Shaily Engineering Plastics Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting their 40th Annual Report together with the Audited statement of Accounts for the year ended on 31st March 2020.

FINANCIAL SUMMARY & HIGHLIGHTS

( Rs in Lacs)
Particulars FY 2019-20 FY 2018-19
Revenue 33,703.30 34,012.14
Profit before Interest, Depreciation & Tax 5,908.99 5,440.03
Finance Cost 1,049.90 952.94
Depreciation & amortisation expense 1,789.32 1,491.64
Profit before Tax 3,069.77 2,995.45
Provision for Tax 710.75 1,067.38
Profit after Tax 2,359.02 1,928.07
Other Comprehensive Income (34.62) 7.19
Total Comprehensive Income 2,324.40 1,935.26

The above figures are extracted from the financial statements prepared in accordance with Indian Accounting Standards (Ind AS) as specified in the Companies (Indian Accounting Standard) Rules, 2015, as amended in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

APPROPRIATIONS Transfer to Reserves

The Company does not propose to transfer amounts to the general reserve out of the amount available for appropriation.

Dividend

The Company is expanding its facilities and re-investing cash accruals for the same. In view of the same, the Company has decided not to pay any dividends for the current year.

In view of the same, your Directors do not recommend dividend for this financial year.

Impact of COVID-19 pandemic on the business of the Company is discussed in detail in the Management Discussion & Analysis.

The Register of Members and Share Transfer Books will remain closed from Saturday, 19th September 2020 to Saturday, 26th September 2020 (both days inclusive) for the purpose of 40th Annual General Meeting scheduled to be held on Saturday, 26th September 2020.

OPERATIONS & STATE OF AFFAIRS

The Companys total revenue is Rs 33,703.30 lacs. EBITDA for the year has been Rs 5,908.99 Lacs. Profit before Tax (PBT) for the year is Rs 3,069.77 Lacs. PAT for the year is Rs 2,359.02 Lacs.

MANAGEMENT DISCUSSION ANDA NALYSIS

In terms of the provisions of Regulation 34 of the SEBI Listing Regulations, 2015 the Management Discussion and Analysis is set out in this Annual report. Certain statements in the said report may be forward looking. Many factors may affect actual results, which could be different from what the Directors envisage in terms of the future performance and outlook.

CONSERVATION OFE NERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure A.

DIRECTORS & KEY MANAGERIAL PERSONNEL a. Appointment of Ms. Tilottama Sanghvi as Whole Time Director

The Board had effective from 02nd April 2019, appointed Ms. Tilottama Sanghvi as a Non-Executive Non-Independent Director of the Company from Whole Time Director.

However, considering the expansion plans of the Company and the experience and expertise Ms. Tilottama Sanghvi holds, the Board of Directors pursuant to the recommendation of the Nomination & Remuneration Committee, have in their meeting held on 31st January 2020, subject to approval of members in the forthcoming Annual General Meeting, appointed Ms. Tilottama Sanghvi as a Whole Time Director, effective from 01st February 2020, for a period of 3 (three) years to hold office from 01st February 2020 to 31st January 2023.

Detailed profile of the Directors alongwith other details, as required under prevailing law, forms part of the Explanatory statement to the notice of 40th AGM of the Company.

b. Retirement by Rotation

As per the provisions of the Companies Act, 2013, Mr. Laxman Sanghvi, Executive Director, (DIN : 00022977), retires by rotation at the forthcoming Annual General Meeting (AGM) of the Company and being eligible, seeks re-appointment. The Board recommends his re-appointment.

c. Re-appointment of Mr. Amit Sanghvi as a Managing Director

The Board in its meeting held on 29th May 2020, have accorded approval for re-appointment of Mr. Amit Sanghvi (DIN : 00022444) for a term of 3(three) years, effective from 01st October 2020 to 30th September 2023, subject to approval of shareholders in the context. The Board recommends his re-appointment at the forthcoming 40th Annual General Meeting (AGM) of the Company.

d. Appointment of Dr. Shailesh Ayyangar as an Independent Director

The Board in its meeting held on 29th May 2020, , appointed Dr. Shailesh Ayyangar as a Non-Executive Independent Director of the Company for a period of 5 (five) consecutive years to hold office from 29th May 2020 till 28th May 2025, subject to approval of members in the context. It recommends appointment of Dr. Shailesh Ayyangar at the forthcoming 40th AGM of the Company:

