DIRECTORS' REPORT: To The Members, Your Directors have pleasure in presenting the 22nd Annual Report on the working of the Company together with the Audited Accounts of the Company for the year ended on 31st March, 2015. OPERATIONS & STATE OF AFFAIRS The Operations during the year under review were satisfactory. Your Company has achieved a gross turnover of Rs. 6143.36 Lacs from Rs. 5823.78 Lacs in the previous year. The Profit after Tax has increased to Rs. 454.09 Lacs for the year under review as compared to Rs. 422.93 Lacs in the previous year. The earnings per share (EPS) of the company have also increased to Rs. 7.38 per share during the year under review as against Rs. 6.88 per share in the previous year. DIVIDEND & RESERVES In consideration to the stagnant performance of the Company for the financial year 2014 - 15, the Board of Directors ("the Board") have decided to recommend a final dividend of Rs. 1.20/- per share, being 12.00% (at par with the previous year) on the face value of Rs. 10/- per share on 6,149,800 Equity Shares of the Company to be appropriated from the profits of the Company for the financial year 2014 - 15. In compliance to the provisions of section 123 (1) of the Companies Act, 2013, the Company proposes to transfer a sum of Rs. 25.00 Lacs to the General Reserve being 5.51% of the Current year's profit. FIXED DEPOSITS The Company has not accepted any public deposits and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the balance sheet. DIRECTORS & KEY MANAGERIAL PERSONNEL (a) Regularizing Dr. Baldev Patel (DIN: 00107161) Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Dr. Baldev Patel who was appointed as an Additional Director of the Company by the Board of Directors at their Meeting held on 3rd February, 2015, shall hold office upto the date of the ensuing Annual General Meeting. The Company has received a requisite notice in writing from a member proposing his appointment as a Director. The Board of Directors recommends his appointment. (b) Resignations Mr. Vitthaldas Patel (DIN: 00126972) During the year under review, Mr. Vitthaldas Patel has resigned from the Chairmanship and Directorship of the Company with effect from 31st March, 2015 due to his other pre-occupations. The Board placed on record its appreciation for the valuable guidance and contribution to the board made by Mr. Patel during his tenure as Director of the Company. Mr. Chandraprakash Devpura - Key Managerial Personnel During the year under review, Mr. Chandraprakash Devpura has resigned from the position of Chief Financial Officer of the Company with effect from 28th February, 2015. The Board has placed on record its appreciation for the valuable services rendered by him. Mr. Pragnesh Darji - Key Managerial Personnel During the year under review, Mr. Pragnesh Darji (ACS 24382) has resigned from the post of Company Secretary with effect from 15th November, 2014. The Board has placed on record its appreciation for the valuable services rendered by him. (c) Retirement By Rotation Mr. Nipam Shah (DIN: 00093697) In accordance with the provisions of Section 152(6) and Articles of Association of the Company, Mr. Nipam Shah will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re-appointment. The Board recommends his re-appointment. (d) Appointment Ms. Gurnish Chhabda - Key Managerial Personnel During the year under review, Ms. Gurnish Chhabda (ACS 28103) was appointed by the Board at its meeting held on 3rd February, 2015 as the Whole-time Company Secretary of the Company. (e) Declaration by Independent Directors The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, the Directors hereby state and confirm that: a) in the preparation of annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; b) the accounting policies have been applied consistently and reasonable and prudent estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-2015 and the profit of the Company for that period; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Annual Accounts have been prepared on a 'going concern basis'; e) the internal financial controls followed by the Company are adequate and has been operating effectively; and f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and have been operating effectively. AUDITORS AND COMMENTS ON AUDITORS' REPORT (a) Statutory Auditors M/s. Deloitte Haskins & Sells (DHS), (ICAI firm Registration Number 117365W), Chartered Accountants (CAs), Ahmedabad, were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2018. In terms of the first proviso to Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. In this regard, the Board based on the recommendation of the Audit Committee recommends the appointment of M/s. Deloitte Haskins & Sells "DHS" as statutory auditors of the Company for the financial year 2015 - 16. The notes on the financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditors Report forming part of this Annual Report does not contain any qualification, reservation or adverse remark. (b) Secretarial Auditors The Board had appointed Mrs. Monica Kanuga, Practicing Company Secretary, Ahmedabad as the Secretarial Auditors to conduct Secretarial Audit for the financial year 2014 - 15 under the provisions of Section 204 of the Companies Act, 2013. The report of Secretarial Auditor is annexed to this report as Annexure - I. The observations made by the Auditor in the Report relates to the reporting/publishing requirements. The Management submits that the lapses are purely out of inadvertence and unintentional. The Management undertakes to ensure complete compliance henceforth. DISCLOSURES UNDER THE COMPANIES ACT, 2013 (a) Extract of Annual Return The details forming part of the extract of the Annual Return is annexed to this report as Annexure - II (b) Number of Board Meetings The Board of Directors met 4 (four) times during the year 2014 - 15. