Your Directors have pleasure in presenting the 115th Annual Report together with theAudited Financial Statements of the Company for the Financial Year ended March 31 2017.
Financial performance `
|Description ||2016-17 ||2015-16 |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Revenue from Operations & Other Income ||37135.52 ||37117.74 ||40435.30 ||40435.30 |
|Expenses ||35483.37 ||35483.73 ||37284.61 ||37287.48 |
|Depreciation ||421.97 ||424.58 ||504.01 ||504.34 |
|Interest ||2257.13 ||2257.14 ||2215.13 ||2215.13 |
|Profit before tax ||-1026.95 ||-1047.71 ||431.55 ||428.35 |
|Deferred Tax ||-367.24 ||-373.09 ||-95.97 ||-96.96 |
|Profit after ||-659.71 ||-674.62 ||527.52 ||525.31 |
|Balance carried to Balance Sheet ||-659.71 ||-674.62 ||527.52 ||525.31 |
Review of Operations and the State of Companys Affairs
The year passed by was a year of challenges in a second half. During first half of theyear your Company was growing and was in profits. The second half of the year was lookingbetter in terms of sales and profits but the two events i.e. sudden declaration ofdemonetization and fire at Nasik Plant in November 2016 pushed the sales into negativegrowth and losses.
Due to this the performance of whole year was effected. Your Company during the yearunder review suffered a loss (after tax) of ` 659.71 lacs as against profit (after tax) of` 527.52 lacs in the previous year. The revenue from operations and other income of theCompany for the financialyear 16-17 stood at ` 37135.52 lacs as against ` 40435.30 lacsin the previous year.
In the Decorative segment your Company had launched new products namely Zinc ChromateYellow Green Primer Super Shaktiman Projects Acrylic Exterior Emulsion Xtra ToughPremier Acrylic Exterior Emulsion Superlac Advance Premium Acrylic Interior Emulsion andin decorative packaging segment Red Oxide Metal Primer Universal White Primer werelaunched.
In the Industrial Product segment your Company had launched Solventless Food GradeEpoxy Quick Drying Alkyd Primer Phenolic Modified Coating Heat Resistance Coating andZinc Phosphate Primer.
Nature of Business
There has been no change in the nature of business of the company.
In view of the losses incurred during the year under review the Board did notrecommend any dividend.
Abridged Financial Statements
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as Listing Regulations) and Section 136 of theCompanies Act 2013 read with Rule 10 of the Companies (Accounts) Rules 2014 theabridged Annual Report containing salient features of the financial statements includingConsolidated Financial Statements for the Financial Year 2016-17 along with statementcontaining salient features of the Directors Report (including Management Discussion& Analysis and Corporate Governance Report) is being sent to all shareholders who havenot registered their email address(es) for the purpose of receiving documents/communication from the Company in physical mode. Full version of Annual Report 2016-17 isalso available for inspection at the registered office of the Company during working hoursup to the date of ensuing Annual general meeting (AGM). It is also available at theCompany`s website at www.shalimarpaints.com
Consolidated Financial Statement
In compliance with the applicable provisions of Companies Act 2013 including theAccounting Standard 21 & SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 on Consolidated Financial Statements this Annual Report also includesConsolidated Financial Statements for the financial year 2016- 17.
Operations and Business Performance
Kindly refer to Management Discussion & Analysis and Corporate Governance Reportwhich forms part of this report.
During the year under review there was no change in the Companys paid-up equityshare capital.
The Company has not transferred any amount to the General Reserve during the financialyear ended st March 2017.
Fire at Nasik Plant
Your Company suffered a major setback when an accidental fire broke at theCompanys Nasik Plant on 19 th November 2016 and the operations of the Nasik Plantare suspended since then.
Material changes and commitments affecting financial position between the end of thefinancial year and date of the report
The Company intends to restart its Resin Aluminum and Packaging facilities atits Howrah Plant. Certain Government approvals are required for which Company iscoordinating with respective Government departments. These facilities are expected torestart in Q2 FY 2017-18 after getting necessary approvals.
