SHILP GRAVURES LIMITED
Your Directors have pleasure in presenting the 27th Annual Report on theworking of the Company together with the Audited Accounts of the Company for the yearended 31st March 2020.
1. FINANCIAL PERFORMANCE: (Rs. in Lacs)
|Particulars ||Standalone ||Consolidated |
| ||For the year ended on 31st March 2020 ||For the year ended on 31st March 2019 ||For the year ended on 31st March 2020 ||For the year ended on 31st March 2019 |
|Revenue from Operations ||6587.00 ||7413.16 ||7064.59 ||- |
|Other Income ||141.34 ||215.90 ||122.32 ||- |
|Total Revenue ||6728.34 ||7629.06 ||7186.91 ||- |
|Operating expenses ||5754.99 ||5915.48 ||6212.84 ||- |
|Depreciation and Amortisation expenses ||588.64 ||685.68 ||613.71 ||- |
|Finance Cost ||130.17 ||120.41 ||147.27 ||- |
|Total Expenditure ||6473.80 ||6721.57 ||6973.82 ||- |
|Profit before Tax ||254.54 ||907.49 ||213.09 ||- |
|Tax Expense || || || || |
|Current tax ||112.58 ||236.72 ||112.58 ||- |
|Short provision for tax relating to prior years ||- ||(23.78) ||- ||- |
|Deferred tax ||28.51 ||(76.87) ||13.64 ||- |
|Net Profit for the year ||113.45 ||771.42 ||86.87 ||- |
|Other Comprehensive Income (net of tax) ||(3.38) ||(13.40) ||(7.24) ||- |
|Total Comprehensive Income ||109.57 ||758.02 ||79.63 ||- |
|Opening Balance of Retained Earning ||4439.76 ||4003.30 ||4439.76 ||- |
|Amount available for appropriation ||4549.33 ||4761.32 ||4519.36 ||- |
|Appropriations: || || || || |
|Transfer to General Reserves ||25.00 ||25.00 ||25.00 ||- |
|Dividend on Equity Shares ||184.49 ||246.00 ||184.49 ||- |
|Tax on Dividend ||37.92 ||50.56 ||37.92 ||- |
|Balance Carried to Balance Sheet ||4301.92 ||4439.76 ||4271.95 ||- |
*Note - As with effect from 9th August 2019 M/ s Etone India PriviateLimited Howrah West Bengal (herein after referred to as "Etone") acquired bythe Company the disclosures of previous period/ year data does not applicable.
2. REVIEW OF OPERATIONS:
On a consolidated basis the revenue from operations for FY 2020 was Rs.7064.59 Lacs.The profit after tax Profit after tax ("PAT") for FY 2019-20 was Rs.86.87 Lacs.On standalone basis the revenue from operations for FY 2019-20 was Rs.6587.00 Lacsdecreased by 11.14% percent over the previous year's revenue of Rs.7413.16 Lacs in FY2018-19. The Profit after tax ("PAT") was Rs.113.45 Lacs over the previousyear's Profit after tax ("PAT") of Rs.771.42 Lacs for FY 2018-19.
The Board of Directors of your company after considering the relevant circumstanceshas decided that it would be prudent not to recommend any Final Dividend for the yearunder review. The interim dividend of Rs.1.50 (i.e. @ 15%) per equity share of face valueof Rs.10 each declared by the Board at its meeting held on 17th March 2020 shall beconsidered as final dividend for F.Y. 2019-20.
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lock-downs of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers. This responsehas reinforced customer confidence in Shilp and many of them have expressed theirappreciation and gratitude for keeping their businesses running under most challengingconditions. Although there are uncertainties due to the pandemic and reversal of thepositive momentum post lockdown we expect business to improve gradually and that businesswill start moving upwards from 2nd quarter of FY20-21. We can expect the business tonormalize from the 3rd quarter of FY20-21. Strong balance sheet position and inherentresilience of the business model position the Company well to navigate the challengesahead and gain market share.
5. TRANSFER TO RESERVES:
The Company proposes to transfer Rs.25.00 Lacs to the General Reserve.
In its strategy to pursue inorganic growth for further accelerating its progress andexpanding its presence in eastern zone your Company's has acquired 100% stake in EtoneIndia Private Limited. Etone is a Company in similar line of business and is based inKolkata. The acquisition would provide manufacturing facilities on eastern zone and itwould also help focusing on to cater to the markets around Kolkata thereby increasing thepresence of the Company's product in that region.
