in the ongoing events and development relating to the Company. The Companys Policy of conducting the Familiarisation Programme have been disclosed on the website of the Company at https://shigan-quantum.com/view/codespolicies/index.php

MEETINGS OF BOARD AND SHAREHOLDERS

The Board meets at regular intervals to review strategic, operational and financial performance of the Company, apart from other agenda items. In case of business exigencies or urgent matters, resolutions are passed by circulations, as permitted by law, which are confirmed in the next Board / Committee meeting.

There were 6 (six) Board Meetings held during the Financial Year 2022-23 viz.

S. No.

Date of Meeting Total Number of directors associated as on the date of meeting Attendance Number of Directors Attended % of attendance

1

09/04/2022 5 2 40

2

24/05/2022 5 5 100

3

25/05/2022 5 3 60

4

06/09/2022 5 5 100

5

11/11/2022 5 5 100

6

13/02/2023 5 5 100

The intervening period between any two consecutive Board meetings was within the maximum time gap prescribed under the Act, Listing Regulations and the Secretarial Standard.

COMMITTEES OF THE BOARD

The Company has constituted various Committees as stipulated under the Act and Listing Regulations with well-defined roles and accountabilities to deal with specific areas of concerns. The Board Committees are governed by its terms of reference which exhibit the scope, composition, functioning and reporting parameters. The details on the constitution, composition, brief terms of reference, meetings held and attendance of all the Board-level Committees are mentioned below :.

(a) Audit Committee

The Audit Committee comprises of six members, out of which three are Non-Executive and Independent Directors, including the Chairman. The composition of the Committee is as follows:

Name

Status in Committee

Designation

Vijay Lal Toshavda

Chairman

Independent Director

Balraj Bhanot

Member

Independent Director

Shubhangi Agarwal

Member

Independent Director

Shishir Agrawal

Member

Managing Director

Gagan Agrawal

Member

Joint Managing Director

Nathu Singh Tawar

Member

Chief Financial Officer

The Company Secretary & Compliance Officer of our Company acts as the Secretary to the Audit Committee.

Brief description of terms of reference:

Review of the financial reporting process and the Companys financial statements. Recommendation for appointment, remuneration and terms of appointment of Auditors. Review of the adequacy of internal control systems.

The detailed terms of reference of Audit Committee covers the areas mentioned under Section 177 of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

(b) Nomination and Remuneration Committee

The Nomination and Remuneration Committee assists the Board in identifying persons who are qualified to become Directors of our Company and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. The detailed terms of reference of the Committee cover the areas mentioned under SEBI (LODR) Regulations, 2015 as well as Section 178 of the Companies Act, 2013. The composition of the Committee is as follows :

Name of Director

Status in Committee

Nature of Directorship

Balraj Bhanot

Chairperson

Independent Director

Vijay Lal Toshavda

Member

Independent Director

Shubhangi Agarwal

Member

Independent Director

Shishir Agrawal

Member

Managing Director

The Company Secretary & Compliance Officer of our Company acts as the Secretary to the Nomination and Remuneration Committee.

Performance Evaluation

The Board carries out an Annual Performance Evaluation of its own performance, of its Directors individually and that of its Committees in compliance with the provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The evaluation was carried out on the basis of questionnaire prepared in alignment to the Act, Listing Regulations and the SEBI Circular dated 05 January 2017, which provides further clarity on the process of Board Evaluation (‘SEBI Guidance Note). Separate evaluation questionnaire for each category of evaluation viz. the Board, Committees of the Board and have been prepared with separate sets of questions (questionnaire) for each of the evaluation(s).

The results of above performance evaluation was presented to the Nomination and Remuneration Committee and the Board of Directors. The Nomination and Remuneration Committee and Board of Directors expressed their satisfaction towards the process followed by the Company for evaluating the performance of the Directors, Board as a whole including Chairperson and its Committees.

Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee, approved a Policy for Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other related matters. The terms of reference of the Committee are in conformity with the said requirements. The Nomination and Remuneration Policy as approved by the Board may be accessed on Companys website at https://shigan-quantum.com/view/codespolicies/index.php.

