Your Directors are pleased to present the 114th Annual Report on the business andoperations of the Company along with Standalone and consolidated financial statements forthe financial year ended 31st March 2016.
|Description || |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Net Revenue from Operations & Other Income ||40322.67 ||40322.67 ||43501.14 ||43501.14 |
|Expenses ||37171.98 ||37174.98 ||42444.96 ||42444.96 |
|PBIDT ||3150.69 ||3147.82 ||1056.18 ||1056.18 |
|Exceptional Items ||- ||- ||- ||- |
|Profit before tax ||431.55 ||428.35 ||-1484.76 ||-1484.76 |
|Provision for taxation || || || || |
|Current Tax ||- ||- ||- ||- |
|Deferred Tax ||-95.97 ||-96.96 ||-426.36 ||-426.36 |
|Profit after tax ||527.52 ||525.31 ||-1058.4 ||-1058.4 |
|Add: Amount brought forward from last year's account ||650.76 ||650.76 ||1820.77 ||1820.77 |
|Less: Prior period adjustment - Depreciation ||- ||- ||-111.61 ||-111.61 |
|Profit available for appropriation ||-922 ||-924.21 ||650.76 ||650.76 |
|Balance carried to Balance Sheet ||-922 ||-924.21 ||650.76 ||650.76 |
Review of Operations & State of Company's Affairs
The Company turned into profit after two consecutive years of loss. A lot of newinitiatives were taken; improvement in operational efficiency improvement in workingcapital cost control and measures automation of processes. During the FY 2015-16 theCompany earned a profit (after tax) of ' 527.52 lacs as against loss (after tax) of' 1058.40 lacs in the previous year. The Net revenue from operations & otherincome of the Company for the FY 2015-16 stood at ' 40322.67 lacs as against '43501.14lacs in the previous year. There is a plunge in the revenue of the Companyalthough there is a improvement in the working capital and cash flow. A lot of newproducts were launched in the decorative paint segment in the interior as well as exteriorpaint category namely Signature Superlac Stay Clean Weather PRO+ G. P. SyntheticEnamel.
In the industrial segment your company had launched quite a few new products namelySingle Pack DT- Primer cum Topcoat Low Cost Zinc Silicate for Projects High Build QuickDrying Coal Tar Epoxy Solvent less Epoxy Costing For Pipe Industries Quick drying Singlepack Paint for Cylinder Industries Black and Clear Bitumen Varnish and Stoving Paint forHair Clip.
Nature of Business
There has been no change in the nature of business of the company.
No dividend was declared by the Company for the financial year 2015-16.
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 2015-16 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 electronic mode. Please note that you will be entitledto be furnished free of cost the full Annual Report 2015-16 upon receipt of writtenrequest from you as a member of the Company. Full version of the Annual Report 2015-16containing complete Balance Sheet Statement of Profit & Loss other statements andnotes thereto including Consolidated Financial Statements prepared as per therequirements of Schedule III to the Companies Act 2013 Directors' Report (includingManagement Discussion and Analysis and Corporate Governance Report is being sent viaemail to all shareholders who have provided their email address(es). Full version ofAnnual Report 2015-16 is also available for inspection at the corporate office of theCompany during working hours up to the date of ensuing Annual general meeting (AGM). It isalso available at the Company'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 2015- 16.
Operations and Business Performance
Kindly refer to Management Discussion & Analysis and Corporate Governance Reportwhich forms part of this report.
Board's Report Share Capital
During the year under review there were changes in the Company's paid-up equity sharecapital.
During the current financial year up to the date of this report the Company has issued17875 equity shares of ' 2/- each upon exercise of stock options under theCompany's ESOP Scheme i.e. ESOP 2013'. Consequently the paid-up equity sharecapital of the Company as on the date of this report stood at ' 37891950 dividedinto 18945975 equity shares of ' 2/- each.
The Company has transferred ' 2100.28 Lacs to the General Reserve during thefinancial year ended 31st March 2016.
Material changes and commitments affecting financial position between the end of thefinancial year and date of the report
The shareholders have passed the special resolution for shifting of registeredoffice of the Company from the State of West Bengal to the State of Haryana throughpostal ballot. The result of which was declared on 15th March 2016.
