To the Shareholders
The Directors are pleased to present the 111th Annual Report on the
business and operations of the Company together with the audited
statement of accounts for the year ended 31 st March, 2013.
(Rs. in lacs)
Description 2012-13 2011-12
Revenue from Operations & Other Income 59167 52872
Expenses 55348 49070
PBIDT 3819 3802
Exceptional Items 212 -
Profit before tax 1566 2096
Provision for taxation
Current Tax 489 682
Deferred Tax (25) (32)
Profit after tax 1102 1446
Add: Amount brought forward from last
year''s account 967 761
Profit available for appropriation 2069 2207
Less: Proposed Dividend - 379
Tax on proposed dividend - 61
Amount transferred to General Reserve - 800
Balance carried to Balance Sheet 2069 967
Sub-division of Equity Shares
The equity share of face value of Rs.10/- each of the Company have been
sub-divided into 5 equity shares of Rs.2/- each in terms of the
approval of shareholders of the Company accorded on 26th October, 2012.
The Board of Directors fixed 23rd November, 2012 as Record Date for
this purpose. Consequently, the existing Issued, Subscribed and Paid-up
Equity Share Capital of Rs. 3,78,56,200/- which were divided into
37,85,620 Equity Shares of Rs.10/- each have been sub-divided into
1,89,28,100 Equity Shares of Rs.2/- each. Similarly, the existing
Authorised Share Capital of Rs. 8,00,00,000/- which was divided into
80,00,000 Equity Shares of Rs.10/- each has been sub-divided into
4,00,00,000 Equity Shares of Rs.2 / - each.
With a view to attract, retain and motivate the best available talent,
the Board of Directors of the Company has formulated Employees Stock
Option Scheme in accordance with the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 (''Guidelines''). The salient features of the said
Scheme is detailed in the Explanatory Statement annexed to Notice of
the Annual General Meeting. The requisite approval of the shareholders
of the Company to enable the Company to issue shares/options under the
said Scheme is being sought at the forthcoming Annual General Meeting.
The Board of Directors of your Company has decided to plough back the
profit of the Company and therefore does not recommend any dividend.
Review of operations
The year under review continues to be impacted due to economic
slowdown. The Company''s revenue from operations has increased from Rs.
529 crores in 2011-12 to Rs.592 crores in 2012-13, an increase of 12%,
which can be considered satisfactory in view of the difficult economic
condition. The profitability was however affected because of onetime
cost incurred due to higher provisioning for bad debts and obsolete
Due to increase in the interest cost related to working capital
financing, the finance costs have also increased from Rs. 15.22 crores
in 2011-12 to Rs. 16.58 crores in 2012-13.
The Company continued with its policy of installation of tinting
systems in various retail outlets across the country with a view to
increase the demand for its high value products, especially water based
All the three plants of the Company at Howrah, Nasik and Sikandrabad
are ISO 9000 accredited. The Nasik plant is also ISO 14001 accredited.
These accreditations have been renewed during the year under review.
The Company has two subsidiaries, namely Shalimar Adhunik Nirman
Limited (SANL) and Eastern Speciality Paints & Coatings Private Limited
(ESPCPL). Since there was no business activity carried out either by
SANL or by ESPCPL during the year under review, these subsidiaries have
not prepared the Statement of Profit & Loss for the year 2012-13.
In terms of General Circular No. 2/2011 dated 8th February, 2011 issued
by the Ministry of Corporate Affairs, Government of India, granting
general exemption to attach Subsidiaries'' Annual Accounts, as required
under Section 212 of the Companies Act, 1956, the Board of Directors of
the Company has decided not to attach the Annual Accounts of the said
subsidiaries. Any member desires to obtain the copy of Annual Report &
Accounts of SANL and ESPCPL may send his/her request to the Company
Secretary of the Company.
The consolidated financial statement of the Company and its
subsidiaries duly audited by the Company''s Statutory Auditors are
attached in the Annual Report.
In accordance with Article 118 of the Articles of Association, Mr.
