Shilp Gravures Ltd Directors Report.

To

The Members,

SHILP GRAVURES LIMITED

Your Directors have pleasure in presenting the 27th Annual Report on the working of the Company together with the Audited Accounts of the Company for the year ended 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 Priviate Limited, Howrah, West Bengal (herein after referred to as "Etone"), acquired by the 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 Lacs, decreased by 11.14% percent over the previous years revenue of Rs.7413.16 Lacs in FY 2018-19. The Profit after tax ("PAT") was Rs.113.45 Lacs over the previous years Profit after tax ("PAT") of Rs.771.42 Lacs for FY 2018-19.

3. DIVIDEND:

The Board of Directors of your company, after considering the relevant circumstances, has decided that it would be prudent, not to recommend any Final Dividend for the year under review. The interim dividend of Rs.1.50 (i.e. @ 15%) per equity share of face value of Rs.10 each declared by the Board at its meeting held on 17th March, 2020 shall be considered as final dividend for F.Y. 2019-20.

4. COVID-19

In the last month of FY 2020, the COVID-19 pandemic developed rapidly into a global crisis, forcing governments to enforce lock-downs of all economic activity. For the Company, the focus immediately shifted to ensuring the health and well-being of all employees, and on minimizing disruption to services for all our customers. This response has reinforced customer confidence in Shilp and many of them have expressed their appreciation and gratitude for keeping their businesses running under most challenging conditions. Although there are uncertainties due to the pandemic and reversal of the positive momentum post lockdown, we expect business to improve gradually and that business will start moving upwards from 2nd quarter of FY20-21. We can expect the business to normalize from the 3rd quarter of FY20-21. Strong balance sheet position and inherent resilience of the business model position the Company well to navigate the challenges ahead and gain market share.

5. TRANSFER TO RESERVES:

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

6. ACQUISITION

In its strategy to pursue inorganic growth for further accelerating its progress and expanding its presence in eastern zone, your Companys has acquired 100% stake in Etone India Private Limited. Etone is a Company in similar line of business and is based in Kolkata. The acquisition would provide manufacturing facilities on eastern zone and it would also help focusing on to cater to the markets around Kolkata thereby increasing the presence of the Companys product in that region.

7. PUBLIC DEPOSITS:

The Company has not accepted any deposits falling under the ambit of Section 73 of the Companies Act, 2013 (hereinafter referred to as "The Act") and the Rules framed thereunder during the year under review.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The particulars of loans, guarantees and investments as per Section 186 of the Companies Act, 2013, by the Company, have been disclosed in notes no. 7, 8 and 13 to the financial statements.

9. 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.

10. CORPORATE GOVERNANCE:

Your Company has complied with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding Corporate Governance. A report on the Corporate Governance practices, a Certificate from Statutory Auditors regarding compliance of the conditions of Corporate Governance is given as an annexure to this report. In compliance with Corporate Governance requirements as per the Listing Regulations, 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.

11. 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.

12. 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 exchanges for the financial 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 the Nomination and Remuneration Committee, the Board of Directors, in its meeting held on 31st January, 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-Executive Director). Dr. Baldev Patel and Mr. Padmin Buch hold office up to the date of the forthcoming 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 Association of the Company, Mrs. Monica Kanuga (DIN: 06919996) is liable to retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer herself for re-appointment. The Board recommends the appointment of Mrs. Monica Kanuga 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 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 the Company confirming that they meet with the criteria of Independence provided in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) & 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances, which may affect their status as Independent Director during the year. Also, your Company has received annual declarations from all the Independent Directors of the Company confirming that they have already registered their names with the data bank maintained by the Indian Institute of Corporate Affairs ["IICA"] as prescribed by the Ministry of Corporate Affairs.

The Independent Directors met on March 17, 2020, without the attendance of Non-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 the provisions of the Act read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as on March 31, 2020: Mr Ambar Patel, Managing Director Mr. Roshan Shah, Chief Executive Officer Mr Amit Agrawal, Chief Financial Officer Mr Bharat Patel, Company Secretary

14. 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, 2020, 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, 2020, 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.

15. MEETINGS OF THE BOARD:

The Board of Directors met 6 (six) times during the year under review. The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

16. COMMITTEES OF BOARD:

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 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 Company has not any Associate or Joint Venture within the meaning of Section 2(6) of Companies Act, 2013 ("ACT"). The Financial Statement of subsidiary, in particular the investment 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 the salient features of financial statements of the Companys subsidiary in Form AOC-1 is given in Annexure-B. Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which have been prepared in accordance with the applicable 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 Audited Financial Statements of the Company and its Subsidiary Company, as approved by their respective Board of Directors. Further, pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect 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 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.

20. CORPORATE SOCIAL RESPONSIBILITY:

Shilp has been proactively carrying out CSR activities in alignment with the vision of the Company. Shilp strives continuously, 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.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company as adopted by the Board and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure-C of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, 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 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 professional fees), Key Managerial Personnel. The above policy is available on Companys website at https:/ / www.shilpgravures.com/ Investorrelations/ policies.

22. 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.

23. ANNUAL RETURN:

The Extract of Annual Return as per the provisions of Section 92 of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 in Form MGT-9 is annexed to this Boards Report as Annexure - D and available on the Companys website https:/ / www.shilpgravures.com.

24. RELATED PARTY TRANSACTIONS:

All the related party transactions entered into during the financial year were on an arms length basis and were in the ordinary course of business. Your Company had not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC 2 is not annexed. The Company has formulated a policy on related party transactions which is available on Companys website at https:/ / www.shilpgravures.com/ Investorrelations/ policies.

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. Members may refer to note no. 43 to the financial statement which sets 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 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.

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 Company Secretaries of India on Board Meetings and General Meetings.

28. 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.

29. 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, 2020.

LIMITED

30. 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 - 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 year and the date of this Report which affect the financial statements of the Company in respect of the reporting year.

32. AUDITORS:

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), as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the thirty AGM, subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM. There has been no qualification, reservation or adverse remark or disclaimer in their Report. The Auditors Report is enclosed with the financial statements in 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 Directors have 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 Year ended March 31, 2020. The Secretarial Audit Report for financial year 2019-20 in Form MR-3 is annexed, which forms part of this report, as Annexure-F. There were no qualifications, reservation or adverse remarks given by Secretarial Auditor of the Company in the Secretarial Audit Report of the Company.

32.3 Internal Auditors:

The Board of Directors appointed M/ s. KJP & Associates LLP, Chartered Accountants, as Internal Auditors of the Company for the F. Y. 2019-20.

32.4 Reporting of frauds by auditors:

During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the Audit Committee, under Section 143 (12) of the Act, 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.

33. INSURANCE:

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

34. ACKNOWLEDGMENTS:

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.

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