Re-designated Mr. Surender Kumar as CEO of the Company w.e.f 1stApril 2016.
Central Government vides its order number RD/T/23269/S-13(4)/16/6452 dated 5thAugust 2016 has approved the application under section 13(4) of the Companies Act 2013for change of registered office of the Company from the State of West Bengal to the Stateof Haryana and the certificate of registration of order of Regional Director for change ofstate has been issued by the Registrar of Companies NCT of Delhi & Haryana on 1st dayof September 2016.
Resignation of Mr. Girish Jhunjhnuwala from the Chairmanship and Directorship ofthe Company w.e.f 12th August 2016.
Re-designated Mr. Surender Kumar as Managing Director and CEO of the Companyw.e.f 12th August 2016.
Appointment of Mr. Janak Raj Goyal as Chief Financial Officer (CFO) of theCompany w.e.f 12th August 2016
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 2007-08 which remained unpaid/unclaimedaggregating to ' 3 20460/- (Rupees Three Lacs Twenty Thousand Four Hundred SixtyOnly) 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 2016.
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. During the year the Company had launched their low cost high qualitytinting machine. This technology will allow us to build our distribution faster and in amore competitive way especially in high growth regions.
Nashik and Sikandrabad Plants of the Company are ISO 9001:2008 accredited.
The company has been accorded credit rating of CARE BBB for long term bank facilitiesCARE BBB/CARE A3 for long/ short term bank facilities and CARE A3 for short term bankfacilities by Credit Analysis and Research Limited on 1st December 2015.
Employee Stock Option Plan (ESOP)
Pursuant to Employee Stock Option Scheme 2013 i.e. ESOP 2013' of the Companythe details of ESOPs granted vested and exercised by permanent employees of the Companyduring the financial year under review as required under the Securities and ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014 and as per the provisionsof Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital andDebenture) 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 year 2015-16 Mr. Pujit Aggarwal and Mr. Aditya Vikram Lodha - NonExecutive Independent Directors of the Company has resigned from the Board of the Companyw.e.f 16th June 2015 and 7th November 2015 respectively. The Boardplaced on record their sincere appreciation for the guidance and contribution made by themduring 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. Gautam Kanjilal (DIN:03034033) was appointed as IndependentDirector by the Board of Directors of the Company in their meeting held on 7th November2015 and will vacate his office at the ensuing Annual General Meeting. A notice in writingwas received from the Member of the Company in terms of Section 160 of the Companies Act2013 signifying the intention to propose the appointment of Mr. Gautam Kanjilal as aDirector of the Company. Your Board recommends his appointment as the Director in theensuing AGM.
During the financial year 2015-16 Mr. Sameer Nagpal (DIN: 06599230) Managing Directorand CEO had resigned from the Board of the Company with effect from 30th May 2015. TheBoard placed on record their sincere appreciation for the guidance and contribution madeby him during his tenure on the Board.
Mr. Surender Kumar who was appointed as Whole-time Director and Chief OperatingOfficer (COO) and Chief Financial Officer (CFO) was re-designated as CEO of the Companyw.e.f 1st April 2016. Further Mr. Kumar was re-designated as ManagingDirector and CEO of the Company w.e.f 12th August 2016.
Mr. Girish Jhunjhnuwala Chairman of the Company has resigned from the Chairmanship andDirectorship of the Company w.e.f 12th August 2016. The Board placed on record theirsincere appreciation for the guidance and contribution made by him during his tenure onthe Board.
Mr. Ratan Jindal Non-Executive Non-Independent Director is liable to retire byrotation at the ensuing Annual General Meeting (AGM) pursuant to the provisions of Section152 of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 and the Articles of Association of the Company and he has shown hisunwillingness to be re-appointed at the ensuing Annual General Meeting.
In compliance with the provisions of Section 203 of the Companies Act 2013 Mr. JanakRaj Goyal has been appointed as Chief Financial Officer (CFO) of the Company w.e.f 12thAugust 2016.
Ms. Bernadette Dominic Company Secretary had resigned with effect from 16th October2015. The Board at its meeting held on 1st February 2016 had appointed Mr. Nitin Gupta asthe Company Secretary and Compliance Officer.
