Dear Members,

Your Directors have pleasure in presenting the 122nd Annual Report on the business and operations of your Company along with the Audited Standalone and Consolidated Financial Statements and the Auditors' Report thereon for the financial year ended March 31, 2024.

Financial Results

The highlights of your Company's performance (standalone and consolidated) is summarized below:

(Rs. in Crore)

Results of our operations and state of affairs for financial year 2023-24

During the financial year 2023-24, your Company's revenue from operations stood at Rs. 534.91 crore as against Rs. 483.81 crore in the previous year, recording a growth of about 10.6% over last year. On standalone basis, the Company has registered negative EBITDA of Rs. 45.97 crore during the financial year 2023-24 as compared to negative EBITDA of Rs. 7.51 crore during previous financial year. During the year under review, your Company has suffered a loss of Rs. 73.75 crore as against loss of Rs. 36.10 crore in the previous year, on standalone basis.

Decorative Paints Segment - Decorative Paints primarily caters to architectural needs of the industry catering to residential, commercial, and institutional constructions, combining both repainting and renovation projects. It accounts for about 70% of Paints Industry. Your Company manufactures and markets wide range of decorative paints for interior and exterior surfaces - concrete, plasters, metals etc. During the financial year 2023-24, your Company launched an innovative product Hero Interior emulsion with 5 years warranty which is a multi-featured product at a differentiated price point. To add to it, Shalimar Paints has expanded the wood-coating portfolio under the brand umbrella of CareWood by launching Melamine.

During the year under review, Shalimar Paints decorative segment focused on fundamentals of the business like increasing its channel base by 40%. We have also installed 220+ tinting machines from where your Company has garnered decent amount of incremental sale. We reached out and partnered with influencers and have successfully enrolled 50K+ new painters. Our emulsion mix increased to 33% of the total decorative sales which is a promising indication of better acceptance of our brand in the market.

Industrial Paints Segment - From a pure play supplier of Industrial paints and coatings, your Company today has been instrumental in changing the landscape to offer a more meaningful and structured solution to the coating needs in the Industrial Space.

Apart from the steady growth over the last couple of years, the Industrial team now presents an even better understanding of corrosion issues plaguing the system. With a strong customer focus, Shalimar Paints' Industrial Division has demonstrated consistent growth and expansion by growing more than 20% in FY 2023-24.

The growth in the Pipeline segment paved the path for this superlative performance showcasing the talent of the entire organization with a complete product line for coatings / linings for the Potable water industry catering to LSAW Pipes and Ductile Iron pipes.

The industrial team also increased its presence in the Minerals, Metals and Mining sector by picking up a lot of prestigious contracts like MSPL, Sarda Metals and Alloys Ltd., Shyam Metalics and Energy Ltd., NMDC, Rungta Mines and Minerals thus showcasing its dedication to quality, innovation and customer-centric approach. The division's ability to adapt to changing industrial trends, technological advancements, and regulatory requirements has played a pivotal role in its success.

With the two back-to-back strong performances outpacing the industry norms, your Company in Industrial paints category moved up by a few notches to reach Number 4.

Our high-performance linings have been protecting millions of kilometres of potable water pipelines by providing Food Grade Coatings which are both NSF & WRAS certified for projects in India and abroad. Notably, we have been the single supplier for the prestigious NEOM Project in Saudi Arabia, Projects in Morocco and domestic projects across various State Public Health Engineering Departments.

Through hard work and innovation, we are set to launch our API 5L2 and ISO 15471 certified Gas Flow Epoxy. Among our innovative new and maintenance project products is EPIGARD NGF 83, which can be applied on wet and sweat pipelines and offers 8,000 hours of salt spray resistance. Additionally, products like Solvent-Free Epoxy and Polyurethane have helped our organization meet market demands.

Today, Shalimar Paints is embarking on a new chapter of excellence, redefining our role not just as providers of paints and coatings, but as partners in asset preservation. Your Company is now collaborating closely with asset owners to extend the lifespan of their assets by offering tailored product recommendations and specialized application training by our NACE-certified coating experts. Our commitment to sustainability drives us to work hand-in-hand with industry and academia, developing innovative and environmentally conscious solutions to address potential corrosion challenges.

Additionally, our dedicated NACE Certified technical service teams are stationed at customer locations to monitor and enhance productivity, providing feedback to support R&D, and assisting in designing products for easier application on customer lines. This unique service is highly appreciated by our clients and aids in customer relationship and customer retention.

The detailed information on the business operations of the Company and other relevant information is given in the Management Discussion and Analysis Report forming part of the Annual Report.

