To the Members
Your Directors have pleasure in presenting the 24th Annual Report on theworking of the Company together with the audited accounts for the financial year ended 31stMarch 2020.
The financial results of the Company as prescribed in the said Accounts are summarizedbelow :
|Particulars ||2019-20 ||2018-19 |
| ||(Rs. In lacs) ||(Rs. In lacs) |
|Revenue from Operations (Net) ||11099.48 ||11534.55 |
|Other Income ||705.16 ||333.78 |
|Total Revenue ||11804.64 ||11868.33 |
|Less : Total Expenses ||10101.42 ||10995.20 |
|Profit before Finance Cost and Depreciation ||1703.22 ||873.13 |
|Less : Finance Cost ||1172.82 ||881.31 |
|Depreciation and Amortization Expense ||864.22 ||504.81 |
|Profit before exceptional/extra-ordinary items ||(333.78) ||(512.99) |
|Add : Exceptional Items ||- ||- |
|Profit before Tax ||(333.78) ||(512.99) |
|Add : Deferred Tax || ||- |
|Profit for the year from continuing operation ||(333.78) ||(512.99) |
|Profit/(Loss) from discontinuing operation || ||- |
|Other comprehensive income ||32.82 ||(21.24) |
|Profit for the year ||(300.96) ||(534.23) |
During the year under review total revenue of the company was almost equal i.e. Rs.11804.64 lacs as compared to Rs.11868.33 lacs in the previous year although themanufacturing units were shut down from 23rt March 2020 in view of thenationwide lockdown declared by Govt. of India to prevent the outbreak of COVID 19 inIndia resulting estimated loss of revenue of Rs. 800 lacs and operating loss of Rs. 250lacs during the year under review. The operating surplus (profit before finance cost anddepreciation) of the Company was Rs. 1703.22 lacs as compared to Rs.873.13 lacs ( aftercharging Rs. 698.42 lacs towards the liability of custom duly on account of earlier yearsfor non-fulfilment of export obligation of its closed unit at Nasik) in the previous year.Total loss during the year is Rs. 300.96 lacs as against total loss of Rs. 534.23 lacs inthe previous year.
As per new guidelines issued by Govt. of India the Company has been grantedregistration under MSME vide registration no. UDYAM-WB-10-0000193 dated 6th July 2020.
COVID -19 PANDEMIC
In view of the nationwide lockdown declared by Government of India due to the COVID-19pandemic the manufacturing operations of the Company in its Uttrapara unit in West Bengaland Nasik unit in Maharshtra had been suspended temporarily in compliance with thedirectives/orders issued by the Government. The Company has made detailed assessments ofthe recoverability and carrying values of its assets comprising property plant andequipments inventories receivables and other current assets as at the balance sheet dateand on the basis of evaluation hasconcluded that no material adjustments are required inthe standalone financial results. The Company is taking all the necessary steps andprecautionary measures to ensure smooth functioning of its operations and to ensure thesafety and well-being of all its employees. Given the criticalities associated withnature condition and duration of COVID-19 the impact assessment on the Company'sfinancial statements will be continuously made and provided for as required. Subsequent toyear end Company's both manufacturing units have resumed operations under the guidelinesand directives issued by the government from time to time.
Your Directors does not recommend any dividend on Equity Shares for the year underreview.
During the financial year under review in view of loss the Company has nottransferred any amount to General Reserve.
The Company's export turnover was Rs. 2092.75 lacs during the year under review ascompared to Rs. 2267.90 lacs in the previous year.
The Company has not accepted any public deposit since its inception.
MODERNIZATION CUM EXPANSION PLAN
The Company has taken major capacity expansion and up-gradation plan for manufacturingfacilities at Uttarpara unit due to change in market dynamics and demand for hi-techproducts which will result in increase in production level of synthetic forming fabric andlarger market share for the Company. The Company has already started commercial productionin two imported Looms and has also added two imported seaming machines one StretchingMachine and other equipments in its manufacturing facility at Uttarpara unit in WestBengal. The company is hopeful that with such capacity expansion and up-gradation plan inits existing manufacturing facilities profitability of the company will increasesubstantially in coming years.
