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You can view full text of the latest Director's Report for the company.

BSE: 519397ISIN: INE220Z01013INDUSTRY: Aquaculture - Integrated

BSE   ` 100.45   Open: 101.90   Today's Range 99.00
102.89
+0.17 (+ 0.17 %) Prev Close: 100.28 52 Week Range 38.28
104.00
Year End :2024-03 

Your Director are pleased to present their Thirty-Fourth (34th) Annual Report on the business and operations of your Company along with the audited financial statements, both standalone and consolidated, for the financial year ended 31st March 2024.

1. FINANCIAL HIGHLIGHTS:

Description

Standalone

(Rupeesinlakhs)

Consolidated (Rupees inlakhs)

FY2023-2024

FY 2022-2023

FY 2023-2024

FY2022-2023

Revenue from Operation

30215.92

33253.83

30215.92

33253.83

Other Income

58.77

346.89

58.77

346.89

Total Income

30274.69

33600.72

30274.69

33600.72

Cost of Materials Consumed

24370.26

25363.90

24370.26

25363.90

Changes in Inventory

(1418.75)

(859.06)

(1418.75)

(859.06)

Employee Benefit Expenses

720.69

765.54

720.69

765.54

Finance Cost

938.78

858.68

938.78

858.68

DepreciationandAmortization

469.50

424.03

469.50

424.03

OtherExpenses

4428.29

6138.92

4428.29

6138.92

TotalExpenses

29,508.77

32,692.02

29,508.77

32,692.02

Profit before Tax & Exceptional Items

765.92

908.69

765.92

908.69

ShareofProfit/(Loss) fromAssociate

-

-

-

(4.90)

ExceptionalItems

-

-

-

-

Profit Before Tax

765.92

908.69

765.92

903.79

Tax Expenses

178.62

254.27

178.62

254.27

Profit after Tax

587.30

654.42

587.30

649.52

Earnings Per Share

-

-

-

-

Basic

2.46

2.69

2.46

2.67

Diluted

2.46

2.69

2.46

2.67

2. SUM MARY OF OPERATIONS & STATE OF COMPANY AFFAIRS:

The turnover of the company for the year ended 31st March, 2024 was ? 30,215.92 Lakhs against ? 33,253.83 Lakhsintheprevious year. Theprofitfortheyear after tax is ? 587.30 lakhs as against a profit of ? 654.42 lakhs during thepreviousfinancial year.

SharatIndustriesLimited is oneoftheveryfew companies inIndia which has all 4 divisions located within a 5-kilometer radius. All the divisions work together to ensure that there is continuous production throughout the year despite pre-existing seasonality in the business in general. This

results in high quality produce due to quick processing and reduced logistics. The Company has invested significantly in the capex of its farm and processing divisions in recent years to further boost the production capacity.

The shortfall in market demand during the year and price fluctuations were the key factors for inappreciable profits. The company is exploring alternate market facilities to increase export volume and lower operating costs. The directors are confident that the performance of the company will improve in the years to come.

3. CHANGES IN SHARE CAPITAL:

During the year under review there were no changes to Share Capital of the Company.

Authorized Share Capital:

The authorized Share Capital of the Company as on 31st March 2024 is ? 50,00,00,000/- (Rupees Fifty Crore) divided into 5,00,00,000 Equity shares having face value of Rs. 10/- each.

Paid-Up Equity Share Capital:

The Paid-up Capital of the Company is ? 23,91,25,000 (Rupees Twenty Three Crores Ninety One Lakhs Twenty Five Thousand) divided into 2,39,12,500 equity shares having face value of ? 10/- each.

4. DIVIDEND:

The Board of Directors at their meeting held on 14th November 2023, declared an interim dividend of ? 0.25 (Twenty Five paise only) (2.5%) per equity shares of ? 10/- each. The interim dividend was paid to the shareholders on 08th December 2023. The total outflow on account of said dividend was ? 59.78 lakhs. Your Board has not recommended any further dividend for the financial year 2023-2024.

5. TRANSFER TO RESERVES:

The Board of Directors of your company has decided not to transfer any amount to the reserves for the year under review.

6. CREDIT RATING:

The Credit rating of the Company remained unchanged during the Financial Year under review.

7. LISTING OF SHARES:

The Equity shares of the Company have been listed on the BSE Limited. The Company has paid applicable listing fees to the Stock Exchange and Depositories within stipulated time.

