shalimar paints ltd share price Auditors report

To the Members of Shalimar Paints Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Shalimar Paints Limited (‘the Company), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (‘the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its loss (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter	How our audit addressed the key audit matter
A. Revenue recognition	Our audit procedures for testing revenue recognition included, but were not limited to the following:
(Refer Note 3.3 and 32 for details of revenue recognised during the year)
The Companys revenue is derived primarily from manufacturing, selling and distribution of paints, coatings and providing related services recognised in accordance with the accounting policy described in the accompanying standalone financial statements.
	a) Assessed the appropriateness of the revenue recognition accounting policies and its compliances with applicable accounting standards.
	b) Obtained an understanding of the managements processes and controls relating to revenue recognition.
In accordance with the principles of Ind AS 115, Revenue from Contracts with Customers, (‘Ind AS 115) revenue from the sale of products is recognised by the Company when the performance obligation is satisfied, i.e., when the ‘control of the goods underlying the particular performance obligation is transferred to the customer. The performance obligations are generally considered to be satisfied by the management when the buyer examines the goods after taking delivery in accordance with the terms and conditions included in the revenue contracts.
	c) Evaluated the design and tested the operating effectiveness of Companys key internal controls relating to revenue recognition.
	d) Performed substantive testing of revenue transactions recorded during the year using statistical sampling by verifying the underlying supporting documents including customer contracts, purchase order, sales order, sales invoice and proof of delivery through dispatch/shipping documents.
Revenue recognition from sale of products also involves determination of variable consideration on account of volume discounts and other rebate programs run by the Company, which requires estimates to be made by the management at each period end.
	e) Performed testing of samples of revenue transactions recorded during specific period before and after year-end by verifying underlying documents as above, to assess whether revenue was recognised in the correct period.
Further, the Company and its external stakeholders focus on revenue as a key performance measure, which could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred.
	f) Performed analytical procedures which include variance analysis of current year revenue with previous year revenue and corroborating the variance considering both qualitative and quantitative factors.
Considering the above factors and the amounts involved, it required considerable audit efforts in testing revenue recorded during the year, and therefore, we have identified revenue recognition as a key audit matter in the current year audit.
	g) Tested on a sample basis rebates and discount schemes as approved by the management to assess its accounting. For the samples selected compared that the actual rebates and discounts recognized in respect of particular schemes do not exceed their approved amounts.
	h) Circularised balance confirmations for invoices outstanding at the year-end on a sample basis and reviewed the reconciling items, if any.
	i) Assessed that the adequacy of disclosures made by the management are in accordance with the applicable accounting standards.

B. Provision for Obsolescence of Inventory
(Refer Note 3.5 and 13 for details of inventory as at 31 March, 2023).	Our audit procedures for testing provision for obsolescence of inventory included, but were not limited to the following:
The Company held inventories aggregating Rs. 11,358.17 lacs as at 31 March, 2023 comprising of raw materials, work-in progress, stock-in-trade, finished goods, packaging materials and stores, spares and consumables, on which the Company has recorded an obsolescence provision amounting to Rs. 277.47 lacs as at 31 March 2023.	a) Obtained an understanding of managements process to identify slow-moving, obsolete, and other non-saleable inventory, and process of consequent measurement of required provision for obsolescence.
	b) Evaluated the appropriateness of related accounting policies adopted by the Company in accordance with the requirements of Ind AS 2 (‘Ind AS 2);
At each reporting period end, the management assesses whether there is any objective evidence indicating that the net realisable value of any item of inventory is below its carrying value. If so, such inventories are written down to their net realisable value in accordance with the requirements of Ind AS 2, Inventories (‘Ind AS 2).
	c) Evaluated the design, implementation and tested the operating effectiveness of key controls that the Company has in relation to aforesaid process;
	d) Evaluated the nature, source and reliability of all the information used by the management for arriving at the estimates for determination of provision for obsolescence of inventory;
The factors that the Company considers in determining the provision for slow moving, obsolete and other non-saleable inventory include estimated remaining shelf life, product discontinuances and ageing of inventory, to the extent each of these factors impact the Companys business and markets.
	e) For the provision made in respect of non-processable inventory and reprocessing cost to be incurred on re- processable inventory, discussed with the senior management the basis of identification of such inventory along with the judgement and estimates used. We have evaluated the aforesaid in view of our understanding of the business and industry conditions. Further, reperformed computations to validate the accuracy and completeness of such provision; and
The Company considers all these factors and adjusts the inventory provision to reflect its actual experience on a periodic basis. The aforesaid determination involves significant management judgement and high estimation uncertainty on account of usage of slow moving, obsolete and other non- saleable inventory.
Considering the above, provision for obsolescence of inventory has been considered as key audit matter for the current period audit.
	f) Evaluated appropriateness of disclosures made in the standalone financial statements.