Nature of Business

We are engaged in the business of manufacturing and selling of paints and coatings. There are 3 operating plants, one each in north, south and west. The manufactured products are sold directly to consumers as well as through distribution channels.

During the year under review, there has been no change in the nature of Company's business.

Certifications

Your Company's Plants at Nashik, Sikandrabad and Chennai are certified for integrated management systems comprising of Quality Management System (ISO 9001:2015), Environment Management System (ISO 14001:2015) and Occupational Health & Safety Management System (ISO 45001:2018).

Your Company's R&D Laboratory is NABL (National Accreditation Board for Testing and Calibration Laboratories) accredited as per laboratory management system ISO/IEC 17025:2017.

Credit Ratings

The credit rating(s) for the long term / short term bank facilities of the Company as on date of this report is as under:

The Company has been accorded credit rating of ‘CARE BBB- (RWD)' for long term bank facilities and ‘CARE A3 (RWD)' for short term bank facilities by CARE Ratings Limited. Further, the Company has been accorded credit rating of ‘ACUITE BB : Downgraded : Issuer not co-operating' for long term bank facilities and ‘ACUITE A4+ : Reaffirmed : Issuer not co-operating' for short term bank facilities by Acuite Ratings and Research Limited ("Acuite").

The Company is in the process of withdrawal of ratings from Acuite. While downgrading the credit ratings arbitrarily, Acuite has not worked with the Company's management to understand its business perspective and plans to improve operational performance. Accordingly, the Company has refused to accept any report which has been made unilaterally by Acuite without any discussion, deliberation and concurrence of Company's management.

Dividend and Transfer to Reserves

In view of losses during the year under review, the Board of Directors has not recommended any dividend on the Equity Shares of the Company. Accordingly, there has been no transfer to general reserves.

As per the requirements of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company has adopted a Dividend Distribution Policy which may be accessed on the Company's website at the link: https://www.shalimarpaints.com/uploads/Dividend Distribution Policy.pdf

Share Capital

During the year under review, the paid up equity share capital of your Company, has increased from Rs. 14.44 crore divided into 7,22,16,926 equity shares of face value Rs. 2/- each to Rs. 16.74 crore divided into 8,37,11,178 equity shares of face value of Rs. 2/- each on account of allotment of 1,14,94,252 equity shares of the Company (pursuant to conversion of Warrants) of face value of Rs. 2/ - each at an issue price of Rs. 130.50 per share aggregating to Rs. 149.99 crore.

Out of 1,14,94,252 equity shares, 30,65,134 equity shares were allotted to Virtuous Tradecorp Private Limited, a promoter group company; 26,81,992 equity shares were allotted to JSL Limited, a promoter group company; and 57,47,126 equity shares were allotted to Hella Infra Market Private Limited.

During the year under review, the Company has not issued any equity shares with differential rights / sweat equity shares under Rule 4 and Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014.

Significant Events during the year under review / current year

The Company has from time to time during the year under review and current year informed its stakeholders about the key developments that took place by disseminating necessary information to the stock exchanges and through various other means of communication, inter-alia, including as under:

• Redemption of Optionally Convertible Debentures ("OCDs"):

During the financial year 2021-22, the Company had raised funds by way of allotment of 30,55,556, 9% optionally convertible debentures ("OCDs") having face value of Rs. 180/- each, for cash at a price of Rs. 180/- per OCD, aggregating to Rs. 55 crore to Hella Infra Market Private Limited ("HIMPL"). Upon receipt of redemption notice from HIMPL, the OCDs holder, the Company on August 22, 2023, made the full payment along with accrued interest thereon, towards redemption of the entire 30,55,556, 9% OCDs held by HIMPL.

• Issue of Equity Shares pursuant to conversion of Warrants:

During the financial year 2022-23, on April 13, 2022, the Company had allotted by way of preferential allotment on a private placement basis 1,14,94,252 Warrants, each carrying a right to subscribe to 1 fully paid up equity share of the Company having a face value of Rs. 2/- each at a price of Rs. 130.50 each, upon receipt of subscription money @ 25% of the issue price out of which 30,65,134 Warrants were allotted to Virtuous Tradecorp Private Limited, a promoter group company; 26,81,992 Warrants were allotted to JSL Limited, a promoter group company; and 57,47,126 Warrants were allotted to Hella Infra Market Private Limited (collectively "the Warrant Holders/Allottees") with a right exercisable by the Warrant Holders to subscribe for One (1) Equity Share per warrant within 18 months.

