Shalimar Paints Ltd

Dear Members,

Your Directors have pleasure in presenting the 124^th 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, 2026.

FINANCIAL RESULTS

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

(Rs. in Crore)

Particulars	Standalone		Consolidated
	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Revenue from Operations	569.03	599.06	575.63	599.81
Other Income	6.86	9.86	6.52	9.84
Total Income	575.89	608.92	582.15	609.65
Total Expenses	634.63	689.03	642.94	690.82
Profit/(Loss) before Depreciation, Finance Costs,	-18.54	-46.81	-15.87	-47.83
Exceptional Items and Tax
Profit/(Loss) before Exceptional Items and Tax	-63.34	-80.11	-60.79	-81.17
Exceptional Items	-	-	-	-
Profit/(Loss) before Tax	-63.34	-80.11	-60.79	-81.17
Profit/(Loss) after Tax	-63.34	-80.11	-60.79	-81.17
Other Comprehensive Income/(Loss)	1.11	1.64	1.11	1.64
Total Comprehensive Income/(Loss)	-62.23	-78.47	-59.68	-79.53

RESULTS OF OUR OPERATIONS AND STATE OF AFFAIRS FOR FINANCIAL YEAR 2025-26

During the Financial Year 2025-26, your Company's revenue from operations stood at Rs. 569.03 crore as against Rs. 599.06 crore in the previous year, dwindled to about 5.28% over last year. On standalone basis, the Company has registered negative EBITDA of Rs. 18.54 crore during the Financial Year 2025-26 as compared to negative EBITDA of Rs. 46.81 crore during previous Financial Year. During the year under review, your Company has suffered a loss of Rs. 63.34 crore as against loss of Rs. 80.11 crore in the previous year, on standalone basis.

Decorative Paints Segment - The Decorative Paints segment, which caters primarily to the architectural needs of the industry covering residential, commercial, and institutional construction—continues to dominate the Indian paints market, accounting for approximately 70% of the total industry. This segment spans both repainting and renovation projects. Repainting or renovation contributes to 70% of the paint demand whereas new surface painting contributes to almost 30%.

Your Company manufactures and markets a comprehensive range of decorative paints for interior and exterior applications across varied substrates such as concrete, plaster, and metal. During FY 2025-26, we extended the Hero and Zero Damp brands by introducing newer variants that deliver multiple features at differentiated price points. We also came up with luxury segment PU enamel and ancillary tools under "Magic" brand. Additionally, we consolidated on tailor-made solutions for rural markets under the Mela brand, offering undercoat and topcoat options in both water-based and solvent-based categories. New products collectively contributed nearly 10% of the total annual turnover of the decorative business.

In the year under review, our Decorative segment concentrated on strengthening business fundamentals. We consolidated the dedicated distributor model to enhance coverage in rural and remote regions which gave us a business of almost 20CR. Furthermore, over 250 tinting machines were installed, generating a notable increase in incremental sales in the emulsion segment. Market expansion in terms of new dealer opening contributed to almost 16%. To deepen market engagement, we partnered with key influencers and consistently onboarded over 12,000+ active painters each month.

Our emulsion product mix caters to 34% of total Decorative sales—an encouraging indicator of the growing acceptance and preference for our brand in the marketplace whereas the water-based category caters to almost 64% of the sale.

Industrial Paints Segment - Brutal is what can be summarised for FY 25-26 with a lot of head winds affecting business through out the various quarters.

Going into Q1, the business witnessed a growth momentum carried forward from Q4 2024-25. The abruptness of a slowdown across Iron and Steel sector in Q2 was unprecedented and unanticipated. The momentum stopped midway with major Iron and Steel industries declaring a slow down in production owing to Funds inflow stoppage from the Centre. The corruption exposed in Jal Jeevan Mission forced the government to halt further funds flow into the market till time the CAG audit was not completed. The Trend continued in to the remaining quarters with very minimal production happening and dampening the sales of paints and coating to such industry segment. The Second half of FY 25-26 faced further crisis from various state governments going into election year and funds release to small and big time contractors became a big issue for various running projects across West Bengal, Karnataka and some other states leading to lengthy credit.

Steel price increase a slowdown in the market forced Pipe Manufacturing companies to defer the orders for Bitumen paints, Solvent Free epoxies and Solvent Free Polyurethanes. Compounded by competitive prices in the market; margins have been severely eroded. Q4 volatility in Raw material prices due to Gulf War raised input costs and put additional pressure on margins. While a portion of the impact was passed onto the customers in March, the full impact of the price increases will be seen in the next further quarters. This business slowdown forced a strategic shift to move away from traditional business model into other segments of the business by focussing on core protective coatings. The team was re-organized so that the focus is now on the Zonal opportunities. With this change, FY 26-27 should see your organization on a rebound note.

