Dear Shareholders,
The Board of Directors hereby submits the report of the business and operations of Shish Industries Limited ("the Company"), along with the audited financial statements, for the financial year ended March 31, 2024.
BUSINESS OVERVIEW
Shish was established in the year 2012, to provide the industry with innovative State of the art manufacturing solutions in protective packaging Domain. The Company?s expertise has led us to produce designs right from the concept stage to development there by helping to achieve leadership as wholly integrated unit. The Company is known for its groundbreaking innovations and quality products in Industrial Packaging, Thermal Insulation, PP/PE Woven Fabric & Consumer products. The Company strive towards all-round growth, so it not only grows bigger but also stronger together. The Company see further growth opportunities ahead by innovating with customers in new markets; seeing Globe as its Market and never hesitate to accept a business opportunity overseas. The Company?s approach is to diversify and to reach out for new developments and in-depth research to provide solutions has granted an edge to reach new markets.
NEW INITIATIVES Shishcart
Shishcart is more than just a platform it is a destination where style meets innovation. Our passion lies in curating a diverse range of products that reflect both your unique taste and modern needs. With a commitment to quality, our handpicked selection of packaging solutions is designed to elevate your lifestyle and enhance your operations.
Our Mission- Empowering lives through curated elegance and innovative solutions that inspire.
Our Vision - To become the trusted Global Destination for unparalleled e-commerce experience and transformative products.
Inpackaging
InPackaging, initiated by Shish, transforms the packaging industry with a wide range of packaging solutions, such as paper, plastic, metal, wooden, sustainable packaging and packaging accessories. Our commitment to sustainable innovation ensures secure packing and promotes plastic waste recycling.
RESEARCH LAB Establishment
Design development and sampling form a core part of operations and a key differentiator in the business. We have an established product design and development team is comprised of industry experts with numerous years of experience.
Always Ahead
Shish Industries Ltd. has always stayed ahead of its time and has introduced advanced plastic manufacturing technology in India. Through strategic investment in R&D, Shish Industries has successfully managed to innovate and develop unique products.
Key Features of our Infrastructure
- First company to develop & patent 5-ply Polypropylene Corrugated Sheet - Developer of Indigenous Reflective Insulation Product- Carmika - Pioneered the concept of Insulated water tank covers in India.
ENVIROMENTAL
More and more companies across business industries are committing to reducing their impact on the environment, by creating environmentally conscious workplaces. This means having policies and programs in place that encourage green behaviors. We at Shish have taken a pledge to go green and have taken following measures to implement the same. - Implemented a recycling program - Conserve energy within the office - Promote a paperless office - Support green vendors - Reduce by reusing - Invest in office plants - Conserve human energy - Encourage sustainable transportation - Get outside and volunteer - Make green thinking a key part of your company culture
FINANCIAL YEAR 2023-24 AT GLANCE Financial Highlights
FINANCIAL PERFORMANCE On Standalone Basis
During the year under review, the revenue from operation of the Company was stood at INR 8,547.88 Lakhs as against that of INR 7,022.97 Lakhs for previous year. Revenue from operation of the Company was increased by 21.71% over previous year. Profit before Tax for the financial year 2023-24 stood at INR 1,130.73 Lakhs as against that of INR 768.52 Lakhs making the net profit of INR 843.20 Lakhs for the financial year 2023-24 as against the net profit of INR 573.19 Lakhs for the financial year 2022-23. The increase in profit after tax was achieved due to effective purchase policy of the Company and thereby reducing the cost of raw materials. During the year under review, export sales of the Company was increased by 16.66% than that of previous year, due to which the revenue of the Company was increased. On the other side, the Company also performed well in Domestic Market. The domestic sales of the Company were increased by 27.92% than that of previous year.
On Consolidated Basis
The consolidated revenue from operation of the Company for financial year 2023-24 stood at INR 8,574.08 Lakhs as against that of INR 6,853.79 Lakhs for previous year. The consolidated net profit after tax for the financial year 2023-24 was stood at INR 800.43 Lakhs as compared to INR 677.87 Lakhs for the previous financial year 2022-23. The Company has reported growth of 18.09% in consolidated net profit after tax and 25.10% in revenue for the full financial year 2023-24 as compared to the previous financial year 2022-23. The increase in profit after tax was achieved due to effective purchase policy of the Company and thereby reducing the cost of raw materials.
FINANCIAL STATEMENTS
The audited financial statements of the Company drawn up both on standalone and consolidated basis, for the financial year ended March 31, 2024, in accordance with the requirements of the Companies (Indian Accounting Standards) Rules, 2015 ("Ind AS") notified under Section
133 of the Act, read with relevant rules and other accounting principles. The Consolidated Financial Statements have been prepared in accordance with Ind AS and relevant provisions of the Act based on the financial statements received from subsidiaries, as approved by their respective Board of Directors.
