Your Directors have pleasure in presenting their 37th Annual Report together with theAudited statement of Accounts for the year ended on 31st March 2017.
Financial Summary & Highlights
| || ||(` in lacs) |
|Particulars ||FY 2016-17 ||FY 2015-16 |
|Net Revenue from Operations ||24637.49 ||22553.94 |
|Other Income ||337.32 ||279.50 |
|TOTAL REVENUE ||24974.81 ||22833.44 |
|Total Expenses ||20530.97 ||18652.90 |
|Profit before Interest Depreciation & Tax ||4443.84 ||4180.54 |
|Finance Cost ||788.53 ||1013.45 |
|Depreciation & amortization expense ||1335.43 ||1025.59 |
|Profit before Tax ||2319.88 ||2141.50 |
|Current Tax ||720.63 ||458.54 |
|Short provision in earlier years ||8.81 ||- |
|Deferred Tax ||2.73 ||134.65 |
|Add : MAT Credit Entitlement ||- ||(0.89) |
|Net Profit for the year ||1587.71 ||1549.20 |
Your Directors recommend dividend on equity shares of Rs. 5 per share i.e. 50 % for thefinancial year 2016-17.
Operation & state of affairs :
The Company's total revenue has been Rs. 249.75 cr in the current year an increase of9.387% over last year.
EBIDTA for the year has been Rs. 44.44 cr. Profit before Tax (PBT) for the year is Rs.23.20 cr. PAT for the year is Rs. 15.88 cr.
The Company in this year participated at Global Events namely CPhI Exhibition MumbaiInnopack Conference Mumbai and PharmaPack Paris Exhibition.
Management Discussion and Analysis
A report on Management Discussion and Analysis as required in terms of Regulation34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms part of this Report at Annexure A. Certain statements in the said report may beforward looking. Many factors may affect the actual results which could be different fromwhat the Directors envisage in terms of the future performance and outlook.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Laxman Sanghvi Executive Director will retire byrotation at the ensuing Annual General Meeting and is eligible for re-appointment.
The members approved the appointment of Mr. Dilip Shah as an Independent Director witheffect from May 18 2016.
The Board had at its meeting held on 20th May 2017 re-appointed Mr. Amit Sanghvi asManaging Director and Ms. Tilottama Sanghvi as Whole Time Director for a period of three(3) years effective from 01/10/2017 & 01/06/2017 respectively subject to approval ofmembers at the 37th Annual General Meeting of the Company. The Board has also recommendedrevision in remuneration of Mr. Mahendra Sanghvi Executive Chairman effective from01/04/2017.
A brief resume of and particulars relating to the above directors is given in theNotice containing particulars of the 37th Annual General Meeting.
The Board recommends their re-appointment and revision in remuneration.
Key Managerial Personnel
Mr. Mahendra Sanghvi Executive Chairman Mr. Laxman Sanghvi Executive Director Ms.Tilottama Sanghvi Whole Time Director Mr. Amit Sanghvi Managing Director Mr. SanjayShah CFO & Vice President Finance and Ms. Preeti Sheth Asst. Company Secretary areKey Managerial Personnel of the Company in accordance with Companies Act 2013.
Meetings of Board
A calendar of Meetings is prepared and circulated in advance to the Directors. FourBoard Meetings were held during the financial year 2016-17. The details of the BoardMeetings with regard to their dates and attendance of each of the Directors thereat havebeen provided in the Corporate Governance Report.
The intervening gap between the Meetings was within the period prescribed underCompanies Act 2013 and the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
The Independent Directors of the Company have given the declaration to the Company thatthey meet the criteria of independence as required under the Act and the ListingRegulations.
Meeting of Independent Directors
The Independent Directors met on May 18 2016 to carry out the evaluation for thefinancial year 2016-17 and interalia discussed the following :
Evaluation of the performance of Non - Independent Directors and the Board ofDirectors as a whole;
Evaluation of the performance of the Chairman taking into account the views ofthe Executive and Non-Executive Directors;
Evaluation of quality content and timeliness of flow of information between theManagement and the Board that is necessary for the Board to effectively and reasonablyperform its duties.
Mr. Sarup Chowdhary was not present at the Meeting.