OUTSTANDING DEBENTURE HOLDERS DUES AND TRANSFER OF SAME TO INVESTORS' EDUCATION ANDPROTECTION FUND
In terms of exemption granted by erstwhile Board for Industrial and FinancialReconstruction (BIFR) vide its order dated 10th June 2010 the Company hasbeen making payment to the debenture holders under public category as and when claims havebeen received by the Company from them. However on repeal of SICA Act and dissolution ofBIFR by Govt. of India the Company has been advised to transfer the unclaimed debenturesalong with accrued interest to Investors Education and Protection Fund pursuant to Section125 of the Companies Act 2013 and other applicable provisions. Accordingly the Board hasdecided to initiate all necessary action subject to availability of finance at theearliest including issuance of notice to debenture holders release of advertisement interms of provisions of Section 125 of the Companies Act2013 and other applicableprovisions and same are being followed presently.
Ms Surabhi Sanganeria (DIN 06987772) resigned from Board of Directors of the Company on12th November 2019 due to her ill health and limitations arising out of same.Ms Sanganeria has confirmed that there are no other reasons attributable/connected withthe Company.The board placed on record its deep appreciation of valuable contribution madeby Ms Surabhi Sanganeria during her tenure as Director of the Company.
The Board appointed Mrs. Trishna Guha (DIN 08200779) as Additional Director on 11thFebruary2020 who shall hold office up to the date of the ensuing Annual General Meeting.The company has received a notice as per the provisions of section 160(1) of the CompaniesAct 2013 from a member proposing her appointment as a director. Based on her vastexperience in financial and banking sector the Board recommends the appointment of Mrs.Trishna Guha as an Independent Director who shall hold office for five consecutive yearstill 10th February 2025.
As per provisions of Section 152 of the Companies Act 2013 read with Companies(Appointment and Qualifications of Directors) Rules 2014 Mr. Sunil Khaitan (DIN00385961) Director of the Company retires by rotation and being eligible offer himselffor reappointment. The resolution has been included in the Agenda of the ensuing AnnualGeneral Meeting. Approval of the members is sought for the said appointment.
Mr. Sunil Khaitan has been re-appointed as Chairman and Managing Director of theCompany by the Board for a period of 3 years w.e.f 1st April 2020 in terms ofSection 196 197 and 203 read with Schedule V of the Companies Act 2013 whose period ofoffice shall be liable to retirement of directors by rotation.
Brief particulars of said directors as stipulated under Regulation 26(4) and 36(3) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 have been givenin the Notice convening the ensuing annual general meeting and your Board recommends theirappointment/ re-appointment as set out in the Notice.
KEY MANAGERIAL PERSONNEL (KMPs)
There was no change in key managerial personnel during the year under review.
DECLARATION FROM INDEPENDENT DIRECTORS
Your Company has received declaration from each of the Independent Directors underSection 149(7) of the Companies Act 2013 and Regulation 25(8) of SEBI ListingRegulations 2015 that they meets the criteria of independence laid down in Section 149(6)of the Companies Act 2013 and Regulation 16 of SEBI Listing Regulations 2015 and thatthey are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact his/her ability to discharge their duties with anobjective independent judgment and without any external influence. All the declarationswere placed before the Board.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board of Directors of the Company based on the recommendation of the Nomination& Remuneration Committee has formulated a Remuneration Policy for selection andappointment of Directors Senior Management and their remuneration. The RemunerationPolicy has been placed on the website of the Company at www. shalimarwires.com under theweblink http://www.shalimarwires.com/uploaded/5b71775bcd5ef_Nomination%20&%20Remuneration%20Policy.pdf
In terms of Section 139(2) of the Companies Act 2013 M/s. Khandelwal Ray & Co.Chartered Accountants Kolkata (Regn. No. 302035E) were appointed as the StatutoryAuditors for a period of 5 years commencing from the conclusion of the 21stAnnual General Meeting till the conclusion of the 26th Annual General Meetingat a remuneration to be fixed by the Board from time to time.
