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
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.
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
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.
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, 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.
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
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,
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
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
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. 2.31,
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.
Messrs Chaturvedi and Partners, the Auditors of the Company, retire at
the forthcoming Annual General Meeting, and being eligible, offer
themselves for re-appointment.
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.
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
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, 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.
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