To the Members
Your Directors have pleasure in presenting the 23rd Annual Report on the working of theCompany together with the audited accounts for the financial year ended 31st March 2019.
The financial results of the Company as prescribed in the said Accounts are summarizedbelow :
|Particulars ||2018-19 ||2017-18 |
| ||(Rs. In lacs) ||(Rs. In lacs) |
|Revenue from Operations (Net) ||11534.55 ||10806.67 |
|Other Income ||333.78 ||331.49 |
|Total Revenue ||11868.33 ||11138.16 |
|Less : Total Expenses ||10995.20 ||10915.92 |
|Profit before Finance Cost and Depreciation ||873.13 ||222.24 |
|Less : Finance Cost ||881.31 ||797.06 |
|Depreciation and Amortization Expense ||504.81 ||536.27 |
|Profit before exceptional/extra-ordinary items ||(512.99) ||(1111.09) |
|Add : Exceptional Items ||- ||21457.65 |
|Profit before Tax ||(512.99) ||20346.56 |
|Add : Deferred Tax ||- ||- |
|Profit for the year from continuing operation ||(512.99) ||20346.56 |
|Profit/(Loss) from discontinuing operation ||- ||- |
|Other comprehensive income ||(21.24) ||42.75 |
|Profit for the year ||(534.23) ||20389.31 |
During the year under review total revenue of the company was higher by 6.7% i.e. Rs.11868.33 lacs as compared to Rs.11138.16 lacs in the previous year. The operating surplus(profit before finance cost and depreciation) of the Company was Rs. 873.13 lacs ascompared to Rs.222.24 lacs in the previous year. However during the year the profit ofthe Company has been adjusted by Rs. 698.42 lacs being the liability of custom duty onaccount of earlier years for non-fulfilment of export obligation of its closed unit atNasik and due to this there is net loss during the year of Rs. 534.23 lacs as against netprofit of Rs. 20389.31 ( including exceptional item of Rs. 21457.65 lacs ) in the previousyear.
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 has increased by 8.80% during the year under review i.e.Rs. 2267.90 lacs as compared to Rs. 2084.15 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 other machineries are also under the installation stage. Thecompany is hopeful that with such capacity expansion and up-gradation plan in its existingmanufacturing facilities profitability of the company will increase substantially incoming years.
TRANSFER TO INVESTORS' EDUCATION AND PROTECTION FUND
In terms of exemption granted by erstwhile Board for Industrial and FinancialReconstruction (BIFR) vide its order dated 10th June 2010 the Company has been makingpayment to the debentureholders under public category as and when claims have beenreceived by the Company. In view of repeal of SICA Act and dissolution of BIFR by Govt. ofIndia the Company is required to transfer the unclaimed debentures alongwith accruedinterest to Investors Education and Protection Fund pursuant to Section 125 of theCompanies Act 2013 and other applicable provision. Accordingly your Board has decided totransfer the unclaimed debentures and accrued interest to Investors Education andProtection Fund after giving necessary notices to the Debenture holders in terms ofprovisions of Section 125 of the Companies Act2013 and other applicable provisions forwhich necessary steps are being taken.
Mr Dipak Dasgupta (DIN 01099414) resigned from Board of Directors of the Company on 6thAugust 2019. The board placed on record its deep appreciation of valuable contributionmade by Mr. Dipak Dasgupta during his tenure as Director of the Company.
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.
Brief particulars of the Mr Sunil Khaitan Chairman and Managing Director as stipulatedunder Regulation 26(4) and 36(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 have been given in the Notice convening the ensuing annual generalmeeting and your Board recommends his 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
The independent directors have submitted their declaration of independence as requiredunder Section 149(6) of the Companies Act 2013 read with the Schedules and rules issuedthereunder as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and the Board is of the opinion that they are independent within the meaning of thesaid requirement of the Act.
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/5b71775bcd5efNomination%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 21st Annual GeneralMeeting till the conclusion of the 26th Annual General Meeting at a remuneration to befixed by the Board from time to time.
The Auditors Report for the Financial Year 2018-19 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 27th May 2019 has recommended thereappointment of M/s. Mitra Bose & Associates the Cost Auditor to conduct the costaudit of the company for the financial year 2019-20 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 2019-20 on the remuneration as recommended by theBoard to be fixed by members in the ensuing Annual General Meeting of the Company. TheAuditors' Report are selfexplanatory 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 2018-19. The report of theSecretarial Audit is annexed herewith as Annexure - III.
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 Iforming part 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
Pursuant to Section 134 of the Companies Act 2013 there has been no material changesand commitments affecting the financial position of the Company.
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 geffing 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 2019 forming part of the extractof the annual return is enclosed as Annexure - IV.
The issued and subscribed capital of the company as on 31st March 2019 is Rs. 855.10lacs comprising of 42755123 equity shares of Rs. 2/- each and there is no change inshare capital since last year.
NUMBER OF BOARD MEETINGS
The Board of Directors met four times during the year ended 31st March 2019 ( 23rdMay 2018 13th August 2018 14th November 2018 and 14th February 2019). The details ofthe Board meetings and the attendance of Directors are provided in the CorporateGovernance 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_PQLICY%20ON%20RELATED%20PARTY%20TRANSACTIQNS.pdf. Disclosure as required under AccountingStandard - 18 and in terms of point A(2) and Schedule V of the SEBI Listing Regulations2015 have been made in note no. 39 to the financial statements for the year ended 31stMarch2019.