The business consolidated its existing grip on existing accounts across the Steel, Minerals, Metals and Mining sector by continuously picking up contracts across various units in Jindal Steel & Power Limited, Jindal Steel Limited, Lloyds Metals & Energy, Shyam Metalics Group, MSPL (Baldota Group), NMDC, Rungta Mines and Minerals and also added new feather to its kitty with breakthrough in Arcellor Mittal Nippon Steel, Star Metal, Kalyani Ispat.

Your company also consolidated its hold in the Karnataka Irrigation and Drinking water sector with business through various contractors in Karnataka like Shankaranarayana Constructions, Sree UGCL Projects Ltd, Sri Srinivasa constructions, Suprada Constructions, Amrutha Constructions etc.

Shalimar Paints Limited foray in to the Truck body segment and Agriculture & Construction equipment segment over a year back has proudly stood the test of time with close to 10000 such assemblies painted to the happiness of customers.

Over last 2 years Shalimar paints progressed onto solutions for long term product performance with a comprehensive module including Application services and Technical support with NACE certified coating inspectors; thus ensuring a strong bond with the customer and a move from a mere supplier to a partner. This business has now grown multi-fold and will grow even more in the near future. The year 2026-27 is a force to reckon and with the changes panned, the growth story in Shalimar will continue.

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 reaffirmed its credit rating of ‘CARE BB+; Negative' for long term bank facilities and ‘CARE A4+' for short term bank facilities by CARE Ratings Limited.

DIVIDEND AND TRANSFER TO RESERVES

In view of losses during the year under review, the Board of Directors of the company has not recommended any dividend on the Equity Shares of the Company for the financial year ended March 31, 2026. 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/investors-relations/codes-and-policies

SHARE CAPITAL a. Authorised Capital

As on March 31, 2026 the authorised share capital of the Company is Rs. 20,00,00,000 (Rupees Twenty Crore Only) divided into 10,00,00,000 (Ten Crore) Equity Shares of Rs. 2/- (Rupees Two Only).

b. Issued, subscribed and Paid-up Capital

As on March 31, 2026, the issued, subscribed and paid-up equity share capital of the Company stood at Rs. 16,74,22,356 (Indian Rupees Sixteen Crores Seventy-Four Lakhs Twenty-Two Thousand Three Hundred Fifty-Six only), divided into 8,37,11,178 (Eight Crores Thirty-Seven Lakhs Eleven Thousand One Hundred Seventy-Eight) equity shares of face value of Rs. 2/- each.

During the year under review, there is no change in the paid-up capital of the Company. c. Issue of equity shares with differential rights

During the year under review, the Company has not issued any equity shares with differential rights under Rule 4 of the Companies (Share Capital and Debentures) Rules, 2014. d. Issue of sweat equity shares During the year under review, the Company has not issued any sweat equity shares under Rule 8 of the Companies (Share Capital and Debentures) Rules, 2014. e. Provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees Company has not made any provision of money for purchase of its own shares by employees or by trustees for the benefit of employees during the year under review.

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:

EMPLOYEES STOCK OPTION SCHEME

The Employee Stock Option Scheme of the Company aims to give benefit to eligible employees with a view to attract and retain the best talent, encourage employees to align individual performance with company objectives, and promote their increased participation and involvement in the growth of the Company.

The Board of Directors of the Company, inter alia administers and monitors the Employee Stock Option Schemes of the Company. During the year under review, no shares have been allotted by the Company pursuant to Employee Stock Option Scheme, 2022 i.e. ‘ESOP 2022' of the Company.

The disclosures as required under Regulation 14 of SBEB Regulations, is available on website of the Company at www.shalimarpaints.com The certificate from the Secretarial Auditors of the Company, that the ESOP 2022 has been implemented in accordance with the SBEB Regulations and the resolutions passed by the members of the Company, shall be uploaded on the website of the Company i.e. www.shalimarpaints.com and shall be available for inspection by members in electronic mode during the Annual General Meeting of the Company.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, the provision of Section 125(2) of the Act does not apply as the Company was not required to transfer any amount to the Investor Education and Protection Fund (IEPF) established by the Central Government of India. The Company has designated the Company Secretary as ‘Nodal Officer' for the purposes of IEPF related matters.

