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Directors Report of Shaily Engineering Plastics Ltd.

Mar 31, 2013

To the Members,

The Directors are pleased to present the 33rd Annual Report together with the Audited Accounts for the year ended on 31st March 2013.

Financial Highlights

(Rs. in lacs)

Particulars Financial Year

2012-13 2011-12

Net revenue from Operations 12276.17 14,558.36

Other Income 63.53 123.55

Total Revenue 12339.70 14,681.91

Total Expenses 10579.02 12,472.81

Profit Before Interest, Depreciation & Tax 1760.68 2,209.10

Finance Cost 693.13 863.40

Depreciation and amortization expense 561.58 518.51

Profit Before Tax 505.97 827.19

Current Tax 101.22 165.49

Short provision in earlier years (22.99) 12.50

Deferred tax 142.02 165.55

Add: MAT Credit Entitlement 76.43 153.02

Net Profit for the year 362.15 636.67

Business Performance

The Company''s sales have been lower during the year under review.

lSales have come down by Rs. 23.42 Crores (15.95%). This is on account of global conditions.

lProfit before tax has come down by Rs. 3.21 Crores (38.83%). The drop in profit is mainly due to drop in sales.

Exports continue to account for over 70% of the Company''s income.

All significant accounting policies and material transactions have been disclosed in notes on accounts to the Balance Sheet as on 31st March 2013.

Dividend

In view of conserving the resources for business needs, your Directors do not recommend payment of divided for the year under review.

Directors

Mr. Hasmukh Shah has resigned as the Director and Chairman of the Board w.e.f. 25th June, 2012. He had been the Chairman of the company and a member of the Board since 2002. He was also the Chairman and member of the Board of erstwhile Shaily Engineering Plastics Ltd. which was merged into the company and was associated with the company for the past 17 years. Mr. Hasmukh Shah with his vast experience has made substantial contribution to the company''s growth and has been instrumental in many strategic initiatives of the company. The Board and management of the company would like to place on record and thank Mr. Hasmukh Shah for his advice and guidance which enabled the company to make substantial progress.

The Board of Directors in the meeting held on 4th August, 2012 elected Mr. Mahendra Sanghvi as the new Chairman of the Board. In the same meeting the Board has appointed Mr. Pushp Raj Singhvi and Mr. Samaresh Parida as Additional Directors w.e.f. 4th August, 2012 and 1st September, 2012 respectively. We seek your support in confirming their appointment in the forthcoming Annual General Meeting as Directors liable to retire by rotation.

Mr. Jayessh Shah, Mr. Sarup Chowdhary and Mr. Amit Sanghvi, Directors, will be retiring by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

The 3 year term of Mr. Mahendra Sanghvi as the Managing Director and Mr. Laxman Sanghvi as the Executive Director came to an end on 31st March, 2013. The Board of Directors have in their meeting held on 18th May, 2013 re-appointed them for another 3 years w.e.f. 1st April, 2013, at the same remuneration which was paid for the previous term, subject to approval of the members at the ensuing Annual General Meeting.

Brief resumes of all the concerned directors are included in the notice for the annual general meeting. Your directors have pleasure in recommending their appointment / re-appointment.

Fixed Deposits

The Company has accepted deposits of Rs. 152.60 lacs during the year, in compliance with provisions of section 58A of Companies Act 1956 read with Companies (Acceptance of Deposits) Rules 1975, as amended.

Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo

Information pursuant to section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March 2013.

A) Conservation of Energy

The Company has installed in-built energy mechanism to conserve energy.

B) Technology Absorption

lResearch and Development: The Company has developed several dies and moulds, which were earlier imported. The Company has also developed several plastic components, which were earlier imported. The activities in development are carried out by the technicians, and the expenditure thereon is debited to the respective heads.

lTechnology absorption, adaptation and innovation: The Company has manufactured many plastic components of international standard/quality, which are import substitutes for diverse applications.

