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DIRECTOR'S REPORT

Sirca Paints India Ltd.

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Market Cap. (₹) 509.31 Cr. P/BV 5.38 Book Value (₹) 34.57
52 Week High/Low (₹) 220/121 FV/ML 10/1 P/E(X) 22.90
Bookclosure 10/07/2019 EPS (₹) 8.11 Div Yield (%) 0.00
Year End :2018-03 

To, The Members of Sirca Paints India Limited

Dear Members,

The Board of Director’s take pleasure in presenting the 13th Annual Report on the business and operations of your Company along with the Audited Standalone Financial Statements for the year ended March 31, 2018.

1. FINANCIAL RESULT

A brief overview on standalone Financial Performance for the Financial Year ended March 31, 2018. is as follow:

(Amount in Rs.) (Amount in Rs.)

Particulars

Current Year 2017-18

Previous Year 2016-17

Revenue from Operations

89,22,07,788.03

82,51,00,331.50

Other Income

4,35,15,994.51

1,83,15,933.65

Total revenue (including other income)

93,57,23,782.54

84,34,16,265.15

Total Expenses

64,02,66,041.61

62,78,58,785. 11

Profit /Loss before Exceptional and Extra ordinary items and Tax

29,54,57,740.93

21,55,57,480.04

Exceptional Items

-

-

Profit/Loss before extra ordinary item and tax

29,54,57,740.93

21,55,57,480.04

Extraordinary Item

-

-

Profit/Loss before tax

29,54,57,740.93

21,55,57,480.04

Tax Expenses

Less: Current Tax

10,20,10,926.12

7,88,00,540

Add: Deferred Tax

4,51,506.11

2,77,451.69

Profit/Loss for the period from continuing operations

19,38,98,320.92

13,70,34,391.35

Profit/Loss for the period from discontinuing operations

-

-

Profit for the period

19,38,98,320.92

13,70,34,391.35

2. COMPANY’S PERFORMANCE REVIEW

- During the financial year 2017-18, revenue from operations on standalone basis increased to Rs. 892,207,788.03 as against Rs. 825,100,331.50 in the previous year- a growth of 8.13%.

- Other income increased to Rs. 4,35,15,994.51 as against Rs. 1,83,15,933.65 in the previous year- a growth of more than 50%

- Total Expenses was increased to Rs. 640,266,041.61 as against 627,858,785.11 in the previous year of 1.98%

- Profit after tax for the current year is 193,898,320.92 against Rs. 137,034,391.35 in the previous year -a growth of 41.49%.

3. DIVIDEND

To maintain the liquidity of funds, the Board of Directors has decided not to declare any Dividend for the Financial Year 17-18. The Board assured you to present a much strong Financial Statements in coming years.

4. RESERVES

The Company does not propose to transfer/carry any amount to the General Reserve as there are no such mandatory requirements under Companies Act, 2013.

5. SHARE CAPITAL

- During the Financial Year 2017-2018 Company has increased the Authorised Share Capital as on 14th November, 2017 from existing Rs. 10, 00,000/- (Rupee Ten Lac Only) divided into 1,00,000 (One Lac) Equity Shares of Rs. 10/-(Rupees Ten) each to Rs. 20,00,00,000 (Rupees Twenty Crore Only) divided into 2,00,00,000 (Two Crore) Equity Shares of Rs. 10/- (Rupees Ten) each by creation of additional 1, 99,00,000 (One Crore Ninety Nine Lac) Equity Shares of Rs. 10/- (Rupees Ten) each.

- As on 19th day of December, 2017 Company has Increased it Capital from existing Rs. 10,00,000/- (Rupee Ten Lac Only) Equity Shares of Rs. 10/- (Rupees Ten) each to Rs. 12,30,00,000 (Rupees Twelve Crore Thirty Lacs Only) by Issued bonus shares in the ratio of 122:1, 1,22,00,000 Bonus equity shares of Rs. 10/- each be and are hereby allotted to the shareholders.

- As on 02nd February, 2018 Company Allot 400,000 (Four Lakh) Equity shares of Rs. 150 /- (One Hundred Fifty) each of the Company at premium of Rs. 140.

- As on 19th February 2018 Company Entered into the Agreement with Sirca S.p.A, a company duly incorporated under the laws of Italy, Share Subscription and Shareholders Agreement (SSHA) Under the SSSHA, it has been, inter alia, agreed that the Company shall issue and allot to Sirca S.p.A, 700,000 (Seven hundred thousand) equity shares, on 22nd February, 2018 Company Allotted 700,000 (Seven hundred thousand) equity shares of Rs. 120/- (One Hundred Twenty) each at premium of Rs. 110.