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, JOINT VENTURE AND ASSOCIATE COMPANIES

During the year under review, your Company has no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("the Act") and has not entered into any joint venture. However, your Company has following two Subsidiaries:

Name of the Subsidiaries & CIN	Date of Incorporation	Registered Office Address	Principal Business
Shalimar Adhunik Nirman Limited [U24220DL2007PLC168944]	04/10/2007	9A, Cannaught Place Above ICICI Bank, New Delhi 110001	To deal in Land and Properties
IM Inicio Projects Private Limited (Formerly known as Eastern Speciality Paints & Coatings Private Limited) [U46639HR2009PTC066208]	24/02/2009	Stainless Centre, 4th Floor, Plot No. 50, Sector 32, Gurgaon, Haryana 122001	To trade or conduct business in Paints

There has been no material change in business of subsidiary companies during the Financial Year 2025-26. 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/investors-relations/codes-and-policies Further, as on March 31, 2026, the Company does not have any material subsidiary as per the provisions of Regulation 16 of the SEBI Listing Regulations.

FINANCIAL DETAILS OF SUBSIDIARIES

Pursuant to Section 129(3) of the Act read with Rule 5(1) of the Companies (Accounts) Rules, 2014, the statement containing the salient features of the financial statement of your Company's Subsidiaries in the prescribed Form AOC-1 is annexed as Annexure - I, 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

a. Appointment of Managing Director & Chief Executive Officer (MD&CEO): During the year under review, the Board of Directors, based on the recommendation of NRC, appointed Mr. Kuldip Raina (DIN: 10956069), as an additional director as well as Managing Director & Chief Executive Officer (MD&CEO) of the Company under the category of Key Managerial Personnel of the Company w.e.f. April 10, 2025, 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 and the same was subsequently approved by the shareholders through Postal Ballot passed on May 16, 2025.

b. Re-appointment of Ms. Shan Jain (DIN: 09661574) as an Independent Director of the Company for a second term of three (3) consecutive years : During the year under review, the Board of Directors, on the recommendation of NRC, re-appointed Ms.Shan Jain, as a Non-Executive Independent Director for a second term of three (3) consecutive years w.e.f. February 13, 2026 and the aforesaid re-appointment have been approved by the shareholders of the Company through postal ballot passed on February 06, 2026.

c. Cessation of Whole-time Directors: During the year under review, Mr. Venugopal Chetlur, Chief Operating Officer & Whole-time Director of the Company has resigned from the position of Whole-time Director of the Company with effect from close of business hours on Wednesday, March 04, 2026, due to personal reasons. He continues to serve the Company in the position of Chief Operating Officer (COO) and will look after the operational management of the Company.

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

d. Re-appointment of Mr. Atul Rasiklal Desai (DIN: 01918187) as an Independent Director of the Company for a second term of three (3) consecutive years: During the current year on the recommendation of NRC, reappointed Mr. Atul Rasiklal Desai, as Non-Executive Independent Director for a second term of three (3) consecutive years w.e.f. June 28, 2026 and the aforesaid reappointment have been approved by the shareholders of the Company through postal ballot passed on June 13, 2026.

e. Appointment of Non-Executive Non-Independent Director: During the current year, the Board of Directors, on the recommendation of NRC, has appointed Mr. Abhijeet Jhawar, as an Additional Director (in the category of Non-Executive Non-Independent Director) of the Company with effect from May 12, 2026, and the aforesaid appointment have been approved by the shareholders of the Company through postal ballot passed on June 13, 2026.

f. 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. The resolution seeking members' approval for his re-appointment forms part of the Notice of 124^th Annual General Meeting. g. 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.

h. Declaration by Independent Directors: Your Company has received declarations from all the Independent Directors of the Company confirming that:

(a) they meet the criteria of independence provided in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations;

(b) there has been no change in the circumstances which may affect their status as independent director during the year under review;

(c) they have complied with the Company's Code of Conduct for Board Members and Senior Management and code of conduct for independent directors as prescribed in schedule IV to the Act;

(d) they are not debarred to act as a Director by virtue of any SEBI order or any other authority; and

(e) they are not aware of any circumstances or situation which exist or may be anticipated, that could impair or impact their ability to discharge their duties in terms of regulation 25(8) of the SEBI Listing Regulations with an objective independent judgement and without any external influence and that they are independent of the Management.

i. 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) and are independent of management.

j. 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.

k. Cessation and appointment of Key Managerial Personnel: During the current year, Mr. Sachin Naik has resigned from the position of Chief Financial Officer (Key Managerial Personnel) of the Company with effect from close of business hours on Saturday, May 30, 2026, due to better career opportunities and professional growth prospects.