Detailed profile of Dr. Shailesh Ayyangar alongwith other details, as required under prevailing law, forms part of the Explanatory statement to the notice of 40th AGM of the Company.

d. Appointment of Ms. Varsha Purandare as an Independent Director

The Board in its meeting held on 29th May 2020, appointed Ms. Varsha Purandare as a Non-Executive Independent Director of the Company for a period of 5 (five) consecutive years to hold office from 29th May 2020 till 28th May 2025, subject to approval of members in the context. It recommends appointment of Ms. Varsha Purandare at the forthcoming 40th AGM of the Company :

Detailed profile of Ms. Varsha Purandare alongwith other details, as required under prevailing law, forms part of the Explanatory statement to the notice of 40th AGM of the Company.

d. Appointment of Mr. Anil Kalra as Chief Executive Officer (KMP)

The Board in its meeting held on 29th May 2020 , appointed Mr. Anil Kalra as a Chief Executive Officer (KMP), effective from 01st June 2020.

Brief Profile :

Mr. Kalra has a rich experience of over 4 decades. He holds a Mechanical Engineering degree from IIT, Delhi. He has been associated with Samvardhana Motherson International Ltd. for over 19 years as President & CEO. Mr. Kalra has led numerous organisations from strategic planning, growth & transformational perspectives, demonstrated turnaround of numerous troubled companies, directed wide-ranging mergers & acquisitions, and delivered stellar P&Ls. Other than his long stint at Samvardhana Motherson International, his professional experience includes the following:

- CEO, Control Group

- CEO, Oman filters, Muscat

- Advisor to the management of Continental Engines (part of Bakshi Group)

- GM and plant head, Blowplast

- DGM, Anand group (Purolator)

- Association with Eicher & Kinetics Technology

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. Chintan Shah, Chief Financial Officer and Ms. Preeti Sheth, Asst. Company Secretary & Compliance Officer are Key Managerial Personnel of the Company as on 31st March 2020, in accordance with Companies Act, 2013.

MEETINGS OF BOARD

The Board met Four (4) times during the financial year. The meeting details are provided in the Corporate Governance Report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.

POLICY ON NOMINATION & REMUNERATION

The existing policy is to have an appropriate mix of Executive and Independent Directors to maintain independence of the Board and separate its functions of governance and management. As of 31st March 2020, the Board had 8 members, 4 of whom are Executive directors and 4 are Independent directors. One of the Director is a Woman Director.

The policy of the Company on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, as revised in accordance with SEBI Listing Regulations, 2015, is available on our website www.shaily.com at https://shaily. com/investors/corporate-governance.

Salient features of the Nomination & Remuneration Policy are as under :

1. Setting out the objectives of the Policy

2. Definitions for the purpose of the Policy

3. Policy for appointment and removal of Director, Key Managerial Personnel and Senior Management.

4. Policy relating to the remuneration for the Directors, Key Managerial Personnel, Senior Management Personnel and other employees.

5. Remuneration to Non-Executive/Independent Directors.

We affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration policy of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have given the declaration to the Company that they meet the criteria of independence as required under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

FAMILIARISATION PROGRAMME

All new Independent Directors inducted into the Board attend an orientation program. At the time of the appointment of an Independent Director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The format of the letter of appointment is available on our website www.shaily.com at https://shaily.com/investors/ corporate-governance

The Board members are provided with necessary reports, internal policies, periodical plant visits to enable them to familiarise with the Companys procedures and practices.

Periodic presentations are made at the meetings of the Board and the committees, on business and performance updates, global business environment, business strategy and risks involved.

The details of familiarisation programme for Independent Directors are available at our website. www.shaily.com at https:// shaily.com/investors/corporate-governance

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of the Board, its Committees and of individual directors on an evaluation framework as adopted by the Board.

The framework includes evaluation of directors on various parameters such as:

Board dynamics and relationships Information flows Decision – making Company performance and strategy

Tracking board and committees effectiveness Peer evaluation

The outcome of the Board Evaluation for F.Y. 2019-20 was discussed by the Nomination and Remuneration committee and the Board meeting held on 29th May 2020.

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 the Corporate Governance Report.

CORPORATE GOVERNANCE

The Company believes in adopting best practices of corporate governance. Corporate governance principles are enshrined in the spirit of the Company, forming its core values. These guiding principles are also articulated through the Companys code of business conduct, corporate governance guidelines, charter of various sub-committees and disclosure policy.

