The Board of Directors hereby submits the report of the businesses and operations ofyour Company (the Company' or Shalimar') along with the audited financialstatements (Standalone and Consolidated) for the financial year ended March 31 2018. Theconsolidated performance of the Company and its subsidiaries has been referred to whereverrequired.
|Description || |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|Revenue from Operations & Other Income ||27863.96 ||27838.23 ||39631.13 ||39609.39 |
|Expenses ||34571.01 ||34575.18 ||41128.39 ||41130.35 |
|PBIDT ||(6707.05) ||(6736.95) ||(1497.26) ||(1520.96) |
|Exceptional Items ||- ||- ||- ||- |
|Profit before tax ||(6707.05) ||(6736.95) ||(1497.26) ||(1520.96) |
|Provision for taxation || || || || |
|Current Tax ||- ||- ||- ||- |
|Deferred Tax ||(2165.41) ||(2181.45) ||(536.02) ||(551.62) |
|Profit after tax ||(4541.64) ||(4555.50) ||(961.24) ||(969.34) |
|Balance carried to Balance Sheet ||(4541.64) ||(4555.50) ||(961.24) ||(969.34) |
Results of our operations and state of affairs for financial year 2017-18
Your Company during the year under review suffered a loss ' 4541.64/- Lacs as againstloss of ' 961.24/- Lacs in the previous year. The revenue from operations and other incomeof the Company for the financial year 17-18 stood at ' 27863.96/- Lacs as against '39631.13/- Lacs in the previous year.
The Company have received an interim payment of ' 1099.73 Lakhs in respect of Nasikplant in March 2018. Decorative Paints Segment - Decorative paints are generally used forpainting of domestic office and other buildings mainly for enhancement of aesthetic look& protection. Our Company manufactures and markets wide range of decorative paints forinterior and exterior surfaces - concrete plaster metal or wood etc. We have createdestablished brand like Weather Pro Xtra Tough premier Shaktiman exterior emulsionspecially designed for exterior surfaces. We have wide range of interior emulsions brandlike Signature luxury emulsion Stay Clean interior emulsion Superlac Advance No 1 Silkand Master interior emulsion & NO.1 Distemper. Shalimar enjoys established brand insolvent based product range like Superlac Hi-Gloss synthetic enamel Superlac satinenamel lustre finish. Our Company's range of water based paints come with no added leador mercury and with near zero VOC (Volatile Organic Component).
Industrial Paints Segment - Shalimar manufactures and markets industrial coatings tocater Protective coating sector Product Finish (OEMGENERAL INDUSTRIAL SECTOR) Range ofmarine paints including antifouling paints Packaging coatings for metal decorationincluding food can lacquers are established products running successfully in differentcoating lines for years. Industrial paints can again be classified into Heavy DutyProtective Coating GI Coating Packaging Coating and Marine Coatings and primarily usedfor protect the structure from deterioration through corrosion and then beautification.Shalimar is actively involved in providing solution through their expert team to mitigatecorrosion by recommending the appropriate coating systems.
Nature of Business
We are engaged in the business of manufacturing of paints.
In view of the losses incurred during the year under review the Board did notrecommend any dividend.
Standalone/ Consolidated Financial Statement
As per Regulation 33 of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred to as ListingRegulations) and applicable provisions of the Companies Act 2013 read with therules issued thereunder the Standalone as well as Consolidated Financial Statements ofthe Company with applicable Accounting Standards are approved by the Board of Directors ofthe Company. The Consolidated Financial Statements together with the Auditors' Report formpart of this Annual Report.
Operations and Business Performance
Kindly refer to Management Discussion & Analysis and Corporate Governance Reportwhich forms part of this report. Share Capital
During the year under review there was no change in the Company's paid-up equity sharecapital.
However the Company has allotted 3552370 equity shares of ' 2/- each at a premium of' 138/- per share on Rights basis to the eligible equity shareholders on April 27 2018.
Further the Authorised Share Capital of the Company has been raised from '80000000/- to ' 200000000/- through Postal Ballot the result of which was declaredon July 7 2018.
