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Shanti Overseas (India) Ltd

| Annual Report for the Financial Year 2024-25

BEARISH SENTIMENT

Report Source

⬤8th Dec 25

Summary : Shanti Overseas (India) Limited faced significant losses and declining financial ratios in FY2024-25 due to industry challenges and duties on soyameal exports, despite new management's strategic realignment efforts.

Annual Report Analysis & Insights

Financial Disclosures

  1. Standalone Total expense: INR 2,712.48 Lakhs (2024-25) vs INR 1,214.10 Lakhs (2023-24).
  2. Consolidated Total expense: INR 2,852.68 Lakhs (2024-25) vs INR 1,348.27 Lakhs (2023-24).
  3. Standalone Trade Receivables (Undisputed, considered good) as of March 31, 2025: Less than 6 months: INR 108.21 Lakhs; 6 months - 1 year: INR 96.37 Lakhs; 1-2 years: INR 38.92 Lakhs; 2-3 years: INR 0.55 Lakhs; Total: INR 244.06 Lakhs.
  4. Consolidated Trade Receivables (Undisputed, considered good) as of March 31, 2025: Less than 6 months: INR 108.39 Lakhs; 6 months - 1 year: INR 96.37 Lakhs; 1-2 years: INR 38.92 Lakhs; 2-3 years: INR 0.55 Lakhs; Total: INR 244.23 Lakhs.
  5. Standalone Revenue from operations: INR 2,265.94 Lakhs (2024-25) vs INR 993.64 Lakhs (2023-24).
  6. Standalone Other income: INR 125.29 Lakhs (2024-25) vs INR 93.52 Lakhs (2023-24).
  7. Consolidated Revenue from operations: INR 2,384.10 Lakhs (2024-25) vs INR 1,066.16 Lakhs (2023-24).
  8. Consolidated Other income: INR 113.46 Lakhs (2024-25) vs INR 76.79 Lakhs (2023-24).
  9. Standalone Net cash flow from operating activities: (INR 99.61) Lakhs (2025) vs (INR 134.27) Lakhs (2024).
  10. Standalone Net cash used in investing activities: (INR 75.40) Lakhs (2025) vs INR 56.52 Lakhs (2024).
  11. Standalone Net cash used in financing activities: INR 107.46 Lakhs (2025) vs (INR 16.86) Lakhs (2024).
  12. Consolidated Net cash flow from operating activities: (INR 221.22) Lakhs (2025) vs (INR 101.81) Lakhs (2024).
  13. Consolidated Net cash used in investing activities: INR 52.84 Lakhs (2025) vs INR 52.03 Lakhs (2024).
  14. Consolidated Net cash used in financing activities: INR 85.14 Lakhs (2025) vs (INR 34.06) Lakhs (2024).
  15. Statutory dues related to TDS and GST amounting to Rs. 95,230 were in arrears as of March 31, 2025.
  16. A High Court case is pending regarding an arbitration order from GAFTA for approximately Rs. 33 crores.
  17. The Company does not reasonably expect the outcome of the case to have any material impact.
  18. Standalone Total Assets: INR 2,552.61 Lakhs (2025) vs INR 2,484.62 Lakhs (2024).
  19. Standalone Total Equity: INR 1,686.75 Lakhs (2025) vs INR 1,934.70 Lakhs (2024).
  20. Standalone Total Liabilities: INR 865.86 Lakhs (2025) vs INR 549.92 Lakhs (2024).
  21. Consolidated Total Assets: INR 2,016.30 Lakhs (2025) vs INR 2,044.18 Lakhs (2024).
  22. Consolidated Total Equity: INR 1,149.90 Lakhs (2025) vs INR 1,397.09 Lakhs (2024).
  23. Consolidated Total Liabilities: INR 866.40 Lakhs (2025) vs INR 647.09 Lakhs (2024).
  24. All related party transactions were in the ordinary course of business and on an arm’s length basis.
  25. No materially significant related party transactions with potential conflict of interest were entered.
  26. Loans provided to Shaan Agro Oils & Extractions Private Limited (INR 170.37 Lakhs) and Dispar Fin Trade Pvt Limited (INR 270.67 Lakhs).
  27. Outstanding loans from related parties include Karuna Kacholia (INR 58.07 Lakhs), Kashikalyani Trade (INR 50.00 Lakhs), and VSMA Buildcon Private Limited (INR 25.00 Lakhs).
  28. The report presents both Standalone and Consolidated Financial Statements for the financial year ended March 31, 2025.
  29. Consolidated financials include the results of its wholly-owned subsidiary, Shaan Agro Oils & Extractions Private Limited.

