Shreyas Intermediates Ltd Directors Report.

To,

The Members of

SHREYAS INTERMEDIATES LIMITED

Your Directors present the 31st Annual Report together with the Audited Financial Statements for the year ended 31st March, 2020.

FINANCIAL RESULTS:

The Companys financial performance for the year ended 31st March, 2020 is summarized below:

(Rs. in Lakhs)

Particulars FY 2019-20 FY 2018-19
Total Turnover & Other Income 56.75 133.24
Less : Manufacturing and Other Expenses 54.51 17.23
Profit / (Loss) before interest and Depreciation 0.69 116.01
Less : Finance Costs (Interest) 0.01 0.16
Profit / (Loss) after Interest 0.68 115.85
Less : Depreciation and Misc. Expenses written off 204.03 405.94
Net Profit / (Loss) before Extra-Ordinary Items (203.35) (290.09)
Less : Extra-Ordinary Items NIL NIL
Net Profit / (Loss) Before Tax (203.35) (290.09)
Add / Less: Provision for Tax (including Deferred Tax) NIL NIL
Profit/(Loss) after tax (203.35) (290.09)
Earnings Per Share (EPS) (-) 0.29 (-) 1.80

REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

The total revenue including other income of the Company during the year was Rs.56.75 Lakhs (Previous Year - Rs. 133.24 Lakhs). The Company has incurred a loss after tax of Rs. 203.35 Lakhs (Previous Year - Loss of Rs. 290.09 Lakhs).

DIVIDEND:

In view of carry forward losses, your Directors do not recommend any dividend for the year under review. RESERVES:

The Company has not transferred any amount to General Reserve.

CHANGE IN NATURE OF BUSINESS:

The Company is engaged in the business of manufacturing of Pigments and Pigment Intermediates. There was no change in the nature of business activities of the Company during the year under review.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE 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 these financial statements relate and the date of this report.

SCHEME OF COMPROMISE/ARRANGEMENT

The Companys Scheme of Arrangement was approved by the Honble National Company Law Tribunal (NCLT) on 27th July, 2018. The Order was pronounced on 3rd September, 2018 by the Honble National Company Law Tribunal. The application for the copy of the order was made on 4th September, 2018 and it was received on 2nd January, 2019 by the Company. The Company has allotted 5,47,50,000 (Five Crores Forty Seven Lakhs Fifty Thousand) Equity Shares at a face value of Rs. 10/- each (Rupees Ten Only) to the 8 allottees on 10th February, 2020, as per the NCLT Order. The Company has made the Listing Application to BSE on 17th June, 2020 and the said application is pending; the process of listing and the trade license would be done in due course.

SHARE CAPITAL:

There were no changes in the authorized capital; the paid up share capital was increased by the allotment of 5,47,50,000 shares, as per the NCLT Order, during the year.

SUBIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any subsidiary, joint venture and associate company.

DEPOSITS:

During the year under review, the Company has not accepted or renewed any deposits within the meaning of Section 73 and 76 of the Companies Act 2013 read with the Companies (Acceptance deposits Rules), 2014. There was no deposit which remained unclaimed and unpaid at the end of the year.

EXTRACT OF ANNUAL RETURN:

An extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is attached herewith and marked as Annexure I.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Ramjan Kadar Shaikh was appointed as a Director of the Company by the Shareholders at the 30th Annual General Meeting. Mr. Ramjan Kadar Shaikh retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Mr. G. K. Sharma, an Independent Director, whose first term expired on 31st March, 2020, was re-appointed for a second term of 5 years with effect from 1st April, 2020 by the Nomination and Remuneration Committee of the Board on 30th July, 2020, and confirmed by the Board of Directors in its meeting held on 31st July, 2020, subject to the shareholders approving his re-appointment as a Special Resolution at the ensuing Annual General Meeting.

There was no change in the Directors and Key Managerial Personnel of the Company.

COMPOSITION OF BOARD AND STATUTORY COMMITTEES

The Composition of the Board and Statutory Committees thereof along with other details are given in the Corporate Governance Report.