The Company has not transferred any amount to the General Reserve during the financialyear ended March 312018. Material changes and commitments affecting financial positionbetween the end of the financial year and date of the report
T he Company has allotted 3552370 equity shares of ' 2/- each at a premium of' 138/- per share on Rights basis to the eligible equity shareholders on April 27 2018.
T he Company has changed its Registrar and Transfer Agents (RTA) from MCS ShareTransfer Agent Limited to BEETAL Financial & Computer Services Private Limited w.e.fMay 23 2018.
The Company has received an Insurance claim amount of ' 1122.35 lakhs in respectof Howrah plant in June 2018.
The shareholders have passed the following resolutions through Postal Ballot.The result of which was declared on July 7 2018:
> O rdinary resolution for raising the Authorised Share Capital of the Company from' 80000000/- to ' 200000000/.
> Special resolution for alteration of capital clause of Articles of Association ofthe Company.
> Tpecial resolution for approval of Rights Issue for an amount not exceeding '3000000000/- (Rupees Three Hundred Crores only)
> Special resolution for increase in the limit of total shareholding of allregistered Foreign Portfolio Investors (FPIs)/ Registered Foreign Institutional Investors(FIIs) put together from 24% to 49% of the paid up equity share capital of the Company
The Board of Directors have passed a resolution for the approval of the RightsIssue of Equity Shares for an amount not exceeding ' 2400000000/- (Rupees Two HundredForty Crores Only). The draft offer document has been filed with BSE NSE and SEBI fortheir observations. The Company has received In-Principal approval from BSE and NSE.
Oppointment of Mr. Ashok Kumar Gupta (DIN: 01722395) as Vice Chairman cumAdditional Director of the Company w.e.f August 10 2018.
Transfer of amount to Investor Education and Protection Fund
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 (the Rules') allunpaid or unclaimed dividends are required to be transferred by the Company to the IEPFestablished by Government of India after the completion of seven years. Furtheraccording to the Rules the shares on which dividend has not been paid or claimed by theshareholders for seven consecutive years or more shall be transferred to the IEPFAuthority. Accordingly the Company has transferred the unclaimed and unpaid dividends of' 286665.00/- (Rupees Two Lac Eighty Six Thousand Six Hundred Sixty Five Only).
Tinting is a vital element of the paint manufacturing process. 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.
Tinting is an economic way of producing a virtually unlimited number of paint colors tomeet the exact needs of each individual customer large or small.
Presently Sikandrabad plant of the company certified for Quality Management System-ISO9001.
The company has been assigned credit rating of CARE D for long term bank facilities andshort term bank facilities by CARE Ratings Limited on March 7 2018.
Employee Stock Option Plan (ESOP)
There were no shares offered by the company pursuant to Employee Stock Option Scheme2013 i.e. ESOP 2013' of the Company during the financial year under review. Areport as required under the SEBI (Share Based Employee Benefits) Regulations 2014 and asper the provisions of section 62(1)(b) of the Companies Act readwith rule 12(9) of theCompanies (Share Capital and Debenture) Rules 2014 and other applicable Regulations isannexed as Annexure A' to this report. Directors and Key Managerial PersonnelAppointments/ Re-appointments
During the year under review Mr. Alok Perti was appointed as non-executive independentdirector of the Company with effect from May 24 2017 and his appointment was confirmed bythe shareholders in 115th Annual General Meeting of the Company held onSeptember 28 2017.
Mr. Gautam Kanjilal - Chairman cum non-executive independent director of the Companywas appointed for a term of three years with effect from November 7 2015. Your boardrecommends his appointment as Chairman cum Independent Director of the Company for furtherperiod of 3 years in the ensuing Annual General Meeting.
Mr. Ashok Kumar Gupta was appointed as Vice-Chairman cum Additional Director(Non-Executive Non Independent) of the Company in the Board Meeting held on August 102018 and shall hold office upto the ensuing Annual General Meeting. Your Board recommendshis appointment as the Director in the ensuing AGM.