Girish Jhunjhnuwala and Mr. A. V. Lodha retire by rotation and being
eligible, offer themselves for re-appointment.
Mr. Sandeep Sarda, Executive Director of the Company has resigned from
the Company. The Board has accepted his resignation with effect from
10th June, 2013. The Board also recorded its appreciation for the
valuable contribution made by Mr. Sarda during his long association
with the Company.
Mr. Sameer Nagpal, Chief Executive Officer of the Company, has been
appointed as Additional Director of the Company with effect from 2 5th
May, 2013 and will vacate his office at the forthcoming Annual General
Meeting and shall seek election under Section 257 of the Companies Act,
1956. Mr. Nagpal, subject to necessary approvals, has also been
appointed the Managing Director for a period of three years with effect
from that date.
Brief resume of Mr. Jhunjhnuwala, Mr. Lodha and Mr. Nagpal are given in
Point No.12 of the Report on Corporate Governance attached to this
Directors'' Responsibility Statement
Pursuant to Section 217 (2 AA) of the Companies Act, 1956, the
Directors confirm that:
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any;
ii) The accounting policies have been selected and applied consistently
and the judgements and estimates made are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the financial year and of the profit of the Company for that
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) The accounts have been prepared on a going concern basis.
Conservation of energy and technical absorption
The particulars as prescribed under Section 217(1)(e) of the Companies
Act, 1956 read with Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 are given in Annexure ''A'' to the
Foreign exchange earnings and outgo
Foreign exchange earnings and outgo are outlined in Note nos. 2.33,
2.34 and 2.35 of Notes to the Accounts. Particulars of employees
Information as required under Section 217(2 A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975, as
amended, forms part of this report. However as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the report and
accounts are being sent excluding the statement containing the
particulars to be provided under Section 217(2A) of the Companies Act
1956. Any member interested in obtaining such particulars may write to
the Company Secretary for a copy thereof.
Messrs Chaturvedi and Partners, the Auditors of the Company, retire at
the forthcoming Annual General Meeting, and being eligible, offer
themselves for re-appointment.
In compliance with the Central Government''s order, your Board has
appointed Messrs D. Sabyasachi & Co., Cost Accountants, to carry out
the Cost Audit of the Company in respect of Paints & Varnishes. This
appointment is to be made in each financial year and based on the
application of your Company the Central Government has approved the
re-appointment of Cost Auditors for the year under review. The
necessary application will be made to the Central Government in due
course seeking approval to the re-appointment of the Cost Auditors for
the financial year 2013-14.
The Cost Audit report for the financial year ended 31st March, 2012 has
been filed with the Ministry of Corporate Affairs, Cost Audit Branch,
Government of India, on 31st January, 2013 i.e. within the stipulated
time as extended.
Your Company''s equity shares continue to be listed with the BSE
Limited, National Stock Exchange of India Limited and The Calcutta
Stock Exchange Limited.
The Company has paid annual listing fees to the respective Stock
Exchanges. As the trading in equity shares of the Company is permitted
only in dematerialized form, the Company has made the requisite
arrangements with National Securities Depository Limited and Central
Depository Services (India) Limited to enable investors to hold shares
in dematerialized form.
The Company continues to comply with the requirements of the Listing
Agreement with the Stock Exchanges where the Company''s shares are
listed. The report on Corporate Governance for the financial year ended
31st March, 2013, together with Certificate on its compliance, pursuant
to requirements of Clause 49 of the Listing Agreement with Stock
Exchanges is annexed hereto as Annexure ''B'' to this Report.
The Directors would like to place on record their grateful appreciation
of the co-operation and assistance received from the financial
institutions, banks, investors, valued customers, various government
agencies and business associates during the year under review.
Industrial relations and personnel
Industrial relations remained cordial and satisfactory. Your Directors
wish to place on record their deep sense of appreciation of the devoted
services rendered by all officers, staff and workers of the Company.
For and on behalf of the Board
New Delhi Girish Jhunjhnuwala
25 th May, 2013 Chairman