8. NATURE OF BUSINESS:

The company continues to be an integrated Aquaculture company with Hatchery, Culture, Feed and Shrimp Processing & Exports business and during the year, the company has not changed its business.

9. MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments, which affect the financial position of the company that have occurred between the end of the financial year to the date of this report.

10. ALTERATION OF MEMORANDUM OF ASSOCIATION

During the year under review, your company has not altered its Memorandum of Association and Articles of Association.

11. INTERNALCONTROLSYSTEMSANDITSADEQUACY:

In accordance with Section 134(5) of the Act, the Company has Internal Financial Control Policies by means of policies & procedures commensurate with size and nature of operations. The Company's policies, procedures & standardsare developed toupholdinternal controlsacrossthe organisation. These controls ensure transactionsare authorised,recordedand reported correctly and assets are safeguarded and protected againstloss fromunauthorised use or disposition. In addition, there are operational controls and fraud risk controls, coveringthe entire spectrum of internal financial controls. The controls were testedduringtheyear andnomaterial weaknessexists. AuditCommittee of the Board, periodically reviews the internal audit plans and observations/recommendations of Internal and Statutory Auditors. In accordance with Rule 8(5) (viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that theInternal Financial Controls are adequate with referenceto the financial statements.

12. ANNUAL RETURN:

Pursuant to the provisions of Section92(3)and Section134(3) of the CompaniesAct2013read withrule 12 of the Companies (Management andAdministration)Rules 2014asamendedfromtimetotime, theAnnual Return of the Company as on 31st March2024ine-form MGT-7 isavailableonCompany'swebsite andcan beaccessed at http://www.sharatindustries.com/uploads/3/9/8/5/39859679/sil_draft_mgt-7_fy_23-24.pdf

13. DETAILS OF SUBSIDIARIES AND ASSOCIATE COMPANIES:

UnitedAquatech PrivateLimited

UnitedAquatechPrivateLimited isCompany's associateinChennai. Yourcompany holds49%of United Aquatech Private Limited equity share capital. United Aquatech Private Limited deals in business of Special Purpose Vehicle (SPV) for development of and operation of Shrimp farm at projectlocations.

During the year under review, UnitedAquatech PrivateLimitedrecordedrevenueof ? 178.68 lakhs(previous year ? 284.79 lakhs) and registeredlossbefore taxof ? 10.61 lakhs(previousyearloss ? 20.04lakhs)

Pursuant to section 129(3) of the Act,the statement containing the salient features of thefinancial statements of the Company's associateisenclosed as Annexure-III of theBoard Report.

14. STATUTORY AUDITORS:

M/s A. R Krishnan & Associates, Chartered Accountants (FRN: 009805S) were re-appointed as statutoryauditorsoftheCompany for a second term of five (5) consecutiveyears,toholdofficefrom theconclusion of the 32nd Annual General Meeting held on 29th September 2022 tilltheconclusion of37th Annual Generalmeeting to be held in the year 2027.

15. STATUTORY AUDITOR S' REPORT:

The Statutory Auditors report for the Financial Year 2023-2024 does not contain any qualification, reservation or adverse remark or disclaimer.

16. CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review, there were no changes on the Board of Directors of the Company.

KEY MANAGERIAL PERSONNEL:

Mr. M. Balamurugan (Membership No: A66115) was appointed as Company Secretary and Compliance officer with effect from 22nd April 2023 and continues to hold the position.

RE-APPOINTMENT OF DIRECTOR RETIRING BY ROTATION:

In terms of Section 152 of the Companies Act, 2013, Mr. Shanmugam P (DIN: 08877587) is liable to retire by rotation at the ensuing 34th Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee has recommended the re-appointment of Mr. Shanmugam P (DIN: 08877587) as Director of the Company.

17. DECLARATION FROM INDEPENDENT DIRECTORS:

The Board of Directors has received declarations from all the Independent Directors of the Company confirming that they meet with criteria of Independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) read with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The Independent Directors have also complied with the Code of Conduct prescribed in Schedule IV to the Act.

In accordance with Companies (Appointment & Qualification of Directors) Fifth Amendment Rules, 2019, Company has received declarations from Independent Directors confirming that they have registered with the Independent Directors Data Bank through Indian Institute of Corporate Affairs.

Information on familiarization program to Independent Directors is provided in the Corporate Governance Report section of this Annual Report.

