Shah Foods Director Discussions


To, The Members, M/s. SHAH FOODS LIMITED

Your directors have pleasure in presenting the 41st (Forty First) Directors Report of your Company together with the Audited Statement of Accounts and the Auditors Report of your company for the financial year ended, 31st March, 2023.

The summary of operating results for the year is given below.

1. FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)

Particulars

Current year (2022-23) Previous year (2021-22)
Sales -- --
Other Income 6.40* 0.16

Total Income

6.40* 0.16
Depreciation -- 0.04

Tax

-- --

Current Tax

-- --
Deferred Tax

Profit/(Loss) after Tax

(20.61) (27.39)

Earnings per share (Rs.) :

(3.45) (4.59)

Basic

(3.45) (4.59)

Diluted

* Previous Liabilities written off of Rs. 6,34,411/- in the year 2022-23 and interest of fixed deposit of Rs. 5,098/-, other than that there is no income in the Company.

2. STATE OF COMPANYS AFFAIRS

As reported in previous three annual reports via 2019-20, 2020-21 and 2021-22, the factory was closed since 30th June, 2019. The Company has sold/ disposed off the assets last year. In view of this, there is no business transected by the Company during the year. During the year under review, the total Income of the Company was Rs. 6.40 Lakh against Rs. 0.16 Lakh in the previous year. The Company has incurred loss after Tax of Rs. (20.61) compared to loss of Rs. (27.40) Lakh in the previous year.

3. TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) OF THE COMPANIES ACT, 2013

During the year, due to loss in the Company, the Board of Directors proposed to carry Nil amount to General Reserve Account.

4. MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

5. DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES

No company has become or ceased to be Subsidiary Company, Joint Venture Company or Associate Company during the year.

6. CHANGE IN THE NATURE OF BUSINESS

During the Financial Year 2022-2023 your Company has not commenced any new business.

7. CHANGES IN SHARE CAPITAL

The issued, subscribed and paid-up Equity Share Capital of the Company as on March 31, 2023 was 59,75,000/- (Rupees Fifty-Nine Lakh and Seventy-Five Thousand Only) comprising of 5,97,500 (Five Lakh Ninety-Seven Thousand and Five Hundred) Equity Shares of 10/- (Rupees Ten Only) each. The Company has not issued any Equity Shares during FY 2022-2023. There was no change in Share Capital during the year under review.

8. MANAGEMENT DISCUSSION & ANALYSIS

A report on Management Discussion and Analysis, as required in terms of Regulation 34(2) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, forms part of this report and it deals with the Business Operations and Financial Performance, Research & Development Expansion & Diversification, Risk Management, Marketing Strategy, Safety & Environment, significant changes in key financial ratios etc. in "Annexure-A".

9. MEETINGS OF THE BOARD OF DIRECTORS

The gap between two Board meetings did not exceed four months. The schedule of Board/ Committee meetings is communicated in advance to the directors/ committee members to enable them to plan their schedules and to ensure their meaningful participation in the meetings. The Board met seven times in financial year details of which are summarized as below:

Sr No.

Date of Meeting Board Strength No. of Directors Present
1 11.04.2022 6 6
2 18.05.2022 6 6
3 08.08.2022 6 6
4 03.09.2022 6 6
5 02.11.2022 6 6
6 11.02.2023 6 6
7 30.03.2023 6 6

In addition, Independent Directors met exclusively in the last quarter of the financial year i.e. on 30th March, 2023.

10. CORPORATE GOVERNANCE

As provided under Regulation 15(2) of the SEBI (LODR) Regulations, 2015, the compliance with Corporate Governance as specified in Regulation 17 to 27, 46 (2)(b) to (i) & para-C, D & E of Schedule V are not applicable to the Company as paid-up share capital doesnt exceed Rs. 10 Crore and Net Worth doesnt exceed Rs. 25 Crore, as on the last day of previous financial year.

11. DIVIDEND

In view of loss, the Directors do not recommend any Dividend for the year under review.

12. DEPOSITS

Your Company has not accepted any deposits from the public within the meaning of Section 73 and 74 of the Companies Act, 2013 and read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended March 31, 2023.

13. A STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY FOR THE COMPANY INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK, IF ANY, WHICH IN THE OPINION OF THE BOARD MAY THREATEN THE EXISTENCE OF THE COMPANY

There is an adequate risk management infrastructure in place capable of addressing risks that the organization faces such as strategic, financial, market, property, IT, legal, regulatory, reputational and other risks those have been identified and assessed.