6. DEPOSIT

During the financial year 2017-18, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014.

7. CONVERSION & NAME CHANGE OF COMPANY

- Our Company has entered into a Distributorship Contract dated 1st January, 2018 with SIRCA S.p.A ITALY wherein Our Company got the Exclusive Right to promote the sale of PU & Metal Coating under trademark SIRCA in the territory of India, Sri Lanka, Bangladesh and Nepal.

- During the Year Company has Changed its Name from SIRCOLOR WOOD COATINGS PRIVATE LIMITED to SIRCA PAINTS INDIA LIMITED as on 03 rd Day of May, 2017.

- Further, the Status of the Company has also been Changed From Private Limited Company to Public Limited Company and Necessary Fresh Certificate to that effect has been issued by ROC, Delhi Dated 17th January, 2018. Consequent to conversion of the Company the name of the Company Changed From SIRCA PAINTS INDIA PRIVATE LIMITED to SIRCA PAINTS INDIA LIMITED.

8. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors of the Company confirm that:

(a) In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as give a true and fair view of the state of affairs of the Companies as at 31st March, 2018 and of profit and Loss of the Company for the financial year ended 31st March, 2018;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Company Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities.

(d) the annual accounts have been prepared on a “going concern” principal;

(e) proper internal financial control laid down by the directors were followed by the Companies and that such internal financial controls are adequate and operating effectively ; and;

(f) proper system to ensure compliance with the provisions of all applicable laws were in place and that such system are adequate and operating effectively .

9. MANAGEMENT DISCUSSION AND ANALYSIS.

Management Discussion and Analysis as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report as Annexure-I. It speaks about the overall industry structure, global and domestic economic scenarios, developments in business operations/performance of the Company’s various businesses viz., decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, Risk, threats, outlook etc.

10. CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a Certificate of Auditors on its Compliance forms an integral part of this Report Annual Report as Annexure-II.

11. DIRECTORS AND KEY MANAGEERIAL PERSONNEL

- As on 14/12/2017, Mr. Sanjay Kapoor (00383275) Appointed as Independent Director for a Period of Five Years.

- As on 03/01/2018, Mrs. Archana Agarwal (08038188) Appointed as Independent Director for a Period of Five Years.

- As on 14/11/2017, Designation Change of Mr. Sanjay Agarwal (01302479) From Whole Time Director to Chairman Cum Managing Director for a Period of Five Years.

- As on 14/11/2017, Designation Change of Mr. Apoorv Agarwal (01302537) From Whole Time Director to Joint Managing Director for a Period of Five Years.

- As on 20/11/2017 Ms. Chanchal Gupta* Appointed as Company Secretary

- As on 26/12/2017 Mr. Bharat Bhushan Arora Appointed as Chief Financial Officer

- As on 21/02/2018 Mr. Chahat Mahajan Appointed as Company Secretary

*Ms. Chanchal Gupta had resigned from the post of Company Secretary w.e.f. 20/02/2018 and such vacancy was filled by Board of Directors at their Meeting held on 22/02/2018 by appointing Mr. Chahat Mahajan w.e.f. 21 /02/2018 as Company Secretary.

12. NUMBER OF MEETINGS OF THE BOARD

During the year 2017-18, 20 (Twenty) Board Meetings, 6 (Six) Extra Ordinary General Meeting, 1 (One) Nomination and Remuneration Committee Meetings, 1 (One) Corporate Social Responsibility Committee Meeting were convened and held. The maximum interval between any two consecutive Board meetings did not exceed 120 days.

The details About to Composition of the Board and its Committees, Date of Meetings and attendance of the Directors and Members are provided in the Corporate Governance Report which is a part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013, SEBI Listing Regulations and other applicable provisions, if any.

13. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a), an extract of annual return in the prescribed format i.e MGT 9 as per section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014 is appended as Annexure-III to the Director’s Report.

14. PARTICULARS OF EMPLOYEES

Pursuant to Section 197(12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details/information related to the remuneration of Directors and Key Managerial Personnel are set out as Annexure-IV to the Directors’ Report.

There is no information required to mention under Rule 5 (2) except statement showing details pertaining to names of the top ten employees in terms of remuneration drawn and various other details related as per Rule 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.

Further, the Company has no such employee who falls under Rule 5 (2)(i), (ii) and (iii) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Amendment Rules, 2016.

15. DECLARATION BY AN INDEPENDENT DIRECTOR(S)

The Company had received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence, as prescribed under Sub Section (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also confirmed that they have complied with the Company’s Code of Conduct.