As per the terms of issue of Warrants, consequent to exercising the option of conversion of respective Warrants into equity shares, in entirety by the Warrant Holders and upon receipt of balance 75% of the subscription money on said Warrants, the Company, on October 11, 2023, allotted 1,14,94,252 equity shares of face value of Rs. 2/- each at an issue price of Rs. 130.50 each to the Warrant Holders as per their entitlement on account of conversion.

The Company had utilised Rs. 134.48 crore till June 30, 2024 out of the funds so raised through issue of aforesaid equity shares pursuant to conversion of Warrants to strengthen Company's balance sheet, have access to long term resources to meet its growth requirements and for general corporate purposes.

• Open Offer by Hella Infra Market Private Limited:

Hella Infra Market Private Limited ("HIMPL") had issued a notice dated September 27, 2023 to the Company for exercising its right to subscribe to 57,47,126 Equity Shares in lieu of 57,47,126 Warrants of the Company held by it. Further, HIMPL proposed to place purchase order(s), in one or more tranches, with its stock broker on or after September 28, 2023 to purchase upto 1,00,00,000 Equity Shares of the Company ("SE Shares"). Pursuant to the aforementioned transactions, HIMPL would be acquiring a substantial stake (i.e. shares/ voting rights in excess of 25% of the expanded voting share capital) and also desired to exercise joint control over the Company alongwith the existing promoters of the Company.

Accordingly, in view of the aforementioned transactions, HIMPL made an open offer to acquire upto 2,17,64,907 fully paid up equity shares of the Company having face value of Rs. 2/- each ("Equity Shares"), representing 26% of the expanded voting share capital of the Company at a price of Rs. 200/- per Equity Share from the eligible shareholders of the Company in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

HIMPL acquired (i) an aggregate of 78,03,400 equity shares from open market in a series of acquisitions undertaken between October 03, 2023 to January 04, 2024 pursuant to SE Share Purchase; (ii) 57,47,126 equity shares on October 11,2023 pursuant to conversion of warrants into equity shares; and (iii) 1,26,46,650 equity shares on March 11, 2024 pursuant to the open offer in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Pursuant to the above acquisitions and completion of open offer:

a) HIMPL has become the largest shareholder and holding company of the Company holding 52.85% of the total paid up equity share capital of the Company;

b) HIMPL has also become one of the promoters of the Company w.e.f. March 11, 2024; and

c) the minimum public shareholding requirement as per Rule 19(2)(b) of Securities Contracts (Regulation) Rules, 1957 ("SCRR") read with Rule 19A of the SCRR and Regulation 38 of the SEBI Listing Regulations fell below 25% of the total paid up equity share capital of the Company.

As per SCRR, a maximum period of 12 months is available to bring the public shareholding to 25% from the date of such fall in accordance with the manner specified by the SEBI and the same will be ensured.

Employees Stock Option Scheme

During the year under review, no shares have been offered by the Company pursuant to Employee Stock Option Scheme, 2013 i.e. "ESOP 2013" of the Company.

Further, with a view to motivate the employees seeking their contribution to the corporate growth, to create a sense of ownership and participation amongst them, to attract new talents, to retain them for ensuring sustained growth and to encourage them in aligning individual goals with that of the Company's objectives, your Company had implemented an Employees Stock Option Scheme namely "Shalimar Paints Limited Employees Stock Option Scheme - 2022" ("SPL ESOP 2022") for which approval of shareholders of the Company was received on September 29, 2022.

The Nomination and Remuneration Committee ("NRC") of the Board of Directors of the Company, inter-alia, administers and monitors the Employees' Stock Option Schemes of the Company in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI (SBEB & SE) Regulations").

Under SPL ESOP 2022, out of total 21,66,500 (Twenty One Lacs Sixty Six Thousand Five Hundred) Options available for grant to the eligible employees of the Company, during the year under review, the NRC of the Company had granted 19,66,566 (Nineteen Lacs Sixty Six Thousand Five Hundred Sixty Six) Stock Options to the eligible employees of the Company. All Options upon vesting shall be exercisable during the Exercise period of Four (4) years.

As on March 31, 2024, no options were vested under SPL ESOP 2022. Subsequent to the year under review, 2,61,864 options have been vested under SPL ESOP 2022. However, no allotment of shares was made under the SPL ESOP 2022 as on the date of the Report.

SPL ESOP 2022 is in compliance with the SEBI (SBEB & SE) Regulations and related resolution passed by the members of the Company on September 29, 2022. During the year under review, no changes have been made in the ESOP Schemes of the Company.

