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Directors Report of Berger Paints (India) Ltd.

Mar 31, 2023

Your Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2023.

FINANCIAL RESULTS

(? in Crore)

Particulars

Financial Year

Standalone

Consolidated

2022-2023

2021-2022

2022-2023

2021-2022

Profit before Depreciation, Finance Cost and Taxation

1423.00

1245.65

1538.77

1395.66

Add: Share of Profit/Loss from Joint Ventures

-

-

(13.17)

3.86

Less:

Depreciation and Amortisation Expense

234.00

197.53

264.03

226.51

Finance Cost

86.28

42.93

99.23

50.72

Profit Before Taxation

1102.72

1005.19

1162.34

1122.29

Less:

Provision for Taxation

274.33

255.33

301.94

289.34

Profit After Taxation

828.39

749.86

860.40

832.95

Add:

Other comprehensive income/(loss) for the year net of taxation

(0.55)

0.82

4.36

(15.50)

Total comprehensive income

827.84

750.68

864.76

817.45

FINANCIAL PERFORMANCE Highlights of the Standalone Results:

a. Revenue from Operations for the year ended 31st March, 2023 was ?9,470.62 Crore as against ?7,740.93 Crore in the corresponding last financial year, representing an increase of 22.34% over the last financial year.

b. EBIDTA (excluding other income) for the year ended 31st March, 2023 was ?1,345.85 Crore as against ?1,182.53 Crore in the corresponding last financial year, representing an increase of 13.81% over the last financial year.

c. Net Profit for the financial year ended 31st March, 2023 was ?828.39 Crore as against ?749.86 Crore recorded in the previous financial year, representing an increase of 10.47% over the corresponding period of last financial year.

Highlights of the Consolidated Results:

a. Revenue from Operations for the year ended 31st March, 2023 was ?10,567.84 Crore as against ?8,761.78 Crore in the corresponding last financial year, representing an increase of 20.61% over the last financial year.

b. EBIDTA (excluding other income) for the year ended 31st March, 2023 was ?1,487.20 Crore as against ?1,331.07 Crore in the corresponding last financial year, representing an increase of 11.73% over the last financial year.

c. Net Profit for the year ended 31st March, 2023 was ?860.40 Crore as against ?832.95 Crore in the corresponding last financial year, representing an increase of 3.30% over the last financial year.

The Board of Directors have recommended a dividend of ?3.20 (320%) per equity share of ?1/- each fully paid up for the financial year ended 31st March, 2023. Dividend is subject to approval of the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE AND DEVELOPMENT

The global economy largely recovered from the impact of successive waves of the COVID-19 pandemic by early 2022, aided by large policy stimulus and expanding coverage of vaccinations. The gains achieved through concerted physical and monetary policy interventions during the pandemic period (2020-2021) were however somewhat impacted by the disturbances in Ukraine.

By the end of the year (FY 2022-23), the global economy regained poise, cushioned by a milder winter in Europe, policy support to mitigate the impact of soaring energy prices, resilient labour markets, and signs of inflation peaking. Easing of pandemic restrictions, mending of supply chain and logistics disruptions and a rebound in demand for contact intensive services buoyed the global economy. Nonetheless, global inflation surged to 8.7% from 4.7% in 2021, over shooting targets in the majority of the countries through the year. Global trade (goods and services) growth slowed from 10.4% in 2021 to 5.1% in 2022, reflecting the post pandemic slowdown in global demand and the restrictions on cross-border movement of goods and services imposed by the war in Ukraine.

Amidst, strong global headwinds, the Indian Economy closed with 7.2% GDP growth in 2022-23. A sustained recovery in discretionary spending, particularly in contact intensive services, restoration of consumer confidence, high festival season spending after two consecutive years of COVID-19 induced isolation and the Government’s thrust on capex provided impetus to the growth momentum. In the second half of the year, however, the pace of year-on-year growth moderated because of base effects, lower private consumption demand caused by high inflation, slowdown in export growth on account of poor global demands and sustained input cost pressures.

In the industrial sector, manufacturing activities withstood global spillovers while electricity generation exhibited robust growth and mining recorded steady activity. Sustained momentum was seen in construction activity while infrastructure and capital goods production benefited from the government-led investments in infrastructure.

Like many economies, India also experienced a surge in inflation during 2022-23 primarily reflecting the impact of overlapping global supply shocks and pass through of higher input costs.

INDIAN PAINT INDUSTRY

Coming out of two COVID hit years at the start of 2022, Indian Paint Industry was expecting a smooth sail, but the Russia - Ukraine conflict in late February, 2022 led to skyrocketing of crude oil prices and resultantly in raw material prices.

INR 700 (USD 8.64) billion, Indian Paint and Coatings Industry has been among the fastest growing industry for a number of years. Major headwinds such as COVID and high crude oil prices in 2022 have led to a significant impact on volume and on profitability of the paint companies in 2022, but industrys'' overall performance has been satisfactory on volume and value fronts. According to a forecast by Indian Paint Association, Indian paint and coatings industry will be worth INR 1000 billion (USD 12.34 billion) during the next 5 years, a growth of 43% from the current levels. The decorative segment has been the main stay of the Indian Paint and Coatings Industry. This segment witnessed strong growth in 2022 on the back of vibrant construction sector. Q3 (FY 2022-23), which is traditionally known as strong growth period for decorative paints business in the country proved a muted period for Indian decorative paints industry due to extended monsoon and shorter Diwali period. Healthy construction pipeline in the country, ambitious schemes of the Indian Government such as “Housing for All” and rising urbanization have been the main demand drivers for decorative coatings to play a major role in the future growth of the decorative paint consumption in the country in the medium and long term.

Economic growth, urbanization and purchasing power are three key demand drivers of decorative paint growth in any country. India is ticking all the boxes right in this aspect. With a fair GDP growth, rising urbanization and increasing purchasing power of a vast section of population, the outlook remains promising.

Urbanization in particular will play the most important role in the growth of the coatings industry in the decorative segment. Currently 34% of India’s population resides in urban areas. The pace of urbanization has increased significantly over the last two decades. This pace is likely to continue and is estimated that 590 million people will start living in our cities by 2030, going up to 820 million by

2050. By 2035 the percentage of population in India residing in urban areas will be 43.2% according to a 2022 United Nations Report. With drive on capital outlay leading to robust growth in infrastructure spending by the Central Government, a large push has been made towards capital expenditure for infra projects. Union Budget of 2022-23 allotted two-thirds (64.7 per cent) of the total capex for Ministries of defence, road, and railways which shows the positive intent of the Central Government to drive all round infrastructure growth.

Accounting for more than 30% of India’s paint and coatings industry, industrial segment of the paints and coatings has rapidly grown over the years. Primarily driven by steady growth in automotive segment, industrial coatings segment is expected to increase its share in the coming years. Growth in automotive segment has been driven by growing automotive industry in the country. India has overtaken Japan to become the third largest vehicle market in 2022 after China and the United States, selling more than 4.25 million vehicles riding on pent-up demand and enhanced production by car makers.

