To the Members
Your Directors have pleasure in presenting the 21st Annual Report on the working of theCompany together with the audited accounts for the year ended 31st March 2017.
The financial results of the Company as prescribed in the said Accounts are summarizedbelow :
|Particulars ||2016-17 ||2015-16 |
| ||(Rs. In lacs) ||(Rs. In lacs) |
|Revenue from Operations (Net) ||10216.08 ||9601.50 |
|Other Income ||445.83 ||151.22 |
|Total Revenue ||10661.91 ||9752.72 |
|Less : Total Expenses ||9110.59 ||8374.56 |
|Profit before Finance Cost and Depreciation ||1551.32 ||1405.16 |
|Less : Finance Cost ||731.82 ||800.74 |
|Depreciation and Amortization Expense ||632.54 ||593.80 |
|Profit before exceptional/extra-ordinary items ||186.96 ||10.62 |
|Add : Exceptional Items ||1990.30 ||- |
|Less : Extraordinary items ||- ||- |
|Profit before Tax ||2177.26 ||10.62 |
|Add : Deferred Tax ||- ||- |
|Profit for the year from continuing operation ||2177.26 ||10.62 |
|Profit/(Loss) from discontinuing operation ||- ||(33.72) |
|Profit for the year ||2177.26 ||(23.10) |
During the year under review your Company has crossed Rs. 100 crores mark and itstotal revenue was Rs. 10661.91 lacs as compared to Rs. 9752.50 lacs in the previous year.The operating surplus (profit before finance cost and depreciation) of the Company wasRs.1551.32 lacs as compared to Rs. 1405.16 lacs in the previous year. The Company hasshown net profit of Rs.186.96 lacs as against profit of Rs.10.32 lacs in the previousyear. During the year the Company has shown profit of Rs.1990.30 lacs as exceptional itemon account of sale of its idle assets and total profit for the year is Rs. 2177.26 asagainst loss of Rs. 23.10 in the previous year. There is no change in nature of businessof the Company during the year under review.
Your Directors does not recommend any dividend on Equity Shares for the year underreview.
The Company's export turnover was Rs. 2305.12 lacs during the year under review ascompared to Rs. 2069.53 lacs in the previous year.
The Company has not accepted any public deposit since its inception.
The Govt. of India vide its notification dated 25th November 2016 have notified SickIndustrial Companies (Special Provision) Repeal Act 2013 by enforcing section 4(b) of theAct (as amended vide Schedule VIII of Insolvency and Bankruptcy Code 2016). In view ofsuch Repeal Act the Sick Industrial Companies (Special Provision) Act 1985 standsrepealed and Board for Industrial and Financial Reconstruction (BIFR) and AppellateAuthority for Industrial and Financial Reconstruction (AAIFR) stand dissolved w.e.f. 1stDecember 2016. Further National Company Law Tribunal (NCLT) and the National Company LawAppellate Tribunal (NCLAT) have been constituted by Central Government with effect from1st June 2016 who shall take up the matter pending before erstwhile BIFR and AAIFR. TheCompany is exploring various options available to the Company for settlement/restructuringof debts of its secured lenders including settlement/restructuring of Financial Creditorsthrough NCLT by submission of an appropriate Resolution Plan and also release of Rs. 26Cr. lying in"No Lien Account" of SBI on account of sale of surplus assets of theCompany during the period 2015-16 and 2016-17.
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 debenture certificateswere surrendered by them with the Company. On this basis of legal opinion obtained yourCompany is continuing to make payment to the debentureholders under public category as andwhen debenture certificates are surrendered to the company.
As per provisions of Section 152 of the Companies Act 2013 Mr. Sunil Khaitan (DIN00385961) retire by rotation and being eligible offer himself for reappointment.
During the year Mr. Probir Roy (DIN: 00033045) Mr. Dipak Rudra (DIN: 00240145) andMs. Sunanda Lahiri (DIN: 00451473) resigned on 6th January 2017 6th March 2017 and 24thMarch 2017 respectively from the Board of Directors of the Company. The Board places onrecord its deep appreciation of the valuable services rendered by Mr. Probir Roy Mr.Dipak Rudra and Ms. Sunanda Lahiri during their tenure as Directors of the company.
The Board appointed Ms. Surabhi Sanganeria (DIN 06987772) as Additional Director on16th May 2017 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 secretarial matter the Board recommend the appointment of Ms.Surabhi Sanganeria as an Independent Director who shall hold office for five consecutiveyears until the conclusion of Annual General Meeting to be held in the year 2022.
The independent directors have submitted the declaration of independence as requiredunder Section 149 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.
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 2017 in terms of Section196 197 and 203 read with Schedule V of the Companies Act 2013 whose period of officeshall be liable to retirement of directors by rotation.
Brief particulars of the said directors have been given in the Notice convening theensuing annual general meeting and your Board recommends appointment/re-appointment as setout in the Notice.
In terms of Section 139(2) of the Companies Act 2013 M/s. S. S. Kothari & Co.Chartered Accountants existing Statutory Auditors of the Company have completed theirtenure of two terms of five consecutive years at the commencement of the Act on 1st April2014 and an additional period of 3 years as stipulated under third proviso of Section139(2) read with Rule 6 of the Companies (Audit and Auditors) Rules 2014. Accordinglythey will vacate the office at the conclusion of the forthcoming Annual General Meeting ofthe Company.