Certificate from the Secretarial Auditors of the Company confirming that Schemes have been implemented in accordance with the SEBI (SBEB & SE) Regulations and resolution passed by the members of the Company will be made available for inspection by the members at the Annual General Meeting ("AGM") of the Company.

A report as required under the SEBI (SBEB & SE) Regulations and as per the provisions of section 62(1)(b) of the Companies Act, 2013 ("the Act") read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and other applicable Regulations is annexed as Annexure - I to this Report.

Transfer to Investor Education and Protection Fund

During the year under review, no amount was required to be transferred by the Company to the Investor Education and Protection Fund.

Significant and material orders impacting the going concern status and Company's operations in future

During the year under review, no significant and material orders were passed by any regulator or court or tribunal which may impact the going concern status and your Company's operations in future.

Further, during the year under review, there was no instance of one time settlement with any bank or financial institution.

Subsidiaries

As on March 31, 2024, your Company had two subsidiaries, viz. Shalimar Adhunik Nirman Limited ("SANL") and Eastern Speciality Paints & Coatings Private Limited ("ESPCPL"). None of the Companies has become or ceased to be the Company's subsidiaries, during the year under review. The Company does not have any associate and/or joint venture company.

The Company has formulated a Policy for determining material subsidiaries which may be accessed on the Company's website at the link: https://www.shalimarpaints.com/uploads/SPL Material Subsidiaries.pdf. As on March 31,2024, the Company does not have any material subsidiary as per the provisions of Regulation 16 of the SEBI Listing Regulations.

Financial Details of Subsidiaries

A separate statement containing the salient features of financial statements of the Company's Subsidiaries in the prescribed Form AOC-1, annexed as Annexure - II, forms part of the Annual Report and hence not repeated here for the sake of brevity. This statement also provides details of performance and financial position of each of the Subsidiaries.

The separate Audited Financial Statements of the Subsidiaries shall be kept open for inspection at the Company's Corporate Office during working hours for a period of 21 days before the date of the ensuing AGM of the Company and are also available on the website of the Company at https://www.shalimarpaints.com/investors-relations/financial-statements-of-subsidiary-companies. The same will also be made available upon request of any member of the Company who is interested in obtaining the same.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its Subsidiaries, prepared in terms of Section 129 of the Act, Regulation 33 of SEBI Listing Regulations and in accordance with IND AS 110 as specified in the Companies (Indian Accounting Standards) Rules, 2015 and provisions of Schedule III to the Act, are attached herewith and the same together with Auditors' Report thereon, forms part of the Annual Report.

Indian Accounting Standards, 2015

The annexed financial statements comply in all material aspects with Indian Accounting Standards notified under Section 133 of the Act,

Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.

Directors and Key Managerial Personnel

i. Cessation of Directors: During the year under review, Mr. Alok Perti (DIN: 00475747) and Mr. Vijay Kumar Sharma (DIN: 01468701), Non-Executive Independent Directors, ceased to be directors of the Company w.e.f. June 29, 2023 and October 04, 2023, respectively.

Further, during the current year, Mr. Ashok Kumar Gupta (DIN: 01722395) has ceased to be the Managing Director of the Company w.e.f. July 02, 2024, and Mr. Abhyuday Jindal (DIN: 07290474) has ceased to be the Non-Executive Non-Independent Director of the Company w.e.f. July 15, 2024, pursuant to their resignation from the Board of Directors of the Company.

Your Directors place their sincere appreciation towards the invaluable contributions, guidance and support received from them during their tenure as Director towards the progress of the Company.

ii. Appointment of Non-Executive Independent Directors: During the year under review, the appointment of Mr. Atul Rasiklal Desai (DIN: 01918187), who was appointed as Non-Executive Independent Director by the Board of Directors, based on recommendation of Nomination and Remuneration Committee ("NRC"), w.e.f. June 28, 2023 was approved by the shareholders at the Annual General Meeting held on September 27, 2023.

Further, during the current year, the Board of Directors, based on the recommendation of NRC, has appointed Mr. Vijay Kumar Sharma (DIN: 01468701), as an additional director (in the category of Non-Executive Independent Director) for a period of three (3) years w.e.f. July 23, 2024, subject to the approval of the shareholders of the Company.

iii. Re-appointment of Non-Executive Independent Director: During the current year, the Board of Directors, based on recommendation of NRC, re-appointed Dr. Rajeev Uberoi (DIN: 01731829) as Non-Executive Independent Director for second consecutive term of three (3) years w.e.f. May 11, 2024, subject to the approval of the shareholders of the Company and the same was subsequently approved by the shareholders through Postal Ballot passed on July 04, 2024.