Though the Russia - Ukraine conflict had a worse impact on raw material prices for Indian paints and coatings business, the same was negated with increase in prices of paints in quick succession during May to November, 2022. Thankfully, prices of key inputs such as crude based monomers and titanium dioxide eased during October, 2022 period providing much needed relief for paint and coatings producers.

COMPANY’S OPERATIONS

The last two years were tumultuous. The microbe with deadly intent brought the entire world to a standstill. However, the human species overcame this pestilence and survived. Berger overcame this crisis by a combination of indomitable willpower and management skills and was always on track achieving growth and registering higher profits year on year. Berger continued to re-invent by looking at processes and practices and did what it always excelled in, seeking out new opportunities and innovate new products keeping in mind better customer experiences, optimization of cost, digitization, made possible through an enthusiastic workforce.

With a focus on trust, excellence and innovation, Berger has been able to consistently deliver double-digit growth in profit and revenue. The Company achieved highest revenue growth among paint companies in India which are listed with the Stock Exchanges in 2022-23. To be precise, Berger achieved consolidated sales of ''10,567.84 Crore during Financial Year 2022-23 and the EBIDTA of ''1,487.20 Crore (consolidated). Even with many new entrants jostling for market share, Berger has been able to increase its presence in the market both in terms of market share and geographical footprints.

Our enduring success can be attributed to superior-quality products and distinguished leadership with a diverse portfolio of world class products that have acquired widespread recognition coupled with a robust distribution network and a nimble sales force. We have garnered customer loyalty and set new industry benchmarks.

Berger has developed an extensive network of dealers and retailers, having over 60,000 touchpoints across the country. This robust network has experienced remarkable expansion in the past financial year. Our impressive revenue growth of 23% further demonstrates our market strengths, even in the face of challenging circumstances.

Berger’s move to venture into various innovative distribution modes contributed significantly to our growth, expanding our distribution network and solidifying our presence in diverse markets. Our sales force plays a pivotal role in driving our growth. With a constant focus on digitization, we equip our sales force, with advanced digital tools and track their performance using intelligent dashboards. Training programs have also been enhanced to encompass managerial skills, empowering the sales force to handle teams effectively.

The Company launched many new products out of which significant ones are as follows:

In luxury emulsion interior category, Berger introduced ‘Silk Glamor Matt’ and ‘Silk Glamor Dazzle’. Berger Silk Glamor Matt is best in class luxury emulsion for smooth matte finish. Berger Silk Glamor Dazzle, a super-hi-sheen paint which is washable and contains low VOC. In the premium interior category, Berger launched Rangoli Rich Matt containing best in class smooth matte emulsion with assured two coats hiding. Berger also launched ‘LUXOL PU ENAMEL’. Luxol PU Enamel is a superior quality

enamel formulated with special Polyurethane resin to give long-lasting finish with superior coverage. The product''s USP is ''Superior gloss'', ''Xtra coverage'', '' Higher viscosity'', ''Xtra hiding'' and ''Anti-fungal'' in nature. Under accessories, Berger Masking Film has been introduced which is a high density non-porous film used to protect surfaces against any paint job or wood-work activities. The product saves time and effort, ensures minimum wastage and can be used for exteriors and interiors.

Berger Home Shield has recently launched two more innovative products based on nano-technology, under its iconic DAMPSTOP brand to promote hassle-free water proofing: ‘DAMPSTOP Duo’ and ‘DAMPSTOP Advanced’. Both the products are ready to use and painter friendly which can be applied directly by brush.

DAMPSTOP Duo, as the name suggests, acts as both a water-proofing barrier as well as primary coat, on which paint can be applied directly. It can be applied on both interior and exterior walls to tackle low to moderate dampness. DAMPSTOP Duo gives water proofing protection to a building upto 2 bar water pressure on the negative side. It can be applied on both plastered walls and puttied surface.

DAMPSTOP Advanced is a waterproofing barrier coat that can be applied on plastered surfaces, thus saving the customer from going through the masonry hassle of conventional water proofing where one needs to reach the brick surface to apply the water proofing coat. DAMPSTOP Advanced consists of nano-additives that block the micro pores to protect wall from damp and efflorescence. It is a one component, brush-applied water proofing emulsion that imports hydrophobicity upto 4 bar water pressure on the negative side to protect interior wall surfaces. WeatherCoat Long Life Flexo campaign is here with Akshay Kumar creating magic in his best funny avatar.

Some other significant products are as follows:

‘Berger Silk Glamor’, ‘Berger Easy Clean’, ‘Berger WeatherCoat Long Life 10’, ‘Berger WeatherCoat Long Life Flexo’, ‘Berger WeatherCoat Anti Dustt’, ‘Berger WeatherCoat Long Life 15’, ‘Berger WeatherCoat Anti Dustt Kool’ have been performing well. WeatherCoat Long Life 15 prepared using nano-technology plus PU Silicon chemistry having elastomeric film with excellent DPUR, 15 year performance warranty has received excellent initial response from launch markets. Anti Dustt Kool having dust guard plus heat reflective nano-technology helps maintaining the cooling efficacy of the paint film last longer. This product is also expected to do very well under Indian conditions.

‘Express painting’, a home painting service innovation from Berger launched in 2015 has revolutionized the painting industry with innovative techniques, premium quality and customer-centricity. Consumers prefer express painting for its reliability and convenience and it has become the go-to choice for a hassle free painting experience. With time, traditional painting methods have been streamlined with introduction of advanced tools and equipment that have modified surface preparation, crack filling, sanding and priming procedure. Substantial painting time has been reduced by applying newer techniques which has helped to deliver a flawless and professional finish.

Our long-standing reputation for excellence and differentiated products has played a crucial role in the success of express painting with trained painters offering expert solution using cutting-edge technology, durable, and visually appealing results which have exceeded customer expectations. Understanding the challenges and stress associated with painting while keeping in mind differentiated customer preferences, Express painting has been hugely successful in delivering what has been asked for in an environment friendly hassle-free manner.

We, at Berger have introduced the ‘iTrain Program’ towards skilling and up-skilling of painters through extensive training programs spread across the length and breadth of the country. These programs are aimed at equipping painters with innovative products and methods of painting thus resulting in learning and improving the quality of life of those trained in these academies. In order to ensure that existing painters as well as aspiring painters in far-flung areas of the country receive training, the model of mobile iTrain vans have been hugely successful. These iTrain vans travel to remote locations and carry out training. These mobile iTrain vans are presently managed by Smile Foundation, a reputed NGO who has entered into a Memorandum of Understanding (MOU) with the Company for carrying out mobile iTrain activity on behalf of the Company thus bringing in more efficiency into the program. While

traditionally painting has been a male-dominated profession, Berger has been committed to empowering women in the industry by providing them training and vocational skills and encouraging them to take up painting as a profession. This has resulted in gradual increase in women participation in the iTrain program and as a result of that, many more women are expressing their interest to take up painting as a profession for their livelihood.

‘Berger Prolinks’ division provides customised painting solutions for India''s urban landmark old and new. The performance during the year was extremely encouraging. The Company continued to secure and simultaneously grow its share in key accounts. With the introduction of new software to track the progress of work in the key accounts backed by specialised key accounts management team, Prolinks business is expected to grow at a much faster pace in the coming years.