All new independent directors inducted into the Board attend an orientation program. Atthe time of the appointment of an independent director the Company issues a formal letterof appointment outlining his / her role function duties and responsibilities. The formatof the letter of appointment is available on our website. (www.shaily.com)
The Board members are provided with necessary reports internal policies periodicalplant visits to enable them to familiarize with the Company's procedures and practices.
Periodic presentations are made at the meetings of the Board and the committees onbusiness and performance updates global business environment business strategy and risksinvolved.
The details of familiarization programme for Independent Directors are available at ourwebsite. (www.shaily.com )
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of the Board and of individual directors on an evaluation frameworkas adopted by the Board.
The framework includes evaluation of directors on various parameters such as:
Board dynamics and relationships
Company performance and strategy
Tracking board and committee's effectiveness
The Board approved the evaluation results as collated by the nomination &remuneration committee.
Related Party Transactions
Related party transactions that were entered into during the financial year were onarm's length basis and were in ordinary course of business. There are no materiallysignificant related party transactions made by the Company which may have potentialconflict with the interests of the Company.
There are no material related party transactions which are not in ordinary course ofbusiness or which are not on arm's length hence there is no information to be provided asrequired under Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014.
The Board has approved a policy for related party transactions which has been uploadedon the Company's website ( www.shaily.com )
The Company has not accepted deposits from the public falling within the ambit ofsection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 during the financial year 2016-17.
Loans Guarantees or Investments
Particulars of Loans guarantees or investments covered under section 186 of theCompanies Act 2013 form part of the notes to the financial statement.
Conservation of Energy Technology absorption and Foreign Exchange earnings and outgo
The information required under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure B.
a. Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules 2014 M/s Deloittee Haskin& Sells. Chartered Accountants have been appointed as Statutory Auditors of theCompany till the conclusion of Annual General Meeting for F.Y. 2017-18 as approved by themembers at their Annual General Meeting held on 02nd August 2016.
Pursuant to the requirement of Section 139 of the Companies Act 2013 the appointmentof Statutory Auditors is to be ratified by the members at every Annual General Meeting.Members are requested to ratify their appointment for F.Y. 2016-17. b. SecretarialAuditors
The Board of Directors of the Company appointed M/s Samdani Shah & Kabra CompanySecretaries Vadodara to conduct Secretarial Audit of the Company for F.Y. 2016-17.
The Secretarial Report of M/s Samdani Shah & Kabra Company Secretaries for thefinancial year ended 31st March 2017 is annexed at Annexure F.
c. Auditor's certificate on corporate governance
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 auditors certificate on corporate governance is enclosed as with the CorporateGovernance Report. The report does not contain any qualification reservation or adverseremark.
d. Cost Auditors
M/s Y.S. Thakar & Co. Cost Accountants Vadodara were appointed as Cost Auditorsto carry out the audit of cost records of the Company for the Financial Year ending on31st March 2017. Based upon the declaration on their eligibility consent and terms ofengagement your Directors have appointed them and recommend the ratification ofremuneration to be paid to the Cost Auditors for F.Y. 2017-18.
e. Internal Auditors
The Board of Directors have appointed M/s Shah Jain & Hindocha CharteredAccountants as Internal Auditors of the Company for F.Y. 2017-18.
There is no qualification reservation adverse remark or disclaimer by the StatutoryAuditors in their report or by the Secretarial Auditor in their Secretarial Audit Reportand hence no explanation or comments of the Board is required in this matter.
Listing of shares
The Equity shares of the Company are listed on the BSE Ltd. (BSE) with scrip code501423. The Company confirms that the annual listing fees to the stock exchange for theF.Y. 2017-18 has been paid.
Committees of the Board
Currently the Board has four committees namely;
- Audit Committee
- Nomination & Remuneration Committee
- Stakeholders Relationship Committee
- Corporate Social Responsibility Committee
A detailed note on the composition of the Board its committees is provided in theCorporate Governance Report.
The Company has a well-defined "Whistle Blower Policy" and has established arobust for Vigil Mechanism for reporting of concerns raised by employees and to providefor adequate safeguards against victimisation of Directors and employees who follow suchmechanism and has also made provision for direct access to the Chairman of Audit Committeein appropriate cases.