iv. Appointment of Non-Executive Non-Independent Directors: During the current year, the Board of Directors, based on the recommendation of NRC, appointed Mr. Aaditya Gajendra Sharda (DIN: 07024283), as an additional director (in the category of Non-Executive Non-Independent Director) w.e.f. April 11,2024, subject to the approval of the shareholders of the Company and the same was subsequently approved by the shareholders through Postal Ballot passed on July 04, 2024.

v. Appointment of Whole-time Director: During the current year, the Board of Directors, based on the recommendation of NRC, appointed Mr. Venugopal Chetlur (DIN: 08686707), as an additional director as well as Whole-time Director (designated as ‘Chief Operating Officer & Whole-time Director') of the Company under the category of Key Managerial Personnel of the Company w.e.f. July 23, 2024, to hold office for a term of three (3) consecutive years, liable to retire by rotation, subject to the approval of the shareholders of the Company.

vi. Director retiring by rotation: In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Aaditya Gajendra Sharda (DIN: 07024283), Non-Executive Non-Independent Director of the Company is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment as director.

vii. Profile of Directors seeking appointment / re-appointment: The brief resume of the Directors seeking appointment / re-appointment along with other details as stipulated under Regulation 36(3) of the SEBI Listing Regulations and Secretarial Standards issued by The Institute of Company Secretaries of India, are provided in the Notice convening the ensuing AGM of the Company.

viii. Declaration by Independent Directors: Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence provided in Section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations and there has been no change in the circumstances which may affect their status as independent director during the year under review. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct for Board Members and Senior Management. Further, all the Directors have also confirmed that they are not debarred to act as a Director by virtue of any SEBI order or any other authority.

ix. Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors appointed during the year: In the opinion of the Board, the Independent Directors possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014 (as amended).

x. Registration in Independent Directors' Data Bank: The Company has received confirmation from all the Independent Directors that they have registered themselves in the Independent Director's Data Bank of Indian Institute of Corporate Affairs at Manesar in compliance with the provisions of sub-rule (1) of rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014.

xi. Cessation and appointment of Key Managerial Personnel: During the year under review, Mr. Mohit Kumar Donter, Chief Financial Officer resigned from the services of the Company w.e.f. close of business hours of June 30, 2023. The Board of Directors on the recommendation of NRC appointed Mr. Davinder Dogra as the Chief Financial Officer of the Company w.e.f. July 01, 2023 who resigned from the services of the Company w.e.f. close of business hours of September 30, 2023. Further, the Board of Directors on the recommendation of NRC has appointed Mr. Sachin Naik as the Chief Financial Officer of the Company w.e.f. December 06, 2023.

Your Directors recommend appointment / re-appointment of the above said directors in the ensuing AGM.

Apart from the above, there is no other change in the directors and Key Managerial Personnel during the year under review and thereafter.

Board Evaluation

In compliance with the applicable provisions of the Act and SEBI Listing Regulations, the Board of Directors on recommendation of the NRC had approved and adopted the Evaluation Policy setting out the process, format, attributes and criteria for the performance evaluation of the Board, Board Committees and Individual Directors.

An annual performance evaluation of all Directors, the Committees of the Board and the Board as a whole was carried out during the year under review. For the purpose of carrying out performance evaluation, assessment questionnaires were circulated to all Directors and their feedback was obtained and recorded. The Board of Directors has expressed its satisfaction with the evaluation process.

Public Deposits

During the year under review, your Company has not invited or accepted any deposits from the public / members pursuant to the provisions of Sections 73 and 76 of the Act read with Companies (Acceptance of Deposits) Rules, 2014 and therefore, no amount of principal or interest was outstanding in respect of deposits from the Public as at the beginning and end of the financial year 2023-24.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

The particulars regarding conservation of energy, technology absorption and foreign exchange earnings & outgo, as required under Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 ("Accounts Rules") are given in Annexure - III hereto and forms part of this Report.

Auditors and Audit Reports

i) Statutory Auditors and Audit Report: Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Walker Chandiok & Co. LLP, Chartered Accountants (Regn. No. 001076N/N500013), were appointed by the members at the 120th AGM of the Company held on September 29, 2022, as Statutory Auditors of the Company, for a period of five (5) consecutive years till the conclusion of the 125th AGM of the Company.

M/s. Walker Chandiok & Co. LLP has confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.

The Auditors' Report does not contain any qualification, reservation or adverse remark on the financial statements for the year ended March 31,2024. The management response to the observations / comments contained in the Auditors' Report and Annexure thereto has been suitably given in the respective Notes to the Financial Statements referred to therein.