The Company has started its saved Nasik plant which includes Resin Packagingand Aluminum facilities in Nashik in Q1 FY 2017-18.
The Chennai plant of the Company is now re-commissioned and ready for productionlikely in the second half of FY 2017-18. The capacity of the plant is 18000 KLPA. Thecompany has started trial runs of production.
The Board of Directors have passed a resolution for the approval of the RightsIssue of Equity Shares for an amount upto `50 Crores. The draft offer document has beenfiled with SEBI for their observations.
The shareholders have passed the special resolution for Conversion of UnsecuredLoans into the Equity through the Rights Issue through postal ballot. The result of whichwas declared on 23rd May 2017.
Resignation of Mr. Rajiv Rajvanshi from the Directorship of the Company w.e.f24th May 2017.
Appointment of Mr. Alok Perti as an Additonal Director of the Company w.e.f 24thMay 2017.
Transfer of amount to Investor Education and Protection Fund
In terms of Section 124 of the Companies Act 2013 the Company is required to transferthe amount of dividend remaining unclaimed for a period of seven years from the date oftransfer to the unpaid dividend account to the Investor Education and Protection Fund(IEPF).The dividend for the financial year 2008-09 which remained unpaid/unclaimedaggregating to ` 172125/- (Rupees One Lac Seventy Two Thousand One Hundred Twenty FiveOnly) was transferred to IEPF during the year under review.
Deposits (Disclosure on Deposit under Chapter V)
The Company has neither accepted nor renewed any deposit during the year. There was nounpaid/unclaimed deposit as at 31st March 2017.
The Company continued with its policy of installation of tinting systems in variousretail outlets across the country with a view to increase the demand for its high valueproducts especially water based products.
Tinting is an economic way of producing a virtually unlimited number of paint coloursto meet the exact needs of each individual customer large or small. The Company continuedwith its policy of installation of tinting systems in various retail outlets across thecountry with a view to increase the demand for its high value products especially waterbased products. The Company is also reviewing the non-performing Tinting machines andwherever required pulling it out from non-performing customers and giving to performingcustomers
Presently Sikandrabad plant of the company certify for Quality Managemt System-ISO9001.
The company has been accorded credit rating of CARE B Negative for long term bankfacilities CARE B Negative/CARE A4 for long/ short term bank facilities and CARE D forshort term bank facilities by CARE Ratings Limited on 11th July 2017.
Employee Stock Option Plan (ESOP)
Pursuant to Employee Stock Option Scheme 2013 i.e. ESOP 2013 of theCompany the details of ESOPs granted vested and exercised by permanent employees of theCompany during the financial year under review as required under the Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014 and as per theprovisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (ShareCapital and Debenture) Rules 2014 and other applicable Regulations is annexed as Annexure- A to this report.
Directors and Key Managerial Personnel
Appointments Re-appointments Retirements & Resignations During the financial year2016-17 Mr. Girish Sundar Jhunjhnuwala had resigned from the Chairmanship andDirectorship of the Company w.e.f 12th August 2016 and Mr. Ratan Jindal Director of theCompany who retires by rotation at Annual General Meeting held in the year 2016 does notseek re-appointment Hence he ceased to be director of the Company w.e.f 28th September2016. The Board placed on record their sincere appreciation for the guidance andcontribution made by them during their tenure on the Board.
Further in compliance with the provisions of Sections 149 150 and 152 read withSchedule IV and other applicable provisions of the Companies Act 2013 and relevant Rulesmade thereunder (including any statutory modification(s) or reenactment thereof for thetime being in force Mr. Alok Perti (DIN: 00475747) was appointed as Independent Directorby the Board of Directors of the Company in their meeting held on 24th May 2017 and willvacate his office at the ensuing Annual General Meeting. A notice in writing was receivedfrom the Member of the Company in terms of Section 160 of the Companies Act 2013signifying the intention to propose the appointment of Mr. Alok Perti as a Director of theCompany. Your Board recommends his appointment as the Director in the ensuing AGM.
Mr. Surender Kumar Executive Director is liable to retire by rotation at the ensuingAnnual General Meeting (AGM) pursuant to the provisions of Section 152 of the CompaniesAct 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014 andthe Articles of Association of the Company and being eligible has offered himself forreappointment.