DIVIDEND
With a view to conserve and save the resources for future prospect of the Company, your directors regret to declare dividend for the financial year 2023-24 (Previous Year Nil).
TRANSFER TO GENERAL RESERVE
Your Directors do not propose to transfer any amount to the General Reserves. Full amount of net profit is carried to reserve & Surplus account of the Company.
CHANGE IN NATURE OF BUSINESS
During the year, your Company has not changed its business or object and continues to be in the same line of business as per the main object of the Company.
SHARE CAPITAL
During the year under review, following changes were carried out in the authorized and paid-up share capital of the Company:
Authorized Capital
During the year under review, vide Special Resolution passed by the Members of the Company at their 6th Annual General Meeting held on July 20th, 2023, at 05:00 P.M. at Park Inn by Radisson, Beside Sumerru
Business Corner, Lane of Rajhans Theatre, Pal, Surat, 395009, Gujarat, India, the authorized share capital of the Company had been increased from INR 1,500.00 Lakh divided into 15000000 Equity Shares of INR 10.00/- each to INR 4,000.00 Lakh divided into 40000000 Equity Shares of INR 10.00/-. The Authorized share Capital of the Company, as at closure of financial year 2023-24, was INR 4,000.00 Lakh divided into 40000000 Equity Shares of INR 10.00/- each.
Issued, Subscribed & Paid-up Capital
During the year under review,
- Vide Special Resolution passed by the Members at their Extra Ordinary General Meeting No. 01/2023-24 held on April 25, 2023, through Video Conferencing ("VC") / Other Audio-Visual Means ("OAVM"), the Company had allotted total 333190 Equity Shares of INR 10.00 each to persons other than promoters and promoter group, on Preferential Basis, at an Issue Price of INR 216.10 per Equity Share;
- Vide Special Resolution passed by the Members at their 6th Annual General Meeting held on July 20th, 2023, at 05:00 P.M. at Park Inn by Radisson, Beside Sumerru Business Corner, Lane of Rajhans Theatre, Pal, Surat, 395009, Gujarat, India, the Company had allotted total 22794266 Equity Shares of INR 10.00 each to the shareholders of the Company whose names appeared in the register of members of the company as on record date i.e. July 28, 2023 by way of bonus issue; - Vide Special Resolution passed by the Members at their Extra Ordinary General Meeting 02/2023-24 held on September 30, 2023, through Video Conferencing ("VC") / Other Audio-Visual
Means ("OAVM"), the Company has allotted total 815750 Equity Shares of INR 10.00 each to Promoters & Promoter group and persons other than the promoters & promoter group, on Preferential Basis, at an Issue Price of INR 120.60 per Equity Share. Issued, Subscribed & Paid-up share Capital of the Company, after Preferential and Bonus Issue, as at closure of financial year 2023-24, was INR 3,500.71 Lakhs divided into 35007149 Equity Shares of INR 10 each. The entire Paid-up Equity shares of the Company are listed at BSE Limited. However, from the date of end of financial year under review till the date of this report, vide Special Resolution passed by the Members at their Extra Ordinary General Meeting 01/2024-25 held on April 6, 2024, through Video Conferencing ("VC") / Other Audio-Visual Means ("OAVM"),
- The Company had further allotted total 6,29,040 Equity Shares of INR 10.00 each to persons other than promoters and promoter group, on Preferential Basis, at an Issue Price of INR 120.05 per Equity Share and
- The Company had further allotted 3266800 fully convertible Equity warrants each convertible into, or exchangeable for, 1 fully paid-up equity share of the Company of face value Rupees 10.00, on a preferential basis, to the Promoters & Promoter Group and the persons other than the Promoters and Promoter Group, at price of Rupees 120.05 per Warrant. Issued, Subscribed & Paid-up share Capital of the Company, as on the date of this report, stood at INR 3,560.12 Lakhs divided into 35601169 Equity Shares of INR 10 each.
The required disclosures with respect to the allotment of warrants are as follows;
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Constitution of Board
The Company has a balanced board with optimum combination of Executive and Non-Executive Directors, including Independent Directors, which plays a crucial role in Board processes and provides independent judgment on issues of strategy and performance. As on March 31, 2024, board comprises of 6 (Six) Directors out of which 3 (Three) Directors are Promoter Executive Directors and remaining 3 (Three) are Non-Promoter Non-Executive Independent Directors. The Board of Directors of the Company has, in their Board Meeting held on March 31, 2023, changed and approved the designation of Mrs. Nitaben Maniya from Promoter Non-Executive Director to Promoter Executive Director w.e.f. April 1, 2023 and the same has also been approved by the Members of the Company at their Extra Ordinary General Meeting held on April 25, 2023, through Video Conferencing
("VC") / Other Audio-Visual Means ("OAVM").