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.

PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS

One of the key responsibilities and role endowed on the Board is to monitor and evaluate the performance of the Board, Committees and Directors.

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. The evaluation tested key areas of the Board's work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directors' functioning.

The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings and procedures, Board development, Board strategy and risk management, etc.

The performance of the Managing Director and Executive Directors is evaluated by all the Board Members based on factors such as leadership, strategy formulation, strategy execution, external relations, etc.

The performance of Non-Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, Knowledge and skill, personal attributes, etc.

It also involves self-assessment by all the Directors and evaluation of Committees of Board based on Knowledge, diligence and participation, leadership team and management relations, committee meetings and procedures respectively.

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 2025-26.

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 - II 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 120^th 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 125^th 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, 2026. 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.

ii) Secretarial Auditors and Secretarial Audit Report: Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. MAKS & CO., Company Secretaries [FRN P2018UP067700 and Peer Review Certificate No.:2064/2022] were appointed as the Secretarial Auditors by the members at the 123^rd AGM of the Company held on September 26, 2025, for a term of 5 (Five) consecutive years from the FY 2025-26 till FY 2029-30.

The Secretarial Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Company Secretaries of India (ICSI) and hold valid certificate issued by the Peer Review Board of the ICSI.

The Secretarial Audit Report issued by Secretarial Auditors of the Company i.e M/s. MAKS & Co., Practicing Company Secretaries for the Financial Year 2025- 26, is annexed herewith as Annexure – III forming part of this Board Report. The Secretarial Audit Report does not contain any qualification, reservation or disclaimer or adverse remark.

In addition to the above and in accordance with Regulation 24A(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all listed entities are required to obtain an Annual Secretarial Compliance Report from a Practicing Company Secretary (PCS), confirming compliance with applicable SEBI Regulations, circulars, and guidelines. This report must be submitted to the Stock Exchanges within 60 days from the end of the financial year.

Accordingly, a report on secretarial compliance issued by M/s. MAKS & Co., Practicing Company Secretaries [FRN P2018UP067700], for the financial year ended March 31, 2026 has been submitted to stock exchanges. The same is available on the website of the Company at https://www.shalimarpaints.com/investors-relations/corporate-announcements iii) Cost Auditors and Audit Report: Pursuant to Section 148(1) of the Act, for the Financial Year 2025-26, 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, had appointed M/s. Sanjay Gupta & Associates, Cost Accountants, for this purpose for the Financial Year 2025-26. The Cost Auditor will submit their report for FY 2025-26 within the timeframe prescribed under the Act. The Cost Audit report for FY 2024-25 did not contain any qualification, reservation or adverse remark.

Further, upon receipt of certificate confirming their eligibility and willingness for appointment as the Cost Auditor of the Company for FY 2026-27 and based on the recommendation of the Audit Committee, M/s. Sanjay Gupta & Associates., have been appointed as the Cost Auditor of the Company for FY 2026-27 at a remuneration of Rs. 200,000/- (Rupees Two Lakhs only) plus applicable taxes and out-of-pocket expenses. The said remuneration has also been proposed for ratification by the members of the Company at the ensuing AGM. iv) Internal Auditors: The Company had appointed M/s. Deloitte Touche Tohmatsu India LLP as Internal Auditors of the Company for Financial Year 2025-26. Internal Auditors of the Company directly report to the Audit Committee on functional matters. v) Report on Frauds U/s 143 (12) of the Companies Act, 2013: During the year under review, the Statutory Auditors, Cost Auditors and the Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act.

Therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Act.

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/investors-relations/codes-and-policies 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 seven (7) times during the Financial Year 2025-26. 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.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

In accordance with Section 149 (7) of the Act read with Para VII (1) of Schedule IV of the Act and Regulation 25 of Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on March 12, 2026, without the presence of Non- Independent Directors and Members of the management.

The Independent Directors at the meeting, inter alia, reviewed the following: -

• Performance of Non-Independent Directors and Board as a whole.

• Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

• Assessed the quality, quantity and timeliness of flow of information between the Company, Management and the Board, that is necessary for the Board to effectively and reasonably perform their duties.

BOARD COMMITTEES

The Board Committees play a vital role in strengthening the Corporate Governance practices of the Company and focus effectively on the issues and ensure expedient resolution of the diverse matters. The Committees also make specific recommendations to the Board on various matters as and when required. All observations, recommendations and decisions of the Committees are placed before the Board for information, noting or approval.

