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Shalimar Paints Directors Report, Shalimar Paints Reports by Directors
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Shalimar Paints
BSE: 509874|NSE: SHALPAINTS|ISIN: INE849C01026|SECTOR: Paints/Varnishes
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Directors Report Year End : Mar '13    « Mar 12
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.
 
 Financial results
 
                                                         (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.
 
 ESOP
 
 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.
 
 Dividend
 
 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
 inventory.
 
 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.
 
 Tinting systems
 
 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
 products.
 
 ISO Certifications
 
 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.
 
 Subsidiaries
 
 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.
 
 Directors
 
 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
 report.
 
 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
 year;
 
 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
 Directors'' Report.
 
 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.
 
 Auditors
 
 Messrs Chaturvedi and Partners, the Auditors of the Company, retire at
 the forthcoming Annual General Meeting, and being eligible, offer
 themselves for re-appointment.
 
 Cost Auditors
 
 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.
 
 Listing
 
 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.
 
 Corporate Governance
 
 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.
 
 Acknowledgements
 
 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
Source : Dion Global Solutions Limited
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