Mr. Janak Raj Goyal Chief Financial Officer (CFO) of the Company had resigned from theposition of CFO w.e.f 31st January 2017 and in compliance with the provisions of Section203 of the Companies Act 2013 Mr. Sandeep Gupta had been appointed as Chief FinancialOfficer (CFO) of the Company w.e.f 11th February 2017.
A brief profile of the Directors proposed to be appointed and re-appointed as requiredunder Secretarial Standard 2 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is appended as an Annexure to the Notice of the ensuing AGM. The Boardrecommends the same for the approval of the shareholders of the Company.
Declaration by Independent Directors
The Company had received declarations from all the Independent Directors of the Companyconfirmingthat they meet with the criteria of independence as prescribed under SubSection (6) of Section 149 of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The Independent Directorshavealsoconfirmedthatthey have complied with the Companys Code of Conduct.
Nomination and Remuneration Policy
This policy formulates the criteria for determining qualifications competenciespositive attributes and independence for the appointment of Director (Executive/ NonExecutive) and also the criteria for determining the remuneration of the Directors KeyManagerial Personnel and other employees.
The detailed policy is available on the Companys website link at:https://www.shalimarpaints.com/upload/investor_reports/Nomination_and_Remuneration_Policy.pdf
Annual Evaluation of Directors Committees and Board
In compliance with the applicable provisions of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board of Directorson recommendation of the Nomination and Remuneration Committee has approved and adoptedthe Evaluation Policy setting out the process format attributes and criteria for theperformance evaluation of the Board Board Committees and Individual Directors.
The Independent Directors had met separately on 11th February 2017 without thepresence of Non-Independent Directors and the Members of management and discussedinter-alia the performance of Non-Independent Directors and Board as a whole and theperformance of the Chairman of the Company after taking into consideration the views ofExecutive and Non-Executive Directors.
Board and its Committees
The Board of Directors met four times during the Financial Year 2016-17. The details ofthe Composition of the Board and its Committees and number of Board and Committee meetingsheld during Financial Year 2016-17 and attendance of Directors and members of theCommittee at the said meetings are provided in the Report on Corporate Governance whichforms part of this Report.
Registered Office of the Company
The Registered Office of the Company was shifted to its present address i.e. StainlessCentre 4th Floor Plot No. 50 Sector-32 Gurugram Haryana 122001 w.e.f 10thFebruary 2017.
During the year the Registered Office was also shifted to 4th Floor Plot No. 64Sector-44Gurgaon Haryana 122001. Earlier the Registered Office of the Companywas situated at Goaberai P.O. Danesh Shaikh Lane Howrah 711109 West Bengal.
As on 31st March 2017 the Company has two subsidiaries namely Shalimar AdhunikNirman Limited (SANL) and Eastern Speciality Paints & Coatings Private Limited(ESPCPL). None of the Companies has become or ceased to be the Companyssubsidiaries during the year under review. In accordance with Section 129(3) of theCompanies Act 2013 read with Rule 5 of Companies (Accounts of Companies)
Rules 2014 the Company has prepared consolidated financial statements of the Companyand its subsidiaries which form part of the Annual Report. A statement in Form AOC- 1containing the salient features of financial statements of the above mentionedsubsidiaries of the Company is annexed as Annexure - B to this Report.
The audited financial statements of the subsidiary companies are available forinspection at the Companys Registered Office.
Any member desirous of obtaining a copy of said financial statements may write to theCompany Secretary at Companys Registered Office.
The Company does not have any associate and/or joint venture company.
Auditors & Audit Report Statutory Auditors
M/s Chaturvedi and Partners the Statutory Auditors of the Company retires at theconclusion of forthcoming Annual General Meeting and did not offer themselves forre-appointment.
The Company has received confirmation from M/s A K Dubey & Co CharteredAccountants to the effect that appointment if made would be within the prescribed limitsunder Section 141(3)(g) of the Companies Act 2013 and that they are not disqualified toact as Auditors of the Company if appointed.
