DIRECTORS' REPORT TO THE MEMBERS OF SHAH CONSTRUCTION COMPANY LIMITED Your directors are pleased to present the Annual Report and the Company's Audited Financial Statement for the financial year ended March, 31, 2015 RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY * Total income decreased by 32% to Rs. 78.30Lacs from Rs.115.35 Lacs in the previous year. * Loss after finance cost and depreciation increased to Rs. 118.73 Lacs for the year ended 31st March, 2015 compared to previous year Rs. 4.67. There are no material changes and commitments have occurred after the close of the financial year till the date of this report, which affect the financial position of the Company. DIVIDEND AND TRANSFER TO RESERVE In view of the loss the Directors are unable to recommend any dividend and no amount is transferred to Reserves & Surplus for the financial year 2014-15. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same; 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 March 31, 2015 and of the loss of the Company for the year 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 the 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 are operating effectively. f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts/arrangements/transactions entered by the Company during the financial year with related parties wherein ordinary course of business and on arms length basis and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in Form AOC-2 is not required. Your Directors draw attention of the members to Note 27 to the financial statement which sets out related party disclosures. CORPORATE SOCIAL RESPONSIBILITY (CSR) The provisions relating to Corporate Social Responsibility (CSR) are not applicable to this Company. RISK MANAGEMENT During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework (b) Overseeing that all the risks that the organization faces such as strategic financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable in addressing those risks. Risk Management Policy was reviewed and approved by the Committee. The Company manages, control, monitors and reports on the principal risk and uncertainties that can impact its ability to achieve its strategic objectives INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to the financial statements. During the year such controls were tested and no reportable material weakness in the design or operation was observed. DIRECTORS AND KEY MANAGERIAL PERSONNEL AND COMMITTEES In accordance with the provisions of the act and Articles of Association of the Company Mr. Damji Lalji Shah and Mr. Mehul J Shah retire by rotation and being eligible offer themselves for re-appointment at the ensuing annual general meeting. Mr. Mehul J Shah has been appointed as Managing Director with effect from15th January,2015 for a period of 5 year without remuneration. The necessary resolution for approval members is proposed at the ensuing annual general meeting. Ms. Jaywanti Jadavji Shah (DIN 03327810) woman director, has been appointed as an additional Director of the Company with effect from 26th March, 2015 in terms of the provisions Section 149 and other applicable provisions of the Companies Act, 2013 read with Rule 3 of Companies (Appointment and Qualification of Directors) Rules. She holds the office as such till the ensuing annual general meeting and being eligible offer herself for the appointment as director liable to retire. The necessary resolution is proposed for her appointment as director of the Company Mr. Keshardeo Sawarmal Poddar resigned as director of the Company effective 31/3/2015. Mr. Sanjay P Shah ,Mr. Sachikumar N. Adalja and Mr. Yogesh J Shah are Independent Directors in terms section 149 of the Companies Act,2013 and the Rules framed thereunder .The necessary resolutions for their appointments are proposed for their appointments as independent directors of the Company. The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013. The Company has devised a policy for performance in relation of Independent Directors, Board, and Committees which includes criteria for performance evaluation of the Non-Executive and Executive Directors. The detailed programs for familiarization of Independent Directors with the Company, their roles, rights and responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company are put in place. Audit Committee The Company has constituted the Audit Committee which comprises of Independent Directors viz. Mr. Sachi N Adalja Chairman, and Mr. Sanjay P. Shah and Mr. Dinesh Poddar as other members. All the recommendations made by the Audit Committee were accepted by the Board. Nomination & Remuneration Committee: The Company has constituted the Nomination & Remuneration Committee of the Board is constituted to formulate and recommend to the Board from time to time, a compensation structure for Managing Directors/Whole-time Directors and Managerial Personnel of the Company. The nomination and Remuneration Committee comprises Independent Directors viz. Mr. Sachi N Adalja Chairman, and Mr. Sanjay P shah and Mr. Dinesh Poddar as other members. Stakeholders Relationship Committee The Company has constituted stakeholders Committee comprises of three Directors namely