Shilp Gravures Ltd Directors Report.

To

The Members,

SHILP GRAVURES LIMITED

Your Directors have pleasure in presenting the 26th Annual Report on the working of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2019.

1. FINANCIAL PERFORMANCE:

Particulars For the year ended on 31st March, 2019 For the year ended on 31st March, 2018
Revenue from Operations 7413.16 6904.07
Other Income 215.90 139.89
Total Revenue 7629.06 7043.96
Operating expenses 5915.48 5436.04
Depreciation and Amortisation expenses 685.68 658.57
Finance Cost 120.41 99.06
Total Expenditure 6721.57 6193.67
Profit before Tax 907.49 850.29
Tax Expense
Current tax 236.72 248.08
Short provision for tax relating to prior years (23.78) (1.17)
Deferred tax (76.87) (99.88)
Net Profit for the year 771.42 703.06
Other Comprehensive Income (net of tax) (13.40) (3.20)
Total Comprehensive Income 758.02 700.06
Opening Balance of Retained Earning 4003.30 3439.27
Amount available for appropriation 4761.32 4139.33
Appropriations:
Transfer to General Reserves 25.00 25.00
Dividend on Equity Shares 246.00 92.25
Tax on Dividend 50.56 18.78
Balance Carried to Balance Sheet 4439.76 4003.30

2. REVIEW OF OPERATIONS:

The revenue from operations for the financial year 2018-19 at Rs. 7413.16 Lacs was higher by 7.37% over last year (Rs. 6904.07 Lacs in financial year 2017-18). Earnings before interest, tax, depreciation and amortisation ("EBITDA") was Rs. 1713.58 Lacs over EBITDA of Rs. 1607.92 Lacs in financial year 2017-18. Your Company has sustained its efforts to maintain profit for the year 2018-19. Profit after tax ("PAT") for the year was Rs. 771.42 Lacs over the PAT of Rs. 703.06 Lacs of financial year 2017-18.

3. DIVIDEND:

Based on the Companys performance for the financial year 2018-19, the Board of Directors ("the Board") are pleased to recommend for approval of the members a final dividend of Rs. 1.50 per share, being 15% (previous year Rs. 1.50 per share) 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 2018-19. The final dividend on Equity Shares, if approved by the members would involve a cash outflow of Rs. 111.21 Lacs including dividend tax. The total dividend for financial year 2018-19 aggregates to Rs. 4.00 per Equity Share which includes Interim Dividend Rs. 2.50 per Equity Share paid on 26th November, 2018 on the occasion of 25th year (Silver Jubilee Year) of the Company.

4. TRANSFER TO RESERVES:

The Company proposes to transfer Rs. 25.00 Lacs to the General Reserve.

5. PUBLIC DEPOSITS:

During the year under review, your Company has not accepted any public deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made thereunder.

6. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year under review, the Company has not given any loan or provided guarantees or made any investments as prescribed under Section 186 of the Companies Act, 2013.

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Act read with Rule, 8 of The Companies (Accounts) Rules, 2014 is provided in Annexure A to the Boards Report.

8. CORPORATE GOVERNANCE:

A separate report on Corporate Governance compliance as stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report along with the required certificate from a Statutory Auditors regarding compliance of the conditions of Corporate Governance as stipulated. In compliance with Corporate Governance requirements, your Company has formulated and implemented a Code of Business Conduct and Ethics for all Board members and senior management personnel of the Company, who have affirmed the compliance thereto. A certificate of Chief Executive Officer and Chief Financial Officer of the Company in terms of Listing Regulations, inter alia, confirming the correctness of the Financial statements and Cash flow statements is also annexed.

9. MANAGEMENT DISCUSSION & ANALYSIS REPORT:

A detailed report on Management Discussion and Analysis as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is included as separate section forming part of this Report. Certain statement of the said report may be forward looking. Many factors may affect the actual results, which could be different from what the directors envisage in terms of performance and outlook.