C) Foreign exchange earnings and outgo

Total foreign exchange used is Rs. 2710.67 lacs and total foreign exchange earned Rs. 9105.14 lacs.

Management Discussion and Analysis

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled ''Management''s Discussion and Analysis'' has been included in this Annual Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled ''Corporate Governance'' has been included in this Annual Report.

Statement pursuant to section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors'' Report for the year ended 31st March 2013.

None of the employees of the Company is in receipt of remuneration in excess of the prescribed limits.

Auditors

The present Auditors of the Company, M/s Deloitte Haskin & Sells, have expressed their willingness to act as Auditors of the Company, on their retirement at the ensuing Annual General Meeting, for the financial year 2013-14. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

Auditors'' report

The observation made in the Auditors'' report read together with relevant notes thereon, are self-explanatory and hence do not call for any comments under section 217 of the Companies Act 1956.

Cost Auditors

The Government of India, Ministry of Corporate Affairs, Cost Audit Branch had vide its Order dated January 24, 2012 bearing no. F. No. 52/26/CAB-2010 directed all Companies to which the Companies (Cost Accounting Records) Rules, 2011 apply, to get their cost accounting records, in respect of each of its financial year commencing on or after April 1, 2012 and for every financial year thereafter, audited by a Cost Auditor. In compliance with the said directive, the company had appointed M/s Y. S. Thakar & Co., Cost Accountants, Vadodara as Cost Auditors of the Company for conducting cost audit for the F.Y. 2012-13. The Central Government had approved the appointment. They have been re-appointed as the Cost Auditors to undertake Cost Audit for the financial year ending 31st March 2014, of the Cost Accounting Records of the Plastic Products of the company covered under Cost Audit Order dated 6th November, 2012.

Directors'' responsibility statement

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state:

(i) that in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates

that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2013 and of the profits of the company for that period;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis.

Acknowledgement

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board places on record their appreciation for the support and co-operation your Company has been receiving from its suppliers, customers, business partners and others associated with the Company as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be Company''s 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.

The Directors also take this opportunity to thank all investors, clients, vendors, banks, regulatory and government authorities and stock exchange, for their continued support.

For and on behalf of Board of Directors

Sd/-

Place: Baroda Mahendra Sanghvi

Date: 18th May, 2013 Chairman & Managing Director


Mar 31, 2012

The Members Shaily Engineering Plastics Limited Your Directors are pleased to present the 32nd Annual Report and Audited Accounts for the year ended on 31st March 2012.

Financial Results

(Rs. In lacs)

Current Year Previous Year

(2011-12) (2010-11)

Gross Total Income 14,719.52 12,936.95

Profit before depreciation and tax 1,345.70 837.81

Less: Depreciation 518.51 469.36

Less: Provision for taxation 24.97 -

Less / (Add) : Deferred tax liability / asset 165.55 (13.26)

Profit after tax 636.67 381.71

Business Performance

Your Company's performance during the year under review has improved substantially over the previous year. Net income has increased by 14.97% from Rs. 12,770.48 lacs to Rs. 14,682.36 lacs. PAT has increased by 66.79% from Rs. 381.71 lacs to Rs. 636.67 lacs.

Exports have been a major factor in the Company's growth with increase in exports from Rs. 9,813.17 lacs to Rs. 112,371.24 lacs (growth of 26.06%).

All significant accounting policies and material transactions have been disclosed in notes on accounts to the Balance Sheet as on 31st March 2012.

Dividend

In view of conserving the resources for business needs, your Directors do not recommend payment of divided for the year under review.

Dividend of Rs. 8,810,888 was accumulated and due for the financial year 2007-08 and 2008-09, on pro-rata basis, on 7% Participatory Cumulative Convertible Preference Shares of Rs. 56/- each which were issued on 6th July, 2007 and which have been converted into equity shares on 5th January 2009. Hence, the Board has approved the payment of interim dividend of Rs. 4,332,959/- and Rs. 4,477,929/- on 20th June 2011 and 13th November 2011 respectively.