18. SEPARATE MEETING OF INDEPENDENT DIRECTORS

Separate meeting of Independent Directors was held on 14th February 2024 to review the performance of the Non-Independent Directors and the Board as a whole, to review the performance of Chairperson of the Company and assess the quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 & 134 (5) of the Companies Act, 2013, shall state that:

a. that the financial statements for the year ended March 31,2024 have been prepared in conformity with Indian Accounting Standards (Ind AS) and requirements of the Act, and that of guidelines issued by SEBI, to the extent applicable to the Company along with proper explanation relating to material departures;

b. 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 as at 31st March 2024 and of the profit of the company for the year ended on that date;

c. 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 detectingfraudandother irregularities;

d. The directors had prepared theannual accountson a goingconcern basis;

e. The directors had laid down internal financialcontrolstobefollowedbythe companyandthatsuch internal financial controls areadequate andwere operating effectively.

f. The directors had devised proper systemstoensurecompliance with theprovisionsofallapplicable laws and that such systems wereadequate and operating effectively.

20. NUMBER OF MEETINGS OF THE BOARD:

During the Financial Year 2023-2024 under review, the BoardofDirectors of the company met 5 (Five) times i.e., on 22nd April 2023, 30th May2023,12th August2023,14th November2023 and14th February2024.

The further details relating to theBoardmeetings aregivenin CorporateGovernanceSectionof this Annual Report. The gap betweenanytwoMeetings was within the period prescribedintheCompanies Act 2013 and SEBI LODR.

21. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

Ason thedate of thisreport, the Boardconsistsof6(Six)Directors,ofwhich2 (Two)areExecutive Directors (one Managing Director and one Whole-Time Director), 4 (Four) are Non-executive Directors (Three are Independent andoneisNon-Independent)Director.The policyofthe Company onDirector's appointmentand remuneration, includingcriteriafordetermining qualifications, independence and othermattersas provided under subsection (3) of Section 178 of theCompaniesAct, 2013(the Act)is available onthe Company'swebsite at http://www.sharatindustries.com/uploads/3/9/8/5/39859679/ sharat_industries_remuneration_policy.pdf

22. AUDIT COMMITTEE:

Your Company has an Audit Committeepursuant to therequirementsoftheAct read withRules framed there under and SEBI (LODR) Regulations, 2015.Thedetails relating to thesamearegiven in thereport on Corporate Governance forming partof thisReport.During FY 2023-2024the recommendations of Audit Committee were duly acceptedbythe Board.

23. VIGIL MECHANISM/ WHISTLE - ELOWER POLICY:

PursuanttoSection 177(9) of theCompaniesAct 2013andRegulation22of theSEBI(ListingObligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a whistle blower mechanism for directors and employeesto reportconcernsabout unethical behavior, actualor suspected frauds orviolation oftheCompany's code ofconductandethics. TheAudit Committee of the Board overseesthefunctioning of Whistle Blower Policy. The WhistleBlowerPolicy covering allthe employees and directorsisavailable in the Company'swebsite. The Vigil Mechanism Policy hasbeenuploaded on the website of the Company at http://www.sharatindustries.com/uploads/3/9/8/5/39859679/sharat_ industries_vigil_mechanism_and_whistle-blower_policy.pdf

24. RISK MANAGEMENT:

The risk management is based on the clear understanding of the type and severity of risks that the organization faces and the processes to be followed for monitoring and measuring on a continuous basis to manage the same with ease and efficiency.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The details of conservation of energy, technology absorption, foreign exchange earnings and outflow are as follows:

a. Conservation of energy

S.No

Particulars

FY 2023-2024

(i)

The steps taken towards conservation of energy

To plan replacement of all ACBs at main control room.

(ii)

The steps taken by the company for utilizing alternate sources of energy

Need to plan stand by DG set for the replacement of old 725 KVA DG set and synchronizing setups.

(iii)

The capital investment on energy conservation equipments

Planning for solar projects at 1.50 MV DC to 1.2 MV AC.

b. Technology absorption:

S.No

Particulars

FY 2023-2024

(i)

Efforts made towards technology absorption

Installed evaporative condenser for replacement of old condenser to carry out full production capacity.

(ii)

Benefits derived like product improvement, cost reduction, product development or import substitution

Installed all VFD drives to system motors/ compressor units

(iii)

In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

Evaporative condensers, grading machinery etc.