The Auditors Report for the Financial Year 2019-20 does not contain any qualificationreservation and adverse remark. Further in terms of section 143 of the Companies Act 2013read with Companies (Audit and Auditors ) Rules 2014 as amended by notification/circularsissued by the Ministry of Corporate Affairs from time to time no fraud has been reportedby the Auditor of the Company where they have reason to believe that an offence involvingfraud is being or has been committed against the Company by officers or employees of theCompany.
The Audit Committee in its meeting held on 30th July 2020 has recommendedthe reappointment of M/s. Mitra Bose & Associates the Cost Auditor to conduct thecost audit of the company for the financial year 2020-21 in terms of section 148(3) of theCompanies Act 2013. Accordingly the Board appointed the said firm of Cost Accountants tocarry out the cost audit for the year 2020-21 on the remuneration as recommended by theBoard to be fixed by members in the ensuing Annual General Meeting of the Company. TheAuditors' Report are self-explanatory and therefore do not call for any furtherexplanations/comments.
The Company has engaged M/s. Chaturvedi & Co. Chartered Accountants as itsInternal Auditor and their scope of work and the plan for audit has been approved by theAudit Committee. The report submitted by them to the Audit Committee is regularly reviewedand their findings are discussed with the senior management and suitable corrective actiontaken on an ongoing basis to improve efficiency in operations.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s. MR & Associates Practicing Company Secretaries to undertake theSecretarial Audit of the company for the financial year 2020-21. The report of theSecretarial Audit is annexed herewith as Annexure - III. All the necessary measures hasalready been initiated by the Company as suggested by Secretarial Auditor in their report.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards.
OTHER DISCLOSURES CORPORATE GOVERNANCE REPORT
The Corporate Governance Report and a certificate from the Statutory Auditors M/s.Khandelwal Ray & Co. Chartered Accountants regarding compliance of the conditions ofcorporate governance as stipulated in Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements ) 2015 is given in Annexure I formingpart of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Sec. 135 of the Companies Act 2013 stipulates expenditure of 2% of the average netprofit of preceding 3 financial years on CSR activities. The Act requires the Board toconstitute a Corporate Social Responsibility Committee of the Board which has already beenconstituted. The company has formulated CSR Policy for promotion of education healthcareand other activities which is uploaded on website of the company. The net profit of theCompany during the preceding 3 financial years is below the stipulated limit of Rs. 5crores and hence the relevant provision of the Act is not applicable on the Company.
DISCLOSURE OF PARTICULARS WITH REGARD TO CONSERVATION OF ENERGY ETC.
Necessary information pursuant to sub-section (3) of section 134 of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is presented in Annexure-II to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Management Discussion and Analysis Report havebeen made a part of the Annual Report and is annexed to this report.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has an Internal Control System based on values of integrity and operationalexcellence. Pursuant to the provisions of section 134(5)(e) of the Act Your Company hasin consultation with a reputed consultancy firm strengthened the existing financialcontrols of the Company. Such internal financial controls were found to be adequate for asize of the company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHOCCURRED BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE REPORT
The outbreak of novel coronavirus ( COVID-19) in India has witnessed a sudden fall inoperations across the nation. As per the Govt directives both manufacturing units of theCompany at Uttarapra in West Bengal and Nasik at Maharashtra were closed from 23rtMarch2020. Uttarpara unit in West Bengal resumed partial operation from 18th May2020 based on the permission granted by Government of West Bengal strictly adhering to thesocial distancing norms and hygiene measures. Subsequently cyclone 'Amphan' hit WestBengal on 20th May 2020 resulting closure of operation till end of May2020.The dual effect of COVID-19 pandemic and cyclone have posed a major challenge on thebusiness operation of the Company during the current financial year. Further sincelockdown was extended by Government of Maharshtra from time to time manufacturingoperation in Nasik unit at Maharashtra could start only in June2020. Due to aforesaidunavoidable and uncontrollable reasons the Company is expecting sharp fall in bothrevenue as well as in its operating profit during the current financial year 2020-21.