The Company has following Committees, in terms of the Act and the SEBI Listing Regulations: -a. Audit Committee b. Nomination and Remuneration Committee c. Stakeholders Relationship Committee d. Corporate Social Responsibility Committee e. Risk Management Committee

The Composition, terms of reference and details of meetings of the aforementioned Committees during FY 2025-26 and the attendance of each Director in the Committee Meetings are provided in Corporate Governance Report which forms integral part of this Report.

GENERAL MEETING / POSTAL BALLOT

During the Financial Year ended March 31, 2026, apart from AGM of the Company held on September 26, 2025, the Company had sought approval of the shareholders through the Postal Ballot process, the details of which are given herein below: Postal Ballot notice dated April 10, 2025, for seeking approval of the shareholders for:

(i) Appointment of Mr. Kuldip Raina as Director of the Company and

(ii) Appointment of Mr. Kuldip Raina as Managing Director and Chief Executive Officer (MD & CEO) of the Company.

The aforesaid matters were duly approved by the shareholders of the Company on May 16, 2025 and the result of postal ballot was declared on May 19, 2025.

Postal Ballot notice dated January 02, 2026, for seeking approval of the shareholders for:

(i) To consider and approve the reappointment of Ms. Shan Jain (DIN: 09661574) as an Independent Director of the Company. The aforesaid matters were duly approved by the shareholders of the Company on February 06, 2026 and the result of postal ballot was declared on February 09, 2026.

NOMINATION AND REMUNERATION POLICY

Pursuant to the provisions of Section 178(3) of the Act, Regulation 19(4) read with Part D of Schedule II of SEBI Listing Regulations and as per the recommendations of NRC, the Board has formulated a Nomination and Remuneration Policy. This policy outlines the criteria for appointment and remuneration of Directors, Key Managerial Personnel (KMP), and other employees, including qualifications, positive attributes, independence of Directors, and other matters as specified under Section 178(3) of the Act. 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/investors-relations/codes-and-policies

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT

The Company has formulated a Code of Conduct for Directors and Senior Management Personnel and has complied with all the requirements mentioned in the aforesaid code.

FAMILIARIZATION PROGRAMME

Pursuant to regulation 25 of the SEBI Listing Regulations, the Company provides orientation and business overview to its independent Directors by way of detailed presentation. Such meetings/programs include briefings on the Company and its business, Executive Team, business model, applicable amendments in the Compliance, the roles and responsibilities of Independent Directors.

The details of such Familiarization Program for Independent Directors are posted on the website of the Company and the web link of the same is provided hereunder: https://www.shalimarpaints.com/investors-relations/codes-and-policies

SUCCESSION PLANNING

The Company has in place the orderly succession plan for the appointments at the Board and Senior Management level.

CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY DESIGNATED PERSONS (CODE OF CONDUCT) The Company has adopted a Code of Conduct to regulate, monitor and report trading by Designated Persons [Pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015]. This Code of Conduct is intended to prevent misuse of Unpublished Price Sensitive Information ("UPSI") by Designated Persons and their immediate relatives.

The said Code lays down guidelines, which advise Designated Persons and Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances. This Code includes a Policy and Procedure for Inquiry in case of leakage of UPSI or suspected leakage of UPSI and is available for reference on the website of the Company i.e. https://www.shalimarpaints.com/investors-relations/codes-and-policies

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, 2026 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/investors-relations/ codes-and-policies. 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 - IV 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 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, 2026, 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, 2026 and of the loss of the Company for the year ended March 31, 2026;

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 2026-27 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 always places major thrust on managing its affairs with diligence, transparency, responsibility and accountability thereby upholding the important dictum that an organization's corporate governance philosophy is directly linked to high performance. The Company understands and respects its fiduciary role and responsibility towards its stakeholders and society at large and strives to serve their interests, resulting in the creation of value and wealth for all stakeholders.

The compliance report on corporate governance and a certificate received from M/s. MAKS & Co., Company Secretaries (FRN: P2018UP067700), Secretarial Auditor of the Company, regarding compliance of the conditions of corporate governance, as stipulated under Chapter IV of SEBI Listing Regulations forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the Financial Year 2025-26, 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 2025-26.

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 2025-26, 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.

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 2025-26.

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/investors-relations/codes-and-policies 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 - V 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/investors-relations/codes-and-policies 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 any incidents that are reported are investigated and suitable action is taken in line with the Company's Whistle Blower Policy. No person is denied access to the Chairperson of the Audit Committee.