The Audit report on the financial statements for the year 2016-17 does not contain anyqualifications reservations or adverse remarks
The Board appointed M/s Arun Goel & Associates Practising Company Secretaries toconduct Secretarial Audit for FY 2016-17. The Secretarial Audit Report for the FinancialYear ended March 31 2017 is annexed herewith as Annexure-C formingintegral part of this report. The said report is self-explanatory and does not contain anyqualification reservation adverse remark or disclaimers.
Corporate Social Responsibility
Your Companys overarching aspiration to create significant and sustainablesocietal value is manifest in its CSR initiatives.
Shalimar Paints has been an early adopter of Corporate Social Responsibility (CSR)initiatives. CSR is traditionally driven by a moral obligation and philanthropic spirit.Through CSR there is a formation of a dynamic relationship between a Company on one handand the society and environment on the other. The CSR Policy of the Company is availableon the Companys website link at:https://www.shalimarpaints.com/upload/investor_reports/Corporate%20Social%20Responsibility%20Policy.pdf
The Annual Report on CSR activities in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as Annexure - D to thisReport.
During the year the Companys equity shares continue to be listed with BSELimited and National Stock Exchange of India Limited.
The Company has paid annual listing fees to the respective Stock Exchanges. As thetrading in equity shares of the Company is permitted only in dematerialized form theCompany has made the requisite arrangements with National Securities Depository Limitedand Central Depository Services (India) Limited to enable investors to hold shares indematerialized form.
Risk Management is a holistic integrated structured and disciplined approach tomanage risks. It involves identifying potential events that may affect the Company andformulating strategy to manage these events while ensuring that the risk exposure remainsat the defined appropriate levels. The Company has developed and implemented comprehensiverisk assessment and mitigation procedures as laid down in the Companys RiskManagement Policy duly approved by the Board.
There are no risks identified by the Board which may threaten the existence of theCompany. The detailed Risk Review is provided in the Management Discussion & Analysissection forming integral part of Annual Report.
The Risk Management Policy of the Company is available on the Companys websitelink at: https://www.shalimarpaints.com/upload/investor_reports/Risk-Management-Policy.pdf
Internal Financial Control
The Company has in place adequate internal financial controls with reference toFinancial Statements. During the year such controls were tested and no reportablematerial weakness in the design or operations were observed.
As on 31st March 2017 the Audit Committee of the Board of Directors of the Companycomprised of Mr. Gautam Kanjilal Mr. Rajiv Rajvanshi and Ms. Pushpa Chowdhary under theChairmanship of Mr. Gautam Kanjilal. During the F.Y. all the recommendations made by theAudit Committee were accepted by the Board and no recommendation is left which has notbeen accepted by the Board.
At present the Audit Committee consists of Mr. Gautam Kanjilal Mr. Alok Perti and Ms.Pushpa Chowdhary under the Chairmanship of Mr. Gautam Kanjilal as Mr. Rajiv Rajvanshihad resigned from the Company w.e.f 24th May 2017.
Whistle Blower Policy/Vigil Mechanism
In compliance with the provisions of Section 177 (9) and (10) of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theCompany has adopted the Whistle Blower Mechanism for Directors and Employees to reportconcerns about unethical behavior actual or suspected fraud or violation of theCompanies code of conducts and ethics. There has been no change to the Whistle BlowerPolicy adopted by the Company during Fiscal Year 2017. The Whistle Blower Policy of theCompany is available on the Companys website link at:https://www.shalimarpaints.com/upload/investor_reports/Whistleblower-Policy.pdf
Extract of Annual Return
The extracts of Annual Return as required under the Act in Form MGT-9 is annexedherewith as Annexure-E forming integral part of this Report.
Significant and Material Orders
Central Government vides its order number RD/T/23269/S-13(4)/16/6452 dated 5th August2016 has approved the application under section 13(4) of the Companies Act 2013 forchange of registered office of the Company from the State of West Bengal to the State ofHaryana and the certificate of registration of order of Honble Regional Director forchange of state has been issued by the Registrar of Companies NCT of Delhi & Haryanaon 1st day of September 2016.