Corporate Overview

  1. Operates within India, with exports impacted by international trade policies.
  2. Significant challenges in the Whole Organic Soyameal Manufacturing Industry due to Countervailing Duty and Anti-Dumping Duty imposed by the United States of America on soyameal imported from India.
  3. Witnessed a decline in export turnover.
  4. Volatility in global commodity prices, currency fluctuations, and shifts in international trade policies.
  5. Uncertainty in agricultural output due to climatic variations.
  6. Intense competition from domestic and international players impacting margins.
  7. Compliance requirements under SEBI, FEMA, GST, and other regulatory frameworks.
  8. Reliance on global commodity prices and international trade policies.
  9. Vulnerability to supply-side disruptions and climatic variations affecting agricultural output.
  10. The company is engaged in primary processing and trading of Agro commodities.
  11. Focus on serving required products to customers efficiently.
  12. Directors express gratitude to stakeholders for continuous support.
  13. New management brings renewed focus, strengthened governance, and commitment to rebuilding a scalable, agile, and future-ready organization.
  14. Management is confident in re-entering the market with focused offerings as economic conditions stabilize.
  15. The company's business activities fall within a single or primary business segment.
  16. Applied strict control system to monitor day-to-day energy consumption.
  17. Ensures optimal use of energy with minimum wastage.
  18. No capital investment on energy conservation equipment.
  19. Company intends to leverage core trading competencies and identify new product categories, emerging markets, and niche segments.
  20. Objective to establish a diversified and resilient portfolio to reduce concentration risk and enhance business agility.
  21. Asset-light approach enables exploration of opportunities with lower capital risk.
  22. Additional hiring will be undertaken gradually as business activities expand.

Risk Factors

  1. Volatile commodity prices, currency fluctuations.
  2. Supply disruptions, changing trade policies.
  3. Intense competition impacts profit margins.
  4. Significant pending High Court litigation.

Key Drivers

  1. New management drives strategic realignment.
  2. Exploring new products, emerging markets.
  3. Diversifying portfolio reduces concentration risk.
  4. Strengthening governance and performance culture.

Auditor’s Report

  1. Unmodified opinion: Financial statements give a true and fair view in conformity with accounting principles generally accepted in India.
  2. No key audit matters to communicate in the report.

Board Commentary

  1. Mrs. Devyani Chhajed appointed as Additional Independent Director w.e.f. April 8, 2024.
  2. Ms. Pooja Chordia and Mr. Rahul Jain resigned as Non-Executive Independent Directors w.e.f. February 10, 2025.
  3. Mr. Manish Harishankar Dubey appointed as Managing Director (Additional Executive Director) w.e.f. March 17, 2025.
  4. Ms. Tejal Dinkar Vaze appointed as Additional Non-executive Director (Independent Director) w.e.f. March 17, 2025.
  5. Mrs. Karuna Kacholia (Whole Time Director and CFO) and Mr. Ayush Kacholia (Managing Director) resigned w.e.f. March 22, 2025.
  6. Mr. Pankaj Agrawal appointed as Chief Financial Officer (CFO) w.e.f. March 22, 2025.
  7. Mr. Ashish Kumar Naik appointed as Additional Non-executive Director w.e.f. May 7, 2025.
  8. Mr. Digvijay D. Singh appointed as Additional Non-executive Director (Independent Director) w.e.f. May 7, 2025.
  9. Mrs. Ramita Otwani resigned as Company Secretary w.e.f. April 29, 2025, resulting in non-compliance of Regulation 6 of SEBI (LODR) Regulations, 2015.
  10. No dividend recommended on Equity Shares due to financial performance and incurred loss.
  11. Decision taken to conserve resources and strengthen financial position for future business operations.
  12. Company has a well-defined process to ensure risks are identified and mitigation steps are in place.
  13. Risk Management process focuses on ensuring risks are identified on a timely basis and reasonably addressed.
  14. No significant material orders passed by Regulators/Courts/Tribunals impacting going concern status.
  15. No applications made or pending proceedings under the Insolvency and Bankruptcy Code, 2016.
  16. Statutory dues related to TDS and GST for various financial years amounted to Rs. 95,230 were in arrears as at March 31, 2025.
  17. High Court case pending regarding arbitration order from GAFTA (the Grain and Feed Trade Association) concerning sale of Organic Soybean Meal to COFCO International France S.A.S, with claims of approximately Rs. 33 crores.
  18. Subscribed to Optionally Convertible Debentures (OCDs) issued by Shaan Agro Oils & Extractions Private Limited amounting to ₹3 crore, by conversion of outstanding loan and debtor balances.
  19. Disposed of entire equity holding in SOIL Consultech Private Limited to related parties for ₹1 lakh, resulting in a loss of ₹9 lakhs.