''Berger Protecton'' has achieved a turnover of more than rupees thousand crore during Financial Year 2022-23 with a 32% value growth over the previous financial year. It is also the business leader in this segment in India. This division of Berger won the award at Rail Analysis Innovation and Excellence Summit 2023. Berger''s Protecton initiative in upgrading the painting system for Indian Railways has resulted in over two-fold lengthening of the re-painting cycle of coaches. Besides, the new paint comes with lower VOC hence, together with sizeable savings in re-painting costs for Indian Railways, the environmental impact has been considerably reduced. Protecton has coated more than 5000 Rajdhani coaches in the last two years. Protecton also takes pride for introducing Fluoropolymer coating on the bogies of Vande Bharat trains, as per Japanese Industrial Standard (JIS) Japanese technology, to prevent corrosion and being water resistant. Berger Protecton division has supplied a special epoxy primer for the zinc metalised steel structures that are top coated with FluroPolymer for the 4700 MT of steel used in the new Pamban rail bridge, Rameshwaram. In pipe coatings, Epilux SF DW coating has been used and the company executed various orders with various major companies including refineries, steel plants and airports. Berger supplied polyurea to major customers.

The ‘Auto & General industrial’ and Powder Coating business achieved a value growth of 20% over the previous financial year. The Automotive business registered a 30% value growth over the previous financial year with more or less all key accounts doing well. The Company is also focused to perform well in the electric vehicle segment. In the general industrial category, Berger alongwith its wholly-owned subsidiary, SBL Specialty Coatings Private Limited holds the leadership position in India and has also performed well during the year under review. With clear cut stress on profitability the business strategy has shifted and is expected to yield good results. With a focus on strategic accounts and business development, fusion-bonded epoxy/re-bar coatings business and stress on bonded metallic powder and heat resistance powder, the business scenario looks better for financial year 2023-2024.

Waterproofing and construction chemicals business has increased many folds. The Company along with its subsidiary STP Limited together achieved a turnover of more than rupees thousand crore during the year with technologically superior products like DAMPSTOP Duo, DAMPSTOP Advanced and Waterproofing putty. The Company has been able to add a lot of value in this space. Scientific waterproofing solutions have been provided across the country through trained applicators.

The Research and Development (R&D) activity of the Company has been effectively supporting the business and is responsible for the Company''s robust growth. With value for money and safe to use products, the customer experience has been better. Lean formulations, raw material options, process efficiency has ensured that our business remains profitable. With an eye towards the environment, low VOC paint has been manufactured, processes made more energy efficient with low carbon footprint and extended product life cycle. Our R&D makes constant endeavours in order to strengthen new technology platform, use new dispersion technology, leverage emulsion strength and improve industrial resin product development quality. During the year, the Company has filed 1 (one) patent application and plans to accelerate in this area.

Procurement and management of inventory has been revolutionised specially after three waves of the COVID-19 pandemic causing sudden disruptions, lockdowns, intermittent lockdowns, restrictions on movement. It is said that a chain is as strong as its weakest link. With ever increasing sales touching new records every year backed by a production capacity of 1 lakh metric ton per month approximately along with a plethora of new products being introduced regularly, implementation of international supply chain management system at Berger changed the way we plan and conduct our business, with multiple touch points in many verticals encompassing sales, marketing, distribution, production and purchase. With this, Berger has implemented end-to-end automation that too in a brief period of one and a half years. This achievement has been well appreciated both internally and externally.

The extent of digital adoption by the Indian consumers means that digital initiatives are key to success in the present environment. Berger has been a forerunner with a number of digital transformation initiatives during the year under review. Starting from implementation of Managed Detection and Response (MDR) monitoring to implementation of SD-WAN solution to enhance network efficacy, implement payroll and PF solutions, rolling out warehouse management system (WMS) solutions at various factories and depots, our stride towards digital transformation has been rapid which holds the key to our success in this ever-competitive paint industry. During the year, with 100% adoption of our DarwinBox HRMS system, we have been able to digitalize the entire employee lifecycle management (Hiring to Exit) along with all HR processes.

The manufacturing function got a huge boost with the commissioning of the state-of-the-art manufacturing facility at Sandila, Uttar Pradesh. The factory was commissioned in February 2023 in a short period under 24 months from piling stage despite COVID-19 related disturbances, thus adding to the production capacity by 33000 MT per month. The manufacturing function ensures that there is no dearth in supply of finished goods while safety and health of workmen are given utmost importance. Constant reduction in carbon emissions, rooftop solar power plants, bio briquette fired thermic fluid heaters, LED lights, zero-liquid discharge from factories are only a few sustainability initiatives among many others undertaken by the Company in all its manufacturing locations.

FOCUS AND OUTLOOK FOR 2023-24

India surpassed UK as the 5th largest economy in the World in 2021 with only United States, China, Japan and Germany being ahead of India in terms of size of the economy. As per the latest International Monetary Fund (IMF) Projections, India is set to move two spots ahead to overtake Germany and Japan in the next 5 years.

Financial markets experienced bouts of volatility in 2022-23, as geo-political tensions intensified, interest rate hikes by the US fed turned aggressive and the global growth outlook deteriorated dampening investor’s sentiments. Equity markets in India, however, gained marginally. The Reserve Bank of India adopted a nuanced and nimble footed approach to liquidity management in sync with the change in the stance of monetary policy, i.e., gradual reduction in the size of surplus liquidity in the system while still maintaining adequate liquidity to meet the credit needs of the productive sectors of the economy.

Sales outlook for Paints and coatings industry (FY 2023-24) looks bright with an expected GDP growth of 7% coupled with urbanization, spending on infrastructure and availability of disposable income among the masses.

Berger as a brand, with its differentiated products, strong distribution network, state-of-the-art technology backed by a strong research and development facility and always supported by all enthusiastic workforce is sufficiently equipped to handle competition and take long strides forward in gaining market share entering newer geographies, pushing sales and enriching customer experience through various digitized solutions. Softening of raw material prices are expected to continue which in turn will result in margin growth. Through intricate planning, the Company is confident to overcome the adversities which may come in the way in due course and ensure smooth raw materials supply, planned production, quality checks and timely distribution of its products and services. The committed workforce, ready to walk an extra mile guarantees better customer handling and endeavors to reduce cost at every stage.

With an aim to keep our homes clean and free from infection, regular painting has now turned into a habit for many. The demand for protective coatings, water proofing, insulated floor coatings etc. are rising by every passing day. The demand for general industrial, automotive and powder coatings have gained pace and it is expected that the Company would cater to an even large demography of consumers with its differentiated products and enhanced customer experience.

PROJECTS

During the year under review, the Company’s state-of-the-art fully automated, manufacturing facility at Sandila, Uttar Pradesh commenced its commercial production on 6th February, 2023. The Sandila Plant is the largest manufacturing facility of the Company in India with capability to produce 33,000 MT per month, bulk of which is water-based paint. The facility also produces resins, emulsions, colorants, stainers, construction chemicals and putty. The Company has made an investment of more than ''1000 Crore for setting up the Sandila Manufacturing facility which is expected to cater to the rising demand for the Company’s products and bring down its cost of production.