Disclosure by Directors
The Directors on the Board have submitted notice of interest under Section 184(1) i.e. in Form MBP 1, intimation under Section 164(2) i.e. in Form DIR 8 and declaration as to compliance with the Code of Conduct of the Company. None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.
Board Meeting
Regular meetings of the Board are held, inter-alia, to review the financial results of the Company. Additional Board meetings are convened, as and when required, to discuss and decide on various business policies, strategies and other businesses. The Board meetings are generally held at registered office of the Company.
During the year under review, Board of Directors of the Company met 15 (Fifteen) times, viz May 1, 2023, May 16, 2023, June 21, 2023, July 17, 2023, July 29, 2023, August 29, 2023, September 5, 2023, October 18, 2023, November 23, 2023, November 30, 2023, December 15, 2023, January 19, 2024, February 6, 2024, March 7, 2024 and March 11, 2024.
The details of attendance of each Director at the Board Meetings and Annual General Meeting are given in the Report on Corporate Governance.
Independent Directors
In terms of Section 149 of the Companies Act, 2013 and rules made there under and Listing Regulations, the Company has three Non-Promoter Non-Executive Independent Directors. In the opinion of the Board of Directors, all three Independent Directors of the Company meet all the criteria mandated by Section 149 of the Companies Act, 2013 and rules made there under and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are Independent of Management.
A separate meeting of Independent Directors was held on March 11, 2024 to review the performance of Non-Independent Directors and Board as whole and performance of Chairperson of the Company including assessment of quality, quantity and timeliness of flow of information between Company management and Board that is necessary for the board of directors to effectively and reasonably perform their duties.
The terms and conditions of appointment of Independent Directors and Code for Independent Director are incorporated on the website of the Company at https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/Letter-of-Appointment-of-IDs.pdf.
The Company has received a declaration from the Independent Directors of the Company under Section 149(7) of Companies Act, 2013 and 16(1)(b) of Listing Regulations confirming that they meet criteria of Independence as per relevant provisions of Companies Act, 2013 for financial year 2024-25. The Board of Directors of the Company has taken on record the said declarations and confirmation as submitted by the Independent Directors after undertaking due assessment of the veracity of the same. In the opinion of the Board, they fulfill the conditions for Independent Directors and are independent of the Management. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. All the Independent Directors have confirmed that they are in compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to registration with the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs. The details of programme for familiarisation of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are uploaded on the website of the Company at the link: https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/Familiarisation-Programme-for-IDs.pdf
None of Independent Directors have resigned during the year.
Information on Directorate
During the year under review, the designation of Mrs. Nitaben Satishkumar Maniya (DIN: 07740523) had been changed from Promoter Non executive Director to Promoter Executive Director of the Company with effect from April 01, 2023 vide Special resolution passed by the members of the Company at their Extra Ordinary general Meeting held on April 25, 2023 through Video Conferencing ("VC") / Other AudioVisual Means ("OAVM").
Further from the date of completion of the financial year 2023-24 till the date of this report, Mr. Rasik Govindbhai Bharodia (DIN: 08514767) had been reappointed as Non-Promoter Non-Executive Independent Director w.e.f. 18/07/2024 for a second term of 5 (five) consecutive years vide Special resolution passed at the Extra ordinary general meeting of the Members held on 06/04/2024 through Video
Conferencing ("VC") / Other Audio-Visual Means ("OAVM").
Rationale for Re-appointment of Mr. Rasik Govindbhai Bharodia (DIN: 08514767): In the opinion of the Board, Mr. Rasik Govindbhai Bharodia (DIN: 08514767) is a person of integrity, possess relevant expertise/experience and fulfills the conditions of his reappointment as an Independent Director as specified in the Act, Rules made thereunder and the SEBI Listing Regulations. Further, keeping in view his qualifications, vast experience and knowledge, the Board of Directors consider that his association would be of immense benefit to the Company and it was in the interest of the Company to reappoint him as an Independent Director of the Company.
In accordance with the provisions of the Articles of Association and Section 152 of the Companies Act, 2013, Mr. Satishkumar Dayabhai Maniya (DIN 02529191), Chairman and Managing Director of the Company retires by rotation at the ensuing annual general meeting. He, being eligible, has offered himself for re-appointment as such and seeks re-appointment. The Board of Directors recommends his appointment on the Board.
The relevant details, as required under Regulation 36 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and Secretarial Standards-II issued by ICSI, of the person seeking re-appointment as Director is annexed to the Notice convening the seventh annual general meeting.