C. Impairment assessment of freehold land at Kolkata
As described in Note 3.6 to the standalone financial statements, In year 2014 the operations in Companys Kolkata plant were suspended after a fire incident as a result of which the land at Kolkata plant is not used to its full capacity.	Our audit procedures for impairment assessment of Kolkata (Howrah) freehold land included, but were not limited to the following:
	a) Discussed with the management, future plans of the Company with respect to alternate use of the plant and future revival of operations of the plant.
The aforesaid matter is impairment indicator and triggered a need for impairment assessment. Management, during the year ended 31 March 2023, has carried out valuation of land
	b) Assessed the appropriateness of the impairment accounting policies and its compliances with applicable accounting standards.
whereby the carrying amount of the land was compared with the recoverable value as determined under the principles of Ind AS 36.
	c) Obtained an understanding of the managements processes and tested the design and operating effectiveness of internal controls over identification and impairment test procedures.
The aforesaid recoverable value has been determined by the management with the help of an external valuation expert using market approach and the key assumptions underpinning such valuation are guideline rate published by state government.
Considering the materiality of the amounts involved and significant degree of judgement and subjectivity involved in the estimates and key assumptions used in the impairment evaluation, impairment assessment of the land at Kolkata plant was determined as a key audit matter.	d) Reviewed the valuation report with respect to Howrah land at Kolkata plant and fair value obtained by the management from an independent valuer and assessed the professional competence, skills and objectivity of the valuer for performing the required valuation;
	e) Assessed the appropriateness of the significant assumptions as well as the Companys valuation methodology and assumptions with the support of auditors valuation specialists.
	f) Evaluated the adequacy and appropriateness of disclosures made by the Company in the standalone financial statements, as required by the applicable provisions of the Act and the requirement of Ind AS 36.

Information other than the Standalone Financial Statements and Auditors Report thereon

6. The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this auditors report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Companys Board of Directors. The Companys Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls;

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

Conclude on the appropriateness of Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern;

Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation; 12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

15. The standalone financial statements of the Company for the year ended 31 March 2022 were audited by the predecessor auditor, A.K. DUBEY & Co., who have expressed an unmodified opinion on those standalone financial statements vide their audit report dated 26 May 2022.

Report on Other Legal and Regulatory Requirements

16. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act. 17. As required by the Companies (Auditors Report) Order, 2020 (‘the Order) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. Further to our comments in Annexure I, as required by section 143

(3) of the Act based on our audit, we report, to the extent applicable, that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements; b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; c) The standalone financial statements dealt with by this report are in agreement with the books of account; d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act; e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 from being appointed as a director in terms of section 164

(2) of the Act; f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company as on 31 March 2023 and the operating effectiveness of such controls, refer to our separate Report in Annexure II wherein we have expressed an unmodified opinion; and g) With respect to the other matters to be included in the Auditors Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us :

i. the Company, as detailed in note 45 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2023; i

i. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2023; ii

i. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023; iv.

a. The management has represented that, to the best of its knowledge and belief, as disclosed in note 63

(o) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person

(s) or entity(ies), including foreign entities (‘the intermediaries), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 63

(p) to the standalone financial statements, no funds have been received by the Company from any person

(s) or entity(ies), including foreign entities (‘the Funding Parties), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses iv

(a) and iv

(b) above contain any material misstatement.

v. The Company has not declared or paid any dividend during the year ended 31 March 2023 and; v

i. Proviso to Rule 3

(1) of the Companies (Accounts) Rules, 2014 requires all companies which use accounting software for maintaining their books of account, to use such an accounting software which has a feature of audit trail, with effect from the financial year beginning on 1 April 2023 and accordingly, reporting under Rule 11

(g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is not applicable for the current financial year.