(a) details of technology imported

System upgraded with drives an operation

(b) the year of import;

2023-2024

(c) whether the technology been fully absorbed

Yes 90% of technology absorbed

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof

One old screw compressor is replaced with new motor and another one will be planned soon

(iv)

The expenditure incurred on Research and Development

Rs. 8-10 lakhs

26. FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review, the details of Foreign Exchange Earnings and outgo are as under:

Particulars

FY 2023-2024 (Rs. in lakhs)

FY 2022-2023 (Rs. in lakhs)

Foreign Exchange

? 21,080.71/-

? 23,072.44/-

Foreign Outgo

? 418.93/-

? 650.12/-

27. CORPORATE SOCIAL RESPONSIBILITY^ SR):

In terms of Section 135 of the CompaniesAct2013read withCSR rules,yourcompany during the year 2023-2024 spent ? 12.10 Lakhs being the two percent of the average net profit of your Company during the three preceding financial yearinaccordance withCSRpolicy of theCompany.

Annual Report on CSR initiativesasrequired under the Companies(Corporate SocialResponsibility Policy) Rules 2014, as amended (CSRRules)is annexed as Annexure - I andforms partof thisreport.

28. CORPORATE GOVERNANCE:

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Compliance report on Corporate Governance as per Schedule V of the Listing Regulations, along with a Certificate of Compliance from the Practicing Company Secretary forms part of this report as Annexure - VI

29. DEPOSITS

During the year under review, yourCompany has not invited or acceptedany depositsfrom thepublic under Section 76 of the CompaniesAct,2013andRules made there under.

30. PARTICULARS OF EMPLOYEES REMUNERATION:

Theinformation asrequiredunder the provisions of Section 197(12) of theCompaniesAct,2013and read withRule 5(1),5(2)and5(3)of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules,2014, are set out in Annexure - V attached herewithwhich formspartof thisreport.

The statement containing such particularsof employees as required intermsofthe provisionsofSection 197(12) of the Act read with rules5(2) and 5(3)ofthe Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014,forms partof theAnnualReport.Pursuanttotheprovisionsof the Section 136(1) of the CompaniesAct,2013,the reportsand accounts, assetout therein, are being sent to all members of the Company, excludingthe aforesaidinformation and the same is open for inspection at the registered office of the Companyduringworkinghoursupto thedateof Annual General Meeting and if any member is interested inobtainingsuchinformation,may writeto theCompanySecretaryat the registered office of the Companyinthisregard.

31. MANAGERIAL REMUNERATION RECEIVLD FROM THE COMPANY, HOLDING OR SUBSIDIARY COMPANY:

Duringtheyear, theCompany does not have holdingorsubsidiary Company.

Name

Designation

Remuneration received from the Company for the FY 2023-2024 (Rs. in Lakhs)

Mr. Prasad Reddy Sabbella

Managing Director

72/-

Mr. Sharat Reddy Sabbella

Whole-Time Director

60/-

32. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 DETAILS OFLOANS:

During the year under review, the Company has not given any loan, guarantee or made Investment as per the provisions of Section 186 of the Companies Act 2013.

33. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All the related party transactions entered during the year were in ordinary course of business and on arm's length basis.

There are no materially significant related party transactions that may have potential conflict with interest of the company at large.

The details of the related party transactions as per Indian Accounting Standards (Ind AS) - 24 are set out in the notes to the Financial Statements of the Company.

Form AOC-2 pursuant to Section 134 (2) (h) of the Companies Act, 2013 read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is set out as Annexure - IV to the report.

The policy on Related Party Transaction as approved and can be accessed at the website of the Company http://www.sharatindustries.com/uploads/3/9/8/5/39859679/sharat_industries_rtp.pdf

34. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING:

During the Financial Year 2023-2024, your company has complied with applicable Secretarial Standards, namely SS-1, SS-2 & SS-3 issued by Company Secretaries of India.

35. ANNUAL SECRETARIAL COMPLIANCE REPORT

Annual Secretarial Compliance report for the Financial Year ended 31st March, 2024 on the compliance of all applicable SEBI regulation and circulars/guidelines, issued by M/s. BP & Associates, Practicing Company Secretaries, Chennai was submitted to BSE Limited.

36. SECRETARIAL AUDITOR 'S REPORT

In terms of Section 204(1) of the companies Act 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board of Directors has appointed M/s. BP & Associates, Practicing Company Secretaries, Chennai as Secretarial Auditors of the Company for conducting the Secretarial Audit for the financial year 2023-2024.The report of the Secretarial Auditor is Annexure -II to this report.