(c) Stakeholder Relationship Committee

The Stakeholders Relationship Committee is responsible for managing investor grievances, and is assisted by the registrar and share transfer agent of the Company. The terms of reference of this Committee are wide enough covering the matters specified under the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013. The Stakeholder Relationship Committee comprises of three members and Chairman of the Committee is an Independent Director. The composition of the Committee is as follows:

S. No.

Name of the Director

Status in Committee

Nature of Directorship

1.

Balraj Bhanot

Chairman

Independent Director

2.

Shishir Agrawal

Member

Managing Director

3.

Gagan Agrawal

Member

Joint Managing Director

The Company Secretary & Compliance Officer of our Company acts as the Secretary to the Stakeholder Relationship Committee.

We had no pending complaints at the beginning of the year and received 01 (one) new complaint during the year. At the end of the reporting period, the complaint was addressed.

In compliance with the SEBI (LODR) Regulations, 2015, the Company has designated an e-mail Id of the Compliance Officer to look after investor grievances and resolve them in a speedy manner, Compliance Officer

Name : Ms. Gunjan Gupta

Designation : Company Secretary & Compliance Officer E-mail Id : investors@shigan.net

(d) Corporate Social Responsibility Committee

In accordance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a Corporate Social Responsibility (CSR) Committee. The composition of the Committee is as follows :

S. No.

Name of the Director

Status in Committee

Nature of Directorship

1

Shishir Agrawal

Chairman

Managing Director

2

Gagan Agrawal

Member

Joint Managing Director

3

Vijay Lal Toshavda

Member

Independent Director

The Company Secretary & Compliance Officer of our Company acts as the Secretary to the Corporate Social Responsibility Committee.

Corporate Social Responsibility

Shigan is committed to build a sustainable business with strong social relevance and a commitment to inclusive growth and contribute to the society by supporting causes on various concerns including road safety, healthcare, environmental sustainability, promoting education, promoting sports and other rural development activities. In pursuance of our vision that Shigan desires to be a ‘Company which society wants to exist, we are dedicated towards fulfilling the social objectives through various CSR activities. The Company shall make its endeavour to positively impact and influence the Society for its sustainable development. The brief outline of the CSR Policy, Annual Report on initiatives undertaken by the Company on CSR activities during the FY 2022-23, in accordance with the Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out in Annexure- B to this Report.

The policy on Corporate Social Responsibility is available at website of the Company at https://shigan-quantum.com/view/codespolicies/index.php

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed that:

1. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures. 2. 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 31 March 2023 and of the profit and loss of the company for financial year ended on that date. 3. 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, if any; 4. the Directors had prepared the annual accounts on a going concern basis; and

5. Proper internal financial controls are in place and that the financial controls are adequate and are operating effectively;

6. Proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

WHISTLE BLOWER POLICY

The Company has adopted Whistler Blower Policy in compliance with the provisions of Section 177(10) of the Act and Listing Regulations. The Company through its whistle blower mechanism provides a formal mechanism for the directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct or Policy. This Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The policy c an be viewed on the Companys website at https://shigan-quantum.com/view/codespolicies/index.php.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has always believed that an appropriate standard of conduct should be maintained by the employees and that work environment should be free from discrimination and harassment thereby providing a friendly workplace environment.

Shigans ‘Policy on Prevention of Sexual Harassment of Women at Workplace is in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder which provide for protection against sexual harassment at workplace and for prevention and redressal of such complaints received by the Company. Internal Complaints Committee has been set up to redress complaints, if any, received regarding sexual harassment.

We affirm that adequate access would be provided to any complainant who wishes to register a complaint under the Policy. During the year under review, the Company did not receive any complaint under the Policy.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Regulation 34(2)(e) of the Listing Regulations, Management Discussion and Analysis Report for the year under review, is presented in a separate section, forming part of the Annual Report and provides a detailed analysis on the performance of the business and outlook.

Web link of Annual Return

A copy of the Annual Return is placed on the website of the Company at Shigan Quantum Technologies Pvt. Ltd. : Annual Report (shigan-quantum.com)

CORPORATE GOVERNANCE REPORT

Shigan is compliant with the principles of the good Corporate Governance and is committed to the highest standard of Compliance. Pursuant to Regulations 15(2) of SEBI (LODR) Regulations 2015, the compliance with Corporate Governance provisions as specified in regulations 17 to 27 and clause (b) to (i) of regulations and Para C, D and E of Schedule V shall not apply to the listed entity which has listed its specified securities on SME Exchange. Therefore, the Corporate Governance Report is not applicable on the Company. Hence, the Company is not filing the Corporate Governance Report with the Stock Exchange and Corporate Governance Report do not form part of this Report.

