Shivchem prospectus has conflicting director status disclosures

Shivchem’s prospectus gives incompatible status descriptions for Ayushi Sharma and Rajeev Gupta. Its five-member board table, organisation chart and committee lists identify both as non-executive independent directors, while its three-year board-change table records Sharma’s regularisation as non-independent and Gupta’s appointment as executive and non-independent.

What is the Shivchem director-status disclosure conflict?

Shivchem uses two different classifications for the same two directors in its management disclosures. The board summary states that the five-director board has one chairman and executive director, one managing director, one non-executive director and two non-executive independent directors. The individual director table identifies Sharma and Gupta as the two non-executive independent directors and states that the board composition complies with the Companies Act, 2013 and the Securities and Exchange Board of India, or SEBI, Listing Regulations.

The table covering board changes during the three years before the red herring prospectus uses contrary wording. For Sharma, the September 11, 2024 entry says “Appointment as Non-Executive & Director; Regularisation as Non-Independent.” For Gupta, the April 4, 2025 entry records his appointment from additional director as “Executive & Non-Independent Director.” Neither historical description matches the non-executive independent designation shown in the board table.

How does Shivchem describe Sharma and Gupta on its board?

Shivchem describes Sharma as a non-executive independent director appointed for five years from September 11, 2024. Her individual board entry says she was appointed as a non-executive independent director on that same date. Gupta’s entry states that he was appointed as an additional director on April 3, 2025 and was designated a non-executive independent director on April 4, 2025, for a five-year term from April 3, 2025.

The directors’ profiles repeat the independent designation. Sharma is described as an advocate admitted with the Bar Council of Delhi, with more than six years of experience, including National Company Law Tribunal and National Company Law Appellate Tribunal matters. Gupta is described as an advocate admitted with the Madhya Pradesh State Bar Council, proprietor of M/s Rajeev Traders and having more than 16 years of experience; neither profile identifies an executive or non-independent position.

Shivchem’s management organisational structure, placed immediately after the historical board-change table, again lists both Sharma and Gupta as non-executive independent directors. That structure is presented as the company’s management organisation, while the earlier table expressly records changes during a three-year period. The supplied prospectus does not say whether the historical wording was an error, an interim classification or a status subsequently changed through a redesignation.

Why does the Shivchem director-status disclosure matter for committees?

The conflicting description matters because Sharma and Gupta hold two of three positions on Shivchem’s Audit Committee and Nomination and Remuneration Committee. The Audit Committee was constituted by a June 24, 2025 board resolution under Section 177 of the Companies Act, 2013. Sharma is chairperson, Gupta is a member and Managing Director Sachin Agarwal is the third member, with Sharma and Gupta both classified as non-executive independent directors.

The Audit Committee’s disclosed quorum is two members or one-third of its members, whichever is greater, with at least two independent directors present. On the three-member committee disclosed by Shivchem, Sharma and Gupta are the only two members labelled independent. The committee’s terms include oversight of financial reporting, auditor appointments, related-party transactions, internal financial controls and the use of funds raised through a public issue.

The Nomination and Remuneration Committee, approved by the board on June 24, 2025 under Section 178 of the Companies Act and Regulation 19 of the SEBI Listing Regulations, has the same two directors alongside Deepa Agarwal. Sharma is chairperson, Gupta is a member and Deepa Agarwal is the third member. Its stated quorum requires two members or one-third of members, whichever is greater, including at least one independent director.

What does Shivchem disclose about the board’s composition and ownership?

Shivchem states that its five directors comprise Rohit Agarwal as chairman and executive director, Sachin Agarwal as managing director, Deepa Agarwal as non-executive director, and Sharma and Gupta as non-executive independent directors. On that stated composition, the two directors designated independent represent 40% of the five-member board. The prospectus also states that the board includes two women directors.

Shivchem identifies Rohit Agarwal, Sachin Agarwal and Deepa Agarwal as promoters in its management disclosure. Its director-shareholding table says Rohit Agarwal and Sachin Agarwal each held 44.57% of the pre-issue paid-up share capital, with each shown at 31.20% of post-issue paid-up share capital, subject to finalisation of the basis of allotment. The prospectus separately states that neither independent director held Shivchem equity shares as of the red herring prospectus date.

Shivchem reports sitting fees in FY 2025-26 of Rs 3.48 lakh for Sharma and Rs 2.07 lakh for Gupta. A board resolution dated October 1, 2025 provides Rs 17,000 for each board or committee meeting attended by non-executive directors and non-executive independent directors. The prospectus says that no contingent or deferred compensation is payable to directors and that it has no director bonus or profit-sharing plan.

What does Shivchem say about compliance and the timing of events?

Shivchem states that its board composition and committee constitution comply with the Companies Act, 2013 and SEBI Listing Regulations. It also says that, because its issue is under Chapter IX of the SEBI Issue of Capital and Disclosure Requirements Regulations, 2018, several specified Listing Regulations did not apply at the red herring prospectus date. Shivchem says Companies Act requirements applied wherever relevant.

The committee resolutions came after both disputed historical entries. Sharma’s September 11, 2024 appointment preceded the June 24, 2025 committee resolutions by more than nine months, while Gupta’s April 4, 2025 appointment preceded them by less than three months. The prospectus does not disclose a dated resolution, explanatory note or correction that reconciles the board-change table’s non-independent descriptions with the committee disclosures.

The document therefore does not establish from the supplied text whether either historic label was the intended classification at the relevant date. It does establish that the current board summary, individual director entries, profiles, organisation chart and June 24, 2025 committee compositions all use the non-executive independent designation for Sharma and Gupta. A reconciliation would need to identify the correct classification on September 11, 2024 and April 4, 2025 and explain whether the board-change table needs correction.

Conclusion

Shivchem consistently presents Sharma and Gupta as non-executive independent directors in the disclosures describing its board and its two key committees. The separate board-change table conflicts with those descriptions by recording Sharma as regularised non-independent and Gupta as appointed executive and non-independent, leaving an unresolved inconsistency within the same prospectus.

The next disclosure to watch is any formal clarification or correction identifying each director’s status on September 11, 2024 and April 4, 2025. That clarification is relevant to the disclosed Audit Committee structure because its quorum requires at least two independent directors and Sharma and Gupta are the two committee members identified as independent.