The Company also commissioned new rooftop solar power plants at Sandila, Puducherry and Jammu factories. Augmentation of rooftop solar power plant capacities were taken up at Puducherry Plant. All the solar plants commissioned till date have overshot the savings estimated initially.

During the year under review, the Company completed brown field expansions at its Rishra and Goa Plants. The Company continued its effort towards reduction of Carbon footprints during the year under review and the incremental savings from electrical energy and revenue cost in FY 2022-23 over and above FY 2021-22 stood at ''6.5 Crore approximately.

OPPORTUNITIES AND THREATS

The Paint and coatings industry is an essential and dynamic part of our nation’s economy and plays a key role in creating products that help preserve and protect everything from everyday objects to our most important infrastructure. Aside from providing aesthetic appeal, paints and coatings act as a protective barrier to an extent the useful life of the surfaces and substrates to which they are applied.

Globally over the next few years, housing and construction activities are expected to gradually expand. Urbanisation holds the key for more demand in paint and coatings with real estate and construction activities witnessing a revival post pandemic and are expected to perform well in the coming year as both demand for and supply of housing remaining buoyant. In India, the domestic economic activity does face an uninspiring global outlook going forward, but resilient domestic macro-economic and financial conditions with dividends from past reforms and new growth opportunities from global geo-economic shifts place India at an advantageous position.

India has emerged stronger and more resilient from the pandemic, partly due to the wave of digital transformation. Initiatives undertaken at various levels with proper planning and execution coupled with technological support ensures that we are on a growth trajectory.

The threat caused due to COVID-19 pandemic and its mutant strains are still fresh in our memories and the continuing conflict in Eastern Europe between Russia and Ukraine adds to the anxiety and uncertainty. Though, with the paint and coatings industry doing well, it is expected that competition will be stiffer, with new entrants knocking at the door, Berger is well equipped to handle the same. The dearth of skilled labour force is one of the biggest threats being faced by the paint and coatings industry on account of skill deficit wherein the skill gap is even more apparent. There is a massive mismatch between the client’s demands and the services provided by the largely unskilled painters, till date.

With employees at the core of business, ably supported by the government policies and continued stress on sustainability initiatives, the paint industry as a whole is expected to surge ahead inspite of challenges.

RISKS AND CONCERNS

The Company has the risk management and materiality policy approved by the Business Process and Risk Management Committee, Audit Committee and the Board of Directors. The policy provides a well-articulated framework for identification of risks inherent in the business operations of the Company and the methods of mitigation in a lucid manner on a continuous basis which are periodically reviewed and modified considering the size and the complexities of the business and the regulatory requirement from time to time. The risk management and materiality policy can be viewed at the following: https://www.bergerpaints.com/about-us/risk-management-policy.html.

The last five years has seen many uncertainties and challenges with the war in Europe still continuing and the people of the world at large still coming to terms with the disruptions caused due to the COVID-19 pandemic and the uncertainties that it brought to life and livelihood throughout the world. With the rise in inflation during the first half of FY 2022-23, rising raw material prices, pressure on supplies, intricate planning had to be made and executed so that the business progress remains unaffected.

Beyond the uncertainties, fortunately with innovative products, enthusiastic workforce, strong market presence and constant focus on profitability with young aspirational population at large, increase in consumption of paint is likely to happen. With the focus of

the Company to cater to the needs of various strata of population striving to give them a better customer experience, the Company is confident to grow and achieve higher numbers inspite of new entrants knocking at the door.

The short-term and long-term goals and strategies needs to be reviewed regularly in order to be ready and adaptable to the change. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Internal Control Systems of the Company are robust and commensurate with the nature, size and complexity of its business. Well-designed internal financial control measures as laid down and adopted continue to be followed by the Company. Policies and procedures, as approved by the Board have been adopted by the Management of the Company for ensuring orderly and efficient conduct of its business, including adherence to Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Good governance, well defined systems and processes and policies, risk assessment, a vigilant control function, communication and monitoring and an independent internal audit function are the foundation of the internal control systems. The Internal Audit function of the Company continues to provide assurance on functioning and quality of internal controls along with adequacy and effectiveness through periodic reporting. The Internal Risk and Control function also evaluates organizational risk along with controls required for mitigating those risks. The control activities continue to incorporate, among others, continuous monitoring, routine reporting, digital business environment with minimum possible manual intervention, checks and balances, purchase policies, authorization and delegation procedures, audits including compliance audits, which are periodically reviewed by the Audit Committee and the Business Process and Risk Management Committee. The performance of the Internal Audit department is also reviewed by the Board and improvements advised. Your Company has a Code of Conduct for all employees and a clearly articulated and internalized delegation of financial authority. Your Company also takes prompt action on any violations of the Code of Conduct by its employees.

The Company’s Enterprise Resource Management Systems with Standard Operating Procedures based on work flows and process flow charts also provide a comfort in this regard. The Company is fully geared to implement any statutory recommendation which may be made in this regard.

Key Financial Ratios

Ratios

Standalone

Consolidated

FY 2022-23

FY 2021-2022

FY 2022-23

FY 2021-2022

Debtors'' Turnover

10.49

9.25

9.20

8.45

Inventory Turnover

2.99

2.82

3.07

2.91

Interest Coverage Ratio*

13.31

23.07

12.33

21.89

Current Ratio

1.34

1.40

1.40

1.42

Debt Equity Ratio

0.25

0.22

0.26

0.26

Operating Profit Margin %

11.74

12.72

11.45

12.65

Net Profit Margin %

8.75

9.69

8.14

9.51

Return on Net Worth (RONW)**

20.56

21.30

20.40

22.81

Note: * There was a 42.31% change in Company''s Standalone Interest Coverage Ratio as well as 43.67% change in Company''s Consolidated Interest Coverage Ratio on account of increase in interest expense.

** There was a 3.47% change in Company’s Standalone Return on Net Worth as well as 10.57% change in Company''s Consolidated Return on Net Worth on account of increase in average total equity.

The Company has policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial disclosures, which are reviewed by the Board and Audit Committee from time to time.

EMPLOYEE STOCK OPTION SCHEME

Your Company had earlier re-introduced the ESOP Scheme, aligned with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in the year 2016 in accordance with the approval of the members granted at the Annual General Meeting held on 3rd August, 2016, to reward eligible employees.

In accordance with the aforesaid scheme of 2016, the Compensation and Nomination and Remuneration Committee has granted 98,877 options on 17th October, 2022 to 260 eligible employees including the following Key Managerial Personnel:-

Name

No. of options granted

1. Mr Abhijit Roy

1,440

2. Mr Vikash Sarda *

739

3. Mr Kaushik Ghosh **

553

* Mr Vikash Sarda was appointed as the Vice President & CFO w.e.f. 01.10.2022. He resigned as the Vice President & CFO of the Company w.e.f. close of business hours on 04.01.2023.