14. LISTING

The Equity shares of the Company are listed at Bombay Stock Exchange. The Company has paid listing fees to the Stock Exchange for the year 2023-24.

15. PERFORMANCE EVALUATION OF BOARD

The Board of Directors has carried out an annual evaluation of its own performance, its Committees and Individual Directors pursuant to the requirements of the Companies Act, 2013 and rules made thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and schedule prescribed thereunder. There is no business transacted by the Company during the year, however the Company is exploring new business lines. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the respective Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as the composition of Committees, effectiveness of Committee meetings, etc. The above criteria are as per the Performance Evaluation Policy of the Company approved by the Board of Directors upon the recommendation of Nomination and Remuneration Committee. As required under Regulation 25 of the Listing Regulations, a separate meeting of the Independent Directors of the Company was also held on 30th March, 2023 to evaluate the performance of the Chairman, Non- Independent Directors and the Board as a whole and also to assess the quality, quantity and timeliness of flow of information between the management of the Company and the Board. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated, on the basis of following evaluation criteria:

Relevant Knowledge, Expertise and Experience.

Devotion of time and attention to the Companys long term strategic issues.

Addressing the most relevant issues for the Company.

Discussing and endorsing the Companys strategy.

Professional Conduct, Ethics and Integrity.

Understanding of Duties, Roles and Function as Independent Director. Your directors have expressed their satisfaction to the evaluation process.

16. INDEPENDENT DIRECTORS MEETING

During the year under review, the Independent Directors of the Company met on 30th March, 2023, discussed inter-alia, a. Evaluation of performance of Non-Independent Director and the Board of Directors of the Company as a whole; b. Evaluation of performance of the Chairman of the Company, taking into views of executive and Non-Executive Directors; c. Evolution of the quality, content and timelines of flow of information between the management and the board that is necessary for the board to effectively and reasonably perform its duties;

17. DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS

The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

18. DIRECTORS & KEY MANAGERIAL PERSONAL

i. Retirement by Rotation:

Shri Nirav Janakbhai Shah, Director (DIN-01880069), retires by rotation and being eligible offers himself for re appointment. Pursuant to Regulation 17 of the SEBI (LODR) Regulations, 2015, details of Director retiring by rotation is provided under explanatory statement of the Notice of the 41st Annual General Meeting.

ii. Appointment Re appointment of KMP:

Shri Kunal Rajesh Asarpota (DIN: 06779773), re appointed as an Independent Director of the Company w. e. f. 09/02/2023 for the term for five consecutive years, subject to the resolution to be passed by the Shareholders at the ensuing Annual General Meeting.

19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure B" to this report.

20. EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as "Annexure C" to this Report.

21. STATUTORY AUDITORS

M/s. Suresh R. Shah & Associates, Chartered Accountants, Ahmedabad (Firm Registration No: 110691W) were appointed as a Statutory Auditors of the Company with the approval of members at the 40th Annual General Meeting to hold office till the conclusion of the 45th Annual General Meeting. As per the recent amendment issued by Ministry of Corporate Affairs, ratification of statutory auditors at every Annual General Meeting is not required and hence your directors have not proposed the ratification of M/s. Suresh R. Shah & Associates at ensuing Annual General Meeting.

Remuneration to Auditors:

The Statutory Auditor was paid Rs. 85,000/- (Rupees Eighty-Five Thousand Only) as Audit fees for the year 2022-23.

22. AUDITORS REPORT

The notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remark.

23. SECRETARIAL AUDITOR

M/s. GKV & ASSOCIATES, Practicing Company Secretary has been appointed as the Secretarial Auditor of the Company for the financial year 2022-23 as required under Section 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit Report for the financial year ended March 31, 2023 is annexed herewith marked as "Annexure-D" to this Report. The Secretarial Audit Report contains certain adverse remarks which are dealt with as under:

Sr. No

Remarks

Explanation

1.

Non-Compliance of Section 138 of the Companies Act, 2013

The Company does not have Internal Audit department as the factory is closed w.e.f. 30/6/2019.

2.

Non-Compliance Regulation 46 of SEBI (LODR) Regulations, 2015

The website was not updated at the time of Secretarial Audit, the Company is under financial stress.

24. DETAILS OF FRAUDS REPORTED BY THE AUDITORS

During the year under review, neither the Statutory Auditor nor the Secretarial Auditor have 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.