In view of above the Company is proposing to appoint M/s. Khandelwal Ray & Co.Chartered Accountants Kolkata (Regn. No. 302035E) as the Statutory Auditors for a periodof 5 years commencing from the conclusion of the 21st Annual General Meeting till theconclusion of the 26th Annual General Meeting. M/s. Khandelwal
Ray & Co. have given their consent to the said appointment and confirmed that theirappointment if made would be within the limits mentioned under Section 141(3) (g) of theAct.
The Audit Committee and the Board of Directors of the Company recommend the appointmentof M/s. Khandelwal Ray & Co. Chartered Accountants as Statutory Auditors of theCompany for a period of 5 years commencing from the conclusion of the 21st Annual GeneralMeeting till the conclusion of the 26th Annual General Meeting.
The Board places on record its appreciation for the contribution of M/s. S. S. Kothari& Co. Chartered Accountants during their tenure as the Statutory Auditors of yourCompany.
The comments made by the Auditors in their report and other relevant points in Annexureto their report are self-explanatory. The relevant notes to the accounts also clarify thepoints referred to by the Auditors. The Auditors have drawn attention of the members inqualified opinion of their report and point wise clarification of your Directors on suchqualified opinion is as under :
1. Point No. (a) regarding dissolution of BIFR and registration with NCLT Company isexploring various options of settling the dues of secured financial creditors by adoptingan acceptable Resolution plan before NCLT.
2. Point No. (b) regarding non-provision of long term and short term loans andadvances which has not been provided because these are related parties transactions.
3. Point No. (c) regarding the claims receivable from octroi department in respect ofthe closed Nasik unit your Company is hopeful of either receiving the claims or will beadjusting the claims with the dues of octroi dept. if any payable by the Company.
4. Point No. (d) is related party transaction and has not been written off.
5. Regarding Point No. (e) your company was declared Non-Performing Asset (NPA) byIDBI since December 2013 during pendency of Modified Rehabilitation Scheme submitted bySBI(monitoring agency) before erstwhile BIFR for restructure of all lenders dues and assuch no provision of interest has been made in the Books of Accounts of the Company andthe same is reported by the Auditor in their report. The amount not provided in theaccount as of 31.03.2017 is Rs 11.94 Cr. and the the Company is negotiating with IDBI foronetime settlement of their debts and outstanding balance of CRPS to bring in anacceptable Resolution.
6. Regarding Point no. (f) your Company has not made the provision of contingentliabilities since quantum of liability can not be ascertained pending settlement/disposalof appeals and the matter and the amount would be reported during Resolution Plan beforeNCLT and the Company is hopeful of geffing favourable orders from the appellateauthorities in respect of such appeals.
The Audit Committee in its meeting held on 16th May 2017 has recommended there-appointment of M/s. Mitra Bose & Associates the Cost Auditor to conduct the costaudit of the company for the financial year 2017-18 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 2017-18 on the remuneration as recommended by theBoard to be fixed by members in the ensuing Annual General Meeting of the Company.
The Auditors' 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 is regularly reviewed and their findings arediscussed with the senior management and suitable corrective action taken on an ongoingbasis 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 201617. The report of theSecretarial Audit is annexed herewith as Annexure - III.
OTHER DISCLOSURES CORPORATE GOVERNANCE REPORT
The Corporate Governance Report and a certificate from the Statutory Auditors M/s. S.S. Kothari & 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.
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 the Your Companyhas in 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 excepting the dissolutionof BIFR from 01.12.2016 pending Registration with NCLT .
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.
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 by the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 the Company has an internal policy on prevention ofsexual harassment at workplace with a mechanism of lodging complaints. During the yearunder 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.
EXTRACT OF ANNUAL RETURN
The details for the financial year ended 31st March 2017 forming part of the extractof the annual return is enclosed as Annexure - IV.
CHANGE IN SHARE CAPITAL
During the year ended 31st March 2017 there is no change in the issued and subscribedcapital of your company. The outstanding equity share capital of the company as on 31stMarch 2017 is Rs. 752.10 lacs comprising of 37605123 equity shares of Rs. 2/- each.
NUMBER OF BOARD MEETINGS
The Board of Directors met four times during the year ended 31st March 2017 i.e. on21st May 2016 12th August 2016 10th November 2016 and 10th February 2017. Thedetails of the Board meetings and the attendance of Directors are provided in theCorporate 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 . Disclosure as required underAccounting Standard- 18 and in terms of point A(2) and Schedule V of the SEBI ListingRegulations 2015 have been made in note no. 36 to the financial statements for the yearended 31st March2017.
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 has open channels of communication with the executives which allowsfree flow of communication among Directors in terms of raising query seekingclarifications and other related information.
KEY MANAGERIAL PERSONNEL (KMPs)
There was no change in key managerial personnel during the year under review.
ANNUAL EVALUATION OF BOARD AND IT'S COMMITTEES PERFORMANCE
In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulation 2015 the performance evaluation ofthe Board was carried out during the Financial Year 2016-17.
PARTICULARS OF EMPLOYEES
The prescribed particulars of employees required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached as Annexure- V to this report.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism/whistle blower policy. The policy allowsintimation by affected persons in good faith of concern or misconduct through a writtencommunication. The Audit Committee oversees the vigil mechanism for disposal of thecomplaint. Direct access to the Chairman of the Audit Committee is also allowed inexceptional cases.
The Company has voluntarily laid down the procedures to inform to the Board about therisk assessment 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 alongwith 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.
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.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status of the Company and its operations infuture.
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.
| ||By Order of the Board |
| ||Shalimar Wires Industries Limited |
|Registered Office: || |
|25 Ganesh Chandra Avenue ||Sunil Khaitan |
|Kolkata - 700 013 ||Chairman & Managing Director |
|Date: 14th August 2017 ||DIN-00385961 |