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, 2026 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

d) Number of complaints pending for more than ninety days – NIL

COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

The Company has complied with the provisions of the Maternity Benefit Act, 1961, including all applicable amendments and rules framed thereunder. The Company is committed to ensuring a safe, inclusive, and supportive workplace for women employees. All eligible women employees are provided with maternity benefits as prescribed under the Maternity Benefit Act, 1961, including paid maternity leave, nursing breaks, and protection from dismissal during maternity leave. The Company also ensures that no discrimination is made in recruitment or service conditions on the grounds of maternity. Necessary internal systems and HR policies are in place to uphold the spirit and letter of the legislation.

GENDER-WISE COMPOSITION OF EMPLOYEES

In alignment with the principles of diversity, equity, and inclusion (DEI), the Company discloses below the gender composition of its workforce as on the March 31, 2026.

Male Employees: 576 Female Employees: 23 Transgender Employees: 0

ANY PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

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

VALUATION FOR ONE TIME SETTLEMENT OR WHILE TAKING THE LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS There were no instances during the period under review where your Company required the valuation for onetime settlement or while taking the loan from the Banks or Financial institutions.

DOWNSTREAM INVESTMENT

The Company does not have any downstream foreign investment.

GREEN INITIATIVES

Electronic copies of the Annual Report 2025-26 and the notice of the 124^th 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 2025-26 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.

	For and on behalf of the Board of Directors of
	Shalimar Paints Limited
Place: Mumbai	Kuldip Raina	Aaditya Sharda
Date: August 12, 2026	MD & CEO	Non-Executive Director
	DIN: 10956069	DIN: 07024283

Annexure - I to Director's Report Form No. AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)

1. Statement containing salient features of the financial statements of Subsidiaries /Associate Company / Joint Venture as on March 31, 2026: Part A: Subsidiaries (Rs. in Lakhs)

S. NO. Particulars	Subsidiary 1	Subsidiary 2
1 CIN/ any other registration number of subsidiary company	U24220DL2007PLC168944	U46639HR2009PTC066208
2 Name of the subsidiaries	Shalimar Adhunik Nirman Limited	IM Inicio Projects Private Limited (Formerly known as Eastern Speciality Paints & Coatings Private Limited)
3 Date since when subsidiary was acquired	04/10/2007	24/02/2009
4 Provisions pursuant to which the company has become a subsidiary (Section 2(87)(i) / Section 2(87)(ii))	2(87)(ii)	2(87)(ii)
5 Reporting Period	April 01, 2025 to March 31, 2026	April 01, 2025 to March 31, 2026
6 Reporting Currency	INR	INR
7 Exchange Rate (in Rs.) as on the last date of the relevant financial year in the case of foreign subsidiaries.	NA	NA
8 Share Capital	9.50	5.00
9 Reserves & Surplus	1464.02	(228.47)
10 Total Assets	2715.49	444.97
11 Total Liabilities	2715.49	444.97
12 Investments	0.00	0.00
13 Turnover	0.00	775.40
14 Profit/(Loss) before Taxation	(8.36)	(187.29)
15 Provision for Taxation	0.00	0.
16 Profit/(Loss) after Taxation	(8.36)	(187.29)
17 Proposed Dividend	0.00	0.00
18 % of shareholding	99.99%	100%

1. Number of subsidiaries which are yet to commence operations – None

2. Number of subsidiaries which have been liquidated or have ceased to be a subsidiary during the year: Not applicable.

Part B: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures- Not Applicable

1. Number of associates or joint ventures which are yet to commence operations – None

2. Number of associates or joint ventures which have been liquidated or have ceased to be associate or joint venture during the year: Not applicable.

	For and on behalf of the Board of Directors of
	Shalimar Paints Limited
Place: Mumbai	Kuldip Raina	Aaditya Sharda
Date: August 12, 2026	MD & CEO	Non-Executive Director
	DIN: 10956069	DIN: 07024283

Annexure - II to Director's Report

A. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo (Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014)

1. Energy Conservation, Manufacturing Excellence and Sustainable Operations

The Company recognizes energy as a critical resource in achieving sustainable manufacturing, operational excellence and environmental stewardship. During the year, continued emphasis was placed on improving energy efficiency across all manufacturing operations through systematic monitoring, process optimization, equipment reliability, and implementation of best manufacturing practices.

Energy conservation initiatives were integrated with manufacturing excellence programmes to reduce specific energy consumption, improve plant productivity and enhance overall resource utilization without compromising product quality or customer requirements.

2. Comprehensive Energy Monitoring Framework

A structured Energy Management System has been implemented to monitor, analyse and optimize energy consumption across manufacturing plants and utility operations.

Energy performance is continuously monitored through monthly and annual reviews covering:

• Electricity purchased from the State Grid.