10. LISTING OF SHARES:

The Equity Shares of the Company are listed on the BSE Limited (BSE) with scrip code No. 513709. The Company confirms that the annual listing fees to stock exchange for the financial year 2019-20 have been paid.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL:

11.1 Appointment/Reappointment of Directors

Pursuant to the provisions of the Companies Act, 2013 ("Act"), the shareholders in the 21st AGM of your Company held on 03rd September, 2014 appointed Mr. Shailesh Desai and Mr. Jainand Vyas as Independent Non-Executive Directors to hold office for five consecutive years up to 02nd September, 2019. Mr. Shailesh Desai (DIN: 00169595) and Mr. Jainand Vyas (DIN: 02656340) are eligible for re-appointment as Independent Non-Executive Directors for a second term of five consecutive years. Pursuant to the provisions of the Act, and based on the recommendation of the Nomination and Remuneration Committee, the Board recommends for the approval of the Members through a Special Resolution in the 26th AGM of your Company, the re-appointment of Mr. Shailesh Desai (DIN: 00169595) and Mr. Jainand Vyas (DIN: 02656340) as Independent Non-Executive Directors for second term of five consecutive years from 03rd September, 2019 up to 02nd September, 2024.

In terms of the Articles of Association of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, in its meeting held on 04th August, 2018, subject to approval of the shareholders of the Company, appointed Mr. Kirit Patel as an Additional Director and Independent Non-Executive Director of the Company with effect from 04th August, 2018 for a period of five consecutive years. Mr. Kirit Patel holds office up to the date of the forthcoming Annual General Meeting and is eligible for appointment.

11.2 Director liable to Retire by Rotation

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Mr. Nipam Shah (DIN: 00093697) is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offers himself for re-appointment. The Board recommends the appointment of Mr. Nipam Shah as Director of the Company retiring by rotation.

Details of the proposal for the appointment / re-appointment of Directors under Section 102 of the Companies Act, 2013 are mentioned in the Explanatory Statement of the Notice of the 26th Annual General Meeting (AGM) of your Company.

11.3 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 provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

11.4 Key Managerial Personnel

The following are the Key Managerial Personnel of the Company in terms of the provisions of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as on March 31, 2019:

• Mr Ambar Patel, Managing Director

• Mr. Roshan Shah, Chief Executive Officer

• Mr Amit Agrawal, Chief Financial Officer

• Mr Bharat Patel, Company Secretary

12. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) that in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies have been applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2019, and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual accounts have been prepared on a going concern basis;

e) that the internal financial controls followed by the Company are adequate and has been operating effectively; and

f) that proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and were operating effectively.

13. MEETINGS OF THE BOARD:

During the year Five Board Meetings were convened and held, the details of which are given in the Corporate Governance Report.

14. COMMITTEES OF BOARD:

The Audit Committee comprises of five members. The Chairman of the Committee is an Independent Director. The Committee met four times during the year. Details of the role and responsibilities of the Audit Committee, the particulars of meetings held and attendance of the Members at such Meetings are given in the Corporate Governance Report. Details of various committees constituted by the Board of Directors as per the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013 are given in the Corporate Governance Report which forms part of this report.

15. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES / JOINT VENTURE:

The Company has no subsidiary, Associate or Joint Venture within the meaning of Section 2(6) of Companies Act, 2013 ("ACT").

16. WHISTLE BLOWER POLICY/ VIGIL MECHANISM:

The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and directors to report concerns about unethical behaviour. No person has been denied access to the Chairman of the Audit Committee. During the year under review, there was no case of whistle blowing. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and as per the Regulation 22 read with Regulation 4(d) (iv) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Company has formulated whistle blower policy which is available on Companys website at https:/ /www.shilpgravures.com/Investorrelations/policies.

17. CORPORATE SOCIAL RESPONSIBILITY:

Shilp has been proactively carrying out CSR activities in alignment with the vision of the Company. Shilp strives continuosly, through its CSR initiatives, to enhance value creation in the society and in the community in which it operates. Through its services, conduct & initiatives, it promotes sustained growth for the society and community, in fulfillment of its role as Socially Responsible Corporate, with environmental concern.

In compliance with requirements of Section 135 of the Companies Act, 2013, the Company has laid down a CSR Policy which is available on Companys website at https://www.shilpgravures.com/Investorrelations/policies. The composition of the Committee, contents of CSR Policy and Report on CSR activities carried out towards supporting projects in eradication of hunger, promoting education, healthcare during the financial year ended 31st March, 2019 in the format prescribed under Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure B.

18. NOMINATION AND REMUNERATION POLICY:

The Company has in place a policy for remuneration of Directors, Key Managerial Personnel and a well-defined criteria for the selection of candidates for appointment to the said positions which has been approved by the Board. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the executive and non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel. The above policy is available on Companys website at https://www.shilpgravures.com/ Investorrelations/policies.

19. BOARD EVALUATION:

The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees, as mandated under the Act and SEBI Listing Regulations. The criteria applied in the evaluation process are explained in the Corporate Governance Report.

