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Shaily Engineering Plastics Ltd.

BSE: 501423 Sector: Industrials
NSE: N.A. ISIN Code: INE151G01010
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OPEN 591.30
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VOLUME 1204
52-Week high 754.00
52-Week low 482.00
P/E 34.18
Mkt Cap.(Rs cr) 499
Buy Price 0.00
Buy Qty 0.00
Sell Price 600.00
Sell Qty 3.00
OPEN 591.30
CLOSE 604.90
VOLUME 1204
52-Week high 754.00
52-Week low 482.00
P/E 34.18
Mkt Cap.(Rs cr) 499
Buy Price 0.00
Buy Qty 0.00
Sell Price 600.00
Sell Qty 3.00

Shaily Engineering Plastics Ltd. (SHAILYENGINEER) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 36th Annual Report together withthe Audited Accounts for the year ended on 31st March 2016.

Financial Highlights

(Rs. in lacs)

Particulars Financial Year
2015-16 2014-15
Net revenue from Operations 22553.94 17970.86
Other Income 279.50 155.02
TOTAL REVENUE 22833.44 18125.88
Total Expenses 20691.94 15322.40
Profit Before Interest Depreciation & Tax 4180.54 2803.48
Finance Cost 1013.45 671.92
Depreciation and amortization expense 1025.59 641.89
Profit Before Tax 2141.50 1489.67
Current Tax 458.54 312.31
Short provision in earlier years - (0.19)
Deferred tax 134.65 188.98
Add: MAT Credit Entitlement 0.89 312.31
Net Profit for the year 1549.20 1300.88

Business & Operational Performance

• The Company’s total sales has increased by 25.5 % as compared toprevious year.

• EBITDA for the year has been 41.8 crores as compared to 28.03 crores in previousyear an increase of 49% over last year. EBITDA margins during the year increased from15.46% in FY 15 to 18.30% in the current year an increase of 284 basis points.

• The Profit Before Tax (PBT) is Rs. 2141.5 lacs which has increased by 43.76%compared to P.Y. which was Rs. 1489.67 lacs.

• The Net Profit for the year is Rs. 1549.20 lacs as compared to Rs. 1300.88 lacsin FY 15. This represents an increase of 19% over last year.

Your Company has been awarded as the TOP Exporter of Engineering Plastic Componentsfrom INDIA for the years 2013-14 and 2014-15 by the "The Plastics Export PromotionCouncil (PLEXCONCIL)". The Company has been awarded with this recognition since theYear 2005.

Your Company has this year obtained Quality Certification ISO 15378:2011 forManufacturing and supply of Plastic Moulded Components and/or assemblies used as PrimaryPackaging Material for medicinal products.

The Company has substantially expanded its Export Oriented Unit (EOU) plant during thisyear.

All significant accounting policies and material transactions have been disclosed innotes on accounts to the Balance Sheet as on 31st March 2016.

India is a growing market for plastics and consumes about 11 million tonnes annuallyagainst a global consumption of 275 million tonnes per year and worldwide. The plasticsand polymer consumption is growing at an average rate of 10 percent and is expected totouch 16.5 million tonnes by 2016.

The Plastics Industry grew by 13 per cent annually in the last five years and isexpected to continue a double-digit growth beyond 2016-17 according to a study onPlastics Industry.

In order to cater to the increased demand of plastics consumption the plasticsprocessing industry will need to grow from a current installed processing capacity of 30MMT to 45 MMT per annum by 2020.

Shaily’s Strategy

Your Company focuses on quality technology and innovation as cornerstones of its longterm strategy. We continue to invest in expansion of our manufacturing and engineeringcapabilities. We keep customer at the centre stage of all our actions and get involved incustomer projects at an early stage of development. This helps us in our endeavours toposition Shaily as a preferred partner of our customers.

The key to Shaily’s success lies in a combination of varied factors; performanceon existing operations cost effectiveness through innovative manufacturing solutions ontime and within cost delivery of new projects. These are important not only to delight thecustomer but also for your growth and improved profitability.