• Solar power generation

• In-house electricity generation through Diesel Generator (DG) sets during grid outages and peak operational requirements.

• Fuel consumption in utility equipment wherever applicable.

• Electricity consumption of major production equipment including High-Speed Dispersers, Bead Mills, Mixers, Attritors, Pumps and Transfer Systems.

• Utility consumption covering compressed air systems, HVAC, ventilation, chilled water and lighting.

• Product-wise and batch-wise Specific Energy Consumption (SEC).

• Utility consumption per tonne of paint produced.

• Energy consumption trends across manufacturing departments.

• Equipment loading patterns and operating efficiencies.

Continuous trend analysis enables benchmarking of plant performance, early identification of abnormal energy consumption and implementation of corrective actions.

3. Energy Audits and Implementation of Recommendations

The Company periodically conducts comprehensive energy audits covering manufacturing processes, utilities and infrastructure.

Recommendations from the energy audits are evaluated based on technical feasibility, financial viability and environmental benefits. Approved projects are implemented in a phased manner and their effectiveness is monitored through measurable energy performance indicators.

The Company continues to review emerging technologies and best industry practices to improve energy productivity across manufacturing operations.

4. Manufacturing Process Optimization

Continuous improvement programmes were undertaken across manufacturing operations with the objective of reducing process cycle time, minimizing energy losses and improving equipment utilization.

Major initiatives included:

• Standardization of products and processes across product categories.

• Optimization of dispersion and grinding cycles based on product characteristics.

• Laying critical hygiene guidelines and monitoring.

• Optimization of pigment dispersion sequences.

• Standardization of mixing parameters for improved batch consistency.

• Reduction in equipment idle time between batches.

• Improved utilization of manufacturing assets through better production planning.

• Optimization of cleaning and changeover practices.

• Improved scheduling to reduce repeated start-stop operations.

• Laying down critical to quality (CTQ) guidelines and monitoring of them.

These initiatives resulted in lower energy consumption per batch while maintaining product quality and production reliability.

5. Batch Cycle Time Reduction

A focused programme on Batch Cycle Time Reduction was implemented across manufacturing lines.

The initiative involved:

• Mapping of complete manufacturing workflows.

• Identification of non-value-added activities.

• Reduction of waiting time between process stages.

• Optimization of raw material charging sequences.

• Improved synchronization between grinding, let-down and filling operations.

• Standard operating procedures for batch execution.

• Reduction in cleaning and product changeover time.

Shorter batch cycle times have improved production throughput while reducing electricity consumption per unit of production.

6. Debottlenecking of Manufacturing Operations

The Company continued its debottlenecking initiatives to maximize capacity utilization using existing assets.

The projects included:

• Improvement in material transfer systems.

• Optimization of pumping and circulation systems.

• Elimination of bottlenecks in grinding operations.

• Improvement in filling line productivity.

• Better utilization of storage tanks and intermediate vessels.

• Optimization of utility distribution.

• Reduction in waiting time between production stages.

• Improvement in equipment availability through preventive maintenance.

These initiatives have increased operational flexibility, reduced production delays and improved manufacturing efficiency.

7. Utility Optimization

Utilities constitute a significant portion of overall energy consumption in paint manufacturing. Continuous improvement initiatives were therefore undertaken in the following areas:

Compressed Air Systems/Electric Motors and Drives/Pumps and Agitators/Lighting/HVAC and Ventilation/Diesel Generator Optimization/Preventive Maintenance for Energy Efficiency.

8. Manufacturing Excellence

Manufacturing Excellence programmes continued to drive operational improvements through structured continuous improvement methodologies.

Key focus areas included:

• Process standardization.

• Reduction in process variability.

• Overall Equipment Effectiveness (OEE) improvement.

• Reduction in manufacturing losses.

• Root Cause Analysis (RCA) of recurring issues.

• Preventive Action implementation.

• Lean manufacturing initiatives.

• Continuous improvement projects.

• Shop-floor productivity enhancement.

• Visual management and workplace organization.

These initiatives have enhanced productivity, improved product consistency and strengthened manufacturing reliability.

9. Sustainability Commitment

The Company remains committed to reducing its energy intensity and carbon footprint through continual improvement in manufacturing processes, adoption of energy-efficient technologies and responsible utilization of natural resources.

Future focus areas include:

• Greater automation of manufacturing processes.

• Deployment of Variable Frequency Drives (VFDs) on suitable equipment.

• Advanced energy monitoring and digital analytics.

• Expansion of renewable energy wherever technically and economically feasible.

• Continuous reduction in Specific Energy Consumption (SEC).