Key Managerial Personnel
In accordance with Section 203 of the Companies Act, 2013, during the year under review, the Company had already appointed Mr. Satishkumar Maniya as Chairman and Managing Director of the Company, Mr. Rameshbhai Kakadiya as Whole-Time Director of the Company, Mr. Nishit Rameshbhai Lakhani as Chief Financial Officer of the Company, Mrs. Vibha Khandelwal as Company Secretary and Compliance Officer of the Company (till November 30, 2023) and Ms. Suman Mohanlal Jat as Company Secretary and Compliance Officer of the Company (w.e.f. December 15, 2023).
As on date of this report, the Company has Mr. Satishkumar Maniya as Chairman and Managing Director, Mr. Rameshbhai Kakadiya as Whole time Director, Mr. Nishit Rameshbhai Lakhani as Chief Financial Officer and Ms. Suman Mohanlal Jat as Company Secretary and Compliance Officer who are acting as Key Managerial Personnel in accordance with Section 203 of the Companies Act, 2013.
Performance Evaluation
The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 in the following manners;
The performance of the board was evaluated by the board, after seeking inputs from all the directors, on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
In addition, the performance of chairperson was also evaluated on the key aspects of his role.
Separate meeting of independent directors was held to evaluate the performance of non-independent directors, performance of the board as a whole and performance of the chairperson, considering the views of executive directors and non-executive directors. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
Directorsf 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) In preparation of annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed and that no material departures have been made from the same;
b) The Directors had 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 at the end of the financial year and of the profit or loss of the Company for that year;
c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) The Directors had prepared the annual accounts for the year ended March 31, 2024 on going concern basis.
e) The Directors had laid down the internal financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
COMMITTEES OF BOARD
The Board of Directors, in line with the requirement of the act, has formed various committees, details of which are given hereunder.
1. Audit Committee
2. Stakeholders Relationship Committee
3. Nomination and Remuneration Committee
4. Corporate Social Responsibility Committee
The composition of each of the above Committees, their respective role and responsibility are detailed in the Report on Corporate Governance annexed to this Report.
Audit Committee
The Company has formed Audit Committee in line with the provisions Section 177 of the Companies Act, 2013 and Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. As at March 31, 2024, the Audit Committee comprised Mr. Rajesh Mepani (Non-Executive Independent Director) as Chairperson and Mr. Rasik Bharodia (Non-Executive Independent Director), Mr. Nareshkumar Lakhani (Non-Executive Independent Director) and Mr. Satishkumar Maniya (Executive Director) as Members. Recommendations of Audit Committee, wherever/whenever given, have been accepted by the Board of Directors. Detailed Disclosure for Audit Committee is given in Corporate Governance Report annexure to this report.
Corporate Social Responsibility (CSR) Committee
Pursuant to Section 135 of Companies Act, 2013, the Company has constituted Corporate Social Responsibility Committee ("the CSR Committee") with object to recommend the Board a Policy on Corporate Social Responsibility and amount to be spent towards Corporate Social Responsibility. The terms of reference of the Committee inter alia comprises of the following:
- To review, formulate and recommend to the Board a CSR Policy which shall indicate the activities to be undertaken by the Company specified in Schedule VII of the Companies Act, 2013 and Rules made thereunder;
- To provide guidance on various CSR activities and recommend the amount of expenditure to be incurred on the activities;
- To monitor the CSR Policy from time to time and may seek outside agency advice, if necessary.
During the year under review, CSR Committee Meetings were held on January 19, 2024; February 6, 2024 and March 11, 2024 in which requisite quorum were present. The meetings were held to review and approve the expenditure incurred by the Company towards CSR activities.
The Composition of the Corporate Social Responsibility Committee as on March 31, 2024 is as under:
The CSR Policy may be accessed at the web link https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/CSR+Policy.pdf. The Annual Report on CSR activities in prescribed format is annexed as an Annexure A.
VIGIL MECHANISM
The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy. The policy enables the employees to report to the management instances of unethical behavior, actual or suspected fraud or violation of Company?s Code of Conduct. Further the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provide for adequate safe guards against victimization of the Whistle Blower who avails of such mechanism and also provides for direct access to the Chairperson of the Audit Committee, in exceptional cases. The functioning of vigil mechanism is reviewed by the Audit Committee from time to time. None of the Whistle blowers has been denied access to the Audit Committee of the Board. The Whistle Blower Policy of the Company is available on the website of the Company at https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/Whistle-Blower-Policy.pdf.
NOMINATION AND REMUNERATION POLICY
Nomination and Remuneration Policy in the Company is designed to create a high-performance culture. It enables the Company to attract motivated and retained manpower in competitive market, and to harmonize the aspirations of human resources consistent with the goals of the Company. The Company pays remuneration by way of salary to its Executive Directors and Key Managerial Personnel. Annual increments are decided by the Nomination and Remuneration Committee within the salary scale approved by the members and are effective from April 1, of each year. The Nomination and Remuneration Policy, as adopted by the Board of Directors, is placed on the website of the Company at https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/Nomination-and-Remuneration-Policy.pdf.