** Mr Kaushik Ghosh was appointed as the Vice President & CFO w.e.f. 12.01.2023.

The Compensation and Nomination and Remuneration Committee has also allotted during the year 98,996 equity shares of ''1 each (face value) to eligible employees (including Key Managerial Personnel) upon exercise of their options earlier granted to them. The allotments of the aforesaid shares were made on 4th April, 2022 (25,760 equity shares), on 2nd January, 2023 (50,187 equity shares) and on 8th March, 2023 (23,049 equity shares), respectively.

For further details, please refer to Annexure II to this report where detailed information required to be disclosed in terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014 are enclosed.

Please also visit the weblink: https://www.bergerpaints.com/investors/esop-disclosure.html for disclosures under Regulation 14 of the aforesaid Regulations.

HUMAN RESOURCES

The Company believes that Culture and Employee Experience are the only differentiators in today’s competitive environment. Endeavour is on to create a workplace where everyone feels valued, supported, and empowered to do their best. The Company focuses on growing talent from within and most of our business leaders are home grown who have played a pivotal role in the success of the organization. Strong emphasis is put on diversity and inclusion and accordingly our focus on women hires have increased.

During the year, with 100% adoption of our DarwinBox HRMS system, we have been able to digitalize the entire Employee lifecycle management (Hiring to Exit) along with all HR processes.

As reported last year, the flagship development programmes for the Mid and Senior level Leadership “Top Gun’’ and “Dronacharya” co-crafted with institutes of global repute are in full swing.

The Company believes in participative engagement across the entire hierarchy of the Organization. With a view to improve the productive participation of employees on the shop floor, a series of innovative programs were rolled out across all our manufacturing locations.

The overall Industrial Relations climate continued to remain harmonious and peaceful during the year. The number of employees as on 31st March, 2023 was 4,088 (31st March, 2022 - 3,931). The Industrial Relations were generally satisfactory during the financial year.

TRANSFER OF SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs (MCA) vide notification no. S.O.2866 (E) dated 5th September, 2017 enforced Sections 124(6) and 125 of the Companies Act, 2013 (hereinafter "the Act") read with the Investor Education and Protection Fund [IEPF] (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended), which require companies to transfer the underlying shares to the IEPF, in respect of which the dividends have remained unclaimed for a consecutive period of seven years. Accordingly, during the year under review, the Company has transferred 1,42,311 equity shares on the due dates to the IEPF.

PREVENTION OF SEXUAL HARASSMENT

Pursuant to Section 134(3)(q) read with the Companies (Accounts) Rules, 2014, the Company has complied with the provisions relating to constitution of Internal Complaint Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. From the date of inception, there has been no such complaint received. During 2022, initiatives were taken to demonstrate the Company’s zero tolerance philosophy against discrimination and sexual harassment, which included easy to understand training and communication material which was made easily accessible. The Company also conducted online training for the employees to cover various aspects in this matter.

Currently, the ICC comprises the following members:-

1. Ms Rishma Kaur (Presiding Officer)

2. Mr Kaushik Ghosh

3. Mr Aniruddha Sen

4. Ms Kakoli Dey (NGO representative).

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 5 wholly-owned subsidiaries as on the date of this report: - (i) Beepee Coatings Private Limited (“Beepee Coatings”) in Gujarat; (ii) Berger Paints (Cyprus) Limited (“Berger Cyprus”) in Cyprus; (iii) Lusako Trading Limited (“Lusako Trading”) in Cyprus; (iv) Berger Jenson & Nicholson (Nepal) Private Limited (“BJN-Nepal”) in Nepal and (v) SBL Specialty Coatings Private Limited (“SCPL”) in Chandigarh.

The following companies are wholly-owned subsidiaries of the Company’s above named subsidiaries: - (i) Bolix S.A., Poland -wholly-owned subsidiary of Lusako Trading; (ii) Berger Paints Overseas Limited (“BPOL”), Russia - wholly-owned subsidiary of Berger Cyprus. Bolix S.A., Poland has 4 subsidiaries, viz.: Bolix UKRAINA sp.z.o.o., Ukraine (“Bolix Ukraine”), BUILD-TRADE sp.z.o.o.,Poland (“Build Trade Poland”), Soltherm External Insulations Limited, U.K. (“Soltherm U.K.”), Soltherm Isolations Thermique Exterieure SAS, France (“Soltherm France”).

Surefire Management Services Ltd., UK (“SMS”), is a joint venture of Bolix S.A., Poland with Green Dynamo Ltd., U.K. Details in respect of SMS are provided in Part B of AOC-1 forming a part of the Financial Statements.

The Company has three other subsidiaries viz., Berger Rock Paints Private Limited (the other shareholder being Rock Paints, Japan), Berger Hesse Wood Coatings Private Limited (the other shareholder being Hesse Shares GmbH, Germany) and STP Ltd. The statement relating to the above companies as specified in Sub-Section (3) of Section 129 of the Companies Act, 2013 is attached to the Report and Accounts of the Company.

Beepee Coatings Private Limited earned a revenue from operations of ?33.56 Crore during the year under review.

Berger Paints (Cyprus) Limited ("Berger Cyprus") is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad and so is Lusako Trading Limited.

Bolix S.A. (including its subsidiaries) also posted encouraging results with a revenue from operations of ?357.63 Crore. During the year under review, BJN-Nepal showed good performance with a revenue from operations of ?250.84 Crore.

SBL Specialty Coatings Private Limited (earlier known as Saboo Coatings Private Limited) continued to perform well with a revenue from operations of ?166.35 Crore during the year.

The revenue from operations of Berger Paints Overseas Limited ("BPOL") was ?15.79 Crore.

Berger Rock Paints Private Limited (“Berger Rock”) recorded revenue from operations of ?23.75 Crore during the year ended 31st March, 2023.

Berger Hesse Wood Coatings Private Limited (“BHWCPL”) (earlier known as Saboo Hesse Wood Coatings Private Limited) recorded revenue from operations of ?20.67 Crore during the year ended 31st March, 2023.

STP Limited recorded revenue from operation of ?323.65 Crore during the year ended 31st March, 2023.

Berger Becker Coatings Private Limited, the Company’s joint venture with Becker Industrifarg, Sweden, showed good performance with revenue from operations of ?288.17 Crore.

Berger Nippon Paint Automotive Coatings Private Limited (“BNPA”), the Company’s joint venture with Issac Newton Corporation, posted revenue from operations of ?281.14 Crore.

The salient features of the financial statements of subsidiaries, associate companies and joint ventures are given in the Statement in Form AOC-1 forming a part of the financial statement attached to this Directors’ Report and pursuant to first proviso to Sub-section (3) of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

Pursuant to Regulation 16 (1) (c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter “Listing Regulations”), a material subsidiary in a year shall be a subsidiary whose income or net worth exceeds 10% of the consolidated income or net worth respectively of the Company and its subsidiaries, in the immediately preceding accounting year. At present, there is no such material subsidiary of the Company within the meaning of the above Regulation.

The duly audited Consolidated Financial Statements as required under the Indian Accounting Standard 110, provisions of Regulation 33 of the Listing Regulations and Section 136 of the Act have been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2022-23.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the relevant provisions of the Listing Regulations.