Further, the Key Audit Matter as contained in the Auditors' Report on the Standalone Financial Statements is also mentioned as Key Audit Matter in the Auditors' Report on the Consolidated Financial Statements in similar manner. The management response thereto has been suitably given in the respective Notes to the Financial Statements referred to therein.

The Notes to financial statements and other observations, if any, in the Auditors' Report are self-explanatory and therefore, do not call for any further comments.

During the financial year 2023-24, the Statutory Auditors have not reported any incident related to fraud to the Audit Committee or the Board under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

ii) Secretarial Auditors and Secretarial Audit Report: Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Managerial Personnel Rules, the Board of Directors had appointed M/s. MAKS & Co., Practicing Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report issued by them is annexed as Annexure - IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. During the financial year 2023-24, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

In addition to the above and in compliance with SEBI Circular No. CIR/CFD/CMD/1/27/2019 dated February 08, 2019, a report on secretarial compliance issued by M/s. MAKS & Co., Practicing Company Secretaries for the year ended March 31, 2024 has been submitted to stock exchanges. The same is available on the website of the Company at https://www.shalimarpaints.com/uploads/Annual Secretarial Compliance Report March 2024.pdf

The Board of Directors, upon the recommendation of the Audit Committee, at their meeting held on August 08, 2024 has appointed M/s. MAKS & Co., Practicing Company Secretaries, as Secretarial Auditors, for conducting Secretarial Audit of the Company for the financial year 2024-25.

iii) Cost Auditors and Audit Report: Pursuant to Section 148(1) of the Act, for the financial year 2024-25, the Company is required to maintain cost records as specified by the Central Government. In accordance with the provisions of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to get its cost accounting records audited by a Cost Auditor. The Board of Directors, upon the recommendation of the Audit Committee, has appointed M/s. Sanjay Gupta & Associates, Cost Accountants, for this purpose for the financial year 2024-25.

The remuneration payable to the Cost Auditors for the financial year 2024-25, as recommended by the Audit Committee and approved by the Board, shall be placed for ratification by members at the ensuing AGM in terms of Section 148 of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

Risk Management

Risk management is integral to your Company's strategy and for the achievement of our long-term goals. Our success as an organization depends on our ability to identify and leverage the opportunities while managing the risks. Your Company has developed and implemented comprehensive risk assessment and mitigation procedures as laid down in the Company's Risk Management Policy duly approved by the Board. The Risk Management Policy of the Company is available on the Company's website at the link: https://www.shalimarpaints.com/uploads/Risk-Management-Policy.pdf

Pursuant to Regulation 21 of SEBI Listing Regulations, the Board of Directors had constituted a Risk Management Committee. The purpose of Risk Management Committee is to assist the Board in fulfilling its responsibilities with regard to the identification, evaluation and mitigation of operational, strategic and environmental risks. It involves identifying potential events that may affect the Company, reviewing all risks, finalizing the risk document and formulating strategy to manage these events while ensuring that the risk exposure remains at the defined appropriate levels. The details of the composition and terms of reference of the Risk Management Committee are given in the Corporate Governance Report, forming integral part of Annual Report.

There are no risks identified by the Board which may threaten the existence of the Company. The detailed Risk Review is provided in the Management Discussion and Analysis Report, forming integral part of Annual Report.

Internal Financial Controls

Your Company has in place adequate internal financial controls commensurate to the size and nature of its business. The Company has policies and procedures in place for ensuring orderly and efficient conduct of its business and operations including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. The internal financial controls operate effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and / or improved controls whenever the effect of such gaps have a material effect on the Company's operations.

Board Meetings

The Board of Directors met six (6) times during the financial year 2023-24. The intervening gap between two Board Meetings was within the maximum period prescribed under the Act. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report forming part of the Annual Report.

Audit Committee

The Composition of the Audit Committee along with the details of meetings held during the financial year 2023-24 and attendance of Committee members at the said meetings, have been provided in the Corporate Governance Report, forming part of the Annual Report. All the recommendations made by the Audit Committee during the financial year 2023-24 were accepted by the Board.

General Meeting / Postal Ballot

During the financial year ended March 31, 2024, apart from AGM of the Company held on September 27, 2023, the Company had sought approval of the shareholders through the following Postal Ballot:

a. Postal Ballot notice dated April 07, 2023, for seeking approval of the shareholders for (i) Appointment of Ms. Shan Jain (DIN: 09661574) as Non-Executive Independent Director of the Company. The aforesaid matter was duly approved by the shareholders of the Company on May 10, 2023 and the result of postal ballot was declared on May 11, 2023.