REMUNERATION OF DIRECTORS
The details of remuneration/sitting fees paid during the financial year 2023-24 to Executive Directors/Directors of the Company is provided in Report on Corporate Governance which is the part of this report. The Company confirms that all the payment of remuneration or commission, if any, paid to Executive Directors, have been paid by the Holding Company only and none of the Subsidiary has paid any remuneration or commission to the Executive Director of the Company.
EMPLOYEE STOCK OPTION PLAN
The Company has instituted one schemes viz, "Shish Industries Limited
- Employee Stock Option Plan 2023" ("ESOP 2023" or "Scheme"). During the year under review, there has not been any material change/s in the scheme and the scheme is in compliance with the Securities and Exchange Board of India (Share based Employee Benefits and Sweat Equity) Regulations, 2021. The Company has not granted any options under ESOP 2023 up to 31st March 2024. A certificate from Secretarial Auditor of the Company i.e. Mr. Anand Lavingia, Practicing Company Secretary, has been received confirming that ESOP Scheme 2023, has been implemented in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI ESOP Regulations") and in accordance with resolutions of the Company. A copy of the certificate has been uploaded on the website of the Company and can be viewed at https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/financial-annual-report/annual-report/ESOP+Certificate.pdf. The disclosures with respect to "ESOP 2023" as required by Section 62 of the Companies Act, 2013, Rule 12 of Companies (Share Capital and Debentures) Rules, 2014 and the Securities and Exchange Board of India (Share based Employee Benefits and Sweat Equity) Regulations, 2021 are set out in Annexure-B to the Board?s Report and can also be viewed at https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/financial-annual-report/annual-report/ESOP+Disclosure+FY+2023-24.pdf.
WEB LINK OF ANNUAL RETURN
The link to access the Annual Return is https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/financial-annual-report/annual-report/Annual+return+FY+2023-24.pdf
RELATED PARTIES TRANSACTION
During the year under review, vide Special Resolution passed by the Members at their Extra Ordinary General Meeting held on September 30, 2023, through Video Conferencing ("VC") / Other Audio-Visual
Means ("OAVM"), the Company had entered into material related party transactions with Mr. Rameshbhai Kakadiya, Promoter cum Whole-Time Director of the Company. Further, there are no materially significant Related Party Transactions made by the Company with any other Promoter, Directors, Key Managerial Personnel. None of these transactions have a potential conflict with the interests of the Company at large. All Related Party Transactions are placed before the Audit Committee and the Board for approval, if required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive in nature. The Company has developed an Internal Guide on Related Party Transactions Manual and prescribed Standard Operating Procedures for the purpose of identification and monitoring of such transactions. The
Policy on Related Party Transactions as approved by the Board is uploaded on the Company?s website at https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/Policy-on-Related-Party-Transactions.pdf.
All Related Party Transactions entered into during the financial year were on an arm?s length basis and were in the ordinary course of business. Your Company had entered into a related party transaction with the Mr. Rameshbhai Kakadiya 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 Companies Act, 2013 in form AOC-2 is annexed to this Report as Annexure C. Apart from this there were no other material related party transactions.
There was no contracts, arrangements or transactions which was not executed in ordinary course of business and/or at arm?s length basis.
UTILIZATION OF PROCEEDS OF PREFERENTIAL ISSUE
The details of utilization of preferential issue proceeds as on the date of this report is provided as follows:
PUBLIC DEPOSIT
The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 (‘the Act?) and the Companies (Acceptance of Deposits) Rules, 2014. There are no unclaimed deposits, unclaimed/ unpaid interest, refunds due to the deposit holders or to be deposited with the Investor Education and Protection Fund as on March 31, 2024.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO A. Conservation of energy
i.) The steps taken or impact on conservation of energy:
No major steps have been taken by the Company. However, the Company continues its endeavor to improve energy conservation and utilization. Moreover, the Company is planning to install solar panels at its manufacturing unit as a part of green energy initiatives of Government of India.
ii.) The steps taken by the Company for utilizing alternate sources of energy:
The Company has continued its focus on energy conservation efforts through up-gradation of process with new technology. The technology installed by the Company has provided better results in quality and production and also reducing the overall cost of production and maintenance which effect production scheduling and various energy saving initiatives in all areas of production. However, the Company has not installed any alternate source of energy running on renewable energy source.
iii.) The capital investment on energy conservation equipment: Nil
B. Technology absorption
i.) The effort made towards technology absorption
Your Company has been very thoughtful in installing new technology to reduce the production cost, improve yield, enhance product endurance and strengthen finish. However, no new technology has been installed by the Company during the year and all existing technology has been fully absorbed.