SIGNIFICANT AND MATERIAL ORDERS
There are no material/significant orders passed by Regulators/Courts/Tribunals whichwould impact the going concern status of the Company and its future operations.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loan Guarantees and investments covered under the provisions of Section 186of the Companies Act 2013 is given in the Financial Statement forming part of the AnnualReport. The Company has repaid total debts of secured creditors except New India AssuranceCompany Ltd. and Oriental Insurance Company Ltd. for which Company is hopeful that onetime settlement with these insurance companies will be completed shortly. The Company hasavailed working capital and other fund based/non fund based facilities from Kotak MahindraBank for its working capital requirement and ongoing expansion cum modernization plan.
ENVIRONMENT SAFETY AND DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company is conscious of clean environment and safe operations. It ensures safety ofall concerned compliance with environmental regulations and preservation of naturalresources. As required under section 4 of The Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 the Company has an internal policy onprevention of sexual harassment at workplace with a mechanism of lodging complaints.During the year under review no complaints were reported to the Board.
Adequate insurance cover has been taken for properties of the Company includingbuildings plant and machineries and stocks against fire earthquake and other risks asconsidered necessary. The Company has also taken Directors & Officers LiabilityInsurance to protect and safeguard the directors and officers of the Company from the riskof getting sued or being held legally responsible for any sort of malpractices negligenceor injury.
EXTRACT OF ANNUAL RETURN
The details for the financial year ended 31st March 2020 forming part of the extractof the annual return can be assessed at Company's website at www.shalimarwires.com and theweblink is http://shalimarwires.com/ others/5f4e336fb597e_MGT-9.pdf
The issued and subscribed capital of the company as on 31st March 2020 isRs. 855.10 lacs comprising of 42755123 equity shares of Rs. 2/- each and there is nochange in share capital since last year.
NUMBER OF BOARD MEETINGS
The Board of Directors met four times during the year ended 31st March 20 2 0 ( 27thMay 2019 12th August 2019 12th November 2019 and 11thFebruary 2020). The details of the Board meetings and the attendance of Directors areprovided in the Corporate Governance Report.
COMPOSITION OF COMMITTEE OF DIRECTORS
The Board has constituted the following Committees of Directors: (a) Audit Committee(b) Nomination & Remuneration Committee. (c) Stakeholder Relationship Committee. Thedetailed composition of above Committees is given in Corporate Governance Report.
RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm's length basis and are incompliance with the Companies Act 2013 and the Listing Regulations. There are nomaterially significant related party transactions made by the Company with PromotersDirectors or Key Managerial Personnel etc which may have potential conflict with theinterest of the Company at large. All related party transactions are presented to theAudit Committee and the Board for its approval. The related party transactions policy asapproved by the Board is uploaded on Company's website: www.shalimarwires.com and weblinkis: http://www.shalimarwires.com/uploaded/54dee8640b2a6_POLICY ON RELATED PARTYTRANSACTIONS.pdf.
Disclosure as required under Accounting Standard - 18 and in terms of point A(2) andSchedule V of the SEBI Listing Regulations 2015 have been made in note no. 37 to thefinancial statements for the year ended 31st March2020.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
In terms of Regulation 25(7) of the SEBI Listing Regulations 2015 your Company isrequired to conduct Familiarisation Programme for Independent Directors (IDs) tofamiliarise them about the Company including nature of industry in which your Companyoperates roles rights and responsibilities of IDs and any other relevant information.Further pursuant to Regulation 46 of the SEBI Listing Regulations 2015 your Company isrequired to disseminate on its website details of familiarisation programme imparted toIndependent Directors during the year. During the year under review four familiarisationprogrammes were conducted during the Board meetings of the Company. Further the Board hasopen channels of communication with the executives which allows free flow of communicationamong Directors in terms of raising query seeking clarifications and other relatedinformation.