	For Walker Chandiok & Co LLP
	Chartered Accountants
	Firms Registration No.: 001076N/N500013
	Ashish Gera
	Partner
Place: Gurugram	Membership No.: 508685
Date: 27 May 2023	UDIN: 23508685BGYCRF9052

Annexure I referred to in Paragraph 17 of the Independent Auditors Report of even date to the members of Shalimar Paints Limited on the standalone financial statements for the year ended 31 March 2023

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and right of use assets.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company has a regular programme of physical verification of its property, plant and equipment under which the assets are physically verified in a phased manner over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain property, plant and equipment were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (including investment properties) held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in note 5.1 to the standalone financial statements are held in the name of the Company. For title deeds of immovable properties in the nature of land situated at Nasik and Chennai with gross carrying values of Rs 2,177 Lakhs and Rs 359.78 Lakhs as at 31 March 2023, which have been mortgaged as security for borrowings taken by the Company.

(d) The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets during the year.

(e) No proceedings have been initiated or are pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended) and rules made thereunder.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for goods in transit. In our opinion, the coverage and procedure of such verification by the management is appropriate and no discrepancies of 10% or more in the aggregate for each class of inventory were noticed as compared to book records.

(b) As disclosed in note 63(i) to the standalone financial statements, the Company has been sanctioned a working capital limit in excess of Rs 5 crore by banks based on the security of current assets. The quarterly returns/statements, in respect of the working capital limits have been filed by the Company with such banks and such returns/statements are in agreement with the books of account of the Company for the respective periods which were not subject to audit, except for the following:

Name of the Banks	Working capital limit sanctioned	Nature of current assets offered as	Quarter	Information disclosed as per return	Information as per books of accounts	Difference (INR Lakhs)
	(INR Lakhs)	security		(INR Lakhs)	(INR Lakhs)
Punjab National		Pari Passu Charge on	June 2022	20,696.69	19,467.32	1,229.37
Bank, State Bank of India and		current assets, also refer note no. 26 of	September 2022	22,068.14	20,234.33	1,833.81
HDFC Bank	16,250	standalone financial	December 2022	22,630.80	21,168.17	1,462.64
		statements	March 2023	-	22,109.91	(22,109.91)

(iii) (a) The Company has provided loans to Subsidiaries during the year as per details given below:

Particulars	Loans
Aggregate amount provided during the year:
- Subsidiaries	2.02
Balance outstanding as at balance sheet date in respect of above cases:
- Subsidiaries	295.48

(b) In our opinion, and according to the information and explanations given to us, the terms and conditions of the grant of all loans are, prima facie, not prejudicial to the interest of the Company. Further the Company has not made investments, provided any guarantees, granted advances in the nature of loans or given any security.

(c) In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the receipts of principal and interest are regular.

(d) There is no overdue amount in respect of loans granted to such companies. The Company has not granted any loans to firm, LLPs or other parties.

(e) The Company has not granted any loans which had fallen due during the year. Further, no fresh loans were granted to any party to settle the overdue loans that existed as at the beginning of the year.

(f) The Company has granted loans, which are repayable on demand, as per the details below:

Particulars	All Parties (Amount in INR Lakhs)	Related Parties (Amount in INR Lakhs)
Aggregate of loans
- Repayable on demand (A)	295.48	295.48
- Agreement does not specify any terms or period of repayment (B) Total (A+B)	- 295.48	- 295.48
Percentage of loans/advances in nature of loan to the total loans	100%	100%

(iv) In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act in respect of loans granted as applicable. Further the Company has not entered into any transaction covered under section 185 and section 186 of the Act in respect of investment made, guarantees and security provided by it.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there are no amounts which have been deemed to be deposits within the meaning of sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

(vi) The Central Government has specified maintenance of cost records under sub-section (1) of section 148 of the Act in respect of the products of the Company. However, according to the information and explanation given to us, such records have not been made.