ii.) The benefit derived like product improvement, cost reduction, product development or import substitution
The Company had installed such technology that improve productivity, quality and reduction in manual intervention and to enhance the quality and productivity. Improvement in manufacturing process helped the Company in managing production scheduling; & better & faster servicing of product for domestic as well as global market.
iii.) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)
a. The details of technology imported:
The Company has imported Second Hand Air Bubble Film Machinery and Cord Strap Die Hard Machine.
b. The year of import: Financial Year 2020-21
c. Whether the technology has been fully absorbed: Yes
iv.) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof: Not Applicable
v.) The expenditure incurred on Research and Development: Nil
C. Foreign Exchange Earnings & Expenditure –
i.) Details of Foreign Exchange Earnings
ii.) Details of Foreign Exchange Expenditure
MAINTENANCE OF COST RECORDS
In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost records and audits) Rules, 2014, the Company is required to maintain the cost records and accordingly the Company has maintained the Cost record for F.Y. 2023-24.
PARTICULAR OF EMPLOYEES
The ratio of the remuneration of each executive director to the median of employees? remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report as Annexure D.
The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is opened for inspection in electronic form. Any Member interested in obtaining a copy of the same may write to the Company Secretary.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS & SECURITY
Details of Loans, Guarantees, Investments and Security covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statement. The Company has complied with the applicable provisions of Section 186 of the Act during the under review.
During the year under review, the Company has
(1) invested total INR 15.00 Lakhs as Equity Contribution in its wholly owned subsidiary Varni Wood & Paper Packaging Private Limited;
(2) acquired by way of subscription the securities of other body corporate worth INR 18.13 Lakhs;
(3) granted total INR 233.16 Lakhs as Unsecured Loan to its wholly owned subsidiary Shish Global Solutions Private Limited, total INR 44.46 Lakhs as Unsecured Loan to its wholly owned subsidiary Varni Wood & Paper Packaging Private Limited, total INR 23.95 Lakhs as Unsecured Loan to Dunnage Bag Private Limited and total INR 931.44 to Interstar Polyfab Private Limited;
(4) given Corporate Guarantee to Standard Chartered Bank on behalf of its wholly owned subsidiary Shish Polylam Private Limited and to Standard Chartered Bank on behalf of Interstar Polyfab Private Limited.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company?s operations in future.
RISK MANAGEMENT
A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.
MATERIAL CHANGES AND COMMITMENT
Post closure of financial year, there have been no material changes and commitments for the likely impact affecting financial position between end of the financial year and the date of the report, except
1) allotment of total 594020 Equity Shares of INR 10.00 each to persons other than promoters and promoter group, on Preferential Basis, at an Issue Price of INR 120.05 per Equity Share,
2) acquisition of 100% stake in Dunnage Bag Private Limited (CIN U25209GJ2020PTC117970) and 76.67% stake in Interstar Polyfab Private Limited (CIN U17299GJ2021PTC123765) by way of subscription to their Equity shares respectively pursuant to which both the Companies have become subsidiaries of the Company and
3) allotment of 3266800 fully convertible Equity warrants each convertible into, or exchangeable for, 1 fully paid-up equity share of the Company of face value Rupees 10.00, on a preferential basis, to the Promoters & Promoter Group and the persons other than the Promoters and Promoter Group, at price of Rupees 120.05 per Warrant.
SUBSIDIARIES/JOINT VENTURE/ASSOCIATE COMPANY
Shish Polylam Private Limited was incorporated as wholly owned subsidiary of the Company for carrying out business of Radiant Barrier, Roof Underlayment, Paper PE / PP / EVA Lamination, Aluminum PE / PP / EVA Lamination, Woven Fabric PE / PP / EVA Lamination, non-woven PE / PP / EVA Lamination and all kind of extrusion lamination products. It has shown immense development since incorporation.
Shish Polylam Private Limited achieved turnover of INR 257.30 Lakh during financial year 2023-24. The Profit Before Tax stood at INR 135.51 Lakh making net profit for financial year 2023-24 of INR 110.53 Lakh. Shish Polylam Private Limited has not declared any dividend for Financial Year 2023-24. The annual accounts of Shish Polylam Private Limited has been consolidated with the accounts of the Company for Financial Year 2023-24.
The Company had also established a wholly owned subsidiary Company - GreenEnergy International INC in Texas, USA. GreenEnergy International INC leverages the growth opportunities in the business of manufacturing and distributing Insulation Building Materials, Geo Textile Fabric, Material Handling Products, and Upvc and Pvc Equipment, Radiant Barrier, Roof Underlayment, PP Woven Fabric, Lumber Wrap, Pp Woven bag, FIBC Jumbo bag, Pp Sheet, Pvc & Cpvc Pipes and Fittings, and so on in USA. GreenEnergy International INC. also focuses on helping clients in expanding their business in various state of USA.