AUDITORS

Statutory Auditors and their Report

M/s Saria Gupta & Co., Chartered Accountants (FRN: 003168N), Statutory Auditors of the Company, were appointed in the 12th (twelth) AGM to hold office until the conclusion of 17th (seventeenth) AGM.

The Statutory Auditors have confirmed their eligibility and submitted their certificate of disqualification to hold office of Statutory Auditors of the Company.

The Auditors have issued their report on the financial statements for the financial year ended 31 March 2023, with an unmodified opinion and do not contain any qualification, observation or adverse remarks or disclaimer that may call for any explanation from the Board of Directors.

The Auditors Report is enclosed with the financial statements in this Annual Report. The Auditors have not reported any matter under Section 143(12) of the Act and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

Details in respect of frauds reported by Auditors

During the year under review, no instances of fraud committed against the Company by its officers or employees, were reported by the Statutory Auditors and Secretarial Auditors under Section 143(12) of the Act to the Audit Committee or the Board of Directors of the Company.

Secretarial Auditors and their Report

Pursuant to the provisions of Section 204(1) of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Listing Regulations, the Board has appointed Mr. Manish Manwani, Manwani & Associates, Company Secretaries to conduct the Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Auditors have submitted their report as provided under Annexure- C to this Boards Report, confirming compliance by the Company of all the provisions of applicable laws.

The Secretarial Audit Report does not contain any qualification, observation or adverse remarks or disclaimer that may call for any explanation from the Board of Directors.

Internal Auditor

M/s ASC Consulting Pvt. Ltd. were appointed as the Internal Auditors of the Company for the financial year 2022-23 in compliance with the provisions of Section 138 of the Act read with Rule 13 of the Companies (Accounts) Rules, 2014. The Internal Audit Report was placed before the Audit Committee and Board. Further, summary of significant audit observations along with recommendations and its implementations are also being reviewed by the Audit Committee.

There were no adverse remarks or qualifications on accounts of the Company from the Internal Auditor.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Shigan ensures adherence to adequate Internal financial controls systems with respect to the policies and procedures adopted by the Company and this system is periodically reviewed by the Management and audited by the Internal Auditor. The internal control system is implemented for the orderly and efficient conduct of its business, including adherence to Companys policies involving safeguarding of its assets, prevention and detection of frauds and errors, and ensuring the accuracy and completeness of the accounting records, together with the timely preparation of reliable financial information.

The internal control system is supplemented by internal audits. The Audit Committee, Senior Management and Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company with reference to the financial statement, its compliance with standard operating procedures, accounting procedures and policies. The Company focuses on the implementation of the necessary systems and controls to strengthen the system and prevent such recurrence. The Internal Auditors periodically present to the Audit Committee, an internal audit report along with audit observations thereon.

During the year under review, no reportable material weakness in the operation was observed. Further, Statutory Auditors verified the systems and processes and confirmed that the internal financial controls system over financial reporting are adequate and such controls are operating effectively. Based on the framework of internal financial controls, the Board is of the opinion that the Companys internal financial controls were adequate and effective during financial year 2022-23.

RISK MANAGEMENT

The Company has an established comprehensive risk management system to identify and evaluate the key risks existed with the operations of the Company. Shigan has an established comprehensive risk management system in place to identify and evaluate the key risks existed with the operations of the Company. The Board periodically reviews its comprehensive risk assessment and minimization procedures.

The compliances related to Risk Management Committee as per Regulation 21 of SEBI (LODR) Regulations, 2015 are not applicable on our Company, hence the Company need not to comply with the provisions relating to formation of Risk Management Committee.

The risk management framework followed by the Company is detailed in the Management Discussion and Analysis section, forming an integral part of this Annual Report.

COST RECORD

The provisions of cost audit as specified by the Central Government under Section 148 of the Act, are applicable to the Company and accounts and records, as required are maintained by the Company.