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 has received declarations from all the Independent Directors of the Companyconfirming that 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 Directors have also confirmedthat they have complied with the Company's 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 Company's website link at:
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.
On the basis of the consolidated report on questionnaire/feedback form received fromthe individual directors the Board evaluated the performance of the Board BoardCommittees and Individual Directors and noted its satisfaction on the outcome.
The Independent Directors had met separately on 1st February 2016 without the presenceof Non-Independent Directors and the Members of management and discussed inter-alia theperformance of Non-Independent Directors and Board as a whole and the performance of theChairman of the Company after taking into consideration the views of Executive andNon-Executive Directors.
Board and its Committees
The Board of Directors met four times during the Financial Year 2015-16. The details ofthe Composition of the Board and its Committees and number of Board and Committee meetingsheld during Financial Year 2015-16 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.
As on 31st March 2016 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 Company's subsidiariesduring the year under review. Since no business activity was carried out by ESPCPL duringthe year under review and accordingly have not prepared the Statement of Profit &Loss for the year 2015-16.
In accordance with Section 129(3) of the Companies Act 2013 read with Rule 5 ofCompanies (Accounts of Companies) Rules 2014 the Company has prepared consolidatedfinancial statements of the Company and its subsidiaries which form part of the AnnualReport. A statement in Form AOC- 1 containing the salient features of financialstatements of the above mentioned subsidiaries of the Company is annexed as Annexure- B' to this Report.
The audited financial statements of the subsidiary companies are available forinspection at the Company's Registered Office.
Any member desirous of obtaining a copy of said financial statements may write to theCompany Secretary at Company's 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 retire at theconclusion of forthcoming Annual General Meeting and being eligible offer themselves forre-appointment for the F.Y. 2016-17.
The Company has received confirmation from M/s Chaturvedi and Partners CharteredAccountants to the effect that their re-appointment if made would be within theprescribed limits under Section 141(3)(g) of the Companies Act 2013 and that they are notdisqualified to act as Auditors of the Company if re-appointed.
The Audit report on the financial statements for the year 2015-16 does not contain anyqualifications reservations or adverse remarks
The Company had appointed M/s Surinder Vashishtha & Associates Practicing CompanySecretaries to conduct Secretarial Audit for the Financial Year 2015-16 ended on 31stMarch 2016.Pursuant to Section 204 of Companies Act 2013 the Secretarial Auditor hassubmitted their report in the prescribed Form MR-3 confirming compliance by the Companyof all the provisions of applicable corporate laws. The Report does not contain anyqualification reservation or adverse remark. The Secretarial Audit Report is annexed as Annexure- C' to this Report.
Corporate Social Responsibility
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 main responsibilities of the Companytowards society at large are to eradicate hunger poverty and malnutrition; promoteeducation promote preventive health care and sanitation and making available safedrinking water promoting gender equality and empowering women.
The Corporate Social Responsibility Policy outlines the Company's strategy to bringabout a positive impact on society through programs relating to hunger povertyeducation health care environment and lowering its resource footprint. The compositionand terms of reference of the CSR Committee is provided in the Report on CorporateGovernance which forms part of this Report.
The CSR Policy of the Company is available on the Company's website link at:
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 Company's equity shares continue to be listed with BSE Limitedthe National Stock Exchange of India Limited.
In wake of an application made by the Company pursuant to the Securities & ExchangeBoard of India (Delisting of Equity Shares) Regulations 2009 the Company's equity shareshave been delisted from the Calcutta Stock Exchange Limited with effect from 3rd July2015.
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.
Risks Management is an integral part of Company's operating framework and is committedtowards identifying key risks and managing them in a proactive and efficient manner. TheCompany periodically assesses both internal as well as external risks to which the Companyis exposed to. Company through its risk management system strives for timelyidentification assessment minimization and management of risks affecting the Company inthe foreseeable future. Detailed discussion on Risk Management has been given as a part ofManagement Discussion & Analysis under the section Risks and Concerns' in theReport on Corporate Governance which forms part of this Annual Report.
The Risk Management Policy of the Company is available on the Company's website linkat: http://www.shalimarpaints.com/upload/investor_reports/Riskmanagment-Policy.pdf
Internal Financial Control
According to Section 134(5) (e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company has adequate and comprehensive internal financial control system ensuringorderly effective and efficient conduct of its business. Detailed discussion on internalcontrol has been given as a part of Management Discussion & Analysis under the sectionInternal Control System' in the Report on Corporate Governance which forms part ofthis Annual Report.