25. COMMITTEES OF THE BOARD

Currently the Board has constituted three Committees:

a) Audit Committee,

b) Stakeholders Relationship Committee,

c) Nomination & Remuneration committee.

A. AUDIT COMMITTEE

All Members of the Audit Committee have accounting and financial management expertise. The role of Audit Committee, the powers exercised by it pursuant to the terms of reference, and the information reviewed by it are in accordance with the requirements as specified in the Regulation 18 of SEBI (LODR) Regulations, 2015 Companies Act, 2013 and other applicable laws, if any. Apart from the above, the Audit Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time. The Vice-Chairman & Whole-time Director and Statutory Auditors are the invitees to the Audit Committee meetings. During the period under review, the Audit Committee met four times on 18.05.2022, 08.08.2022, 02.11.2022 and 11.02.2023 and was attended by the following members.

Name

Designation

No of meetings attended
Shri Sunil Gautambhai Parikh Chairman 4
Shri Kunal Asarpota Member 4
Shri Malav Jashwantlal Shah Member 4

B. NOMINATION AND REMUNERATION COMMITTEE

The roles and responsibilities of the Committee are in accordance with the requirements as specified in the Regulation 19 of SEBI (LODR) Regulations, 2015, Companies Act, 2013 and other applicable laws, if any. Apart from the above, the Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time. All Members of the Nomination and Remuneration Committee have accounting and financial management expertise. The role of Audit Committee, the powers exercised by it pursuant to the terms of reference, and the information reviewed by it are in accordance with the requirements as specified in the Regulation 19 of SEBI (LODR) Regulations, 2015, Companies Act, 2013 and other applicable laws, if any. Apart from the above, the Committee also exercises the role and powers entrusted upon it by the Board of Directors from time to time. During the period under review, the Committee met four times on 18.05.2022, 08.08.2022, 02.11.2022 and 11.02.2023 and was attended by the following members.

Name

Position

Category

Shri Sunil Gautambhai Parikh

Chairman

Non Executive, Independent Director

Shri Kunal Asarpota

Member

Non Executive, Independent Director

Shri Malav Jashwantlal Shah

Member

Non Executive, Independent Director

Remuneration to Directors: a. The Whole Time Director/ Managing Directors/ Manager/ and/ or Directors get Salary and Perquisites. Remuneration paid for the year ended 31st March, 2023 was as under:

Name of the Director

Period of Appointment

Designation Remuneration

Shri Nirav Janak Shah

Five years with effect from 01/07/2022*

Managing Director 8.64 Lakhs

TOTAL

8.64 Lakhs

The Company has not transacted any business during the year;

The criteria for making payments to the Whole time Directors are:

Salary, as recommended by the Nomination and Remuneration Committee and approved by the Board and the Shareholders of the Company. Perquisites, retirement benefits and performance pay are also paid/ provided in accordance with the Companys compensation policies, as applicable to all employees and the relevant legal provisions. Remuneration is determined keeping in view the industry benchmarks and situation of the Company Business. b. The Non-Executive Directors are not paid sitting fees for attending the meetings of the Board and Committees. c. The Company has not paid sitting fees to any Director of the Company.

C. STAKEHOLDER RELATIONSHIP COMMITTEE

The terms of reference of the Committee include reviewing and redressing complaints from shareholders such as non-receipt of annual report, transfer of shares, issue of duplicate share certificates, etc.; to oversee and review all matters connected with transfers, transmissions, dematerialization, re-materialization, splitting and consolidation of securities; to oversee the performance of the Registrar and Transfer Agent and recommends measures for overall improvement in the quality of investor services; and to perform any other function, duty as stipulated by the Companies Act, Securities & Exchange Board of India, BSE and any other regulatory authority or under any applicable laws, as amended from time to time. Committee met four times during FY 2022-23 i.e. 18.05.2022, 08.08.2022, 02.11.2022 and 11.02.2023 and was attended by following members:

Name

Position No of meetings attended

Shri Sunil Gautambhai Parikh

Chairman 4
Shri Kunal Asarpota Member 4

In addition, Details of Shareholders Complaints received during the year are as follows:

Particulars

No. of Complaints
Investor complaints pending as at April 1, 2022 0

Investor complaints received during the year ended on March 31, 2023

0

Investor complaints resolved during the year ended March 31, 2023

0
Investor complaints pending as on March 31, 2023 0

Share Transfer Committee

The Stakeholder relationship committee has delegated power of approving transfer of securities to Shri Nirav Shah and Shri Sunil Parikh. The Committee, inter alia, reviews and approves the transfer/ transmission/ D-mat of equity shares as submitted by M/s. Big Share Services Private Limited., the Registrar & Transfer Agent of the Company. There is no physical transfer during the year.