Directors

The Board has inducted Mr. Amit Sanghvi as an Additional Director w.e.f 1st October, 2011 in the Board Meeting held on 6th August, 2011. In the meeting held on 13th November, 2011 Mr. Amit Sanghvi was appointed as Whole-Time Director w.e.f 1st October, 2011 for a period of 3 years, subject to approval of the Shareholders. We seek your support in confirming his appointment in the forthcoming Annual General Meeting as a Director liable to retire by rotation.

Mr. Bharat Sanghvi and Mr. Michael Woodhall have resigned from the Board of company w.e.f. 1st October, 2011 and 26th May, 2012 respectively. The Directors would like to place on record their appreciation for the contribution made by them to the company.

Mr. A.S.Anandkumar, Mr. Laxman Sanghvi and Mrs. Tilottama Sanghvi, Directors, will be retiring by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment.

Brief resumes of these directors are included in the notice for the annual general meeting. Your directors have pleasure in recommending their appointment / re-appointment.

Fixed Deposits

The Company has accepted deposits of Rs. 152.60 lacs during the year in compliance with provisions of section 58A of Companies Act 1956 read with Companies (Acceptance of Deposits) Rules 1975, as amended.

Conservation of energy, Technology absorption and Foreign Exchange earnings and outgo

Information pursuant to section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March 2012.

Conservation of Energy

The Company has installed in-built energy mechanism to conserve energy.

Technology Absorption

Research and Development: The Company has developed several dies and moulds, which were earlier imported. The Company has also developed several plastic components, which were earlier imported. The activities in development are carried out by the technicians, and the expenditure thereon is debited to the respective heads.

Technology absorption, adaptation and innovation: The Company has manufactured many plastic components of international standard/quality, which are import substitutes for diverse applications.

Foreign exchange earnings and outgo

Total foreign exchange used is Rs. 3,272.42 lacs and total foreign exchange earned Rs. 12,371.24 lacs.

Directors' responsibility statement

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state:

(i) that in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2012 and of the profits of the company for that period;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the annual accounts have been prepared on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled 'Corporate Governance' has been included in this annual report, along with Management discussion and Analysis and additional shareholder information.

Statement pursuant to section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors' Report for the year ended 31st March 2012.

None of the employees of the Company is in receipt of remuneration in excess of the prescribed limits.

Auditors' report

The observation made in the Auditors' report read together with relevant notes thereon, are self-explanatory and hence do not call for any comments under section 217 of the Companies Act 1956.

Auditors

The present Auditors of the Company, M/s Deloitte Haskin & Sells, have expressed their willingness to act as Auditors of the Company, on their retirement at the ensuing Annual General Meeting, for the year 2012-13. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

Acknowledgement

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board places on record their appreciation for the support and co-operation your Company has been receiving from its suppliers, customers, business partners and others associated with the Company as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be Company's 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.

The Directors also take this opportunity to thank all investors, clients, vendors, banks, regulatory and government authorities and stock exchange, for their continued support.

For and on behalf of Board of Directors

Place: Baroda Sd/-

Date: 26th May, 2012 Chairman


Mar 31, 2011

The Directors are pleased to present the 31st Annual Report and Audited Accounts for the year ended on 31st March 2011.

Financial Results (Rs. In lacs) Current Year Previous Year (2010-11) (2009-10)

Gross Total Income 12928.68 9627.72

Profit before depreciation and tax 837.81 718.27

Less: Depreciation 469.36 492.94

Less: Provision for taxation - 0.44

Less / (Add): Deferred tax - 13.26 liability/ asset

Profit after tax 381.71 211.64

Business Performance

Your Companys performance during the year review has improved substantially with the net income crossing Rs. 100 crores for the first time. Net income has increased by @ 32% from Rs. 9627.72 lacs. PAT increased by @ 80% % from Rs. 211.64 lacs to Rs. 381.71 lacs.