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report. (c) Composition of Audit Committee The Audit Committee comprises of Mr. Chinubhai Shah as the Chairman and Mr. Shailesh Desai and Mr. Ambar Patel as the Members of the Committee. More details on the committee are given in the Corporate Governance Report. All the recommendations by the Audit Committee were accepted by the Board. (d) Particulars of Loans given , Guarantees given, Securities provided and Investments made During the year under review, an investment of X 75,00,000/- was made in acquiring the 7,50,000 Non-Cumulative Redeemable Preference Shares ("NCRPS") of X 10/- each of HMSU Rollers (India) Pvt. Ltd. (this investment falls under the provisions of Section 186 of the Companies Act, 2013). (e) Related Party Transactions All the related party transactions entered by the Company during the financial year were on an arm's length basis and in compliance with the applicable provisions of the Act and the Listing Agreement. All the Related Party Transactions are presented before the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The statement is supported by the certificate from the MD / CEO and the CFO. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.shilpgravures.com. The web-link as required under the Listing Agreement is as under: <http://www.shilpgravures.com/pdf/Related%20Party%20Transaction%20Policy.pdf> During the year, the Company had not entered into any materially significant related party transactions which have potential conflict with the interest of the Company at large and hence there is no information to be provided under section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014. (f) Internal Control Systems With the formalized systems and procedures, the Company is able to continuously monitor the efficacy of internal controls and to provide to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organization's risk management, control and governance processes. All significant audit observations and follow-up actions therein were reported to the Audit Committee. The Audit Committee also met the company's Statutory auditors to ascertain their views on the financial statements, including the financial reporting system, compliance to Accounting policies and procedures, the adequacy and effectiveness of the internal controls and systems followed by the Company. (g) Vigil Mechanism / Whistle Blower In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 and Listing Agreements, a Vigil Mechanism or Whistle Blower Policy for directors and employees to report genuine concerns has been established. The same is also uploaded on the website of the Company - www.shilpgravures.com and can be accessed at the following web link: . <http://www.shilpgravures.com/pdf/Whistle%20Blower%20Policy.pdf> (h) Performance Evaluation In compliance with the Companies Act, 2013, and Clause 49 of the Listing Agreement, the performance evaluation of the Board was carried out during the year under review. More detail on the same is given in the Corporate Governance Report. (i) Material Changes There have been no material changes and commitments affecting the financial position of the Company since the close of financial year March 31, 2015. Further, it is hereby confirmed that there has been no change in the nature of business of the Company. (j) CSR Policy In compliance with requirements of Section 135 of the Companies Act, 2013, the Company has laid down a CSR Policy. The composition of the Committee, contents of CSR Policy and report on CSR activities carried out during the financial year ended March 31, 2015 in the format prescribed under Rule 9 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure III. (k) Nomination and Remuneration Policy The contents of Nomination and Remuneration Policy of the Company is prepared in accordance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 (IV) of the Listing Agreement. The policy is devised by the Nomination & Remuneration Committee and thereafter approved by the Board. More details on the same are provided in the Corporate Governance Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As per the terms of Clause 49(VIII)(D) of the Listing Agreement entered into with the Stock Exchange, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report. CORPORATE GOVERNANCE REPORT We comply with the Securities Exchange Board of India (SEBI's) guidelines on Corporate Governance. We have documented our internal policies on Corporate Governance. A report on Corporate Governance along with the requisite certificate from the Auditors of the Company in compliance of terms of the Corporate Governance pursuant to Clause 49 of the Listing Agreement entered into with the Stock Exchange is attached and forms part of this report. PARTICULARS OF EMPLOYEES The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure IV to the Board's Report. During the year under review, there are no employees in respect of whom the information as per Section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is required to be disclosed. SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANY AND ITS CONSOLIDATED FINANCIAL STATEMENT The Company has one Subsidiary and one Joint Venture as on March 31, 2015 by the name of "ReShilp Equipments (India) Private Limited and "HMSU Equipments (India) Private Limited", respectively. There has been no material change in the nature of the business of the subsidiary. The Board of Directors of the Company regularly reviews the affairs of its Subsidiary. The Consolidated Financial Statements of the Company, its subsidiary company and its joint venture company have been prepared in accordance with the relevant Accounting Standards and are provided in the Annual Report. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the provisions of the Companies Act, 2013 is provided as Annexure A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company's website www.shilpgravures.com <http://www.shilpgravures.com> and can be accessed on the following web link : <http://www.shilpgravures.com/pdf/Policy%20on%20Material%20Subsidiary.pdf> CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - V to this report. INSURANCE All the insurable interests of the Company including Inventories, Buildings, Plant & Machinery and Liabilities under legislative enactments are adequately insured. ACKNOWLEDMENTS Your Directors express their appreciation for the continued co-operation, support & assistance received from Auditors, Bankers, Statutory Authorities, Customers, Vendors, Consultants as well as Shareholders during the year. Your Directors also wish to place on record their appreciation for the dedicated services and contribution given by all the employees of the Company. Your Directors gratefully acknowledge the trust and confidence and look forward for their continued support in the future. On the behalf of The Board of Directors Baldev Patel (Chairman) Ambar Patel (Managing Director) Place: Rakanpur Date : 08.08.2015 |