Pursuant to the Listing Regulations, as amended, a certificate obtained from a Practising Company Secretary certifying that the Directors of the Company are not debarred or disqualified from being appointed or to continue as directors of companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs, forms part of the report as Annexure B to the Corporate Governance Report.

In terms of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on 26th May, 2022 appointed Messrs Anjan Kumar Roy & Co., Company Secretaries (FCS-5684/CP No.4557) as the Secretarial Auditor to conduct audit of the secretarial records for the financial year ended 31st March, 2023 and to submit the Secretarial Audit Report.

The Secretarial Audit Report as received from Messrs Anjan Kumar Roy & Co., Company Secretaries in the prescribed Form No. MR-3 is annexed to this Board’s Report and marked as Annexure V. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. An Annual Secretarial Compliance report as per Securities and Exchange Board of India circular dated 8th February, 2019 and as amended vide NSE circular dated 16th March, 2023 and 10th April, 2023 is also attached as Annexure VI as an additional disclosure.

COMPLIANCE WITH THE SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI). In this regard, the Company has devised proper systems to ensure compliance of SS-1 and SS-2 and that such systems are adequate and operating effectively.

TECHNOLOGY AGREEMENTS

Your Company has a Technical License Agreement with Nippon Paint Automotive Coatings Co, Ltd. of Japan.

FIXED DEPOSIT

The Company had earlier discontinued acceptance of fixed deposits since 2002 and accordingly, no fresh deposit was accepted during the year. As per the provisions of Section 125 of the Act, all unclaimed deposits have been transferred to Investor Education and Protection Fund (IEPF).

WEBLINK OF ANNUAL RETURN

The draft Annual Return (e-form MGT-7) for the financial year ended 31st March, 2023 is placed on the website of the Company i.e., https://www.bergerpaints.com/investors/annual-returns.html which is in compliance with the Companies (Amendment) Act, 2017, effective from 28th August, 2020. The e-form MGT-7 shall be filed with the MCA upon the completion of the 99th Annual

General Meeting of the Company as required under Section 92 of the Companies Act, 2013 and the Rules made thereunder and a copy of the same shall be available on the website of the Company.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

SEBI 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 (BRR) in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations with the Stock Exchanges w.e.f. FY 2022-23. The Company accordingly complied with the requirement and had framed a Business Responsibility and Sustainability Policy in line with the BRR Policy and the suggested framework as provided by SEBI based on the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses published by the Ministry of Corporate Affairs. The existing BRR Policy was accordingly modified and approved and adopted by the Board of Directors of the Company (and can be viewed at https://www.bergerpaints.com/about-us/business-responsibility-and-sustainability-policy.html). Mr Abhijit Roy, Managing Director and CEO is the Director responsible for implementing the BRSR Policy and Mr Arunito Ganguly, Vice President and Company Secretary is the BRSR Head. As required, the BRSR for FY 2022-23 is attached to this report as Annexure VIII.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2023 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis,

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively,

vi) The Directors have devised proper systems to ensure proper compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively,

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Company has formulated a Remuneration Policy pursuant to the provisions of Section 178 and other applicable provisions of the Act and Rules thereof. The policy is based on the guiding principle aimed towards retaining and rewarding performers. There has been no change in the said policy during the financial year ended 31st March, 2023.

The Policy is available at the following weblink: www.bergerpaints.com/about-us/remuneration-policy.html.QUALIFICATION OR RESERVATIONS IN THE STATUTORY AND SECRETARIAL AUDIT REPORTS

Your Board has the pleasure in confirming that no qualification, reservation, adverse remark or disclaimer has been made by the Statutory Auditors and the Company Secretary in Practice in their Audit Reports issued to the members of the Company. The Statutory Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143 (12) of the Act.

SHARE CAPITAL

The Authorised Share Capital of your Company as on 31st March, 2023 stood at ''120,00,00,000 divided into 120,00,00,000 equity shares of ''1/- each. The Issued Share Capital of your Company is ''97,15,13,965 divided into 97,15,13,965 equity shares of ''1/- each and the subscribed and paid-up capital is ''97,14,22,485 divided into 97,14,22,485 equity shares of ''1/- each fully paid-up.

CREDIT RATING

Credit ratings obtained by the Company during the relevant financial year, for facilities specified in the table below are as follows:-

Name of Entity

Instrument

Rating

CRISIL

Fund Based facilities from Banks

CRISIL AAA /Stable

CRISIL

Non Fund Based facilities from Banks

CRISIL A1

CRISIL

Commercial Paper

CRISIL A1

CARE

Commercial Paper

CARE A1

There was no revision in rating during the year.

LOANS, COMMITMENTS AND CONTINGENCIES, INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statements (please refer Notes 7,8,13 and 46 of the standalone financial statements).

RELATED PARTY TRANSACTIONS

The Company has always been committed to good corporate governance practices, including in matters relating to Related Party Transactions (RPTs). Endeavour is consistently made to have only arm’s length transactions with all parties including Related Parties. The Board of Directors of the Company had a "Policy on Related Party Transactions" in terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 188 of the Companies Act, 2013 since 26th September, 2014. However, in light of the various impactful changes pursuant to several amendments in the Listing Regulations and most of which had been made effective from 01.04.2022, it was necessary to amend the existing policy to align it with the changes as introduced by SEBI recently. The new policy is available at the following weblink: https://www.bergerpaints.com/about-us/rpt-policy.html. The Company has also developed a Related Party Transactions (‘RPTs’) Manual and Standard Operating Procedures to identify and monitor RPTs.

All transactions with related parties are placed before the Audit Committee for approval and Board, as applicable. Prior omnibus approval of the Audit Committee is obtained for all the RPTs, which are foreseeable and repetitive and/or entered in the ordinary course of business and are at an arm’s length basis.

All related party transactions entered during the year were in ordinary course of the business and at an arm’s length basis. No material related party transactions, i.e. transaction with a related party exceeding Rupees one thousand crore or 10% of the annual consolidated turnover, as per the last audited Financial Statements of your Company, whichever is lower, were entered during the year by your Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable.

POLICY TO DETERMINE MATERIAL EVENTS

As per the Listing Regulations, the Company has framed a policy for determination of materiality, based on criteria specified in the regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-determine-material-events.html.

POLICY FOR PRESERVATION OF DOCUMENTS

As per Regulation 9 of Listing Regulations, the Company has framed a policy for Preservation of Documents, based on criteria specified in the said Regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-preservation-documents.html.

SIGNIFICANT CHANGES

During the financial year 2022-23, no significant change has taken place which could have an impact over the financial position of the Company. Further, except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e., 31st March, 2023 and the date of this Report.

DIVIDEND

The total comprehensive income of the Company is ''827.84 Crore for the year 2022-23.

Your Directors have recommended a dividend of ''3.20 (320%) per equity share of ''1/- each for the financial year ended 31st March, 2023. Dividend is subject to approval of the shareholders at the ensuing Annual General Meeting. The dividend, if approved, will absorb an amount of ''310.86 Crore (compared to ''301.11 Crore in the previous year), based on the current paid-up capital of the Company. The dividend will be paid to those members holding shares in the physical mode whose names appear in the Register of Members as on 11th August, 2023 and for shares held in electronic form, to those whose names appear in the list of beneficial holders furnished by respective Depositories as at the end of business hours on 4th August, 2023.