As on 31st March 2016 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.
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 2016.
The Whistle Blower Policy of the Company is available on the Company's website linkat: http://www.shalimarpaints.com/upload/investor_reports/Whistleblower-Policy.pdf
Extract of Annual Return
In terms of provisions of Section 92 134(3)(a) of the Companies Act 2013 read withRule 12 of the Companies (Management and Administration) Rules 2014 the extracts ofAnnual Return of the Company in the prescribed Form MGT-9 is annexed as Annexure- E' to this Report.
Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
Particulars of Loans Guarantees or Investments
Particulars of loans guarantees and investments form part of Note no 2.11 to theFinancial Statements provided in the Annual Report.
Related Party Transactions
All transactions entered into by the Company during the year under review with theRelated Parties as defined under the Companies Act 2013 Rules framed thereunder andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 were in theordinary course of business' and on arm's length' basis. As such provisionsof Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules 2014 are notapplicable to the Company during the year under review.
There has been no materially significant Related Party Transactions during the periodunder review which would have any potential conflict with the interest of the Company.Your Company did not have any Related Party Transaction which required prior approval ofthe Shareholders. Necessary disclosures required under the Accounting Standards (AS-18)have been made in the Notes to Financial Statements.
The Related Party Transactions policy of the Company is available on the Company'swebsite link at:http://www.shalimarpaints.com/upload/investor_reports/Related-Party-Transaction-Policy.pdf
Sexual Harassment of Women at Workplace
As required under the provisions of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013 read with the Sexual Harassment ofWomen at the Workplace (Prevention Prohibition & Redressal) Rules 2013 an InternalComplaints Committee (ICC) with requisite number of representatives has been set up toredress complaints sexual harassment if any.
The following is a summary of sexual harassment complaints received and disposed offduring the year ended 31st March 2016:
|No. of Complaints received ||: Nil |
|No. of Complaints disposed off ||: Nil |
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 this Report.
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.
Corporate Governance is all about ethical conduct openness integrity andaccountability of an enterprise. Good Corporate Governance involves a commitment of theCompany to run the business in a legal ethical and transparent manner and runs from thetop and permeates throughout the organization. It involves a set of relationships betweena company's management its Board shareholders and Stakeholders. It is a key element inimproving the economic efficiency of the enterprise. Credibility offered by CorporateGovernance helps in improving the confidence of the investors - both domestic and foreignand establishing productive and lasting business relationship with all stakeholders isannexed as Annexure-H' to this Report.
A certificate from M/s Mohit & Associates Practicing Company Secretary regardingcompliance of the conditions of Corporate Governance as stipulated under Schedule V ofthe Listing Regulations is attached as Annexure H' and forms part of this report.Certificate of the CEO/CFO inter-alia confirming the correctness of the financialstatements compliance with Company's Code of Conduct adequacy of the internal controlmeasures and reporting of matters to the auditors and the Audit committee in terms ofRegulation 17 of the Listing Regulations is attached in the Corporate Governance reportand forms part of this report.
Management Discussion and Analysis
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion and Analysis Report is set out in point number 11(eleven) of CorporateGovernance Report is annexed as Annexure - H' to this Report.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm 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 2016 and of the profit of the Company for that period;
(c) the Directors have taken proper and sufficient care 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 theCompany's internal financial controls were adequate and effective during the FinancialYear 2015-16.
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 their grateful appreciation of theco-operation and assistance received from the financial institutions banks investorsvalued customers valued suppliers our employees various government agencies and otherbusiness associates during the year under review.
The Directors value the trust shown by the shareholders in their ability to manage theCompany. We expect that with the ongoing encouragement and support of our shareholders weshall be successful in achieving the desired objectives in the near future.
| ||For and on behalf of the Board |
| ||For Shalimar Paints Limited |
| ||Surender Kumar ||Rajiv Rajvanshi |
|Date : 1st September 2016 ||Managing Director and CEO ||Director |
|Place : New Delhi ||DIN: 00510137 ||DIN: 00036605 |