Consistent implementation of initiatives to improve market excellence operationalexcellence and people excellence your Company strives not only to achieve profitablegrowth but to also improve its long term competitiveness in the business.

Dividend

The Board of Directors are pleased to recommend for consideration of the shareholdersat the ensuing Annual General Meeting payment of dividend at 40 % (Rs. 4/- per equityshare) on the paid up capital of the company for the year ended on 31st March2016.

Directors

The Board of Directors has in its meeting held on May 18 2016 upon recommendation ofthe Nomination & Remuneration Committee appointed Mr. Dilip Shah as an AdditionalIndependent Director with effect from May 18 2016. His appointment is proposed to beregularized in the ensuing 36th Annual General Meeting.

Ms. Tilottama Sanghvi Whole Time Director will retire by rotation at the ensuingAnnual General Meeting and being eligible offers herself for re-appointment.

The Board of Directors in its meeting held on February 11 2016 upon recommendationof the Nomination & Remuneration Committee recommended extension of tenure ofMr. Mahendra Sanghvi and Mr. Laxman Sanghvi as Executive Chairman and Executive Directorrespectively with effect from April 01 2016 for a period of 3 years i.e. from01.04.2016 to 31.03.2019 subject to the approval of members at the forthcoming 36thAnnual General Meeting.

A brief resume of and particulars relating to the above directors is given in theNotice of the 36th Annual General Meeting.

Mr. A S Anandkumar Independent Director of the Company has tendered his resignationeffective from May 19 2016. The necessary legal formalities in connection thereto havebeen complied with.

Details of all the Directors seeking appointment/re-appointment are included in thenotice calling the 36th Annual General Meeting. Your directors have pleasure inrecommending their appointment / re-appointment.

Key Managerial Personnel (KMP)

Pursuant to the provisions of Section 2(51) and 203 of the Companies Act 2013 readwith Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 following persons are acting as Key Managerial Personnel of the Company as on March31 2016 :-

- Mr. Mahendra Sanghvi Executive Chairman

- Mr. Laxman Sanghvi Executive Director

- Ms. Tilottama Sanghvi Whole Time Director

- Mr. Amit Sanghvi Managing Director

- Mr. Sanjay Shah CFO & Vice President – Finance

- Ms. Preeti Sheth Asst. Company Secretary

Ms. Preeti Sheth holding an Associate Membership of the Institute of CompanySecretaries of India has been appointed as a Company Secretary designated as Asst.Company Secretary of the Company effective from November 09 2015.

Ms. Apeksha Patel Asst. Company Secretary has resigned from the Company effectivefrom November 07 2015.

Independent Directors’ Declaration

The Company has received the declarations in the prescribed format from eachIndependent Director confirming that they meet the criteria of independence as envisagedin the provisions of Section 149 of the Companies Act 2013 read with Regulation 16 ofSecurities and Exchange Board of India (Listing Obligations & Disclosure Requirements)Regulations 2015.

Related Disclosures

Remuneration and other details of the Key Managerial Personnel for the year ended 31stMarch 2016 are mentioned in the Extract of Annual Report which is attached as Annexureand forms part of the Report of Board. (ANNEXURE – E)

The details of Familiarisation Programme and Annual Board Evaluation process have beenprovided under the Corporate Governance Report.

Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors.

During this year four Board and Audit Committee Meetings were convened and held thedetails of which are given 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 read with the erstwhile Listing Agreement.

Statement indicating the manner in which formal annual evaluation has been made by theboard of its own performance and that of its committees and individual directors has beengiven in the Report on Corporate Governance.

Deposits

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.

Particulars of Loans given Guarantees given Investments made and Securities provided

Details of Loans Guarantees and Investments covered under the provisions of section186 of the Companies Act 2013 are given in the Note 14 to the Financial Statements.

Conservation of Energy Technology absorption and Foreign Exchange earnings and outgo– need to mention in details.

Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 is as hereunder:

A) Conservation of Energy

The Company has installed in-built energy mechanism to conserve energy and looks atvarious options in Conservation of Energy.

B) Technology Absorption

- Research and Development: The Company has developed several dies and mouldswhich were earlier imported. The Company has also developed several plastic componentswhich were earlier imported. The activities in development are carried out by thetechnicians and the expenditure thereon is debited to the respective heads.