Mr. Surender Kumar Executive Director is liable to retire by rotation at ensuingAnnual General Meeting pursuant to the provisions of Section 152 of the Companies Act2013 read with Companies (Appointment and Qualification of Directors) Rules 2014 and theArticles of Association of the Company and being eligible has offered himself forre-appointment.
A brief profile of the Directors proposed to be appointed and re-appointed as requiredunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is appendedas an Annexure to the Notice of the ensuing AGM. The Board recommends the same for theapproval of the shareholders of the Company.
Declaration by Independent Directors
The Company has received necessary declarations from each independent director undersection 149(7) of the Companies Act 2013 that he/ she meets the criteria of independencelaid down in section 149(6) of the Companies Act 2013 and Regulation 25 of the ListingRegulations.
Nomination and Remuneration Policy
The current policy is to have appropriate mix of executive non - executive andindependent directors This policy formulates the criteria for determining qualificationscompetencies positive attributes and independence for the appointment of Director(Executive/ Non - Executive) and also the criteria for determining the remuneration of theDirectors Key Managerial Personnel and other employees.
The detailed policy is available on the Company's website link at:https://www.shalimarpaints.com/upload/investor_reports/ Nomination and RemunerationPolicy.pdf Performance Evaluation
In compliance with the applicable provisions of the Companies Act 2013 and SEBI(Listing Obligations and disclosure Requirements) Regulations 2015 the Board ofDirectors on recommendation of the Nomination and Remuneration Committee has approved andadopted the Evaluation Policy setting out the process format attributes and criteria forthe performance evaluation of the Board Board Committees and Individual Directors.
The directors carried out the annual performance evaluation of the Board Committees ofBoard and individual directors along with accessing the quality quantity and timelinessof flow of information between the Company management and the Board that is necessary forthe Board to effectively and reasonably perform their duties. The performance evaluationof independent directors was done by the entire Board of Directors excluding the directorbeing evaluated.
Directors were evaluated on various aspects including inter alia active participationspecialization on subject and expressing views dissemination of information andexplanation or response on various queries in the meeting.
The Independent Directors had met separately on August 10 2017 without the presence ofNon 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 Committee Meetings
During the year under review Board Meetings and Committee Meetings were held and theintervening gap between the meetings did not exceed the period prescribed under the Actthe details of which are given in the Corporate Governance Report.
As on March 31 2018 the Company has two subsidiaries namely Shalimar Adhunik NirmanLimited (SANL) and Eastern Speciality Paints & Coatings Private Limited (ESPCPL). Noneof the Companies has become or ceased to be the Company's subsidiaries during the yearunder review.
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 ofsaid financial statements may write to the Company Secretary at Company's RegisteredOffice. The Company does not have any associate and/or joint venture company.
Auditor reports and auditors Audit reports
T he Auditors' Report for financial year 2017-18 does not contain anyqualifications reservations or adverse remarks. The Auditors' Report is enclosed with thefinancial statements in this Annual Report.
T he Secretarial Auditors' Report for financial year 2017-18 does not containany qualifications reservations or adverse remarks. The Secretarial Auditors' Report isenclosed as Annexure-C' to the Director's Report in this Annual Report.
As required by the Listing Regulations the auditors' certificate on corporategovernance is forming part to this Director's Report. The auditors' certificate forfinancial year 2017-18 does not contain any qualifications reservations or adverseremarks.
During the year under review M/s Chaturvedi and Partners retired at the conclusion of115th Annual General Meeting and did not offer themselves for re-appointment.M/s A K Dubey & Co. Chartered Accountants (Firm Registration No. 329518E) wereappointed as Statutory Auditors of the Company at the 115th Annual GeneralMeeting till the conclusion of the 120th Annual General Meeting.
M/s A K Dubey & Co. Chartered Accountants have confirmed their eligibility andqualification required under Sections 139 141 and other applicable provisions of theCompanies Act 2013 and Rules issued thereunder (including any statutory modification(s)or re-enactment(s) thereof for the time being in force).