Export have been a major factor in the Companys growth with exports increase from Rs. 6916.93 lacs to Rs. 9792.16 lacs (growth of 41.57%).

All significant accounting policies and material transactions have been disclosed in notes on accounts to the Balance Sheet as on 31st March 2011.

Dividend

In view of conserving the resources for business needs, your Directors do not recommend payment of divided during the year under review.

Sale of Property

Your Company has sold out its land at Dehradun along with superstructure thereon during the year under as it was not advisable to commence manufacturing there.

Directors

Mr. Jayessh Shah, Mr. Bharat Sanghvi and Mr. Michael Woodhall, Directors will be retiring by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment. Brief resumes of these directors are included in the notice for the annual general meeting.

Your directors have pleasure in recommending reappointment of the Directors retiring by rotation.

Fixed Deposits

The Company has accepted deposits of Rs. 154.05 lacs during the year in compliance with provisions of section 58A of Companies Act 1956 read with Companies (Acceptance of Deposits) Rules 1975, as amended.

Shifting of the Registered Office

Pursuant to the petition filed by your Company, the Honble Company Law Board, Mumbai Bench vide its order # 109/14/CLB/MB/2011/1423 dated 29th April, 2011 passed an order for the alteration of Clause II of the Memorandum of Association of the Company for the shifting of the Registered Office from the State of Maharashtra to the State of Gujarat. In view of the same the Registered Office of the Company has been shifted at Rania Plant.

Conservation of energy, Technology absorption and Foreign Exchange earnings and outgo

Information pursuant to section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March 2011.

Conservation of Energy

The Company has installed in-built energy mechanism to conserve energy.

Technology Absorption

Research and Development: The Company has developed several dies and moulds, which were earlier imported. The Company has also developed several plastic components, which were earlier imported. The activities in development are carried out by the technicians, and the expenditure thereon is debited to the respective heads.

Technology absorption, adaptation and innovation: The Company has manufactured many plastic components of international standard/quality, which are import substitutes for diverse applications.

Foreign exchange earnings and outgo

Total foreign exchange used is Rs. 1895,93 lacs and total foreign exchange earned Rs. 97.92 lacs.

Directors responsibility statement

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state:

i. That in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2011 and of the profits of the company for that period.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the annual accounts have been prepared on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled Corporate Governance has been included in this annual report, along with the report of Management discussion and Analysis and additional shareholder information.

Statement pursuant to section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors Report for the year ended 31st March 2011

None of the employees of the Company is in receipt of remuneration in excess of the prescribed limits.

Auditors report

The observation made in the Auditors report read together with relevant notes thereon, are self-explanatory and hence do not call for any comments under section 217 of the Companies Act 1956.

Auditors

The present Auditors of the Company, M/s Deloitte Haskin & Sells, have expressed their willingness to act as Auditors of the Company, on their retirement at the ensuing Annual General Meeting, for the year 2011.12. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

Acknowledgement

Your directors wish to place their sincere thanks to the Government authorities, banks, customers, suppliers, shareholders and employees, who extended support and co-operation, and helped, in your companys progress.

For and on behalf of Board of Directors Hasmukh Shah Chairman

Place: Baroda Date : 27.05.2011


Mar 31, 2010

The Directors have pleasure in presenting their 30th Annual Report for the year ended on 31st March 2010.

Financial Results (Rs. In lacs)

Current Year Previous Year

(2009-10) (2008-09)

Gross Total Income 9827.72 6755.13

Profit before depreciation and tax 718.27 17.16

Less: Depreciation 492.94 378.21

Less: Provision for taxation - -

Less: Fringe benefit tax - 4.55

Less / (Add): Deferred tax liability / asset 13.26 (129.58)

(Profit after tax 211.64 (239.10)

Business Performance

The current year has been a year of consolidation for the company. Your companys performance in terms of sales and profit has shown remarkable improvement over the F.Y. 2009.