16. NOMINATION AND REMUNERATION POLICY

This policy formulates the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of Director (Executive/ Non Executive) and also the criteria for determining the remuneration of the Directors, Key Managerial Personnel and other employees. The detailed policy is available on the Company’s website link at: www.sircapaints.com

17. COMMITTEES OF THE BOARD

As on January 3rd, 2018, the Board has Constitute four committees: the audit committee, the nomination and remuneration committee, the stakeholder’s relationship Committee and the corporate social responsibility Committee.

Our Committee’s composition meets with the provisions of the Companies Act, 2013 & rules made there under and in accordance with the Regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended up to the date.A detailed note on the composition of the Board and its committee’s with other details regarding all the Committees are provided in the Corporate Governance Report which is a part of this report.

18. INITIAL PUBLIC OFFER

The Company has Come Out with Initial Public offering of 48,69,600 Equity Shares at Face Value of Rs. 10/- at a price band of Rs. 151-160 per share.

Your Directors are pleased to inform you that Company had successfully Completed Its, IPO with an oversubscription of 10.99 Times.

The Company Received the Trading Approval on 30th May, 2018 From National Stock Exchange To Trade the Shares on SME EMERGE Platform

The Company Confirmed that the Annual Listing Fee to NSE for the Financial Year 2018-2019 has been Paid.

The Company has paid the annual custody fees for the year 2018-19 to the depositories namely National Securities Depository Limited and Central Depository Services Limited. The shares of the Company are compulsorily traded in dematerialized form.

19. LOCK-IN SHARES

As per Regulation number 32 and 36 of SEBI (ICDR) Regulations, 2009. All pre Issue shareholding has to be locked-in for period of 3 year and 1 year.

The Details of Lock-in Summary are as follows: CDSL

Sr. No.

Name of the Applicant

Quantity

Tenure

1.

SANJAY AGARWAL

37,00,000

3 YEAR

2.

SANJAY AGARWAL

21,79,646

1 YEAR

3.

BGB ITALIA S R L

34,36,989

1 YEAR

4.

ANITA AGARWAL

12,300

1 YEAR

5.

SRISHTI AGARWAL

12,300

1 YEAR

6.

AYUSHI AGARWAL

12,300

1 YEAR

Total

93,53,535

NSDL

Sr. No

Name

Quantity

Tenure

1

GURJIT SINGH BAINS

25,77,465

I YEAR

2

GITA KIRTI AMBANI

4,00,000

I YEAR

3

APOORV AGARWAL

3,69,000

I YEAR

Total

33,46,465

PHYSICAL SHARES

Sr. No

Name

Quantity

Tenure

1

SIRCA S.p.A

7,00,000

I YEAR

20. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

During the year, there are no Subsidiary, Joint Ventures and Associate Company(s) of the Company.

21. AUDITORS

I. Statutory Auditors

M/s Rajesh Kukreja & Associates, Chartered Accountants (Firm Registration No. 0004254N), were appointed as Statutory Auditors to Fill the Vacancy Caused by the Resignation of M/S Kathuwala & Associates, Chartered Accountant (FRN:015735N) of your Company at the General Meeting held on 14thNovember, 2017, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the Appointment of the auditors is required to be ratified by members at every Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

Statutory Auditors’ Report

The report given by the Auditors on the financial statement of the company is part of this Statutory Auditors’ Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their report.

II. Secretarial Auditors

The Board of Directors of the Company has appointed M/s Karan Khurana & Associates, as the Secretarial Auditor to conduct an audit of secretarial records for the financial year 2018-19.

III. Internal Auditor:

M/s S Mahajan & Co (FRN: 033060N), Chartered Accountants was appointed by the Board of Directors to perform the duties of Internal Auditor of the Company for the financial year 2018-19.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company promotes ethical behavior in all its business activities and has put in place a Mechanism for reporting illegal or unethical behavior. The Company has a Vigil mechanism and Whistle blower policy which provides a channel to the employees and Directors to report to the Management, concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy.

The Company has provided email address of Vigilance and Ethics Officer in its policy to which all protected disclosures should be addressed. It is affirmed that no person has been denied access to the Audit Committee. The employees are encouraged to voice their concerns by way of whistle blowing and the policy provides complete confidentiality and safeguard of the employees who raises the whistle against such improper conduct. The Whistle Blower Policy has been communicated to all the Directors and employees of the Company through website of the Company i.e. www.sircapaints.com.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no such significant and material orders passed by the regulators or courts or tribunals, impacting the going concern status and company’s operations in future.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 -Details of Loans:-

During the year, the Company has not directly or indirectly, given any loan to any person(s) or other body corporate. Details of Investments:-

During the year, the Company has not directly or indirectly acquire, by way of subscription, purchase, invest or otherwise, the securities of any other body corporate. Further former investments made and stand in the Financial Statements are mentioned in the Financial Statements annexed to this report.