20. ANNUAL RETURN:

The extract of Annual Return required under Section 134(3(a) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9, is annexed herewith as Annexure C and available on the Companys Website https://www.shilpgravures.com.

21. RELATED PARTY TRANSACTIONS:

The Company has formulated a policy on related party transactions which is available on Companys website at https://www.shilpgravures.com/Investorrelations/policies. This policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria for taking the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at an arms length basis. All related party transactions are placed before the Audit Committee for review and approval.

All related party transactions entered during the year 2018-19 were in ordinary course of the business and on an arms length basis. No material related party transactions were entered during the Financial Year by your Company, hence, there is no disclosure to be provided for related party transactions as required under Section 134(3)(h) of the Companies Act, 2013. Members may refer to note no. 39 to the financial statement which sets out related party disclosures pursuant to IND AS-24.

22. INTERNAL FINANCIAL CONTROLS:

The Directors had laid down internal financial controls to be followed by your Company and such policies and procedures adopted by your Company for ensuring the orderly and efficient conduct of its business, including adherence to your Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically. The Statutory Auditors have provided their report on Internal Financial Control which is annexed hereafter.

23. 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.

24. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

25. TRANSFER OF EQUITY SHARES UNPAID/UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND:

In line with the statutory requirements, the Company has transferred to the credit of the Investor Education and Protection Fund set up by the Government of India, equity shares in respect of which dividend had remained unpaid/unclaimed for a period of seven consecutive years within the timelines laid down by the MCA. Unpaid/unclaimed dividend for seven years or more has also been transferred to the IEPF pursuant to the requirements under the Act. The details are available on Companys website at https://www.shilpgravures.com/investorrelations/shareholderinformation.

26. EQUAL OPPORTUNITY EMPLOYER:

The Company is an equal opportunity provider and continuously strives to build a work culture 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 in compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated a well-defined policy on prevention, prohibition and redressal of complaints relating to sexual harassment of women at the workplace. No complaints pertaining to sexual harassment of women employees from any of the Companys locations were received during the year ended March 31, 2019.

27. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as Annexure-D.

28. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material changes or commitments have occurred between the end of the financial year and the date of this Report which affect the financial statements of the Company in respect of the reporting year.

29. AUDITORS:

29.1 Statutory Auditors:

As per Section 139 of the Companies Act, 2013 (the Act), read with the Companies (Audit and Auditors) Rules, 2014, the Members of the Company in 25th Annual General Meeting approved the appointment of M/s. Shah & Shah Associates, Chartered Accountants (Firm Registration No-113742W), as the Statutory Auditors of the Company for an initial term of 5 years i.e. from the conclusion of 25th Annual General Meeting till the conclusion of 30th Annual General Meeting of the Company.

Pursuant to amendments in Section 139 of the Companies Act, 2013, the requirements to place the matter relating to such appointment for ratification by members at every annual general meeting has been omitted with effect from 7th May, 2018. Hence, the resolution seeking ratification of the members for their appointment is not being placed at the ensuing Annual General Meeting. The Report given by M/s. Shah & Shah Associates, Chartered Accountants on the financial statement of the Company for the year 2019 is part of the Annual Report.

There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year 2019, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

29.2 Secretarial Auditors:

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 Directors have appointed Mrs. Monica Kanuga, Practicing Company Secretary (CP No. 3868) as Secretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year ended March 31, 2019. The Secretarial Auditors Report issued by Mrs. Monica Kanuga, Practicing Company Secretary in Form MR-3 is annexed to this Boards Report (Annexure - E). The Secretarial Auditors Report does not contain any qualifications, reservation or adverse remarks.

29.3 Internal Auditors:

The Board of Directors appointed M/s. KJP & Associates LLP, Chartered Accountants, as Internal Auditors of the Company for the F. Y. 2018-19.

30. INSURANCE:

All the insurable interests of the Company including Inventories, Buildings, Plant & Machinery and Liabilities under legislative enactments are adequately insured.

31. ACKNOWLEDMENTS:

The Company has maintained healthy, cordial and harmonious relations at all levels throughout the year. 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 was made possible by their hard work, solidarity, cooperation and support.

The Directors also take this opportunity to thank all Auditors, Bankers, Consultants, Investors, Clients, Government and Regulatory Authorities and Stock Exchanges, for their continued support during the year and look forward to their continued support in the future.

On the behalf of The Board of Directors
Ambar Patel Shailesh Desai
(Managing Director) (Director)
Place: Rakanpur (DIN: 00050042) (DIN: 00169595)
Date: 27th April, 2019