Corporate Governance

  1. Company has adopted a Vigil Mechanism/Whistle Blower Policy for directors and employees to report concerns.
  2. A Code of Conduct has been laid down for Board Members and Senior Management.
  3. Policy on Related Party Transactions, Nomination and Remuneration Policy, Risk Management Policy, and CSR Policy are in place and available on the company's website.
  4. The Board has an optimum combination of Executive and Non-Executive Directors.
  5. Independent Directors meet the criteria of independence as specified under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
  6. A separate meeting of Independent Directors was held to review performance of Non-Independent Directors and the Board.
  7. Audit Committee comprises three members, majority Non-executive Directors, all financially literate.
  8. Nomination and Remuneration Committee comprises three Directors.
  9. Stakeholders Relationship Committee comprises three members, two Non-executive Independent Directors and one Executive Director.
  10. Secretarial Auditor observed the Company did not have a Whole-Time Company Secretary during the year, non-compliance with Section 203 of the Companies Act, 2013.
  11. The Board clarified the delay was unintentional due to non-availability of a suitable candidate and initiated recruitment process.
  12. Mrs. Ramita Otwani resigned as Company Secretary w.e.f. April 29, 2025, resulting in non-compliance of Regulation 6 of SEBI (LODR) Regulations, 2015.

Management Discussion & Analysis

Future Strategy

  1. Realign business priorities, reassess market positioning, and strengthen the foundation for sustainable long-term growth.
  2. Leverage core trading competencies, identify new product categories, emerging markets, and niche segments.
  3. Diversify portfolio to reduce concentration risk and enhance business agility.
  4. Improve stakeholder engagement, enhance governance standards, and foster a performance-driven culture.

Industry Overview

  1. Indian soyameal manufacturing industry faced significant challenges due to Countervailing Duty and Anti-Dumping Duty by the USA.
  2. Indian agricultural and allied exports grew to USD 51.9 billion in FY 2024–25, projected to reach around USD 55 billion in FY 2025–26.
  3. Indian soy and soy-meal exports declined due to global economic slowdown, pricing pressure, tariff barriers, and import restrictions.

Macroeconomic Outlook

  1. Global economy experienced subdued growth due to geopolitical tensions, supply chain realignments, and persistent inflationary pressures.
  2. Indian economy demonstrated resilience in FY 2024–25, recording real GDP growth of 6.5%, supported by strong domestic demand and recovery in manufacturing.
  3. Growth momentum continued into FY 2025–26, with real GDP expanding by 7.8% in Q1 and 8.2% in Q2.

Operational Focus Areas

  1. Explore and evaluate new products, new markets, and new trading opportunities aligned with evolving demand patterns.
  2. Closely monitor developments across domestic and global supply chains, focusing on commodities and value-added products.
  3. Prioritize capability-building, training, and digital skill development for future scale-up of trading operations.

Performance Drivers

  1. Operational performance supported by stable production levels and continuous improvements in process efficiency.
  2. Strengthening of supplier relationships enabled consistent procurement.
  3. Ongoing cost-optimisation measures helped mitigate input cost movements.
  4. Maintained financial discipline, ensured timely statutory compliance, and preserved liquidity position despite absence of revenue.

Risk Control Measures

  1. Proactive risk management through structured internal controls, audits, and inspections.
  2. Ongoing evaluation of trading opportunities, pricing structures, hedging practices, and contractual safeguards.
  3. Prudent risk management, stronger internal controls, and strategic diversification initiatives.
  4. Treasury department responsible for liquidity, funding, and settlement management.

Critical Risks

  1. Market risk arising from commodity price fluctuations, currency fluctuations, and interest rate changes.
  2. Supply-side disruptions and changes in import/export regulations affecting trade viability.
  3. Counterparty risk and credit exposure in trading operations.
  4. Liquidity risk due to potential inability to meet financial obligations as they become due.