NUMBER OF BOARD MEETINGS HELD DURING THE YEAR

The Board met 4 (four) times during the year. The details of the meetings are given in the Corporate Governance Report. The intervening gap between the two meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors of the Company have given the requisite declaration pursuant to Section 149(7) of the Companies Act, 2013 to the effect that they meet the criteria of independence as provided in Section 149(6) of the Act.

FORMAL ANNUAL EVALUATION:

The Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:

The Board, on the recommendation of the Nomination and Remuneration Committee of the Company, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Salient features of the Remuneration Policy are:

The Remuneration Policy of the Company is divided into the following headings and the entire policy is available on the website of the Company www.shreyasintermediates.co.in.

(1) Preface

(2) Commencement

(3) Definitions

(4) Purpose

(5) Principles of Remuneration

(6) Nomination and Remuneration Committee

(7) Selection and appointment of the Board Members

(8) Process for evaluation

(9) Publication

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby confirms that:-

(a) In the preparation of the annual accounts, the applicable accounting standards had 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 as at 31st March 2020 and of the loss of the company for period ended on that date;

(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 have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

There were no loans and guarantees made by the Company under Section 186 of the Companies Act, 2013 during the year under review.

Following are the particulars of investments made under Section 186 of the Companies, Act, 2013 of the Company: Investments made:

Nature of Investments Opening Balance (Rs.) Amount Invested during the year (Rs.) Amount Redeemed (Rs.) Closing Balance (Rs.)
FDR Account 42,80,000 - - 42,80,000

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES PURSUANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013:

There were no contracts or arrangements or transactions with any related parties which could be considered material in accordance with the policy of the Company during the year under review. Hence, the Company is not required to disclose details of the related party transactions in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

PARTICULARS OF EMPLOYEES:

There was no employee who was employed throughout the year and in receipt of remuneration aggregating to Rs. 1,02,00,000/- p.a. or more or who was employed for part of the year and in receipt of remuneration aggregating to Rs.8,50,000/- p.m. or more.

PARTICULARS AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

The details related to employees and their remuneration as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are mentioned in Annexure II to this Boards Report.

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

(A) Conservation of energy-

(i) the steps taken or impact on conservation of energy; NIL
(ii) the steps taken by the company for utilizing alternate sources of energy; Exploring the possibility of power generation through sulphuric acid.
(iii) the capital investment on energy conservation equipment. NIL

(B) Technology absorption-

(I) the efforts made towards technology absorption; NIL
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution; NIL
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and NIL
(iv) the expenditure incurred on Research and Development. NIL

(C) Foreign exchange earnings and outgo-

The Foreign Exchange earned in terms of actual inflows during the year; NIL
The Foreign Exchange outgo during the year in terms of actual outflows. NIL

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:

There was no order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on companys operations in future.

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place proper and adequate internal control system, commensurate with the size, scale and complexity of its operations. The Company monitors and evaluates the efficacy and adequacy of internal control system, its compliance with operating systems, accounting procedures and policies.

VIGIL MECHANISM POLICY:

The Company has a Vigil Mechanism policy to deal with instance of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company. We affirm that during the financial year 2019-20, no employee or director was denied access to the Audit Committee.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION ANALYSIS REPORT:

Pursuant to Regulation 34(3) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the following have been made a part of the Annual Report and are attached to this report:

• Management Discussion and Analysis Report - Annexure III

• Corporate Governance Report - Annexure IV

• Declaration by Whole-time Director affirming with the compliance of the code of conduct of Board of Directors and Senior Management -Annexure V

• Practicing Company Secretarys Certificate under sub-para 10(i) of Part C of Schedule V of SEBI (LODR), Regulations, 2015 - Annexure VI

• Auditors Certificate regarding compliance of conditions of Corporate Governance -Annexure VII STATUTORY AUDITORS:

M/s. A. Sachdev Co., Chartered Accountants, Mumbai were appointed as the statutory auditors of the Company at the previous annual general meeting of the Company, for a period of five years commencing from financial year 2017-18.

The first proviso to Section 139(1) of the Companies Act, 2013 wherein the company was required to place the matter relating to ratification of appointment of Statutory Auditors, done under Section 139(1) of the Companies Act, 2013, by members at every annual general meeting is omitted w.e.f 7th May, 2018 vide the Companies (Amendment) Act, 2017. Hence, no resolution for ratification of appointment of M/s. A. Sachdev & Co., the statutory auditors of the Company is required.