- Technology absorption adaptation and innovation: The Company has manufactured variedplastic components of international standard/quality which are import substitutes fordiverse applications.

C) Foreign exchange earnings and outgo

Total Foreign Exchange outgo used is Rs. 6969 lacs and total Foreign Exchange earned isRs. 16867 lacs.

There were no material changes and commitments pursuant to Section 134(3)(l) of theCompanies Act 2013 which has affected the financial position of the Company between theend of the Financial Year 2015-16 and the date of the report.

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 and it deals with the Business Operations and FinancialPerformance Research & Development Expansion & Diversification Risk ManagementMarketing Strategy Safety & Environment Human Resource Development etc. (ANNEXURE– A)

Corporate Governance

The Company has been following the principles and practices of good CorporateGovernance and has ensured compliance of the requirements stipulated under Clause 49 ofthe erstwhile Listing Agreement read with Regulation 34 of the Securities Exchange Boardof India (Listing Obligations and Disclosure Requirement) Regulations 2015.

A detailed report on Corporate Governance as required under Regulation 34 of theSecurities Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015 is appended alongwith the Corporate Governance Report issued by M/sSamdani Shah & Asso. Company Secretaries Vadodara (Gujarat) the Company’sSecretarial Auditors confirming the compliance of conditions on Corporate Governanceforms part of the Boards Report. (ANNEXURE - B)

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 has been appended to this Report.(ANNEXURE - D).

Vigil Mechanism

Your Company has a well-defined "Whistle Blower Policy" and has establishedVigil Mechanism to provide for adequate safeguards against victimisation of Directors andemployees who follow such mechanism and has also made provisions for direct access to theChairman of Audit Committee in appropriate cases.

The Vigil Mechanism Policy of the Company is available on the Company’s website atthe weblink - http:// www.shaily.com/downloads.aspx

Disclosures under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

The Company has in place a Policy against Sexual Harrasment at workplace in line withthe requirement of Sexual Harrasment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding Sexual Harrasment. All employees (permanent contractualtemporary and trainees) are covered under this Policy.

No Complaint has been received by the Committee during the year.

Directors Training & Familiarization

The Directors are regularly informed during the meetings of the Board and theCommittees of the activities of the Company its operations and issues facing thePlastics Industry. Considering the long association of the Directors with the Company andtheir seniority and expertise in their respective areas of specialization and knowledge ofthe plastics industry their training and familiarization were conducted in the belowmentioned areas :

1. The Roles Rights Responsibilities and Duties of Independent Directors.

2. Business Development Strategy and Plans.

3. Changes brought in by the introduction of the Securites Exchange Board of India(Prohibition of Insider Trading) Regulations 2015.

4. New SEBI Regime – Securities Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations 2015.

The details of the Familiarization Programme so imparted can be viewed at thefollowing weblink - http:// www.shaily.com/downloads.aspx

Annual Evaluation

Your Company believes that systematic evaluation contributes significantly to improvedperformance at three levels - Organizational Board and Individual Board Member. Itencourages the leadership teamwork accountability decision making communication andefficiency of the Board. Evaluation also ensures teamwork by creating better understandingof Board dynamics board-management relations and thinking as a group within the Board.

Pursuant to the provisions of the Companies Act 2013 and Regulations 17 & 19 readwith Part D of Schedule II to the Securities Exchange Board of India (Listing Obligationsand Disclosure Requirement) Regulations 2015 the Board has carried out an annualperformance evaluation of its own and that of its Committees and Individual Directors oncertain parameters set out in the Nomination and Remuneration Policy adopted by the Board.

Performance evaluation criteria for the Board its Committees the Directors and theChairman of the Company were circulated to and responded by the Directors. A consolidatedsummary of the ratings as provided by the Directors was prepared by the CompanySecretary. Independent Directors in their meeting have evaluated performance of the‘Board’ the ‘Non-independent Directors’ as well as the‘Chairman’ of the Company and submitted their recommendation to the Board. TheNomination and Remuneration Committee has further carried out evaluation of all Directorsincluding Independent Directors. The report of performance evaluation so arrived at wasthen noted and discussed by the Nomination and Remuneration Committee and the Board intheir respective meetings.

