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Shalimar Paints Ltd.

BSE: 509874 Sector: Consumer
NSE: SHALPAINTS ISIN Code: INE849C01026
BSE LIVE 19:40 | 19 Oct 206.60 -3.55
(-1.69%)
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NSE 19:31 | 19 Oct 208.25 -1.75
(-0.83%)
OPEN

206.00

HIGH

215.00

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OPEN 207.00
PREVIOUS CLOSE 210.15
VOLUME 2859
52-Week high 320.30
52-Week low 118.45
P/E
Mkt Cap.(Rs cr) 392
Buy Price 206.60
Buy Qty 60.00
Sell Price 0.00
Sell Qty 0.00
OPEN 207.00
CLOSE 210.15
VOLUME 2859
52-Week high 320.30
52-Week low 118.45
P/E
Mkt Cap.(Rs cr) 392
Buy Price 206.60
Buy Qty 60.00
Sell Price 0.00
Sell Qty 0.00

Shalimar Paints Ltd. (SHALPAINTS) - Auditors Report

Company auditors report

To the Members of Shalimar Paints Limited Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Shalimar PaintsLimited (‘the Company') which comprise the Balance Sheet as at 31 March 2016 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (‘the Act') with respect to the preparation andpresentation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

(i) The Company has resolved to de-commission its Chennai Plant due to technicalreasons with effect from 06th April 2015 and depreciation afterde-commissioning has not been charged to revenue. The said assets will be put to use oncethe plant restarts & depreciation thereon will be charged thereafter.(Note 2.43 ofaudited accounts)

(ii) The Company on the basis of external expert opinion has not provided for incometax for the reasons stated in Note 2.44 of audited accounts.

(iii) The insurance claim of loss for damage of building & inventories due to firein Howrah Plant is yet to be assessed by the Insurer . Fixed assets and inventoriesexcept the said damaged assets have been verified & valued fairly during the year bythe Company as per its accounting policy with no material discrepancy. (Note 2.45 ofaudited accounts)

(iv) Some of the debtors creditors & advances are pending confirmation/reconciliation and impact of the same if any is unascertained.(Note 2.46 of auditedaccounts)

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2015 (‘the Order')issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the ‘Annexure -A' a statement on the matters specified inthe paragraph 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c) theBalance Sheet the Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e) on the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in ‘Annexure-B'

g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 2.28 to the financial statements;

ii) The Company did not have any long term contracts including derivation contracts forwhich there are any material foreseeable losses.

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Chaturvedi & Partners
Chartered Accountants
(Firm Reg. No. 307068E)
Place : New Delhi Anup Kumar Dubey
Date : 28th May 2016 Partner
Mem. No. 054975

Annexure-A' to the Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of ShalimarPaints Limited(the Company)

on the standalone financial statements for the year ended 31 March 2016 we reportthat:

(i) (a) Fire in Howrah factory of the Company during financial year 2013-14 has damagedits fixed assets comprising

Building and Plant & Machineries situated therein. The fixed assets register wasalso destroyed in fire.Re- construction of fixed assets registeris on showing fullparticulars including quantitative details and situation of fixed assets.Hence we areunable to comment on para 3(i)(a) of the ‘Order'.

(b) Except damaged fixed assets as stated aboveother fixed assets of the Company havebeen verified periodically by the management during the year in a phased manner which inour opinion is reasonable having regard to the size of the Company and nature of itsassets. Since the complete fixed assets register could not be made available to us for thereason stated in 1(a) above we are unable to comment on para 3(1) (b) of the ‘Order'- whether any material discrepancies on physical verification existed as compared to fixedassets register .

(c) According to information and explanations given to us and on the test basisexamination of records of the Company the title deeds of immovable properties are held inthe name of the company.

(ii) The inventories(except damaged due to fire in Howrah factory) havebeenphysicallyverified by the management at regularintervals during the year. There wereno material discrepancies noticed on physical verification of inventory as compared to thebook records.