During the current year, the Company had sought approval of the shareholders through the following Postal Ballot:

a. Postal Ballot notice dated May 17, 2024, for seeking approval of the shareholders for (i) Appointment of Mr. Aaditya Gajendra Sharda (DIN: 07024283) as a Director of the Company; and (ii) Re-appointment of Dr. Rajeev Uberoi (DIN: 01731829) as an Independent Director of the Company for a second term of three (3) consecutive years. The aforesaid matters were duly approved by the shareholders of the Company on July 04, 2024 and the result of postal ballot was declared on July 05, 2024.

Nomination and Remuneration Policy

Pursuant to the provisions of Section 178(3) of the Act, Regulation 19(4) of SEBI Listing Regulations and as per the recommendations of NRC, the Board has adopted a policy for appointment and remuneration of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees of the Company. The compensation and packages of the aforesaid persons are designed in terms of remuneration policy framed by the NRC. The remuneration policy of your Company may be accessed on the Company's website at the link: https://www.shalimarpaints.com/uploads/Nomination and Remuneration Policy.pdf.

Weblink of Annual Return

As required pursuant to Section 134 and 92(3) of the Act, the Annual Return of the Company for the financial year ended on March 31, 2024 is available on the Company's website and can be viewed at: https://www.shalimarpaints.com/investors-relations/annual-return.

Related Party Transactions

All contracts / arrangements / transactions entered by the Company with Related Parties during the year under review were in ordinary course of Business and at arm's length basis. As per the provisions of Section 177 of the Act and Rules made thereunder read with Regulation 23 of the SEBI Listing Regulations, your Company had obtained approval of the Audit Committee under omnibus approval route and / or under specific agenda items for entering into such transactions.

The Company has not entered into any material related party transactions during the year under review. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in the prescribed Form AOC-2 is not applicable.

Your Directors draw attention of the members to notes to the financial statements which inter-alia set out related party disclosures. As per the provisions of the Section 188 of the Act and Regulation 23 of SEBI Listing Regulations, your Company has formulated a policy on Related Party Transactions which is available on Company's website at the link https://www.shalimarpaints.com/uploads/Related- Party-Policy.pdf. The policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and the Related Parties.

Particulars of Employees and Related disclosures

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Managerial Personnel Rules") are provided in the prescribed format and annexed herewith as Annexure - V to this Report.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) & (3) of the Managerial Personnel Rules, is provided in a separate annexure forming part of this Report. Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Corporate Office of the Company during working hours till the date of AGM and any member interested in obtaining such information may write to the Secretarial Department of the Company and the same will be furnished on request.

Particulars of Loans, Guarantees or Investments

The Company has made investments or extended loans to its wholly owned subsidiaries for their business purposes. The particulars of loans and guarantees given, security provided and investments made, if any, covered under the provisions of Section 186 of the Act have been disclosed in the notes to the Financial Statements forming part of the Annual Report.

Material changes and commitments, if any, affecting the financial position of the Company

As required under Section 134(3) of the Act, the Board of Directors inform the members that during the year under review, there have been no material changes, except as disclosed elsewhere in the Annual Report:

• in the nature of Company's business;

• in the Company's subsidiaries or in the nature of business carried out by them; and

• in the classes of business in which the Company has an interest.

Further, except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments which can affect the financial position of the Company between the end of the financial year and the date of this Report.

Secretarial Standards

The Directors state that applicable Secretarial Standards, i.e., SS-1 and SS-2, issued by The Institute of Company Secretaries of India relating to ‘Meetings of the Board of Directors' and ‘General Meetings', respectively have been duly followed by the Company, during the year under review.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Act with respect to directors' responsibility statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the loss of the Company for the year ended March 31, 2024;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis;

e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Listing on Stock Exchanges

The Equity Shares of the Company continue to be listed on BSE Limited and National Stock Exchange of India Limited. The requisite annual listing fees for the financial year 2024-25 have been paid to these Exchanges. The addresses of these Stock Exchanges and other information for shareholders are given in the Corporate Governance Report as contained in the Annual Report.

Report on Corporate Governance

Your Company strive to maintain the high standards of transparency and Corporate Governance. The report on Corporate Governance for the year under review, as stipulated under Regulation 34 read with Schedule V of SEBI Listing Regulations is presented in a separate section and forms an integral part of the Annual Report. The certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached thereto and forms part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the financial year 2023-24, as required pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations, is presented in a separate section and forms an integral part of the Annual Report. 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, industrial and home improvement business, international operations, internal controls and their adequacy, risk management systems and other material developments during the financial year 2023-24.