Nomination and Remuneration Policy

Your Board has adopted a Nomination and Remuneration Policy as required by Section 178of the Companies Act 2013 The Policy provides for the appointment and removal ofDirectors Key Managerial Personnel and Senior Management employees and theirremuneration. The terms of reference of the Nomination and Remuneration Committee aregiven in the Report on Corporate Governance under the section "Nomination &Remuneration Committee".

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. On March 31 2016 the Board consists of eight members four of whom areExecutive and four are Independent Directors.

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 sub-section (3) of Section 178 of the Companies Act2013 the SEPL Nomination and Remuneration Policy is available on the Company’swebsite at the weblink - http://www.shaily.com/downloads.aspx . There has been no changein the policy since last financial year. We affirm that the remuneration paid to theDirectors is as per the terms laid out in the nomination and remuneration policy of theCompany.

Audit Committee

The Audit Committee of the Board consists of Four Independent Directors.

The composition role terms of reference as well as power of the Audit Committee arein accordance with the provisions of Regulation 18 of the Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 177of the Companies Act 2013 and rules/regulations made thereunder.

Audit Committee Composition & Attendance during F.Y.2015-16

Name of the Directors Designation
Mr. A.S Anandkumar Chairman
Mr. William Sean Sovak# Member
Mr. Sarup Chowdhary Member
Mr. Milin Mehta Member
Mr. P.R Singhvi Member

# Mr. William Sean Sovak has ceased to be a Director w.e.f. 22ndJuly 2015.

The details of all related party transactions are placed periodically before the AuditCommittee. All the recommendations made by the Audit Committee were accepted by the Board.The Company has in place Vigil Mechanism; details of which are available on theCompany’s website at weblink - http://www.shaily.com/ downloads.aspx. The Committeehas also been delegated the responsibility for monitoring and reviewing risk managementassessment and minimization procedures implementing and monitoring the risk managementplan and identifying reviewing and monitoring all elements of risks which the company maybe exposed to.

The details of terms of reference of the Committee Number and dates of meeting heldattendance of the Directors and remuneration paid to them are given in the attachedCorporate Governance report under the section "Audit Committee".(ANNEXURE -B)

Risk Management Policy

Your Company has implemented a mechanism for risk management and has formulated a RiskManagement Policy to identify evaluate business risks and opportunities. This frameworkseeks to create transparency minimize adverse impact on the business objectives andenhance the company’s competitive advantage.

Internal Financial Control system and their adequacy

The company has an internal control system commensurate with the size scale andcomplexity of its operation.

Contracts and Arrangements with Related Parties

The transactions with the related parties are governed by prevailing regulatoryrequirements and Company’s policy on dealing with such transactions. All relatedparty transactions that were entered during the financial year were placed before theAudit Committee as also the Board for their approval. All the transactions with theRelated Parties entered during the year were carried on arm’s length basis and thereare no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated person which may havepotential conflict with the interest of the Company at large. Therefore the informationpertaining to Section 188(1) read with Section 134(3)(h) of the Companies Act 2013 andRule 8(2) of the Companies (Accounts) Rules 2014 (Form AOC-2) is not required tobe annexed to this Report.

The policy on Related Party Transactions as approved by the Board is uploaded on theCompany’s website. i.e. www.shaily.com and could be viewed at the weblink ;(http://www.shaily.com/downloads.aspx ).

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 CSRsummary of which together with details of CSR activities undertaken by the Company duringthe financial year 2015-16 have been covered in separate report on CSR annexed to thisreport. (ANNEXURE - C)

The Committee met once during the year on 16th May 2015 to peruse thespending’s and budget for CSR Activities. The Policy on Corporate SocialResponsibility is available on the Company’s website and can be viewed at the weblink; http://www.shaily.com/downloads.aspx

Nomination & Remuneration Committee

In compliance with Section 178 of the Companies Act 2013 Your Company has in place a"Nomination & Remuneration Committee".