INTERNAL AUDITORS:

The Company has appointed M/s. Sayeed Khan & Associates, Chartered Accountants, Mumbai as Internal Auditors. The Internal Auditors monitor and evaluate the efficiency and adequacy of internal control systems in the Company, its compliances with operating systems, accounting procedures and policies at all locations of the Company and reports the same on quarterly basis to the Audit Committee.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Pankaj & Associates, Company Secretaries, Mumbai to undertake the Secretarial Audit and Secretarial Compliance of the Company. The Secretarial Audit Report and the Secretarial Compliance Certificate are attached herewith and marked as Annexures VIII and Ix respectively.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in their reports.

There were no qualifications, reservations or adverse remarks made by the Secretarial Auditors in the Secretarial Compliance Report.

With respect to observation made by Secretarial Auditor in his report, we would like to state that:

a) The website of the Company does not have all the mandatory disclosures- The Company is in process of updating its website.

b) Promoters 100% shareholding is not in dematerialized form in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. - The promoters of the Company are in process of complying the same.

CORPORATE SOCIAL RESPONSIBILITY:

The provision of Section 135 of the Companies Act, 2013 with respect to the Corporate Social Responsibility are not applicable to the Company.

INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITON AND REDRESSAL) ACT, 2013.

Internal Complaint Committee was formed under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaint was received by the Committee.

DISCLOSURE ON IMPACT OF COVID-19 PANDEMIC ON THE BUSINESS AS ADVISED VIDE SEBI CIRCULAR NO SEBI/HO/CFD/CMDI/CIR/P/2020/84 DATED MAY 20, 2020

In accordance with the SEBI Circular, information relating to COVID - 19 impact on the business of the Company is given below:-

Particulars As Per SEBI Circular Dated May 20, 2020 Details of Disclosures
Impact of Covid 19 pandemic on the business The impact on the business has been very pronounced due to National, State and Local Governments Lockdown for almost a period of 4 month
Ability to maintain operations including the Factories /units/office spaces functioning and closed down For more than 3 months the factory / office spaces could not function as 10% of the staff / workers were allowed to work as the company is not in the essential services sector
Schedule, if any for restarting the operations There was no planned schedule as the lockdowns were not allowing for working as a continuous process industry.
Steps taken to ensure smooth functioning of operations Given the constraints, steps have been taken to mitigate the business and industry specific stress.
Estimation of future impact of COVID-19 on operations The past 4 months experience has shown that the financial year 2020 - 2021 is going to be a very stressful and very far from smooth operations.
Details of impact of COVID-19
Capital Adequacy of Capital has been impacted very severely.
Profitability The area is in negative territory and very tough to get by.
Liquidity Operational liquidity was about just 25% and stress on meeting creditors payments has become extremely difficult
Ability to service debts and other financial arrangements About 25% - 30% ability - the rest is in negative territory
Assets Impairment by about 40%
Internal Financial reporting and control Very Stressed reporting and control is weak.
Supply Chain Affected due to transport restrictions and movement of people.
Demand for products and services Demand for products has suffered due to the adverse supply chain impact
Existing contracts/agreements where _ non-fulfilment of the obligations by any party will have significant impact on the listed entitys business Yes - the stress on contracts / obligations exists but so far these factors are not yet disruptive. The next 8 months would reveal the significance and extent of the impact on the companys business.
Other relevant material updates The following are material updates:-
Though the impact of COVID-19 seems to about the listed (1) The factory has been functioning with just about 45 - 50% normalcy.
entitys business (2) The Creditors and Debtors have so far been manageable.
(3) The liquidity is a problem area but the company endeavours to address this with innovative means by addressing these issues to the Companys creditors and debtors.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companys activities during the year under review. Your Directors also acknowledge gratefully the support and confidence reposed by the shareholders of the Company.

By Order of the Board of Directors
For SHREYAS INTERMEDIATES LIMITED
S. P. Pandey Ramjan Shaikh
Place: Mumbai Whole Time Director Director
Date: 31st July, 2020 DIN:01898839 DIN:08286732