The total income increased by Rs. 30.73 Crore or 45% over the F.Y. 2009. The Companys Profit Before Tax was Rs. 2.25 Crore for the F.Y. 2009. Export sales increased substantially during the F.Y. 2010 with export increasing by Rs. 41.25 Crore or 141.46% in the F.Y. 2010.

All significant accounting policies and material transactions have been disclosed in notes on accounts to the Balance Sheet as on 31st March 2010.

Dividend

In view of conserving the resources for business needs, your Directors do not recommend payment of dividend during the year under review.

Directors

Mr. Laxman Sanghvi, Mrs. Tilottama Sanghvi and Mr. Sarup Chowdhary, Directors will be retiring by rotation at the forthcoming Annual General Meeting and are eligible for re-appointment. Brief resumes of these directors are included in the notice for the annual general meeting.

Mr. Sachin Bhartiya has been appointed as Additional Director w.e.f. 1.11.2009 representing Motika Limited. Mr. Nilesh Mehta has resigned as a Director effective from 15.05.2010. The Board wishes to place on record its deep appreciation of the contribution by Mr. Nilesh Mehta during his tenure as member of the Board.

Your directors have pleasure in recommending reappointment of the Directors retiring by rotation.

Fixed Deposits

The Company has accepted deposits of Rs. 116.35 lacs during the year in compliance with provisions of section 58A of Companies Act 1956 read with Companies (Acceptance of Deposits) Rules 1975, as amended.

Conservation of energy, Technology absorption and Foreign Exchange earnings and outgo

Information pursuant to section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March 2010..

Conservation of Energy

The Company has installed in-built energy mechanism to conserve energy.

Technology Absorption

Research and Development: The Company has developed several dies and moulds, which were earlier imported. The Company has also developed several plastic components, which were earlier imported. The activities in development are carried out by the technicians, and the expenditure thereon is debited to the respective heads.

Technology absorption, adaptation and innovation: The Company has manufactured many plastic components of international standard/quality, which are import substitutes for diverse applications.

Foreign exchange earnings and outgo

Total foreign exchange used is Rs. 1632.30 lacs and total foreign exchange earned Rs. 6916.93 lacs.

Directors responsibility statement

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state:

i. That in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii. That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March 2010 and of the profits of the company for that period.

iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. That the annual accounts have been prepared on a going concern basis.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with stock exchanges, a separate section titled ‘Corporate Governance has been included in this annual report, along with the report of Management discussion and Analysis and additional shareholder information.

Statement pursuant to section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors Report for the year ended 31st March 2010

S Name Designation Gross Age Qualification N -n Earnings Rs. (in lacs)

1 Mahendra Managing 49.29 62 B.Sc.(Chem) Sanghvi Director years B.S. Chem Engg

2 Laxman Executive 31.57 53 Chartered Sanghvi Director years Accountant,

Law graduate

Name



Laxman Sanghvi Laxman Sanghvi

Exp Date of Joining Last Employ- ment Mahendra Sanghvi 36 30th Dec GB Book 1985 Plastic Co.,

Laxman Sanghvi 31 30th Dec Practicing 1985 Chartered Accountant

NOTES:

1. The appointment of the Managing Director and Executive Director is contractual.

2. Remuneration includes Basic, HRA, all other allowances and perquisites, Companys contribution to Provident Fund etc.

Auditors report

The observation made in the Auditors report read together with relevant notes thereon, are self-explanatory and hence do not call for any comments under section 217 of the Companies Act 1956.

Auditors

The present Auditors of the Company, M/s Deloitte Haskin & Sells, have expressed their willingness to act as Auditors of the Company, on their retirement at the ensuing Annual General Meeting, for the year 2010.11. They have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (1B) of the Companies Act, 1956.

Acknowledgement

Your directors wish to place their sincere thanks to the Government authorities, banks, customers, suppliers, shareholders and employees, who extended support and co-operation, and helped, in your companys progress.

For and on behalf of Board of Directors

Place: Mumbai Hasmukh Shah

Date: 09.08.2010 Chairman

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