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

The Company has not given any loan, made any investment or given any guarantee hence information is nil.

27. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3)(c) of the Companies Act, 2013, the Board of Directors hereby confirms that; I. In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures. II. It has in the selection of the accounting policies, consulted the Statutory Auditors and has 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, 2023 and of the profits of the Company for that period. III. It has 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, to the best of its knowledge and ability. There are however, inherent limitations, which should be recognized while relying on any system of internal control and records. IV. It has prepared the annual accounts on a going concern basis.

V. The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operation efficiently. VI. 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.

28. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company has transferred unclaimed dividend of Rs. NIL to the Investor Education and Protection Fund in compliance with provisions of the Companies Act, 2013.

29. INSURANCE

All the insurable interests of the Company are adequately insured against risk of fire and other risks.

30. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2022-23, your Company has not entered into any material related party transaction as per the SEBI Listing Regulations with any of its related parties. Disclosures pursuant to the Accounting Standards on related party transactions have been made in the notes to the Financial Statements. As there were no related party transactions which were not in the ordinary course of the business or not on arms length basis and also since there was no material related party transaction as stated above, disclosure under Section 134(3) (h) in Form AOC-2 of the Companies Act, 2013 is not applicable.

31. DECLARATION BY INDEPENDENT DIRECTORS

The Board of Directors of the Company hereby confirms that independent directors have given the declaration and they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013.

32. FAMILIARIZATION PROGRAMME

In Compliance with the requirements of SEBI Regulations, the Company has put in place a familiarization program for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of industry in which the Company operates, business model etc. A familiarization program was conducted for Independent Directors. However, there is no business in the Company.

33. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to provisions of Section 177 (9) of the Act, read with Regulation 22(1) of the SEBI Listing Regulations, your Company has adopted a Whistle Blower Policy, to provide a formal vigil mechanism to the Directors and employees to report their concerns about unethical behaviour, including actual or suspected leak of unpublished price sensitive information, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The 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 in certain cases. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.

34. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

A. Conservation of Energy

The Company has not made any investment for (energy conservation) and taken any specific measures to reduce energy cost per unit. However, it intends to conserve energy for future generation.

B. Technology Absorption

There is no research and development activity carried out by the Company.

35. FOREIGN EXCHANGE EARNINGS AND OUT GO

There were no foreign exchange earnings and outgo during the year under review.

36. EQUITY CAPITAL

a) BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review.

b) SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review.

c) BONUS SHARES

No Bonus Shares were issued during the year under review.

d) EMPLOYEES STOCK OPTION PLAN

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

e) EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The company has not issued equity shares with differential rights as to dividend, voting or otherwise.

SHARES IN SUSPENSE ACCOUNT

? Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the beginning of the year: NIL

? Number of shareholders who approached issuer for transfer of shares from Suspense Account during the year: Not Applicable

? Number of shareholders to whom, shares were transferred from Suspense Account during the year: Not Applicable

? Aggregate number of shareholders and the outstanding shares in the Suspense Account lying at the end of the year: NIL

? That the voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares: Not Applicable

SHARES IN UNCLAIMED SUSPENSE ACCOUNT

? Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account lying at the beginning of the year: NIL

? Number of shareholders who approached issuer for transfer of shares from the Unclaimed Suspense Account during the year: Not Applicable

? Number of shareholders to whom, shares were transferred from the Unclaimed Suspense Account during the year: Not Applicable

? Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account lying at the end of the year: NIL

37. ANY SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS

Pursuant to the requirement of Section 134(3)(q) of the Act, read with Rule 8 (5)(vii) of the Companies (Accounts) Rules, 2014, it is confirmed that during FY 2022-23, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operations in future.

38. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS

During the year under review, the Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India as approved by the Central Government.

39. 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 weaknesses in the design or operation were observed.

40. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made there under.

Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

a. number of complaints filed during the financial year: Nil

b. number of complaints disposed of during the financial year: Nil

c. number of complaints pending as on end of the financial year: Nil

41. ACKNOWLEDGEMENT

Your directors wish to express the continued co-operation received from all the Stakeholders.

Date: 14.08.2023

For, Shah Foods Limited

Place: Ahmedabad

Sd/-

Mr. Nirav J. Shah

Managing Director

DIN: 01880069