The powers role and terms of reference of the Nomination and Remuneration Committeecovers the areas as contemplated under Regulation 19 of the Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 178of the Companies Act 2013 and rules and regulations made thereunder besides otherterms as may be referred by the Board of Directors. The terms of reference of theNomination & Remuneration committee number and dates of meeting held attendance ofthe Directors and remuneration paid to them are given separately in the attached CorporateGovernance report under the section " Nomination & RemunerationCommittee". (ANNEXURE – B)

AUDITORS

• Statutory Auditors

M/s Deloitte Haskin & Sells (Registration No.: 117364W) the StatutoryAuditors of the Company hold office until the conclusion of the ensuing 36thAnnual General Meeting and are recommended for re-appointment for the Financial Year2016-17 & 2017-18. i.e. until the conclusion of the 38th Annual GeneralMeeting of the Company subject to ratification of members in the 37th AGM.Based upon the declaration on their eligibility consent and terms of engagement yourDirectors propose their re-appointment in the 36th Annual General Meeting ofthe Company.

Internal Auditors

M/s Shah Jain & Hindocha Chartered Accountants Vadodara have been appointed asInternal Auditors of the Company in terms of Section 138 of the Companies Act 2013 andrules and regulations made thereunder for the Financial Year 2016-17 by the Board ofDirectors upon recommendation of the Audit Committee.

Cost Auditors

M/s Y.S. Thakar & Co. Cost Accountants Vadodara (Firm Registration No. 000318)were appointed as Cost Auditors to carry out the audit of cost records of the Company forthe Financial Year ending on 31st March 2016. Based upon the declaration ontheir eligibility consent and terms of engagement your Directors have appointed them andrecommend the ratification of remuneration to be paid to the Cost Auditors for theFinancial Year 2016-17.

• Secretarial Auditors

M/s Samdani Shah & Associates a firm of Company Secretaries in practice based inVadodara Gujarat were appointed as Secretarial Auditors to carry out Secretarial Auditof the Company. In terms of provisions of Section 204 of the Companies Act 2013 aSecretarial Audit Report has been annexed to this Report. (ANNEXURE - F)

Explanation or Comments on disqualifications reservations adverse remarks ordisclaimers in the auditor’s reports;

There have been no disqualifications reservations adverse remarks or disclaimers inthe auditor’s reports requiring explanation or comments by the Board.

Extract of Annual Return

As per the regulatory requirements "Extract of Annual Return" (Form MGT-9)is provided in a separate report annexed to this Report as ANNEXURE - G.

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.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 yourDirectors hereby state that:

(i) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed;

(ii) The accounting policies have been selected and these have been appliedconsistently and judgements and estimates made thereon are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company for the year ended on31st March 2016 and of the profit of the Company for that period;

(iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) Annual Accounts have been prepared on a ‘going concern’ basis.

(v) Internal Financial Controls have been laid down and being followed by the Companyand that such internal financial controls are adequate and were operating effectively.

(vi) Proper systems to ensure compliance with the provisions of all applicable lawshave been devised.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and External Consultants and the reviews performed by the Managementand the Audit Committee the Board is of the opinion that the Company’s InternalFinancial Controls were adequate and effective during the financial year ended March 312016.

Acknowledgement

Your Directors wish to place on record their sincere appreciation to employees at alllevels for their hard work dedication and commitment.

The Board places on record their appreciation for the support and co-operation yourCompany has been receiving from its suppliers customers business partners and othersassociated with the Company. Your Company looks upon them as partners in its progress andhas shared with them the rewards of growth. It will be Company’s endeavor to buildand nurture strong links with the trade based on mutuality of benefits respect to andcooperation with each other consistent with consumer interests.

Your Directors also take this opportunity to thank all investors clients vendorsbanks regulatory and government authorities and stock exchange for their continuedsupport.