The Company has not transferred any amount to the General Reserve during the financial year ended 31st March, 2023.

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. The Dividend Distribution Policy (though optional) is annexed to this Report (marked as Annexure I). The Policy is available at the following weblink: https://www.bergerpaints.com/about-us/dividend-distribution-policy.html.

In terms of the provisions of Section 124 of the Act, your Company has transferred an amount of ''37,50,785 for 2014-15 (Final) and ''36,66,001 for 2015-16 (Interim) to the Investor Education and Protection Fund in respect of dividend amounts lying unclaimed or unpaid for more than seven years from the date they became due.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, as on 31st March, 2014.

Pursuant to the changes introduced by the Finance Act, 2020 in the Income-tax, Act 1961, the dividend paid or distributed by a Company shall be taxable in the hands of the shareholders. Accordingly, in compliance with the said provisions, your Company shall make the payment after necessary deduction of tax at source.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 (as amended), is annexed as Annexure VII of this report.

Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings and Outgo of the Company are ''4.42 Crore and ''1313.02 Crore respectively. Primarily, earnings were from exports and consultancy services and outgo was towards import payments.

Particulars of Employees

In terms of the provisions of Section 197(12) read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 particulars of certain category of employees have been set out in Annexure IV of this report.

STATEMENT OF EVALUATION OF BOARD OF DIRECTORS AND COMMITTEES THEREOF

Your Company understands the requirements of an effective Board Evaluation process and accordingly conducts the Performance Evaluation every year in respect of the following:

i. Board of Directors as a whole.

ii. Committees of the Board of Directors.

iii. Individual Directors including the Chairman of the Board of Directors.

In compliance with the requirements of the provisions of Section 178 of the Act, the Listing Regulations and the Guidance Note on Board Evaluation issued by SEBI in January 2017, your Company has carried out an Online Performance Evaluation process for the Board/Committees of the Board/Individual Directors including the Chairman of the Board of Directors for the financial year ended 31st March, 2023. During the year under review, the Company has complied with all the criteria of Evaluation as envisaged in the SEBI Circular on ‘Guidance Note on Board Evaluation’.

The key objectives of conducting the Board Evaluation process were to ensure that the Board and various Committees of the Board have appropriate composition of Directors and they have been functioning collectively to achieve common business goals of your Company. Similarly, the key objective of conducting performance evaluation of the Directors through individual assessment and peer assessment was to ascertain if the Directors actively participate in the Board/Committee Meetings and contribute to achieve the common business goals of the Company.

The Directors carry out the aforesaid Online Performance Evaluation in a confidential manner and provide their feedback on a rating scale of 1-5. Duly completed formats were sent to the Chairman of the Board and the Chairman/Chairperson of the respective Committees of the Board for their consideration. The Performance Evaluation feedback of the Chairman was sent to the Chairman of the Compensation and Nomination and Remuneration Committee.

This year also, the outcome of such Performance Evaluation exercise was discussed at a separate meeting of the Independent Directors held on 2nd February, 2023 and was later tabled at the Compensation and Nomination and Remuneration Committee meeting held on the same day. The Compensation and Nomination and Remuneration Committee forwarded their recommendation based on such Performance Evaluation Process to the Board of Directors and the same was tabled at the Board Meeting held on 2nd February, 2023.

After completion of online evaluation process, the Board of Directors at its Meeting held on 2nd February, 2023, also discussed the Performance Evaluation of the Board, its Committees and individual directors. The performance evaluation of Independent Directors of the Company were done by the entire Board of Directors, excluding the Independent Directors being evaluated and after being satisfied with the outcome, it was noted that the Committees were working effectively.

Pursuant to Section 178(3) of the Act and Regulation 19 of the Listing Regulations, the Remuneration Committee is entrusted with responsibility of formulating criteria for determining qualifications, positive attributes and independence of an Independent Director. This can be viewed at https://www.bergerpaints.com/about-us/criteria-policy.html.

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

Pursuant to Section 134(3)(q) of the Act read with Companies (Accounts) Rules, 2014, it is stated that no material order has been passed by any regulator, court or tribunal impacting the Company''s operations and its going concern status during the financial year 2022-23.

No application has been made under the Insolvency and Bankruptcy Code, 2016 against the Company; hence the requirement to disclose the details are not applicable. The requirement to disclose the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL

Your Company’s Board is duly constituted and in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.

COMPOSITION OF BOARD

The Board comprises 11 Directors of which, 3 are Executive Directors (2 of whom are part of the promoter group), 2 are NonExecutive (both are part of the promoter group) and 6 are Non-Executive, Independent Directors. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations read with Section 149 of the Act.

MEETINGS

During the year under review, a total of seven Meetings of the Board of Directors of the Company were held, i.e., on 20th and 21st April, 2022, 26th May, 2022, 04th August, 2022, 26th September, 2022, 10th November, 2022, 12th January, 2023 and 2nd February, 2023. Also, the Board of Directors have passed 13 (thirteen) Resolutions by Circulation. Details of Board composition and Board Meetings held during the financial year 2022-2023 have been provided in the Corporate Governance Report - Annexure IX which forms part of this Annual Report.

KEY MANAGERIAL PERSONNEL (KMP)

Mr Abhijit Roy (DIN: 03439064) is the Managing Director & CEO and a KMP of the Company. Mr Srijit Dasgupta ceased to be the Director-Finance & CFO & KMP w.e.f. close of business hours on 30.09.2022. Thereafter, Mr Vikash Sarda was appointed as the Vice President & CFO & KMP w.e.f. 01.10.2022. He resigned as the Vice President & CFO & KMP of the Company w.e.f. close of business hours on 04.01.2023. Further, Mr Kaushik Ghosh was appointed as the Vice President & CFO & KMP w.e.f. 12.01.2023. Messers Abhijit Roy, Kaushik Ghosh and Arunito Ganguly (Vice President & Company Secretary) are the KMPs of the Company.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The following are the Independent Directors of your Company:-

1) Mrs Sonu Halan Bhasin

2) Mr Naresh Gujral

3) Mr Pulak Chandan Prasad

4) Mr Anoop Hoon

5) Dr Anoop Kumar Mittal

6) Mr Gopal Krishna Pillai (w.e.f. 15.05.2023)

The Company has received declarations from Independent Directors that they meet the criteria of independence as prescribed u/s 149(6) of the Act and as required under the Listing Regulations. In the opinion of the Board, they fulfil the condition for appointment/ re-appointment as Independent Directors on the Board.

The Board of Directors confirms that the Independent Directors have affirmed compliance with the Code for Independent Directors as prescribed in Schedule IV to the Act and also with the Company’s Code of Conduct applicable to all the Board Members and Senior Management Personnel of the Company for the financial year ended on 31st March, 2023.

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).

All the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs (IICA) as was notified and required under Section 150(1) of the Act.