(iii) The Company is to receive balance consideration money of '621.21lacs(previous year ' 499.16 lac)from its subsidiary

Shalimar AdhunikNirman Limited for transfer of its assets advances made to thesubsidiary & expenses incurred on behalf of the said subsidiary. Till the previousyear advances made /recoverable from subsidiary were non-interest bearing. The Companyhas decided to charge interest on loans &advances given during the year to itssubsidiary. (Note 2.13 to Financial Statement).

As per information & explanation given to us there is no schedule of repayment ofloan & advances comprising principal and interest thereon . As confirmed by theCompany such loans & advances are repayable on demand and there is no overdueamount .

Except loan and advances tothe aforesaid subsidiary the Company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnership or otherparties covered in the register maintained under section 189 of the Companies Act 2013.

(iv) In our opinion and according to information and explanations given to us theCompany has complied with the provisions of section 185 & 186 of the Companies Act2013 with respect to loans and advances made.

(v) The Company has not accepted any deposits from the public; and hence para 3(v) ofthe Order is not applicable.

(vi) The Central Government has prescribed maintenance of Cost Records under Section148(1) of the Companies Act in respect of certain manufacturing activities of the Company.We have broadly reviewed the accounts and records of the Company in this connection andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. We have not however made a detailed examination of the same.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund Employees' StateInsuranceincome tax sales tax service tax duty of customs duty of excise valueadded tax cess and other material statutory dues as applicable have been regularlydeposited during the year by the Company to the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of aforesaid statutory dues were in arrears on 31 March 2016 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of income tax or sales tax or wealth tax or service tax or duty of customs or duty ofexcise or value added tax which have not been deposited with the appropriate authoritieson account of any dispute except the following disputed statutory dues aggregatingRs1033.0olacs (Note- 2.28).

Sl No. Name of the statute Nature of Dues Forum where dispute is pending Amount (Rs.in lacs)
01. Central Excise Act 1944 Excise Duty Various Assessing Appellate & Tribunal Authorities 302.59
02. Sales Tax Act Sales Tax Various Assessing Appellate Tribunal & Revision Board Authorities 676.73
03 Income Tax Act 1961 Income Tax Various Assessing Appellate Tribunal Authorities 53.68
TOTAL: 1033.00

viii) As per the information and explanations given to us the Company has notdefaulted in repayment ofloans or borrowings to a financial institution bank governmentor dues to debenture holders.

ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loan ; hence Para 3 (ix) of the Orderis not applicable.

x) Based on the audit procedures performed for reporting on the true & fair view ofthe financial statements and as per the information and explanations given by themanagement we report that no fraud by the Company or fraud on the Company on or by theCompany by its officers / employees has been noticed or reported during the year underaudit.

xi) Managerial remuneration has been paid / provided by the Company in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act.

xii) The Company is not a Nidhi Company; hence Para 3 (xii) of the Order is notapplicable.

xiii) Transactions with the related parties are in compliance with Section 177 and 188of Companies Act 2013 and the details have been disclosed in the Financial Statementsetc. as required by the applicable accounting standards. The company has not made anypreferential allotment / private placement of shares or fully or partly convertibledebentures during the year under review; hence Para 3 (xiv) of the Order is notapplicable.

xiv) The company hasnot entered into any non-cash transactions with directors orpersons connected with him; hence Para 3 (xv) of the Order is not applicable.

xv) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934; hence Para 3 (xvi) of the Order is not applicable.

For Chaturvedi & Partners
Chartered Accountants
(Firm Reg. No. 307068E)
Place : New Delhi Anup Kumar Dubey
Date : 28th May 2016 Partner
Mem. No. 054975

‘Annexure- B' to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial controls over financial reporting of ShalimarPaints Limited (‘the Company') as of 31 March 2016 in conjunction with our audit ofthe standalone financial statements of the company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the ‘Guidance Note') and the Standards on Auditing both issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote which are applicable to an audit of internal financial controls require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wereestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations of theManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion the Company has in all material respects and adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Chaturvedi & Partners
Chartered Accountants
(Firm Reg. No. 307068E)
Place : New Delhi Anup Kumar Dubey
Date : 28th May 2016 Partner
Mem. No. 054975