-Details of Guarantee / Security Provided:-

During the year, the Company has not directly or indirectly, given any guarantee or provided any security in connection with a loan to any other body corporate or person(s).

25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions which were repetitive in nature, entered on arm’s length basis in the ordinary course of business and compliance with Section 188 (1) of the Companies Act 2013 read with rules made there under, Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable provisions of the Law. However, none of the transactions with related parties fall under the scope of Section 188(1) of the Companies Act, 2013 and no material related party transactions were entered during the Financial Year by your Company.

The Related Party Transactions Policy as approved by the Board, was uploaded on the Company’s website pursuant to Regulation 46 of the SEBI (LODR) Regulations, 2015 at the web link: https://www.sircapaints.com/policies-programs-code. The information relating to particulars of contracts or arrangements with related party prepared under Section 188(1) of the Companies Act, 2013 read with Rule 8(2) of Companies (Accounts) Rule, 2014 is in Form AOC-2 is appended as Annexure-VII to the Directors’ Report as required, although it’s not applicable.

Details of the transactions with Related Parties are provided in the accompanying financial statements. Members may refer to NOTE NO. 23.5 to the financial statements which sets out related party disclosures pursuant to AS-18.

26. CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of the provisions of Section 135 of the Act your Company has constituted a CSR Committee. The composition and terms of reference of the CSR Committee are provided in the Corporate Governance Report forming part of this report. The Company has also formulated a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Companies Act. As part of its CSR contribution, the Company had utilized its contribution through “Kartavya Janhit Foundation” a registered under Society Registration Act XXI of 1860 having a registered Office at Richmondd Global School Campus, N.S. Road, Mianwali Nagar, Paschim Vihar, New Delhi-110087, with the objectives of Spreading the education for all, Women and Child Development.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014(including any modification or re-enactment thereof, for the time being in force), the Annual Report on CSR activities is appended as Annexure-VIII to the Directors’ Report. The policy on CSR is available on the website of the Company i.e. www.sircapaints.com.

27. BUSINESS RESPONSIBILITY STATEMENT

The same is not applicable to our Company. Since no initiative with respect to environmental, social etc has been taken.

28. CODE OF CONDUCT

The Board of Directors has approved a code of conduct which is applicable to members of the Board and all employees in the course of day to day business operations of the Company. The code has been placed on the Company’s website www.sircapaints.com. The Code lays down the standard procedure of business conduct which is expected to be followed by the directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.

All the Board Members and Senior Management personnel have confirmed compliance with the code.

29. DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.

30. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 are as follow:

(A) CONSERVATION OF ENERGY

The Company continues its attempts to improve energy conservation and utilization. Your company has not set up a manufacturing unit until now. However, we are in process of setting up the same. Your company is ensuring that every measure to conserve energy is taken in setting up in the manufacturing plant. We hopefully will provide the detailed disclosure of same in the Next Annual Report.

(B) TECHNOLOGY ABSORPTION

Your company keeps itself updated with latest technological innovations by way of constant communication, personal discussions and visit to overseas countries/ plants and benchmarking best industrial practices.

You company has entered into a Technical Knowhow agreement dated 16th February, 2018 with SIRCA S.P.A. It will take time for us implementing the same. This agreement was signed for providing even better products to the end user. Your company will only able to provide the detailed disclosure on the said agreement on and after the proper implementation of this agreement.

Since this being a continuous process, continuous up gradation does take place from time to time depending upon products/ process. Any fixed line of action other than above has not been envisaged.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

At present your company have not yet started the export of its product as we are still pursuing with the trade business. However, this one thing is on top of the list of our Action plan of coming year. We are planning to start the export of our products as early as possible.

Details of expenditure in foreign exchange and earnings are given in NOTE NO. 23.7 of the financial statements.

31. SECRETARIAL STANDARD

The Company has complied with Secretarial Standard issued by the Institute of Company Secretaries of India on meetings of Board of Directors and General Meeting.

APPRECIATION

The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

The Board conveys its appreciation for its customer, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board

Sirca Paints India Limited

(Formerly Known as Sircolor Wood Coatings Pvt. Ltd.)

-Sd - - Sd-

SANJAY AGARWAL APOORV AGARWAL

DIN: 01302479 DIN: 01302537

Place- New Delhi Chairman cum Managing Director Joint Managing Director

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