(vii) (a) In our opinion, and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues, as applicable, have not been regularly deposited with the appropriate authorities and there have been significant delays in a certain cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no statutory dues referred in sub-clause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:

Name of the statute	Nature of dues	Amount Rs. in lakhs	Amount paid under Protest Rs. in lakhs	Period to which the amount relates	Forum where dispute is pending	Remarks, if any
Income-Tax Act, 1961	Income Tax	258.03	-	AY 2015-16	Commissioner Income Tax (Appeals), New Delhi	-
Income-Tax Act, 1961	Income Tax	245.78	-	AY 2018-19	Commissioner Income Tax (Appeals), New Delhi	-
Central Excise Excise Act, 1944	Central Excise	211.34	-	Jan 2005 to Mar 2008	CESTAT, Kolkata	-
Central Excise Excise Act, 1944	Central Excise	122.86	-	FY 2009-10 to 2011-12	CESTAT, Kolkata	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	9.34	-	FY 2005-06	Assistant Commissioner, Madhya Pradesh	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	5.82	-	FY 2006-07	Assistant Commissioner, Madhya Pradesh	-

Name of the statute	Nature of dues	Amount Rs. in lakhs	Amount paid under Protest Rs. in lakhs	Period to which the amount relates	Forum where dispute is pending	Remarks, if any
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	13.82	-	FY 2008-09	Assistant Commissioner, Madhya Pradesh	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	17.66	-	FY 2016-17	Assistant Commissioner, Bihar	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	23.61	3.00	FY 1996-97	Commissioner, Delhi	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	2.33	-	FY 2007-08	Commissioner, Delhi	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	475.48	-	FY 2015-16	Assistant Commissioner, Delhi	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	1.50	-	FY 2015-16	Assistant Commissioner, Delhi	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	17.24	-	FY 2005-06	Tribunal level in Odisha	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	1.99	-	FY 2013-15	Tribunal level in Odisha	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	0.32	-	FY 2015-16	CIT, Odisha	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	1.34	-	FY 1995-96	Revision board, Tripura	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	4.00	-	FY 2016-17	Commissioner, Tripura	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	4.15	-	FY 2016-17	CIT, Odisha	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	0.07	-	FY 1994-95	Revision board, Tripura	-

Name of the statute	Nature of dues	Amount Rs. in lakhs	Amount paid under Protest Rs. in lakhs	Period to which the amount relates	Forum where dispute is pending	Remarks, if any
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	14.36	-	FY 2013-14	Appeal with Joint Commissioner, Uttarakhand	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	4.25	-	FY 2013-14	High Court, Kerala	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	3.22	-	FY 2017-18	Appeal, Haryana	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT	9.73	-	FY 2012-13	Assistant Commissioner, Ahmedabad	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT/ET	1.75	-	FY 2005-06	Assistant Commissioner, Madhya Pradesh	-
Central Sales Tax, 1956 & Value Added Tax Act	Sales Tax and VAT/CST	1.88	0.27	FY 2005-06	Assistant Commissioner, Madhya Pradesh	-
The Uttar Pradesh Goods and Services Tax Act, 2017	GST	76.76	-	FY 2017-18	Assistant Commissioner, Madhya Pradesh	-
West Bengal Premises Tenancy Act, 1956	Lease Rental	900.00	-	FY 1984	High CourtKolkata	-
Public Premises (Eviction of Unauthorised Occupants) Act, 1971	Lease Rental	32.00	-	FY 1990	Before Estate Officer, Kolkata	-
Public Premises (Eviction of Unauthorised Occupants) Act, 1971	Lease Rental	1.17	-	FY 1994	Before Estate Officer, Kolkata	-
Industrial Disputes Act, 1947	Reinstatement in Back Wages	15.00	-	FY 1999	High Court Kolkata	-
Contract Act, 1872/ Sale of Goods Act,1930	Money Recovery	3.67	-	FY 2009	City Civil Court Kolkata	-
Contract Act, 1872/ Sale of Goods Act,1930	Money Recovery	6.90	-	FY 2001	City Civil Court Kolkata	-