For and on behalf of the Board
Mahendra Sanghvi
Vadodara May 18 2016 Executive Chairman
DIN : 00084162

Information as per Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

1. The Ratio of the remuneration of each Director to the median remuneration ofthe employees for the Financial Year 2015-16 and the Percentage increase in remunerationof each Director Chief Financial Officer Company Secretary in the F.Y. 2015-16

S. No Name of Director Designation Remuneration (paid/payable) in 2015-16 Ratio of Directors Remuneration to Median Remuneration % of increase in Remuneration in Financial Year 2015-16
(Rs. in lacs)
A Executive Directors
1 Mr. Mahendra Sanghvi Executive Chairman 89.70 46.66:1 -
2 Mr. Laxman Sanghvi Executive Director 60.07 31.45:1 -
3 Ms. Tilottama Sanghvi Whole Time Director 32.03 16.66:1 -
4 Mr. Amit Sanghvi Managing Director 89.70 46.66:1 74.44
B Key Managerial Personnel
5 Mr. Sanjay Shah Chief Financial Officer & Vice President – Finance 32.19 NA 5.14
6 *Ms. Apeksha Patel (Upto November 07 2015) Asst. Company Secretary 1.22 NA
7 *Ms. Preeti Sheth (From November 09 2015) Asst. Company Secretary 1.46 NA

*Note :Ms Preeti Sheth appointed as Asst. Company Secretary effective from November 092015 upon resignation of Ms. Apeksha Patel.

2. The percentage increase in the median remuneration of employees in theFinancial Year :

The median remuneration of employees of the Company was increased by 11.78% during theFinancial Year 2015-16.

3. The number of permanent employees on the rolls of the Company as on March 312016 :

The number of Staff was 258 and of the Permanent Workers was 101 as on March 31 2016.

4. The Relationship between average increase in remuneration and CompanyPerformance

As per the remuneration policy of your Company employees are compensated on the basisof performance and potential needed for achieving competitive advantage in the business.The compensation structure has been built by regular benchmarking over the years withrelevant players across the industry in which your Company operates in. The increases in2015-16 were in line with your Company’s performance as well as per Company’smarket competitiveness.

5. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company

Internally performance ratings of all employees (staff) are always spread across anormal distribution curve. The rating given to an employee is used as an input todetermine his variable and merit pay increases. Variable and Merit pay increases arecalculated using a combination of individual performance and Company performance.

6. Variations in the Market Capitalization of the Company price earnings ratioas at closing date of the current Financial Year and previous financial year

Particulars March 31 2015 March 31 2016 % Change
*Market Capitalization (Rs. in Crores) 257.87 415.92 61.29%
Price Earnings Ratio 18.03 26.85 48.92%

*For computation of Market Capitalisation& PE Ratio we have considered BSE Closingshare price as on March 31 of respective years.

7. Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration:

Internally performance ratings of all employees are always spread across a normaldistribution curve. The rating obtained by an employee is used as an input to determinehis variable and merit pay increases. Variable and merit pay increases are calculatedusing a combination of individual performance and Company performance.

There are no exceptional circumstances for increase in managerial remuneration.

8. Comparison of the remuneration of each of the Key Managerial Personnelagainst the performance of the Company

The compensation for the Key Managerial Personnels Senior Management and Employees(Staff) of the Company is guided by the external competitiveness and internal paritythrough benchmarking surveys.

9. Key Parameters for any variable component of remuneration availed byDirectors

The key parameters for any variable component of remuneration availed by the Executive& Non-executive Directors are considered by the Board of Directors based on therecommendations of Nomination & Remuneration committee as per the Remuneration policyfor Directors Key Managerial Personnel Senior Management Team and other Employees.

All employees including the Managing Director’s entitlement to incentive has avariable component which is based on the individual’s performance and company’sfinancial performance. Other components of remuneration are not variable during aparticular year.

10. Ratio of the remuneration of the highest paid Director to that of the employees whoare not Directors but receive remuneration in excess of the highest paid Director duringthe year:

No Employee of the Company has been paid salary in excess of any Managing / Whole-timeDirector of the Company.

11. Affirmation that the remuneration is as per the remuneration policy of the Company:

We affirm that remuneration paid to the Employees & Directors is as per theremuneration policy of the Company.

For and on behalf of the Board
Mahendra Sanghvi
Executive Chairman
Vadodara May 18 2016 DIN : 00084162