The Company had received consent from M/s Arun Goel & Associates to act as theauditor for conducting audit of the secretarial records for the financial year endingMarch 31 2018. As required under Section 204 of the Companies Act 2013 and Rulesthereunder the Board appointed M/s Arun Goel & Associates Practicing CompanySecretaries as Secretarial Auditor for financial year 2017-18.
Corporate Social Responsibility
Shalimar has been an early adopter of CSR initiatives. Your Company's overarchingaspiration to create significant and sustainable societal value is manifest in its CSRinitiatives. 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 available on the Company's website link at:https://www.shalimarpaints.com/upload/ investorreports/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 this Report.
Listing on stock exchanges
The Company's shares are listed on BSE Limited and National Stock Exchange of IndiaLimited
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
The purpose of Risk Management is to assist the Board in fulfilling itsresponsibilities with regard to the identification evaluation and mitigation ofoperational strategic and environmental risks. It involves identifying potential eventsthat may affect the Company and formulating strategy to manage these events while ensuringthat the risk exposure remains at the defined appropriate levels. The Company hasdeveloped and implemented comprehensive risk assessment and mitigation procedures as laiddown in the Company's Risk Management 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 Company's website linkat: https://www.shalimarpaints. com/upload/investor reports/Risk-Management-Policy.pdfInternal financial control and its adequacy
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofits assets prevention and detection of fraud error reporting mechanisms accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures. The Board of Directors of the Company had discussed in their meeting aboutthe effectiveness and appropriateness of a sound Internal Financial Control System alreadyestablished in the Company. They also discussed the strength and weakness of the system.They also discussed the various suggestions recommended by the audit committee with theinternal auditors. Internal audit department provide an annual overall assessment of therobustness of the Internal Financial Control System in the Company.
As on March 312018 the Audit Committee of the Board of Directors of the Companycomprised of Mr. Gautam Kanjilal Mr. Alok Perti and Ms. Pushpa Chowdhary under theChairmanship of Mr. Gautam Kanjilal. During the financial year under review all therecommendations made by the Audit Committee were accepted by the Board and norecommendation is left which has not been accepted by the Board.
The Whistle-blower Policy has been approved and adopted by Board of Directors of theCompany in compliance with the provisions of Section 177 (10) of the Companies Act 2013and Regulation 22 of the Listing Regulations.
The Policy also provides protection to the employees and business associates who reportunethical practices and irregularities. The Whistle Blower Policy of the Company isavailable on the Company's website link at: https://www.shalimarpaints.com/upload/investor reports/Whistleblower-Policy.pdf Annual Return
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format is appended as Annexure-E' to the Director'sReport. The same is available at company's website i.e. www.shalimarpaints.com.
Significant and Material Orders
The Securities and Exchange Board of India vide its order dated March 19 2018approved the Rights Issue of the Company for an amount not exceeding ' 50 Crore (RupeesFifty Crores only).
The Company have received interim payment of ' 1099.73 Lakhs in respect ofNasik plant in March 2018.
The Company has received an Insurance claim amount of ' 1122.35 lakhs in respectof Howrah plant in June 2018. Particulars of Loans Guarantees or Investments
Details of loans guarantees and investments under the provisions of Section 186 of theCompanies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules2014 as on March 312018 are set out in Note 8 9 and 14 to the Standalone FinancialStatements of the Company.
Related Party Transactions
All contracts/arrangements/transactions entered by the Company with Related Partieswere in ordinary course of Business and at arm's length basis.
During the year under review the Company has not entered into anycontracts/arrangements/transactions with the Policy of the Company on materiality ofrelated party transactions.
All transactions with related parties were reviewed and approved by the Audit Committeeand are in accordance with the Policy on Related Party Transactions formulated by theCompany.
The details of the related party transactions as per Indian Accounting Standards (INDAS) - 24 are set out in Note 47 to the Standalone Financial Statements of the Company.
Form AOC - 2 pursuant to Section 134 (3) (h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is set out in the Annexure-F' to thisreport.
