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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 '14    « Mar 13
Dear Shareholders,
 
 The Directors are pleased to present the 112th Annual Report on the
 business and operations of the Company together with the audited
 financial statements for the year ended 31st March, 2014.
 
 Financial results                                         (Rs. in lacs)
 
 Description                                          2013-14    2012-13
 
 Revenue from Operations & Other Income                 54630      56313
 
 Expenses                                               52525      52494
 
 PBIDT                                                   2105       3819
 
 Exceptional Items                                          -        212
 
 Profit before tax                                       -360       1566
 
 Provision for taxation
 
   Current Tax                                              -        489
   Deferred Tax                                           -81        -25
 
 Profit after tax                                        -279       1102
 
 Add: Amount brought forward from last year''s account    2100        967
 
 Add: Adjustment for Earlier year Tax                       -         31
 
 Profit available for appropriation                      1821       2100
 
 Balance carried to Balance Sheet                        1821       2100
 
 Review of operations
 
 The year passed by was a year of transition, the management changed its
 strategic direction to increase focus on the consumer business. A
 number of corrections and initiatives were taken through the year to
 prepare your Company for an accelerated profitable growth in coming
 years.
 
 Your Company during the year under review suffered a loss (after tax)
 of Rs. 2.79 crores as against profit of Rs. 11.02 crores in the
 previous year. The turnover of the Company for year 2013-14 stood at
 Rs. 546.30 crores as against Rs. 563.13 crores in the previous year
 2012-13. The decrease in sales is attributed to the economic slowdown
 and sluggishness in demand of industrial products.
 
 Dividend
 
 In view of the loss during the year under review, your Directors did
 not recommend any dividend.
 
 Shifting of Corporate Office
 
 During the year under review, the company has shifted its corporate
 office from Mumbai, Maharashtra to Gurgaon, Haryana.  ESOP
 
 During the year under review the Company had granted 4,88,000 ESOPs to
 the permanent employees of the Company pursuant to Employees Stock
 Option Scheme, 2013 formulated by Company in accordance with the
 Securities and Exchange Board of India (Employee Stock Option Scheme
 and Employee Stock Purchase Scheme) Guidelines, 1999 (''Guidelines'')
 issued by SEBI. None of the options have been vested till date.
 
 The Company has adopted intrinsic Value method for the valuation of the
 ESOPs granted under the said Scheme.
 
 The particulars of options issued under the said Scheme as required by
 SEBI (Employees Stock Option Scheme and Employees Stock Purchase
 Scheme) Guidelines, 1999 are appended as ''Annexure B'' and forms part of
 this report.
 
 Fire at Howrah Plant
 
 Your Company suffered a major set back when an accidental fire broke at
 the Company''s Howrah plant on 12th March, 2014.
 
 Due to the fire both structure and equipment of paint mill suffered
 damages. Majority of the finished goods, work-in-progress and raw
 material lying at the factory were also destroyed, as a result, the
 plant has been inoperational.
 
 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, Nashik and Sikandrabad
 are ISO 9000 accredited. The Nashik plant is also ISO 14001 accredited.
 These accreditations have been renewed in 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 2013-14.
 
 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 the 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, SANL and ESPCPL
 duly audited by the Company''s Statutory Auditors are attached in the
 Annual Report.
 
 Directors
 
 Pursuant to Article 118 of the Articles of Association, Mr. Ratan
 Jindal, Non-Independent Non-Executive Director, is liable to retire by
 rotation at the ensuing Annual General Meeting and being eligible,
 offers himself for re-appointment.
 
 Dr. R. Srinivasan, who is liable to retire by rotation at the ensuing
 Annual General Meeting, has expressed his unwillingness to continue as
 Director of the Company. The Board of Directors has decided not to fill
 the vacancy caused by his unwillingness to be re-appointed.
 
 Mr. Rajiv Rajvanshi and Ms. Pushpa Chowdhary were appointed as
 Additional Directors, in Independent Category, on the Board of the
 Company with effect from 20th September, 2013 and 30th May, 2014,
 respectively, who would hold office up to the conclusion of the ensuing
 Annual General Meeting.
 
 In accordance with the provisions of Sections 149, 150, 152 and any
 other applicable provisions of the Companies Act, 2013 and the rules
 framed thereunder read with Schedule IV to the said Act, the term of
 office Independent Directors would be non-rotational for a consecutive
 period of five years from the date of ensuing Annual General Meeting
 i.e., 26th September, 2014.
 
 To comply with the requirements of the Companies Act, 2013, as
 aforesaid, it is proposed to be appoint/re-appoint Mr. A. V.  Lodha,
 Mr. Pujit Aggarwal, Mr. Rajiv Rajvanshi and Ms. Pushpa Chowdhary,
 Company''s independent directors, for a period of five consecutive years
 from the date of ensuing Annual General Meeting i.e., 26th September,
 2014.
 
 The Company has received declaration from all the Independent Directors
 of the Company confirming that they meet with the criteria of
 independence as prescribed, both under sub-section (6) of Section 149
 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement
 with the Stock Exchanges.
 
 Brief resume of Mr. Ratan Jindal, Mr. A. V. Lodha, Mr. Pujit Aggarwal,
 Mr. Rajiv Rajvanshi and Ms. Pushpa Chowdhary are given in the Point No.
 12 of the Report on Corporate Governance attached to this report.
 
 Directors'' Responsibility Statement
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
 confirm that:
 
 i) In the preparation of the annual accounts for the year ended 31st
 March, 2014, the applicable accounting standards have been followed and
 there are no material departures from the same;
 
 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. 2.31,
 2.32, 2.33 and 2.34 of Notes to the Accounts.
 
 Particulars of employees
 
 In terms of the provisions of Section 217 (2A) 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
 
 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 2014-15.
 
 The Cost Audit report for the financial year ended 31st March, 2013 has
 been filed with the Ministry of Corporate Affairs, Cost Audit Branch,
 Government of India on 29.11.2013.
 
 Listing
 
 During the year, 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.
 
 However, the Board in its meeting held on 30th May, 2014 resolved to
 delist the equity shares of the Company from The Calcutta Stock
 Exchange Ltd.
 
 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, 2014, together with Certificate on its compliance, pursuant
 to requirements of Clause 49 of the Listing Agreement with Stock
 Exchanges is annexed hereto as Annexure ''C'' to this Report.
 
 Corporate Social Responsibility
 
 Complementing every aspect of our business is our commitment to support
 positive transformation in the society. As one of the early adopters of
 CSR in the country, we have been supporting initiatives to promote
 education and environment conservation around our factories. Apart from
 energy and water conservation initiatives at our factories, we have
 been running a school at Howrah for primary and secondary school
 children. Through our CSR efforts, we aim to bring change that has a
 measurable, long-term impact on the communities of which we are a part.
 
 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.
 
 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.
 
 
                                       For and on behalf of the Board
 
 New Delhi                       Ratan Jindal        Sameer Nagpal
 30th May, 2014                    Director     Managing Director & CEO
Source : Dion Global Solutions Limited
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