7. PUBLIC DEPOSITS:
The Company has not accepted any deposits falling under the ambit of Section 73 of theCompanies Act 2013 (hereinafter referred to as "The Act") and the Rules framedthereunder during the year under review.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The particulars of loans guarantees and investments as per Section 186 of theCompanies Act 2013 by the Company have been disclosed in notes no. 7 8 and 13 to thefinancial statements.
9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
Information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated in Section 134(3)(m) of the Act read with Rule 8 of TheCompanies (Accounts) Rules 2014 is provided in Annexure A to the Board's Report.
10. CORPORATE GOVERNANCE:
Your Company has complied with the requirements of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 regardingCorporate Governance. A report on the Corporate Governance practices a Certificate fromStatutory Auditors regarding compliance of the conditions of Corporate Governance is givenas an annexure to this report. In compliance with Corporate Governance requirements as perthe Listing Regulations your Company has formulated and implemented a Code of BusinessConduct and Ethics for all Board members and senior management personnel of the Companywho have affirmed the compliance thereto. A certificate of Chief Executive Officer andChief Financial Officer of the Company in terms of Listing Regulations inter aliaconfirming the correctness of the Financial Statements and Cash flow statements is alsoannexed.
11. MANAGEMENT DISCUSSION & ANALYSIS REPORT:
A detailed report on Management Discussion and Analysis as required under Schedule V ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is included asseparate section forming part of this Report. Certain statement of the said report may beforward looking. Many factors may affect the actual results which could be different fromwhat the directors envisage in terms of performance and outlook.
12. LISTING OF SHARES:
The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip codeNo. 513709. The Company confirms that the annual listing fees to stock exchanges for thefinancial year 2020-21 have been paid.
13. DIRECTORS & KEY MANAGERIAL PERSONNEL:
13.1 Appointment/ Reappointment of Directors
In terms of the Articles of Association of the Company and on the recommendation of theNomination and Remuneration Committee the Board of Directors in its meeting held on 31stJanuary 2020 subject to approval of the shareholders of the Company appointed Dr.Baldev Patel (DIN : 00107161) as and Additional Director (Non-Executive Director) and Mr.Padmin Buch (DIN : 03411816) as an Additional Director (Independent Non-ExecutiveDirector). Dr. Baldev Patel and Mr. Padmin Buch hold office up to the date of theforthcoming Annual General Meeting and are eligible for appointment.
13.2 Director liable to Retire by Rotation
I n accordance with the provisions of Companies Act 2013 and Articles of Associationof the Company Mrs. Monica Kanuga (DIN: 06919996) is liable to retire by rotation at theensuing Annual General Meeting of the Company and being eligible offer herself forre-appointment. The Board recommends the appointment of Mrs. Monica Kanuga as Director ofthe Company retiring by rotation.
Details of the proposal for the appointment / re-appointment of Directors under Section102 of the Companies Act 2013 are mentioned in the Explanatory Statement of the Notice ofthe 27th Annual General Meeting ('AGM') of your Company.
13.3 Declaration by Independent Directors
Your Company has received annual declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of Independence provided in Section149(6) of the Companies Act 2013 and Regulations 16(1)(b) & 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and there has been no change inthe circumstances which may affect their status as Independent Director during the year.Also your Company has received annual declarations from all the Independent Directors ofthe Company confirming that they have already registered their names with the data bankmaintained by the Indian Institute of Corporate Affairs ["IICA"] as prescribedby the Ministry of Corporate Affairs.
The Independent Directors met on March 17 2020 without the attendance ofNon-Independent Directors and members of the Management.
13.4 Key Managerial Personnel
The following are the Key Managerial Personnel of the Company in terms of theprovisions of the Act read with The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as on March 31 2020: Mr Ambar Patel Managing Director Mr. RoshanShah Chief Executive Officer Mr Amit Agrawal Chief Financial Officer Mr Bharat PatelCompany Secretary
14. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that: a) that in the preparation of theannual financial statements for the year ended March 31 2020 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; b) that such accounting policies have been applied consistently andjudgment and estimates have been made that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as on March 31 2020 and of theprofit of the Company for the year ended on that date; c) that proper and sufficient carehas been taken for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) that the annual accounts have been preparedon a going concern basis; e) that the internal financial controls followed by the Companyare adequate and has been operating effectively; and f) that proper systems to ensurecompliance with the provisions of all applicable laws have been devised and such systemswere adequate and were operating effectively.
15. MEETINGS OF THE BOARD:
The Board of Directors met 6 (six) times during the year under review. The details ofBoard meetings and the attendance of the Directors are provided in the CorporateGovernance Report.