Mr. Sachi N Adalja Chairman, and Mr. Sanjay P shah and Mr. Dinesh Poddar as other members. REMUNERATION AND NOMINATION POLICY The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. AUDITORS AND AUDITORS REPORT Statutory Auditors' M/s. N. B. Purohit & Co., Chartered Accountants, Statutory Auditors of the Company hold the office till the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. N. B. Purohit & Co to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141 (3)(g) of the Companies Act, 2013 and they are not disqualified for re-appointment. The observations made in the Auditors' report, read together with the relevant notes thereon are self- explanatory and hence, do not call for any comments under section 134 of the Companies Act, 2013. Secretarial Auditor The Board has appointed D.Kothari & Associates, Practicing Company Secretary to conduct the Secretarial Audit for the financial year ended 2014-15. The Secretarial Audit report for the financial year ended March 31, 2015 is annexed herewith and marked as Annexure I to this report. Regarding the observations in the Secretarial Audit Report, directors wish to clarify that due to financial constraints, economic reasons, and administrative difficulties , Equity Shares of the Company have not been demated and consequently the Company is not able to conduct e voting, the quarterly results are not published in the newspapers , however the same are sent to Bombay Stock Exchange Ltd immediately after the same are approved, besides the share are not traded as also the floating stock of the public holding is very meager. The management has taken steps to comply the required compliances within the constraints mentioned herein as soon as possible. DISCLOSURES Vigil Mechanism The Vigil Mechanism of the Company, which also includes Whistle Blower Policy in terms of the Listing Agreement, includes an ethics and compliance task force comprising senior executives of the Company. Protected disclosures can be made by Whistle Blower through an email or letter to the Chairman of the Audit Committee. Meetings of the Board Seven meetings of the Board of Directors were held during the year on the following dates namely 30/5/2014, 14/8/2014, 14/11/2014, 15/11/2014, 8/12/2014, 14/02/2015 and 26/03/2015. Particulars of loans given, investments made, Guarantees given and Securities provided The Company has not given any loans or made any investments u/s 186 of the Companies Act, 2013. Conservation of Energy, technology absorption and foreign exchange earning and outgo. A) The Company is not engaged in manufacturing activity, however wherever possible measures have been taken to conserve the energy. B) The Company has neither purchased any technology domestically nor imported any technology hence the question of furnishing the information regarding technology absorption does not arise. C) Foreign Exchange earnings and Outgo a) Foreign Exchange earned : Nil b) Foreign Exchange used : Nil Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure II to this report. Particulars of employees and related disclosures The total number of permanent employees as on 31/3/2015 were 3. The Company has not paid any remuneration to Managing director/ directors hence the question of furnishing information regarding ratio of remuneration of each director to the median remuneration of the employees of the Company, percentage increase in remuneration of each director, comparison of remuneration of the Key Managerial remuneration against company performance and percentile increase, key parameters for variable components not applicable. Market Capitalization as on 31 /3/2014 Rs.84.66 Lacs Market Capitalization as on 31/3/2015 Rs. 84.66 Lacs There is no change in market capitalization PE ratio as on 31/3/2014........ (Rs.18.10) PE ratio as on 31/3/2015........ (Rs. 0.71) The Company does not have any employee whose particulars are required to be disclosed in terms of the provisions of Section 197(12) of the act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, hence furnishing of the same does not arise. General Your Directors take that no disclosure or reporting required in respect of the following items as there were no transactions on these items during the year under review. 1) Details relating to deposits covered under Chapter V of the act. 2) Issue of Equity Shares to differential rights has to dividend, voting or otherwise. 3) Issue of shares (including sweat equity shares) to employees of the Company 4) The Company does not have any subsidiaries, hence, the question of receiving remuneration or commission by the Managing Directors or Whole Time Directors from the subsidiaries of the Company does not arise. 5) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operation in the future. 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. ACKNOWLEDGEMENT Your Directors would like to access the sincere appreciation for the assistance and cooperation received from Shareholders, Bank Government Authorities and other Business constituents during the year under review. On behalf of the Board of Directors Mehul J shah Managing Director DIN 00933528 Keshardeo S Poddar Director DIN 00158601 Place : Mumbai Date : 2nd September, 2015 |