The Secretarial Audit report for the financial year ended 31st March 2024 contains qualification and clarification by the Board is as follows:

S. No

Observations/Remarks

Response by the Company

1.

The Company has not followed the procedure for reclassification of Promoters as per the Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company is continuously initiating appropriate steps to file a fresh application under Regulation 102 of SEBI (LODR) Regulations, 2015 seeking dispensation or relaxation of strict compliance with respect to regulation 31A of SEBI (LODR) Regulations, 2015 for rectifying the errors as soon as possible due toincorrectclassification ofcertain publicshareholders under promoter'scategory.

2.

The Company has not filed certain forms and maintained register as required under other laws that are applicable to the Company.

The Company has taken cognizant of the fact and has ensured that the company will take all the possible steps to comply with the provisions of allapplicable laws applicable tocompany.

37. INTERNAL AUDIT:

Pursuant to Section 138 of the CompaniesAct,2013readwithRule13 oftheCompanies (Accounts) Rules, 2014 and all other applicable provisions (including any amendment thereto) if any of the Companies Act, 2013, M/s. P S S & CO CharteredAccountants, Chennaiwerere-appointed as the Internal Auditors of the Company for the Financial Year 2023-2024.

38. COST AUDIT:

The provisions of the Cost Auditarenotapplicabletothe Company.

39. MANAGEMENT DISCUSSION AND ANALYSIS RE!PORT.

Management Discussion and AnalysisReport of the companyfor theyear under review as required under Regulation 17 of SEBI (Listing ObligationsandDisclosure Requirements)Regulations, 2015 is included inthis report.

40. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS/COURTS/TRIBUNAL

Thereare nosignificantandmaterialorderpassedbythe regulators orcourtor tribunalimpacting the goingconcern status and the Company's operationsin furture.

41. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

To prevent sexual harassment ofwomen atwork place, anew actTheSexualHarassmentof Womenat Workplace (Prevention, ProhibitionandRedressal) Act,2013 hasbeen notified on 9thDecember, 2013 and every company is required tosetupan InternalComplaints Committee to look into complaints relating to sexual harassment atworkplaceofany womenemployee.

Your Companyhasadopted a policy forprevention ofSexualHarassment ofWomenatworkplaceand hassetupCommittee for implementationof saidpolicy. During the year Company has notreceivedany complaintofharassment.

42. MECHANISM FOR BOARD EVALUATION:

Regulation17(10)ofSEBI (LODR)Regulations,2015 statesthatthe Boardshall monitor andreview the Board evaluation framework. The Companies Act,2013statesthat a formal Annual Evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors.

Schedule IV of the Companies Act,2013 states that the performance evaluation of the Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

The Directors evaluation was broadly based on the parameters such as understanding of the Company's vision and objective, skills, knowledge and experience, participation and attendance in Board/Committee meetings; governance and contribution to strategy; interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance.

43. PREVENTION OF INSIDER TRADING:

The Company has a policy viz., Code of Conduct to regulate, monitor and report trading by designated person and same has been posted on the website of the company http://www.sharatindustries.com/ uploads/3/9/8/5/39859679/code_of_conduct_for_insider_trading.pdf

44. PERSONNEL:

The relations between the management and the staff were very cordial throughout the year. Your Directors take this opportunity to record their appreciation for the co-operation and loyal services rendered by the employees.

45. GENERAL

Your directors state that no disclosure or reporting is required of the following matter as there were no transaction on these matters during the year under review:

• Issue of equity shares with differential rights.

• Issue of shares to employees of the Company under any scheme.

• No instance of fraud reported by the Auditors under section 143 (12) of the Act.

• There are no proceedings pending under the Insolvency and Bankruptcy code, 2016.

• There was no instance of one-time settlement with any Banks or financial institution.

46. ACKNOWLEDGEMENTS:

Your Directors gratefully acknowledge with thanks the constructive guidance and co-operation extended by MPEDA, AXIS BANK LIMITED and Government of Andhra Pradesh, Tamil Nadu and also to employees at all levels, suppliers, dealers and customers for their strong support.

Your Directors also thank the shareholders for their continued confidence and trust placed by them with the Company.

By Order of the Board of Directors For SHARAT INDUSTRIES LIMITED

Place: Nellore S. Prasad Reddy S. Sharat Reddy

Date: 22nd July 2024 Managing Director Whole-time Director

DIN:00069094 DIN:02929724