• Enhanced employee participation in energy conservation programmes.

• Adoption of emerging best practices in sustainable paint manufacturing.

Through these initiatives, the Company continues to strengthen its commitment towards operational excellence, responsible manufacturing and sustainable long-term growth while delivering high-quality coating solutions to its customers.

10. Steps taken by the Company for utilizing alternate sources of energy:

Solar panels on roof under outsourced model for 545 KW at Nashik Plant, is working efficiently.

11. Capital investment on energy conservation equipments:

During the year under review, the Company has not made any capital investment towards energy conservation equipments other than increasing throughput leading to Lower Specific Power Consumption.

B. Technology Absorption

1. Efforts made towards technology absorption:

The Research & Development department (R&D) of your Company is aggressively pursuing following activities to achieve short and long term business objectives of the Company with emphasis on new trends and higher durable products in Paints and Coating business.

• New Product development - A large no. of new products developed in all segments of paints operated by Company e.g. Decorative Coatings - Enamels, Interior and water based decorative coatings. Following products were commercialised: o Hero Weatherguard12 - Feature loaded exterior luxury product 12-year warranty of performance at right price. o Hero Insignia – Feature loaded interior luxury emulsion with 10-year warranty and Scuff free resistance o Hero Floorshield- High performance water-based floor coat o Zero Damp Interior – Waterproofing undercoat for interior walls with 4 years warranty o PU Gloss- High performance enamel with high gloss and longer gloss retention o Magic tools- Ancillary tools like masking tape, Spray paints, sandpaper under the brand umbrella of Magic Industrial Coatings - Protective, OEM, General Industrial and Packaging coating segments. o Polysiloxane coating o 100% Solid PU for exterior of pipes coating o HP Gasflow coatings o High performance Alkyd coating for pipe exterior o PU and Epoxy paint system for Tractor sheet metal and Chassis. o PU and Epoxy System for Agricultural and construction segment. o PU plastic coatings for HDPE. o PU System for Bus body.

o Peal based paint system for agri-implements.

o Airdrying HR paint @600 Deg C.

• Value engineering activities – Large no of activities worked for value engineering activity by design modification, cost reduction, process improvement, introducing new raw materials etc.

• Carbon footprint reduction - Most new products developed are green products. New products developed utlise Bio based raw materials, High volume solid low solvent primer and topcoats. DTM metal coatings, using VOC exempt materials.

• Import Substitution – Huge amount of work has been initiated to use local raw material, additives, bioased local RM, Bio based crosslinkers for import substitution and reduce supply chain footprint.

• Upgradation - Major modification / upgradation of products initiated to improve quality and boost image and confidence of customers.

• Efficiency - Reduction in factory level losses by optimization of formulation, reduction in processing time, upgradation of testing process and minimization of waste generation.

• Collaboration - Partnership initiated with RM suppliers for collaborative work.

• Testing / approvals - Food Grade products testings carried out with local and global agencies e.g. NSF, UICT and BIS (India) etc. to supply correct products to customers.

• NABL Certification - Company's R&D Laboratory has maintained NABL certification.

2. Benefits derived as a result of above R&D activities:

• 30+ new products introduced in the Decorative and Industrial segments.

• Green products portfolio increased by adding new high solid products.

• Value engineering and cost optimization of existing products.

• New segments worked by company Bus body, ACE, 12+ year , high gloss Deco products added to Company's business.

Initiatives towards Accreditation, Certification and Product Recognition:

• Company has received Food grade NSF - US certification for Solvent free epoxy pipe coating manufactured at Sikandrabad and Nashik Plant

• Food lacquer and , Epoxy Amino lacquer got certified for food grade and migration test as per Regulation (EC) No 1907/ 2006 ,concerning the REACH regulation.

3. Your Company has not imported any technology during last three years reckoned from the beginning of the financial year.

4. Expenditure incurred on Research and Development:

(Rs. in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Capital	10.55	1,450.73
Recurring	701.96	669.53
Total	712.51	2,120.26
Total R&D expenditure as percentage of turnover	125%	3.55%

5. Foreign Exchange Earnings and Outgo (Rs. in Lakhs) (Equivalent INR value of various currencies)

Particulars	FY 2025-26	FY 2024-25
Inflow	1,468.61	701.85
Outflow	888.87	493.49

 

	For and on behalf of the Board of Directors of
	Shalimar Paints Limited
Place: Mumbai	Kuldip Raina	Aaditya Sharda
Date: August 12, 2026	MD & CEO	Non-Executive Director
	DIN: 10956069	DIN: 07024283