Our Corporate Governance Report for F.Y. 2019-20 forms part of this Annual Report.

AUDIT REPORTS ANDA UDITORS Audit Reports

The Independent Auditors Report for F.Y. 2019-20 does not contain any qualification, reservation or adverse remark. The Independent Auditors Report is enclosed with the financial statements in this Annual Report.

The Secretarial Auditors Report for the F.Y. 2019-20 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is enclosed as Annexure E to the Boards Report in this Annual Report.

As required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Auditors certificate on Corporate governance is enclosed with the Corporate Governance Report in this Annual Report. The auditors certification for F.Y. 2019-20 does not contain any qualification, reservation or adverse remark.

The Company has obtained Certificate from Practicing Company Secretary for Directors Disqualification, which is enclosed with the Corporate Governance Report in this Annual Report. None of the directors are disqualified.

Reporting of fraud by auditors

During the financial year 2019-20, neither of the auditors viz., Statutory Auditors, Secretarial Auditors, Corporate Governance Auditors, have reported to the Audit Committee, under Section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards Report.

Auditors

Statutory Auditors

M/s B S R & Associates LLP, Chartered Accountants (Firm Registration number 116231W/W-100024 are the Statutory Auditors of the Company till the conclusion of the 43rd AGM of the Company to be held in the year 2023.

Details of fees paid to the Statutory Auditors for all service provided by the Statutory Auditor for the F.Y. 2019-20, forms part of the Corporate Governance Report and financials of the Company, included in this Annual Report.

Secretarial & Corporate Governance Auditors

The Board has appointed M/s Samdani Shah & Kabra, Company Secretaries, as Secretarial & Corporate Governance Auditors of the Company for the F.Y. 2020-21, in terms with Section 204 of the Companies Act, 2013 with rules thereunder.

Cost Auditors

M/s Y.S. Thakar & Co., Cost Accountants, Vadodara are appointed as Cost Auditors of the Company to conduct audit of cost records of the Company for F.Y. 2020-21.

Based upon the declaration on their eligibility, consent and terms of engagement, the Board has appointed them and recommend the ratification of remuneration to be paid to the Cost Auditors for F.Y. 2020-21.

Internal Auditors

The Board has appointed M/s Shah Jain & Hindocha, Chartered Accountants, based at Vadodara, Gujarat as Internal Auditors of the Company for F.Y. 2020-21.

RISK MANAGEMENT

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

VIGIL MECHANISM

The Company has a well-defined "Whistle Blower Policy" and has established a robust Vigil Mechanism for reporting of concerns raised by employees and to provide for adequate safeguards against victimisation of Directors and employees who follow such mechanism and has also made provision for direct access to the Chairman of Audit Committee in appropriate cases.

The Vigil Mechanism Policy of the Company is available on the Companys website. www.shaily.com at https://shaily.com/ investors/corporate-governance

INTERNAL FINANCIAL CONTROL & ITS ADEQUACY

The Companys internal control procedures which includes internal financial controls, ensure compliance with various policies, practices and statutes and keeping in view the organisations pace of growth and increasing complexity of operations. The internal auditors team carries out extensive audits throughout the year across all plants and functional areas and submits its reports to the Audit Committee of the Board of Directors.

CONTRACTS & ARRANGEMENTS WITHR ELATED PARTIES

All contracts/arrangements entered by the Company during the financial year with related parties were in ordinary course of business and on arms length basis. During the year, the Company did not enter into any contracts/arrangements/transaction with related parties which could be considered material.

The Directors draw attention to the members to Note no. 33 to the financial statement in this Annual Report, which sets out related party disclosures.

The Board has approved a policy for related party transactions which is available on the Companys website at www.shaily.com at https://shaily.com/investors/corporate-governance.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loan, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.

DEPOSITS

The Company has not accepted deposits from the public falling within the ambit of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the financial year 2019-20.

CORPORATE SOCIAL RESPONSIBILITY _CSR_

Being an Indian company, we are motivated by the Indian ethos of Dharma as a key plank for organisational self-realisation. The Company recognises that its operations impact a wide community of stakeholders, including investors, employees, customers, business associates and local communities and that appropriate attention to the fulfillment of its corporate responsibilities can enhance overall performance. The Company continues its spend to support to local initiatives health/ medical, education and sanitation/ cleanliness, 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 of which together with details of CSR activities undertaken by the Company during the financial year 2019-20, have been covered in separate report on CSR, annexed as Annexure B.