16. COMMITTEES OF BOARD:
Details of various committees constituted by the Board of Directors as per theprovisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and the Companies Act 2013 are given in the Corporate Governance Report.
17. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES / JOINT VENTURE:
The Company has one (1) Wholly Owned Subsidiary (WOS) as on March 31 2020. The Companyhas not any Associate or Joint Venture within the meaning of Section 2(6) of CompaniesAct 2013 ("ACT"). The Financial Statement of subsidiary in particular theinvestment made by subsidiary if any is reviewed by the Audit Committee.
18. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENT:
Pursuant to the provisions of Section 129 (3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiary in Form AOC-1 isgiven in Annexure-B. Your Directors have pleasure in attaching the Consolidated FinancialStatements pursuant to Regulation 33 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which have been prepared in accordance with theapplicable provisions of the Companies Act 2013 and Indian Accounting Standards("Ind AS") for financial year ended 31st March 2020 and approved by the Board.These Consolidated Financial Statements have been prepared on the basis of the AuditedFinancial Statements of the Company and its Subsidiary Company as approved by theirrespective Board of Directors. Further pursuant to the provisions of Section 136 of theCompanies Act 2013 the financial statements of the Company consolidated financialstatements along with relevant documents and separate audited financial statements inrespect of subsidiary are available on the website of the company.
19. WHISTLE BLOWER POLICY/ VIGIL MECHANISM:
The Company has adopted a whistle blower policy and has established the necessary vigilmechanism for employees and directors to report concerns about unethical behaviour. Noperson has been denied access to the Chairman of the Audit Committee. During the yearunder review there was no case of whistle blowing. The provisions of this policy are inline with the provisions of Section 177(9) of the Companies Act 2013 and as per theRegulation 22 read with Regulation 4(d) (iv) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015. The Company has formulated whistle blower policy which isavailable on Company's website at https:/ / www.shilpgravures.com/ Investorrelations/policies.
20. CORPORATE SOCIAL RESPONSIBILITY:
Shilp has been proactively carrying out CSR activities in alignment with the vision ofthe Company. Shilp strives continuously through its CSR initiatives to enhance valuecreation in the society and in the community in which it operates. Through its servicesconduct & initiatives it promotes sustained growth for the society and community infulfillment of its role as Socially Responsible Corporate with environmental concern.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company asadopted by the Board and the initiatives undertaken by the Company on CSR activitiesduring the year under review are set out in Annexure-C of this report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. Forother details regarding the CSR Committee please refer to the Corporate GovernanceReport which is a part of this report. The CSR policy is available on https:/ /www.shilpgravures.com/ Investorrelations/ policies.
21. NOMINATION AND REMUNERATION POLICY:
The Company has in place a policy for remuneration of Directors Key ManagerialPersonnel and a well-defined criteria for the selection of candidates for appointment tothe said positions which has been approved by the Board. The Policy broadly lays down theguiding principles philosophy and the basis for payment of remuneration to the executiveand non-executive Directors (by way of sitting fees and professional fees) Key ManagerialPersonnel. The above policy is available on Company's website at https:/ /www.shilpgravures.com/ Investorrelations/ policies.
22. BOARD EVALUATION:
The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of the working of its Audit andNomination & Remuneration Committees as mandated under the Act and SEBI ListingRegulations. The criteria applied in the evaluation process are explained in the CorporateGovernance Report.
23. ANNUAL RETURN:
The Extract of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies (Management and Administration) Rules 2014 in Form MGT-9 isannexed to this Board's Report as Annexure - D and available on the Company's websitehttps:/ / www.shilpgravures.com.
24. RELATED PARTY TRANSACTIONS:
All the related party transactions entered into during the financial year were on anarm's length basis and were in the ordinary course of business. Your Company had notentered into any transactions with related parties which could be considered material interms of Section 188 of the Companies Act 2013. Accordingly the disclosure of relatedparty transactions as required under Section 134(3)(h) of the Act in Form AOC 2 is notannexed. The Company has formulated a policy on related party transactions which isavailable on Company's website at https:/ / www.shilpgravures.com/ Investorrelations/policies.
The Board of Directors of the Company has approved the criteria for taking the omnibusapproval by the Audit Committee within the overall framework of the policy on relatedparty transactions. Prior omnibus approval is obtained for related party transactionswhich are of repetitive nature and entered in the ordinary course of business and at anarm's length basis. All related party transactions are placed before the Audit Committeefor review and approval. Members may refer to note no. 43 to the financial statement whichsets out related party disclosures pursuant to IND AS-24.