Particulars of Loans Guarantees or Investments
Particulars of loans guarantees and investments made under the provisions of Section186 of the Act have been disclosed in note no. 2.11 2.13 and 2.14 of the notes to theStandalone Financial Statements forming integral part of Annual Report.
Related Party Transactions
All contracts arrangements and transactions entered by the Company during FY 2017 werein the ordinary course of business and on arms length basis. During the year theCompany had not entered into any contract arrangement and transaction with relatedparties which could be considered material in accordance with the Companys Policy onmateriality of and dealing with related party transactions (the "Policy") andaccordingly the disclosure of Related Party Transactions in Form AOC-2 is not applicable.The Related Party Transactions policy of the Company is available on the Companyswebsite link at:https://www.shalimarpaints.com/upload/investor_reports/Related-Party-Transaction-Policy.pdf
Pursuant to the provisions of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has adopted a policy on prevention ofsexual harassment at workplace. The Company is committed towards promoting the workenvironment that ensures every employee is treated with dignity and respect and affordedequitable treatment irrespective of their gender race social class caste creedreligion place of origin sexual orientation disability or economic status. During theCalendar year the Company has not received any complaint.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The details of energy conservation technology absorption and foreign exchange earningsand outgo as required under Section 134(3) of the Companies Act 2013 read with Rule 8 ofthe Companies(Accounts) Rules 2014 is annexed as Annexure-F to thisReport.
Particulars of Employees
The information as required to be provided in terms of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) & 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 in respect of Directors/ employees ofyour Company is set out in Annexure-G to this Report.
Being a value-driven organization the Company is committed towards being ethicaltransparent and building trust of its shareholders employees business partners andother stakeholders which is based on the principles of good corporate governance.
The Corporate Governance philosophy of the Company is driven by the interest ofstakeholders and business needs of the organization. Corporate governance is essential forthe growth profitability and stability of any business. Aligning itself to thisphilosophy the Company has placed Corporate Governance on a high priority.
In terms of Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (the "Listing Regulations") the Corporate GovernanceReportalongwithcertificatereceived from M/s Arun Goel & Associates Practising CompanySecretaries certifying compliance with the conditions of Corporate Governance is annexedas Annexure-H forming integral part of this Report. The CorporateGovernance Report inter-alia contains the following disclosures:
a) Details of Board & Committee Meetings
b) Composition of Corporate Social Responsibility Committee
c) Whistle Blower Policy (Vigil Mechanism)
d) Appointment & Remuneration Policy (for Directors Key Managerial PersonnelSenior Management and other Employees of the Company) pursuant to the provision of Section178 of the Act read SEBI(Listing Obligations and Disclosure Requirement) Regulation 2015.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report for the year under review in terms ofRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming integral part of the Annual Report.
Directors Responsibility Statement
Your Directors state that:
(a) in the preparation of the annual accounts for the year under review the applicableaccounting standards have been followed and there are no material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year i.e. asat 31st March 2017 and of the loss of the Company for that period;
(c) the Directors have taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal controls and compliance systems established andmaintained by the Company work performed by the internal statutory and secretarialauditors and external consultants and the reviews performed by management and the relevantboard committees including the audit committee the board is of the opinion that the
Companys internal financial controls were adequate and effective during theFinancial Year 2016-17.
Industrial Relations and Personnel
Industrial relations remained cordial and satisfactory. Your Directors wish to place onrecord their deep sense of appreciation of the devoted services rendered by all officersstaff and workers of the Company.
The Directors would like to place on record its appreciation for the enthusiasticco-operation hard work dedication and commitment of the financial institutions banksinvestors valued customers valued suppliers our employees various government agenciesand other business associates during the year under review.
Your Directors would also like to appreciate the confidence and loyalty displayed bythe guests whom the Company always strive to serve better.
| ||For and on behalf of the Board || |
| ||For Shalimar Paints Limited || |
| ||Surender Kumar ||Pushpa Chowdhary |
|Dated : 10th August 2017 ||Managing Director and CEO ||Director |
|Place : Gurugram ||DIN: 00510137 ||DIN: 06877982 |