The Programme is available for inspection at www.shalimarwires.com and weblink ishttp://shalimarwires.com/ others/5f4e33fc612a0_FAMILIARISATION%20PROGRAMME.pdf
ANNUAL EVALUATION OF BOARD AND IT'S COMMITTEES PERFORMANCE
During the financial year the Board evaluated its own performance as well as that ofits Committees and individual Directors. The exercise was carried out covering variousaspects of the Boards functioning such as composition of the Board & committeesqualification experience & competencies performance of specific duties &obligations governance issues etc. Separate exercise was carried out to evaluate theperformance of Non-Independent Directors. The performance of Independent Directors hasbeen evaluated based on the guidelines as provided under Schedule IV of the Act. Theevaluation of the Independent Directors was carried out by the entire Board except by theDirector being evaluated. The directors were satisfied with the evaluation results whichreflected the overall engagement of the Board and its Committees with the Company.
PARTICULARS OF EMPLOYEES AND MANAGERIAL REMUNERATION
The prescribed particulars of employees and other details as required under Section 197of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached as Annexure - IV to thisreport. There was no employee who is in receipt of annual / monthly remuneration asprescribed under relevant provisions of the Act and the details of remuneration of top 10employees' are available for 21 days before the Annual General Meeting and shall be madeavailable to any shareholder through electronic mode on the request being sent firstname.lastname@example.org as required under provision of section 197 of the CompaniesAct 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
As required under section 177(9) & (10) of the Companies Act 2013 the Company hasestablished a vigil mechanism/whistle blower policy. The policy allows intimation byaffected persons in good faith of concern or misconduct through a written communication.The Audit Committee oversees the vigil mechanism for disposal of the complaint. Directaccess to the Chairman of the Audit Committee is also allowed in exceptional cases. Thevigil mechanism/whistle blower policy is available on the Company's website atwww.shalimarwires.com under the weblink:http://www.shalimarwires.com/uploaded/54dee9cacd6ff_Whistle Blower Policy.pdf
The Company has laid down the procedures to inform to the Board about the riskassessment and minimization procedures which shall be responsible for framingimplementing and monitoring the risk management plan of the company.
DIRECTORS' RESPONSIBILITY STATEMENT
The Audited Accounts for the year under review are in conformity with the requirementsof the Act and the Accounting Standards. The financial statements reflect fairly the formand substance of transactions carried out during the year under review and reasonablypresents your Company's financial condition and results of operations.
In terms of provisions of Section 134(5) of the Companies Act 2013 your Board ofDirectors to the best of their knowledge and ability confirm that:
i) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures if any saveand except as mentioned in the Auditors' Report.
ii) 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 and ofthe loss of the Company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis;
v) The Directors have laid down adequate internal financial controls to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively; and
vi) There is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.
Following disclosures are made under the Companies (Accounts) Rules 2014:
i) The financial summary or highlights are discussed at the beginning of this report;
ii) There is no change in the nature of business;
iii) There is no company which has become or ceased to be the Company's subsidiaryjoint venture or associate company during the year;
iv) There were no significant or material order was passed by the regulators or courtsor tribunals which impact the going concern status and its future operations;
v) There have been no material changes and commitments affecting the financialposition of the Company which occurred between the end of the financial year to which thefinancial statements relate and the date of this report.
The Company continued to have cordial relations with the employees at its plantslocated at Uttarpara and Paper Machine Wire unit at Nasik Registered Office and BranchOffices and the Board records its appreciation for the useful contribution made by them.
Your Directors place on record their deep appreciation for the support and cooperationextended by the lenders i.e. Financial Institutions and Banks customers suppliersemployees investors and Government Authorities during the year.