Name of the statute	Nature of dues	Amount Rs. in lakhs	Amount paid under Protest Rs. in lakhs	Period to which the amount relates	Forum where dispute is pending	Remarks, if any
Workmen Compensation Act, 1923	Compensation	3.89	-	FY 2006	City Civil Court Kolkata	-
Public Premises (Eviction of Unauthorised Occupants) Act, 1971	Lease Rental	575.93	-	FY 2009	SUPREME COURT - OF INDIA
Industrial Disputes Act, 1947	Wages/ Salary Increment	1.00	-	FY 1998	Industrial Court, Mumbai,	-
Industrial Disputes Act, 1947	Wages	1.21	-	FY 2016	Ahmedabad	-
Telangana Buildings (Lease, Rent and Eviction) Control Act, 1960	Lease Rental	4.00	-	FY 1998	City Civil Court, Sikanderabad	-
Industrial Disputes Act, 1947	Wages	7.38	-	FY 2006	High Court & Labour Court, Hubli	-
Capital of Punjab (Development & Regulation) Act, 1952	Lease Rental	16.44	-	FY 2016	Estate officer, Chandigarh	-
Foreign Trade (Development & Regulation) Act, 1992	Delay payment of Customs Duty	85.26	-	FY 2007	Bombay - High Court	-
Payment of Wages Act, 1936	Deduction of Wages	12.88	-	FY 2020	Authority of The Payment of Wages Act, Gurgaon	-

*FY – Financial Year; AY- Assessment Year

(viii) According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been previously recorded in the books of accounts.

(ix) (a) According to the information and explanations given to us, the Company has not defaulted in repayment of its loans or borrowings or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaulter by any bank or financial institution or government or any government authority.

(c) In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained.

(d) In our opinion and according to the information and explanations given to us, and on an overall examination of the financial statements of the Company, funds raised by the Company on short term basis have, prima facie, not been utilised for long term purposes.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries .

(f) According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries.

(x) (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company has been noticed or reported during the period covered by our audit.

(b) According to the information and explanations given to us including the representation made to us by the management of the Company, no report under sub-section 12 of section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014, with the Central Government for the period covered by our audit.

(c) According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. Further, the details of such related party transactions have been disclosed in the standalone financial statements, as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 of the Act.

(xiv) (a) In our opinion and according to the information and explanations given to us, the Company has an internal audit system as per the provisions of section 138 of the Act which is commensurate with the size and nature of its business.

(b) We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

(xv) According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and accordingly, reporting under clause 3(xv) of the Order with respect to compliance with the provisions of section 192 of the Act are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, reporting under clauses 3(xvi)(a),(b),and (c) of the Order are not applicable to the Company.

(d) Based on the information and explanations given to us and as represented by the management of the Company, the Group (as defined in Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC (Core Investment Company).

(xvii) The Company has incurred cash losses in the current financial year and in the immediately preceding financial years amounting to Rs. 2,551.11 lakhs and Rs. 4,668.68 lakhs respectively.

(xviii) There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3(xviii) of the Order is not applicable to the Company.

(xix) According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the plans of the Board of Directors and management and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the company as and when they fall due.

(xx) (a) According to the information and explanations given to us, the Company does not meet the criteria as specified under subsection (1) of section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and according, reporting under clause 3(xx) of the Order is not applicable to the Company.

(b) The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

	For Walker Chandiok & Co LLP
	Chartered Accountants
	Firms Registration No.: 001076N/N500013
	Ashish Gera
	Partner
Place: Gurugram	Membership No.: 508685
Date: 27 May 2023	UDIN: 23508685BGYCRF9052

Annexure II

Independent Auditors Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act)

1. In conjunction with our audit of the standalone financial statements of Shalimar Paints Limited (‘the Company) as at and for the year ended 31 March 2023, we have audited the internal financial controls with reference to standalone financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

2. The Companys Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance Note) issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Companys business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility for the Audit of the Internal Financial Controls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to financial statements, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

6. A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

7. Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such controls were operating effectively as at 31 March 2023, based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

	For Walker Chandiok & Co LLP
	Chartered Accountants
	Firms Registration No.: 001076N/N500013
	Ashish Gera
	Partner
Place: Gurugram	Membership No.: 508685
Date: 27 May 2023	UDIN: 23508685BGYCRF9052

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