GreenEnergy International INC achieved turnover of INR 537.35 Lakh during financial year 2023-24. The loss before tax stood at INR 17.06 Lakh making net loss for financial year 2023-24 of INR 13.66 Lakh. GreenEnergy International INC has not declared any dividend for Financial Year 2023-24. The converted rupees annual accounts of GreenEnergy International INC have been consolidated with the accounts of the Company for Financial Year 2023-24.
The Company had established wholly owned subsidiary Shish Global Solutions Private Limited to leverage the growth opportunities in the business of facilitating transactions, commerce, electronic commerce, mobile commerce, any type of commerce whether between businesses and other businesses or between business and individual consumers for home and office decorative and interior designing items, hardware, sanitary, building materials, pipes and fitting and such other materials and items required for construction of homes and offices and in relation to providing software and information technology-based business solutions in any form and manner to various entities and business of online marketing, on-line shopping, Internet advertising and marketing, creating virtual malls, stores, shops, creating shopping catalogues, providing secured payment processing, net commerce solutions, online trading in and outside India but does not include banking and money circulating business.
Shish Global Solutions Private Limited achieved turnover of INR 735.44 Lakh during financial year 2023-24. The loss before tax stood at INR 137.64 Lakh making net loss for financial year 2023-24 of INR 137.64 Lakh. Shish Global Solutions Private Limited has not declared any dividend for Financial Year 2023-24. The annual accounts of Shish Global Solutions Private Limited have been consolidated with the accounts of the Company for Financial Year 2023-24.
During the year under review, the Company had incorporated wholly owned subsidiary - Varni Wood & Paper Packaging Private Limited to leverage the growth opportunities in the business of manufactures, engineers, contractors, founders, and designers of all kinds of Industrial packing materials.
Varni Wood & Paper Packaging Private Limited achieved turnover of INR 82.00 Lakh during financial year 2023-24. The profit before tax stood at INR 2.93 Lakh making net profit for financial year 2023-24 of INR 2.14 Lakh. Varni Wood & Paper Packaging Private Limited has not declared any dividend for Financial Year 2023-24. The annual accounts of Varni Wood & Paper Packaging Private Limited have been consolidated with the accounts of the Company for Financial Year 2023-24.
Moreover, after completion of the financial year 2023-24 and till the date of this report the Company has acquired 100% stake in Dunnage Bag Private Limited (CIN U25209GJ2020PTC117970) and 76.67% stake in Interstar Polyfab Private Limited (CIN U17299GJ2021PTC123765) by way of subscription to their Equity shares respectively pursuant to which both the Companies have become subsidiaries of the Company.
The Policy for determining material subsidiary company, as approved by the Board, may be accessed on the Company?s website at the link https://shish-industries-images.s3.ap-south-1.amazonaws.com/investorsData/Corporate-announcement/policies/Policy-for-Determining-Material-Subsidiaries.pdf
The Company does not have any Joint venture or associate Company. There has been no material change in the nature of the business of the subsidiaries.
The financial performance of Subsidiary Companies in prescribed Form AOC-1 is annexed to this Report as Annexure E.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well-defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by an experience auditor. The audit is based on an internal audit plan, which is reviewed each year in consultation with the statutory auditor of the Company and the audit committee. The conduct of internal audit is oriented towards the review of internal controls and risks in its operations.
The Internal Auditor of the Company carry out review of the internal control systems and procedures. The internal audit reports are reviewed by Audit Committee and Board.
Your Company has also put in place adequate internal financial controls with reference to the financial statements commensurate with the size and nature of operations of the Company. During the year, such controls were tested and no material discrepancy or weakness in the Company?s internal controls over financial reporting was observed.
CORPORATE GOVERNANCE:
Your Company strives to incorporate the appropriate standards for corporate governance. As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance and Certificate of the Practicing Company Secretary with regards to compliance with the conditions of Corporate
Governance is annexed to the Board?s Report as Annexure F.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34, and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a review of the performance of the Company, for the year under review, Management Discussion and Analysis Report, is presented in a separate section forming part of this Annual Report.
STATUTORY AUDITOR AND THEIR REPORT
M/s. K P C M & Co., Chartered Accountants, Surat (FRN: 117390W) were appointed as Statutory Auditors of the Company at the second Annual General Meeting held on September 28, 2019, for a term of five consecutive years. The present term is expiring at the seventh annual general meeting of the Company. The Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under
Section 134 of the Companies Act, 2013. The Auditors? Report does not contain any qualification, reservation or adverse remark. The Auditors?
