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Shalimar Paints Ltd.

BSE: 509874 Sector: Consumer
NSE: SHALPAINTS ISIN Code: INE849C01026
BSE LIVE 15:40 | 15 Dec 200.95 3.90
(1.98%)
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207.00

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NSE 15:59 | 15 Dec 200.70 3.45
(1.75%)
OPEN

200.00

HIGH

204.00

LOW

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OPEN 207.00
PREVIOUS CLOSE 197.05
VOLUME 21077
52-Week high 320.30
52-Week low 129.65
P/E
Mkt Cap.(Rs cr) 381
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 207.00
CLOSE 197.05
VOLUME 21077
52-Week high 320.30
52-Week low 129.65
P/E
Mkt Cap.(Rs cr) 381
Buy Price 0.00
Buy Qty 0.00
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 2017the Statement of Profit and Loss and the Cash Flow year then ended and a summary ofsignificant 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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Amendment Rules 2016. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of that were operating effectively for ensuring the accuracy and completenessof the adequateinternalfinancial 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 ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of 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 2017 and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

(i) The Company has de-commissioned its Chennai Plant due to technical reasons witheffect from 06th April 2015; and on de-commissioning depreciation on fixed assetslocated at the said plant has not been charged to revenue. The said assets will be put touse once the plant restarts & depreciation thereon will be charged thereafter.( Note2.45 of audited accounts)

(ii) We have been informed that the insurance claims of loss for damage of building& inventories due to fire in Howrah & Nasik Plants are yet to be assessed by theInsurer & claim have been accounted for on estimated book value basis . Fixed assetsand inventories except the said damaged assets have been verified & valued by themanagement with no material discrepancy. ( Note 2.46 of audited accounts)

(iii) Some of the debtors creditors & advances are pending confirmation/reconciliation and impact of the same on financial statements if any isunascertained.( Note 2.50 of audited accounts)

(iv) The Company following the Court Order has given a portion of its land assecurity. (Note 2.48 of audited accounts) Our opinion is not modified in respect of thesematters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 (‘theOrder’) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the ‘Annexure A’ a statement on thematters specified in the 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) the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with 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 Section 133 of the Act read with Rule 7 of theCompanies(Accounts) Amendment Rules 2016;

e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 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) Amendment Rules 2017 inour opinion and to the best of our information and according to the explanations given tous:

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 2.29 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.

iv) The company had provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes(SBN) during the period from November8 2016 to December 30 2016 and such disclosures are in accordance with the books ofaccounts maintained by the company.

For Chaturvedi& Partners
Place : Gurugram Chartered Accountants
Date : 24th May.2017 (Firm Reg. No. 307068E)
Anup Kumar Dubey
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 ended31 March 2017 we report that:

(i) (a) Fire in Company’s Howrah Plant during financial financialyear 2016-2013-14&NasikPlantduringcurrent 17 has damaged its fixed assets comprising BuildingPlant & Machineries etc situated therein. The fixed assets register of Howrah Plant (showing full particulars including quantitative details and situation of fixed assets )maintained at Company’s erstwhile registered office at Howrah Re- construction offixed assets register giving quantitative details and situation of fixed assets is alreadybeing done.

Except as reported above the Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) Except damaged fixed assets as stated aboveother fixed assets of the Company havebeen verifiedperiodically 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 (i)(a) above we are unable to comment on para 3(1) (b) of the‘Order’ - whether any material discrepancies on physical verification existed ascompared to fixed assets 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 burnt/damaged due to fire in Howrah & Nasik Plants)have been physically verified by the management at regular intervals during the year.There were no material discrepancies noticed on physical verification of inventory ascompared to the book records.

(iii) The Company is to receive `672.83 lacs from its subsidiary Shalimar AdhunikNirman Limited( SANL) which is shown as ‘Long Term Loans & Advances’ in Note2.13 of the Financial Statement. The said advances (unsecured & interest bearing)include consideration money for transfer of assets by the Company to SANL. The terms andconditions of said advances are not prejudicial to the Company’s interest.

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 to the 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 Act2013 in respect of certain manufacturing activities of theCompany. We have broadly reviewed the accounts and records of the Company in thisconnection and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of thesame.

(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’State Insurance income tax sales tax service tax duty of customs duty of excise value added tax cess and other material statutory dues as applicable have beengenerally/regularly deposited during the year by the Company to the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of aforesaid statutory dues were in arrears on 31 March 2017for 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 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 aggregating `1227.56 lacs (Note- 2.29).

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 391.86
02. Sales Tax Act Sales Tax Various Assessing Appellate Tribunal & Revision Board Authorities 772.97
03 Income Tax Act 1961 Income Tax Various Assessing Appellate Tribunal Authorities 62.73
TOTAL 1227.56

(viii) As per the information and explanations given to us the Company has notmaterially defaulted in repayment of loans or borrowings to a financial institution bankgovernment or dues to debenture holders and all the borrowings by the Company are held tobe standard assets by the lenders.

(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 viewofthefinancialstatements 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 Para3( 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.

(xiv) The company has not made any preferential allotment / private placement of sharesor fully or partly convertible debentures during the year under review; hence Para3( xiv)of the Order is not applicable.

(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him; hence Para3( xv) of the Order is not applicable.

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934; hence Para3( xvi) of the Order is not applicable.

For Chaturvedi& Partners
Chartered Accountants
Place : Gurugram (Firm Reg. No. 307068E)
Date : 24th May.2017 Anup Kumar Dubey
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 2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on internal control over financial reporting criteria establishedby the Company considering the essential components internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India (‘ICAI’). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company’s policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrolsoverfinancialreporting 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 anddeemed to 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 that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls effectively in all material respects.

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 reporting included obtainingan understanding of internal financial controls over financial reporting assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors’ judgment including the assessment of the risks of materialmisstatement 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable regarding the reliability of financialreporting 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 overfinancialreporting including the possibility of collusion or improper management overrideof controls 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 2017 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 : Gurugram Anup Kumar Dubey
Date : 24th May.2017 Partner
Mem. No. 054975