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 our Company including nature of industry in which your Companyroles rights and responsibilities of IDs and any other relevant information. Furtherpursuant to Regulation 46 of the SEBI Listing Regulations 2015 your Company is requiredto 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.
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
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 - V to thisreport. There was no employee in receipt of annual remuneration of Rs. 10200000/- ormore or monthly remuneration of Rs. 850000/- or more in current financial year and thedetails of top 10 employees' remuneration are available at the Registered Office of theCompany during working hours for 21 days before the Annual General Meeting and shall bemade available to any shareholder on request as required under provision of section 197of the Companies Act 2013 read with Rule 5(2) & (3) of the Companies (Appointment andRemuneration of Managerial 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%20Blower%20Policy.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.
|Kolkata ||By Order of the Board |
|12th August 2019 ||Shalimar Wires Industries Limited |
|Registered Office: ||Sunil Khaitan |
|25 Ganesh Chandra Avenue || |
Chairman & Managing Director
|Kolkata - 700 013 ||DIN-00385961 |
ANNEXURE - II
Information under Section 134(3)(m) of the Companies Act 2013 read with rule 8 of theCompanies (Accounts) Rules 2014 :
A. Conservation of Energy
|(i) The steps taken or impact on Conservation of Energy ||1. We have installed 3 nos. of APFC panel to compensate from transformer and increase the power factor. |
| ||2. Introduction of Energy monitoring with real time software system and installation of energy meters in different equipment/ section loop is in progress for better control. |
| ||3. One 500 KVA Transformer had been replaced on HP side in 2017-18 and two more 500 KVA Transformer have been installed in 2018-19 to reduce the core loss of old transformers. |
| ||4. Most of the conventional lightings have been replaced by energy saving LED lights. |
| ||5. Better insulation provided in Process Electrical Heaters to reduce the heat loss. |
| ||6. Arrangement of better building insulation is in progress where Centralized Air Conditioning system is in operation for increasing the air conditioning efficiency. |
|(ii) The steps taken by the Company for utilizing alternate sources of energy ||Nil |
|(iii) The capital investment on energy conservation equipments ||Rs 31.43 lacs |
B. Technology Absorption
|(i) The efforts made towards technology absorption ||a) Synthetic |
| ||i) Two new looms are put into operation. |
| ||ii) One seaming machine (SC5) is in operation for Forming Fabric and another(PSS5) for Dryer Fabric. |
| ||iii) Woven Dryer Screen new design trial is going on. |
| ||iv) SSB coarser variety has been developed and sent to market and positive feedback is received. |
| ||v) Rack system is installed to keep Cannisters and to save space. |
| ||vi) One modified heat setting cum finishing table is in installation stage to facilitate Dryer Fabric production. |
|(ii) The benefits derived like product improvement cost reduction product development or import substitution ||i) With the development of above designs we have been able to increase product life of highly abrasive machines and increase the scope of supply to different kind of paper machines which ultimately leads to increase in business. |
| ||ii) After introducing 2 more looms in synthetic weaving the productivity & quality of fabric produced will improve simultaneously. |
| ||iii) We have started manufacturing different grades of woven dryer fabrics thereby we are catering into this segment of market which has got growing demand considering the fact of technological up-gradation of paper making process. It has been added in our produce range to cater the segment thereby increasing the business and turn-over of the company. |
| ||iv) After introducing four numbers of new spiral machines and four numbers of Joining machine we are able to increase our productivity with increased product range. |
|(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - ||i) With the development of above designs we have been able to increase product life of highly abrasive machines and increase the scope of supply to different kind of paper machines which ultimately leads to increase in business. |
|a) the details of technology imported ||Dryer seaming by Auto seaming. |
|b) the year of import ||2019 |
|c) whether the technology been fully absorbed ||Yes |
|d) if not fully absorbed areas where absorption has not taken place and the reasons thereof and || |
|(iv) the expenditure incurred on research and development ||Rs. 10.73 lacs |
C. Foreign exchange earnings and outgo :
(i) Foreign exchange earned in terms if actual inflow : Rs 2267.90 lacs
(ii) Foreign exchange outgo in terms of actual outflow : Rs 2746.29 lacs
STATEMENT OF DISCLOSURE OF REMUNERATION PURSUANT TO SECTION 197 OF THE COMPANIES ACT2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
|(i) The ratio of the remuneration of Chairman & Managing Director to the median remuneration of the employees of the Company for the financial year : || |
|Directors ||Ratio |
|Mr. Sunil Khaitan Chairman & Managing Director ||1:47 |
|(ii) The percentage increase in remuneration of Chairman & Managing Director Chief Financial Officer and Company Secretary in the financial year : || |
| ||% increase/(decrease) |
|Mr. Sunil Khaitan Chairman & Managing Director ||36.80% |
|Mr. S.J. Sengupta CFO ||3.20% |
|Mr. S.K. Kejriwal Company Secretary ||35.33% |
|(iii) The percentage increase in the median remuneration of employees in the financial year : ||4.06% |
|(iv) The number of permanent employees on the rolls of company : (as on 31st March 2019) ||510 |
(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Average percentile increase is 4.06% in respect of all the employees except managerialpersonnel. The remuneration of CMD was revised in view of efforts made by him in revivalof the Company and ongoing upgradation and modernization plan undertaken by the Companyunder his leadership. Further remuneration of Company Secretary was increased keeping inview the additional work load given to him.
(vi) Affirmation that the remuneration is as per the remuneration policy of theCompany
The Company affirms that the remuneration paid to employees is in accordance with theRemuneration Policy of the Company.