Business Responsibility and Sustainability Report

SEBI vide its notification dated May 05, 2021, had made it mandatory to publish a Business Responsibility and Sustainability Report ("BRSR") by the top 1000 listed companies based on market capitalization replacing Business Responsibility Report in their Annual Report in terms of Regulation 34(2)(f) of the SEBI Listing Regulations with the Stock Exchanges w.e.f. FY 2022-23. The BRSR requires disclosure on the Company's performance against the nine principles of the National Guidelines on Responsible Business Conduct.

The BRSR for the financial year 2023-24, as required pursuant to Regulation 34 of SEBI Listing Regulations, describing the initiatives taken by the Company from an environmental, social and governance perspective, can be viewed on the Company's website at: https:/ /www.shalimarpaints.com/investors-relations/annual-reports and forms an integral part of the Annual Report.

The policies referred in the above said report can be viewed on the Company's website at: https://www.shalimarpaints.com/investors- relations/corporate-governance.

Corporate Social Responsibility

Shalimar has been an early adopter of Corporate Social Responsibility ("CSR") initiatives. Your Company's overarching aspiration to create significant and sustainable societal value is manifest in its CSR initiatives. CSR is traditionally driven by a moral obligation and philanthropic spirit. Through CSR there is a formation of a dynamic relationship between Company on one hand and the society and environment on the other. However, as there were no profits in terms of the provisions of Section 198 of the Act during last three financial years, the Company was not required under Section 135 of the Act, to incur expenditure on CSR during the financial year 2023-24.

The CSR Committee has formulated and recommended to the Board, a CSR Policy indicating the focus areas of Company's CSR activities. The CSR Policy of the Company is available on the Company's website at the link: https:// www.shalimarpaints.com/uploads/Corporate Social Responsibility Policy.pdf

The details of the composition and terms of reference of the CSR Committee are given in the Corporate Governance Report, forming part of the Annual Report. The Annual Report on CSR Activities (including the details of the development and implementation of the CSR Policy) as prescribed under Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - VI to this Report.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, Regulation 22 of SEBI Listing Regulations and Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, your Company has a Vigil Mechanism / Whistle Blower Policy for directors, employees and business associates to report genuine concerns regarding any unethical behavior or wrongful conduct and to enable employees to report instances of leak of unpublished price sensitive information. This Policy is available on the website of the Company and can be accessed at https:/ /www.shalimarpaints.com/uploads/Whistle Blower Policy.pdf

The Policy provides for adequate safeguards against victimization of whistle blower who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases.

Your Company hereby affirms that no director / employee has been denied access to the Chairman of the Audit Committee and that no complaint has been received during the year under review.

Policy on Prevention of Sexual Harassment at Workplace

To foster a positive workplace environment free from harassment of any nature, your Company has in place a Policy on prevention of sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"). The Policy aims at prevention of harassment of women employees and guarantees non-retaliation to complainants. Your Company has complied with the provisions relating to constitution of Internal Committee under the POSH Act for dealing with the complaint, if any, relating to sexual harassment of women at workplace.

Further, in terms of the provisions of the SEBI Listing Regulations, the details in relation to the POSH Act, for the financial year ended on March 31, 2024 are as under:

a) Number of complaints pertaining to sexual harassment filed during the financial year: NIL

b) Number of complaints pertaining to sexual harassment disposed off during the financial year: NIL

c) Number of complaints pertaining to sexual harassment pending as at the end of the financial year: NIL

Insolvency and Bankruptcy Code, 2016

During the year under review, no application has been admitted against the Company under Insolvency and Bankruptcy Code, 2016.

Green Initiatives

Electronic copies of the Annual Report 2023-24 and the notice of the 122nd AGM are being sent to all members whose email addresses are registered with the Company / Depository Participant(s). The Members holding shares in physical form who have not registered their email addresses with the Company and who wish to receive the Annual Report for the year 2023-24 can now register their e-mail addresses with the Company. For this purpose, they can send scanned copy of signed request letter mentioning folio number, complete address and the email address to be registered along with self-attested copy of the PAN Card and any document supporting the registered address of the Member, by email to the Company at askus@shalimarpaints.com.

Acknowledgements

Your Directors wish to express their grateful appreciation for the valuable support and co-operation received from the shareholders, investors, financial institutions, banks / other lenders, customers, vendors and other business associates during the year. Your Directors also place on record their appreciation for the contribution made by our employees at all levels. Our continuous operation has been made possible due to their hard work, solidarity, cooperation and support. Your Directors would also like to express their gratitude to the Government of India and government agencies for their support and look forward to their continued support in the future.