The Vigil Mechanism Policy of the Company is available on the Company's website. (www.shaily.com)
Internal financial control
The Company's internal control procedures which includes internal financial controlsensure compliance with various policies practices and statutes and keeping in view theorganisation's pace of growth and increasing complexity of operations. The internalauditors team carries out extensive audits throughout the year across all plants andfunctional areas and submits its reports to the Audit Committee of the Board of Directors.
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.
Corporate Social Responsibility (CSR)
Being an Indian company we are motivated by the Indian ethos of Dharma as a key plankfor organisational self-realisation. The Company recognizes that its operations impact awide community of stakeholders including investors employees customers businessassociates and local communities and that appropriate attention to the fulfillment of itscorporate responsibilities can enhance overall performance. The Company continues itsspend to support local initiatives health/ medical education and sanitation/ cleanlinesspurpose as Corporate Social Responsibility initiatives.
Guided by the prevailing regulatory requirements the Company has constituted a'Corporate Social Responsibility (CSR) Committee' and framed a Policy on CSR summary ofwhich together with details of CSR activities undertaken by the Company during thefinancial year 2016-17 have been covered in separate report on CSR annexed as AnnexureC.
The Policy on Corporate Social Responsibility is available on the Company's website. (www.shaily.com)
Policy on Nomination & Remuneration
The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under subsection (3) of Section 178 of the Companies Act2013 is available on our website (www.shaily.com). There has been no change in thepolicy since the last fiscal year. We affirm that the remuneration paid to the directorsis as per the terms laid out in the nomination and remuneration policy of the Company.
The Company believes in adopting best practices of corporate governance. Corporategovernance principles are enshrined in the spirit of the Company forming its core values.These guiding principles are also articulated through the Company's code of businessconduct corporate governance guidelines charter of various sub-committees and disclosurepolicy.
The Report on Corporate Governance as stipulated under Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
Extract of Annual Return
In accordance with the provisions of Section 134(3)(a) of the Companies Act 2013 anextract of the annual return of the Company for the financial year ended 31st March 2017in the prescribed format is annexed at Annexure D.
Particulars of Employees and related disclosures
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure D.
Obligation of Company under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The Company has in place a Policy against Sexual Harassment at workplace in line withthe requirement of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding Sexual Harassment. All employees (permanent contractualtemporary and trainees) are covered under this Policy.
No Complaint has been received by the Committee during the year.
Policy for determining materiality for disclosures
The Company has in line with the SEBI Listing Regulations 2015 devised a policy whichapplies to disclosure of material events affecting the Company. This policy deals withdissemination of unpublished price-sensitive information. The policy can be viewed onweblink; http://www.shaily.com/investors-details.aspx?id=10
Policy on Records and Archive Management
Devised in line with the requirements under SEBI Listing Regulations 2015 this policydeals with the retention and archival of corporate records of the Company. The policy canbe viewed at our website www.shaily.com on weblink; http://www.shaily.com/investors-details.aspx?id=10
Orders passed by the Regulators or the Courts or the Tribunals.
There are no significant and material orders passed by the Regulators or Courts orTribunals that may impact the going concern status of the Company's operation.
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since 31st March 2017. Further it ishereby confirmed that there has been no change in the nature of business of the Company.
Directors' Responsibility Statement
In terms of the provisions of Companies Act 2013 the Directors confirm that ;
(i) in preparation of the annual accounts for the financial year ended 31st March2017 the applicable accounting standards have been followed ;
(ii) They have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and profitand loss of the Company for that period;
(iii) They have taken proper and sufficient care towards the maintenance of adequateaccounting records in accordance with the provisions this Act for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities;
(iv) They have prepared the annual accounts on a going concern basis.
(v) They have laid down internal financial controls which are adequate and areoperating effectively.
(vi) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
We thank our customers vendors investors bankers for their continued support duringthe year. We place on record our appreciation of the contribution made by our employees atall levels. Our consistent growth is made possible by their hard work solidaritycooperation and support.
We also thank our suppliers customers business partners and others associated withthe Company. We look upon them as partners in its progress. It will be Company's endeavorto build and nurture strong links with the trade based on mutuality of benefits respectto and co-operation with each other consistent with consumer interests and looks upon allthe stakeholders for their continued support in future.
For and on behalf of the Board of Directors
|Vadodara ||Mahendra Sanghvi ||Amit Sanghvi |
|May 20 2017 ||Executive Chairman ||Managing Director |