The Board of Directors have in accordance with the terms of Section 148 of the Companies Act, 2013 and on the recommendation of Audit Committee, approved the appointment of Mr. Sunder Prakash Budkoti, Cost Accountant (Membership No. 33832) as the Cost Auditor of the Company for the Financial Year 2023-24 at a remuneration of Rs. 1,10,000/- per annum to conduct the audit of its cost accounting records. The proposed remuneration of the Cost Auditor shall be ratified by the members in the ensuing AGM.

PUBLIC DEPOSITS

The Company has not accepted any public deposits within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014, accordingly no amount of principal or interest on public deposits was outstanding as on the date of financial statements.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loan, security or provided any guarantee under Section 186 of the Act. However, please refer to Annexure-A and Financial Statements for details of Investment made.

CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES

All the Related Party Transactions are entered on arms length basis and in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is annexed as Annexure -D . The Companys policy on Related Party Transactions is available at our website at https://shigan-quantum.com/view/codespolicies/index.php.

The compliances related to Regulation 23(9) of SEBI (LODR) Regulations, 2015 are not applicable on our Company, hence the Company need not comply with the provisions relating to filing of half yearly reports on Related Party Transactions with the Stock Exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are forms part of this Report as Annexure E.

SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant and material orders passed against the Company by the Regulators or Courts or Tribunals during the year ended 31 March 2023, which would impact the going concern status of the Company and its future operations. However, please refer the statement on contingent liabilities and commitments in the Notes forming part of the Financial Statements.

HUMAN RESOURCE

The Company acknowledges that its employees are the foundation of its sustainable approach and play an unparalled role in its growth story. The Company places human resources management at the forefront and continually investing in human capital development, which includes building skills and capabilities. Company provides a wide range of benefits to its employees, including medical insurance and we have covered all our employees under best of Insurances, which secure both employee and his/her family and regular medical camps/awareness programmes are conducted for employees. With an objective of providing ample opportunity for learning and growth, we have structured in house training programs to enhance employees capabilities and skills across roles. The Company undertakes robust learning and development initiatives that include technical, functional, leadership development and culture-building programmes. The learning and development needs are recognized through various processes, which includes Companys vision and mission, competency frameworks and training needs identified through performance management system on regular basis. The outputs of these programs have been very positive and have helped to improve the skills, personality, and performance of the participating individuals. Your Company constantly endeavors to improve upon its practices and processes for employee satisfaction through effective communication and engagement and promoting a culture based on trust and confidence. We aim to develop a culture that is based on fairness and respect.

PARTICULARS OF EMPLOYEES

The disclosures required under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are provided in Annexure F.

GENERAL

Your Directors state that there were no transactions in respect of the following items during the year under review requiring disclosure or reporting:

1. Issue of Equity Shares with Differential Rights as to Dividend, Voting or otherwise.

2. Application made or proceeding pending under Insolvency and Bankruptcy Code, 2016.

3. Valuation or One Time Settlement with Banks and / or Financial Institutions.

However, after the closure of the FY 2023, the Company has obtained shareholders approval in its EGM held on 21 August 2023 for issuance of 32,01,000 Convertible Warrants into Equity Shares by way of private placement on a preferential basis.

CAUTIONARY STATEMENT

The statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be “forward-looking” within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply and price conditions in the domestic & overseas markets in which the Company operates, changes in the government regulations, tax laws & other statutes & other incidental factors.

APPRECIATION

The Directors take this opportunity to express their gratitude to all our customers, vendors and business associate, stock exchanges, depositories, investors, statutory bodies, financial institutions and banks, who have motivated the Company to excel in all its pursuits and constantly contributed towards making the Company more valuable.

The Directors also place on record the enthusiasm and unstinting efforts of all the employees at all levels for their hard work, dedication and commitment without which the Company would not have been able to undertake the challenging targets in all areas of operations. Shigan believes in empowering its employees through greater knowledge, team spirit and developing greater sense of responsibility. They are the key reason behind the success of the Company and contribute to scale new heights, year after year. We are fortunate to have such a team whose endeavors have laid a strong foundation for the success of our organization as a whole. Their commitment and contribution is deeply acknowledged. We are committed to build strong relationships with all our stakeholders, and we value their feedback and input as we strive to improve and grow our business. We look forward to continuing support and involvement of all our stakeholders.

For and on behalf of the Board Shigan Quantum Technologies Limited

Place:

Gurugram

Shishir Agrawal

Date:

September 4, 2023

Managing Director

(DIN: 00054871)