The Related Party Transactions policy of the Company is available on the Company'swebsite link at: https://www. shalimarpaints.com/upload/investorreports/Related-Party-Transaction-Policy.pdf Sexual Harassment
To foster a positive workplace environment free from harassment of any nature we haveadopted a policy on prevention of sexual harassment at workplace. Our policy assuresdiscretion and guarantees non-retaliation to complainants. We follow a gender-neutralapproach in handling complaints of sexual harassment and we are complaint with the law ofthe land wherever we operate. We also constituted an Internal Complaints Committee (ICC)in all locations across India to consider and address sexual harassment complaints inaccordance with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the Calendar year the Company has not received anycomplaint. Particulars of Employees
The ratio of the remuneration of Director and Key Managerial Personnel (KMP) to themedian of employees' remuneration as per section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of the Director's Report as Annexure-G.
Statement containing names of top 10 employees in terms of remuneration drawn
Details of employees posted in India throughout the fiscal and in receipt of aremuneration of ' 1.02 Crore or more per annum
Details of employees posted in India for part of the year and in receipt of '8.5 Lakh or more a month
Details of employees posted outside India and in receipt of a remuneration of'60 lakhs or more per annum or ' 5 lakhs or more a month
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is set out in the Annexure-H' to this report.
In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance along with a certificate from the Auditors on its compliance forms anintegral part of this Annual Report annexed as Annexure-I'. Management Discussionand Analysis Report Management Discussion and Analysis as stipulated under the ListingRegulations is presented in a separate section forming part of this Annual Report. Itspeaks about the overall industry structure global and domestic economic scenariosdevelopments in business operations/ performance of the Company's various businesses viz.decorative business industrial and home improvement business internal controls and theiradequacy risk management systems and other material developments during the financialyear 2017-18.
Directors' Responsibility Statement
The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) (to the extent notified) and guidelines issued by SEBI. The Ind AS are prescribedunder section 133 of the Companies Act 2013 ('the Act') read with Rule 3 of the Companies(Indian Accounting Standards) Rules 2015 and Companies (Indian Accounting Standards)Amendment Rules 2016. Effective April 12017 the Company has adopted all the Ind ASstandards and the adoption was carried out in accordance with applicable transitionguidance. Accounting policies have been consistently applied except where a newly issuedaccounting standard is initially adopted or a revision to an existing accounting standardrequires a change in the accounting policy hitherto in use.
The directors confirm that:
(a) I n the preparation of the annual accounts for the financial year ended March 312018 and applicable accounting standards have been followed and there are no materialdepartures;
(b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period;
(c) They have taken proper and sufficient care towards the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) They have prepared the annual accounts on a going concern basis;
(e) They have laid down internal financial controls which are adequate and areoperating effectively;
(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
Electronic copies of the Annual Report 2017-18 and the notice of the 116thAnnual General Meeting are sent to all members whose email addresses are registered withthe Company/ depository participant(s). For members who have not registered their emailaddresses physical copies are sent in the permitted mode.
a. T uring the year under review the Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules enactment(s) thereof for the time being in force);
b. The Company has complied with Secretarial Standards issued by the Institute ofCompany Secretaries of India on Meetings of the Board of Directors and General Meetings;
c. The Managing Director and CEO of the Company has not received any remuneration orcommission from any of Companies subsidiary;
d. T one of the Auditors of the Company have reported any fraud as specified under thesecond proviso of Section 143 (12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force).
e. The Company does not have any scheme or provision of money for the purchase of itsown shares by employees/ directors or by trustees for the benefit of employees/ Directors.
We thank our customers vendors investors bankers employees for their continuedsupport during the year. We place on record our appreciation of the contribution made byour employees at all levels. Our continuous operation was made possible by their hardwork solidarity cooperation and support.
We thank the Government of India and government agencies for their support and lookforward to their continued support in the future.
| || ||For and on behalf of the Board |
| || ||For Shalimar Paints Limited |
| ||Surender Kumar ||Alok Perti |
|Dated : August 10 2018 ||Managing Director and CEO ||Director |
|Place : Gurugram ||DIN: 00510137 ||DIN: 00475747 |