Report is enclosed with the financial statements in this Annual Report. In terms of provision of Section 139(2) of the Companies Act, 2013, M/s. K P C M & Co., Chartered Accountants, Surat (FRN: 117390W) may be re-appointed for further period of 4 (four) years i.e. from the conclusion of 7th Annual General Meeting of the Company till 11th Annual General Meeting of the Company and hence Board of Directors of the Company recommends resolution for re-appointment of M/s. K P C M & Co., Chartered Accountants, Surat (FRN: 117390W) as statutory auditor of the Company. The Company has received confirmation from M/s. K P C M & Co., Chartered Accountants, Surat (FRN: 117390W) that they are not disqualified from continuing as the Auditors of the Company.
SECRETARIAL AUDITOR AND THEIR REPORT
The Company has appointed Mr. Anand Lavingia, Practicing Company Secretary, to conduct the secretarial audit of the Company for the financial year 2023-24, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The Secretarial Audit Report for the financial year 2023-24 is annexed to this report as an Annexure G 1
The Annual Secretarial Compliance Report for the financial year ended March 31, 2024 issued by Mr. Anand Lavingia, in relation to compliance of all applicable SEBI Regulations/ Circulars/Guidelines issued thereunder, pursuant to requirement of Regulation 24A of the Listing Regulations read with Circular no. CIR/CFD/CMD1/27/2019 dated 8th February, 2019 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) is annexed to this report as an Annexure G 2. The above reports do not contain any remarks by the Secretarial Auditor with regards to Financial year 2023-24.
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.
INSURANCE
The assets of your Company have been adequately insured.
PROCEEDINGS INITIATED/PENDING AGAINST YOUR COMPANY UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the Business of the Company.
WEBSITE
As per Regulation 46 of SEBI (LODR) Regulations, 2015, the Company has maintained a functional website namely "www.shishindustries.com" containing basic information about the Company. The website of the Company is also containing information like Policies, Shareholding Pattern, Financial Results and information of the designated officials of the Company who are responsible for assisting and handling investor grievances for the benefit of all stakeholders of the Company, etc.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
To foster a positive workplace environment, free from harassment of any nature, we have institutionalized the Anti-Sexual Harassment Initiative (ASHI) framework, through which we address complaints of sexual harassment at all the workplaces of the Company. Our policy assures discretion and guarantees non-retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land where we operate. The Company has setup an Internal Complaints Committee (ICC) for redressal of Complaints. During the financial year 2023-24, the Company has received Nil complaints on sexual harassment, out of which Nil complaints have been disposed off and Nil complaints remained pending as of March 31, 2024.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
INDUSTRIAL RELATIONS (IR):
The Company continues to maintain harmonious industrial relations. Company periodically reviews its HR policies and procedures to aid and improve the living standards of its employees, and to keep them motivated and involved with the larger interests of the organization. The Company has systems and procedures in place to hear and resolve employees? grievances in a timely manner, and provides avenues to its employees for their all-round development on professional and personal levels. All these measures aid employee satisfaction and involvement, resulting in good Industrial Relations.
DETAILS OF THE DESIGNATED OFFICER:
Ms. Suman Mohanlal Jat, Company Secretary & Compliance officer of the company is acting as Designated Officer under Rule (9) (5) of the Companies (Management and Administration) Rules, 2014.
LARGE ENTITY:
The Board of Directors of the Company hereby confirm that the Company is not a Large Corporate entity in terms of Regulation 50B of SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (NCS Regulations).
COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2
The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to
‘Meetings of the Board of Directors? and ‘General Meetings?, respectively, have been duly complied by your Company.
LOAN FROM DIRECTORS:
The Company had accepted loan of INR 55.43 Lakhs during the financial year 2023-24 from Mr. Satishkumar Dayabhai Maniya, Managing Director of the Company.
GENERAL DISCLOSURE
Your Directors state that the Company has made disclosures in this report for the items prescribed in section 134 (3) of the Act and Rule 8 of The Companies (Accounts) Rules, 2014 and other applicable provisions of the act and listing regulations, to the extent the transactions took place on those items during the year.
The Board of Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions or applicability pertaining to these matters during the year under review:
i) Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013). ii) One time settlement of loan obtained from the banks or financial institutions. iii) Issue of equity shares with differential rights; iv) Issue of sweat equity shares; v) There is no revision in the Board Report or Financial Statement;
APPRECIATIONS AND ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation for significant contributions made by the employees at all levels through their dedication, hard work and commitment, enabling the Company to achieve good performance during the year under review.
Your Directors also take this opportunity to place on record the valuable co-operation and support extended by the banks, government, business associates and the shareholders for their continued confidence reposed in the Company and look forward to having the same support in all future endeavors.