The Policy on Corporate Social Responsibility is available on the Companys website. www.shaily.com at https://shaily.com/ investors/corporate-governance.

EXTRACT OFA NNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure C.

Copy of Annual Return as prescribed under Section 92(3) for the F.Y. 2018-19 is placed on the website of the Company at www. shaily.com at https://shaily.com/investors/corporate-governance.

SECRETARIAL STANDARDS

The Company complies with all the applicable secretarial standards.

PARTICULARS OFEMP LOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as

Annexure D.

OBLIGATION OFC OMPANY UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE _PREVENTION, PROHIBITION ANDR EDRESSAL_ ACT, 2013.

The Company strongly believes in providing a safe and harassment free workplace for each and every individual working for the Company. The Company has in place a Policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding Sexual Harassment. All employees (permanent, contractual, temporary and trainees) are covered under this Policy.

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

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

LISTING OFSH ARES

The Equity shares of the Company are listed on the BSE Limited (BSE) with Scrip code 501423 and Scrip ID - SHAILY. The Company confirms that the annual listing fees to the stock exchange for F.Y. 2020-21 has been paid.

MATERIAL CHANGES

There have been no material changes and commitments affecting the financial position of the Company since the close of financial year i.e. since 31st March 2020. Further, it is hereby confirmed that there has been no change in the nature of business of the Company.

SIGNIFICANT/MATERIAL ORDERS PASSED BY REGULATORS/COURTS/TRIBUNAL

There are no significant and material orders passed by the Regulators or Courts or Tribunals that may impact the going concern status of the Companys operations in future.

GREEN INITIATIVE

Electronic copies of the Annual Report 2019-20 and the Notice of the 40th Annual General Meeting are being sent to all members whose email addresses are registered with the Company/ depository participant(s).

The regulatory authorities i.e. the Ministry of Corporate Affairs (MCA) and Securities Exchange Board of India (SEBI) in the wake of COVID-19 outbreak and measures to contain it, MCA vide its General Circular No. 20/2020 dated 05th May, 2020 read with Circular No. 14/2020 dated 08th April, 2020 and General Circular No.

14/2020 dated 08th April, 2020 and General Circular No. 17/2020 dated 13th April, 2020 and SEBI vide its Circular No. SEBI/HO/ CFD/CMD1/CIR/P/2020/79 dated 12th May 2020, recommended all listed entites to send digital copies of the Annual Report and Notice of the Annual General Meeting to the shareholders.

It is hereby requested to all the shareholders to kindly update your email id with your depository participant to ensure timely receipt of information.

40THA NNUAL GENERAL MEETING

In order to contain the spread of COVID-19 and safety precautions to be exercised, the Ministry of Corporate Affairs has vide its General Circular No. 20/2020 dated 05th May, 2020 read with General Circular No. 14/2020 dated 08th April, 2020 and General Circular No. 17/2020 dated 13th April 2020 and Securities Exchange Board of India vide its Circular No. SEBI/HO/CFD/CMD1/ CIR/P/2020/79 dated 12th May 2020 has allowed the Companies to hold General Meetings through Video Conference facility or any other audio visual means.

This is a welcome move by the Ministry.

Hence, this year, the Company has decided to hold its Annual General Meeting through Video Conference, to facilitate members to attend the Annual General Meeting,

Details of the meeting and the facility is detailed in the Notice of the 40th Annual General Meeting.

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 March 2020, the applicable accounting standards have been followed;

(ii) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the

financial year and profit and loss of the Company for that period;

(iii) They have taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions this Act, for safeguarding the assets of 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 are operating effectively; and

(vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

ACKNOWLEDGEMENTS

We thank our customers, vendors, investors, bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth is made possible by their hard work, solidarity, cooperation and support.

We also thank our suppliers, customers, business partners and others associated with the Company. We look upon them as partners in its progress. It will be Companys endeavor to build and nurture strong links with the trade based on mutuality of benefits, respect to and co-operation with each other, consistent with consumer interests and looks upon all the stakeholders for their continued support in future.

For and on behalf of the Board of Directors
Place : Vadodara Mahendra Sanghvi
Date : 29th May 2020 Executive Chairman