25. INTERNAL FINANCIAL CONTROLS:
The Directors had laid down internal financial controls to be followed by your Companyand such policies and procedures adopted by your Company for ensuring the orderly andefficient conduct of its business including adherence to your Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically. The Statutory Auditors have provided their report on internalfinancial control which is annexed hereafter.
26. INDIAN ACCOUNTING STANDARDS (IND AS):
The Company has followed the relevant Accounting Standards notified by the Companies(Indian Accounting Standards) Rules 2015 while preparing Financial Statements.
27. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and General Meetings.
28. TRANSFER OF EQUITY SHARES UNPAID/ UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION ANDPROTECTION FUND:
In line with the statutory requirements the Company has transferred to the credit ofthe Investor Education and Protection Fund set up by the Government of India equityshares in respect of which dividend had remained unpaid/ unclaimed for a period of sevenconsecutive years within the timelines laid down by the MCA. Unpaid/ unclaimed dividendfor seven years or more has also been transferred to the IEPF pursuant to the requirementsunder the Act. The details are available on Company's website at https:/ /www.shilpgravures.com/ investorrelations/ shareholderinformation.
29. EQUAL OPPORTUNITY EMPLOYER:
The Company is an equal opportunity provider and continuously strives to build a workculture which promotes the respect and dignity of all employees across the Organization.In order to provide women employees a safe working environment at workplace and also incompliance with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules framed thereunder the Company hasformulated a well-defined policy on prevention prohibition and redressal of complaintsrelating to sexual harassment of women at the workplace. No complaints pertaining tosexual harassment of women employees from any of the Company's locations were receivedduring the year ended March 31 2020.
30. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as Annexure - E.
31. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
No material changes or commitments have occurred between the end of the financial yearand the date of this Report which affect the financial statements of the Company inrespect of the reporting year.
32.1 Statutory Auditors:
At the twenty-fifth AGM held on July 14 2018 the Members approved appointment of M/ s.Shah & Shah Associates Chartered Accountants (Firm Registration No-113742W) asStatutory Auditors of the Company to hold office for a period of five years from theconclusion of that AGM till the conclusion of the thirty AGM subject to ratification oftheir appointment by Members at every AGM if so required under the Act. The requirementto place the matter relating to appointment of auditors for ratification by Members atevery AGM has been done away by the Companies (Amendment) Act 2017 with effect from May7 2018. Accordingly no resolution is being proposed for ratification of appointment ofstatutory auditors at the ensuing AGM and a note in respect of same has been included inthe Notice for this AGM. There has been no qualification reservation or adverse remark ordisclaimer in their Report. The Auditors' Report is enclosed with the financial statementsin this Annual Report.
32.2 Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshave appointed Mrs. Monica Kanuga Practicing Company Secretary (FCS.:3868 CP No. 3868)as Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Yearended March 31 2020. The Secretarial Audit Report for financial year 2019-20 in Form MR-3is annexed which forms part of this report as Annexure-F. There were no qualificationsreservation or adverse remarks given by Secretarial Auditor of the Company in theSecretarial Audit Report of the Company.
32.3 Internal Auditors:
The Board of Directors appointed M/ s. KJP & Associates LLP Chartered Accountantsas Internal Auditors of the Company for the F. Y. 2019-20.
32.4 Reporting of frauds by auditors:
During the year under review neither the statutory auditors nor the secretarialauditor has reported to the Audit Committee under Section 143 (12) of the Act anyinstances of fraud committed against the Company by its officers or employees the detailsof which would need to be mentioned in the Board's Report.
All the insurable interests of the Company including Inventories Buildings Plant& Machinery and Liabilities under legislative enactments are adequately insured.
The Company has maintained healthy cordial and harmonious relations at all levelsthroughout the year. We thank our customers vendors investors bankers for theircontinued support during the year. We place on record our appreciation of the contributionmade by our employees at all levels. Our consistent growth was made possible by their hardwork solidarity cooperation and support. The Directors also take this opportunity tothank all Auditors Bankers Consultants Investors Clients Government and RegulatoryAuthorities and Stock Exchanges for their continued support during the year and lookforward to their continued support in the future.
| ||For and on behalf of the Board of Directors of |
| ||Shilp Gravures Limited |
| ||Ambar Patel ||Shailesh Desai |
| ||(Managing Director) ||(Director) |
|Place: Rakanpur ||(DIN: 00050042) ||(DIN: 00169595) |
|Date: 20th June 2020 || || |