COMMITTEES OF THE BOARDA. AUDIT COMMITTEE

The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The composition of the Audit Committee has been disclosed in the Corporate Governance Report which forms part of the Board''s Report (Annexure IX). The terms of reference of the Audit Committee have been duly approved by the Board of Directors.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 of the Act and the Rules framed therein read with Regulation 22 of the Listing Regulations, your Company has a Vigil Mechanism/Whistle Blower Policy in place for directors and employees of the Company through which genuine concern regarding various issues relating to inappropriate functioning of the organization can be raised. The Vigil Mechanism/Whistle Blower Policy has been uploaded on the website of the Company at https://www.bergerpaints.com/about-us/whistleblower-policy.html.

B. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Company has spent an amount of ?19.28 Crore during the financial year 2022-2023 as against its 2% obligation amounting to ?19.10 Crore, thereby exceeding its entire CSR obligation. The required details as specified in Companies CSR Policy Rules, 2014 are given in Annexure III.

The CSR Policy as recommended by the CSR Committee and as approved by the Board is available on the website of the Company and can be accessed at https://www.bergerpaints.com/about-us/csr-policy.html. The composition of the CSR Committee and a brief outline of the CSR Policy is annexed to this report (Annexure III).

The Company’s CSR activities majorly comprises iTrain programme aimed at skilling/upskilling painters. The programme is carried out from fixed iTrain centres spread across the country and mobile iTrain centres which visit far-flung areas for imparting this skill development exercise. The Company had earlier entered into a Memorandum of Understanding with Smile Foundation, a reputed NGO for carrying out the mobile iTrain activities on behalf of the Company.

C. COMPENSATION AND NOMINATION AND REMUNERATION COMMITTEE

The constitution of the Company’s Compensation and Nomination and Remuneration Committee is given in the Report on Corporate Governance - Annexure IX.

D. SHAREHOLDERS’ COMMITTEES

The constitution of the Company’s Shareholders’ Committees is given in the Report on Corporate Governance - Annexure IX.

E. BUSINESS PROCESS AND RISK MANAGEMENT COMMITTEE

The constitution of the Company’s Business Process and Risk Management Committee is given in the Report on Corporate Governance - Annexure IX.

Structure of the Board of Directors

Name of Directors

Non-Executive

Executive

Independent

Lady

Mr Kuldip Singh Dhingra

Y

N

N

N

Mr Gurbachan Singh Dhingra

Y

N

N

N

Mr Abhijit Roy

N

Y

N

N

Ms Rishma Kaur

N

Y

N

Y

Mr Kanwardip Singh Dhingra

N

Y

N

N

Name of Directors

Non-Executive

Executive

Independent

Lady

Mr Naresh Gujral

Y

N

Y

N

Mr Pulak Chandan Prasad

Y

N

Y

N

Mr Anoop Hoon

Y

N

Y

N

Mrs Sonu Halan Bhasin

Y

N

Y

Y

Dr Anoop Kumar Mittal

Y

N

Y

N

Mr Gopal Krishna Pillai (w.e.f. 15.05.2023)

Y

N

Y

N

F. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) COMMITTEE

The composition of the committee has not been mandated under any law though going by the expectations of the investors, the Committee was formed on 20th October, 2022. The constitution of the same has been given in the Report on Corporate Governance - Annexure IX.

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company believes that the best training is imparted when dealing with actual roles and responsibilities on the job. To this extent, the Company arranges detailed presentation by Business and Functional Heads on various aspects including the business environment, economy, performance of the Company, industry scenario, sales and marketing, production, raw materials, research and development, financial controls, the Company’s strategy, etc. Visits to factories, business units are also undertaken from time to time. Details of Familiarization Programmes imparted during the year under review has been uploaded on the Company’s website and is available at the following weblink: https://www.bergerpaints.com/about-us/familiarization-program.html.

INFORMATION AS TO REMUNERATION OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the following disclosures are made:

1) Ratio of remuneration of Directors/KMP to the median remuneration of the employees:

Name of Directors/KMPs

Remuneration Received (?)

Ratio as to that of the Median Employee

Percentage increase in Remuneration

Mr Kuldip Singh Dhingra

18,00,000

2.31:1

0.00

Mr Gurbachan Singh Dhingra

10,00,000

1.28:1

0.00

Mr Abhijit Roy

7,17,74,190 #

92.21:1

24.04

Mr Kanwardip Singh Dhingra

65,15,861

8.37:1

16.12

Ms Rishma Kaur

64,83,067

8.33:1

14.44

# Remuneration does not include value of ESOPs granted.

Name of Directors/KMPs

Remuneration Received (?)

Ratio as to that of the Median Employee

Percentage increase in Remuneration

Mr Pulak Chandan Prasad

-

-

-

Mr Naresh Gujral

7,20,000

0.93:1

0.00

Mr Anoop Hoon

7,20,000

0.93:1

0.00

Mrs Sonu Halan Bhasin

7,20,000

0.93:1

0.00

Dr Anoop Kumar Mittal

7,20,000

0.93:1

0.00

Mr Srijit Dasgupta*

1,13,88,840 #

14.63:1

(39.18)*

Mr Vikash Sarda**

25,57,744 #

3.29:1

0.00

Mr Kaushik Ghosh***

15,80,972 #

2.03:1

0.00

Mr Arunito Ganguly

57,97,800

7.45:1

8.96

Mr Gopal Krishna Pillai (w.e.f. 15.05.2023)

-

-

-

Note:- * Mr Srijit Dasgupta ceased to be the Director-Finance & CFO of the Company w.e.f. close of business hours on 30.09.2022.

** Mr Vikash Sarda was appointed as the Vice President & CFO w.e.f. 01.10.2022. He resigned as the Vice President & CFO

of the Company w.e.f. close of business hours on 04.01.2023.

*** Mr Kaushik Ghosh was appointed as the Vice President & CFO w.e.f. 12.01.2023.

# Remuneration does not include value of ESOPs granted.

Note:- The median employee remuneration for 2022-23 is: ?7,78,365 p.a. (including variable pay)

2) Percentage (%) increase in remuneration during the financial year 2022-23: Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the financial year 2022-23: 10.6%

4) Number of permanent employees on the rolls of the Company as on 31st March, 2023: 4,088

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration - The average percentile increase in salaries of employees was 14.9% as compared to an average percentile increase of 22.6% of managerial remuneration. The increase of managerial remuneration is based on growth criteria.

6) Pursuant to the requirement of Section 197(14) of the Act, the following disclosure is made in respect to remuneration received by the Whole time Directors:

Particulars of Directors

Nature of Transaction

Amount (?)

Ms Rishma Kaur, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakh

Mr Kanwardip Singh Dhingra, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakh

Affirmation

It is hereby affirmed by the Chairman of the Company that the remuneration paid to all the employees, Directors and Key Managerial Personnel of the Company during the Financial Year 2022-23 are as per the Remuneration Policy framed by the Compensation and Nomination and Remuneration Committee of the Company.

LISTING WITH STOCK EXCHANGES

Your Company is listed with National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited and has paid the listing fees to each of the Exchanges. Your Company’s short term debt instruments (Commercial Papers) were listed with National Stock Exchange of India Limited as was required vide SEBI Circular SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated 22nd October, 2019 w.e.f. 24th December, 2019. The addresses of these Stock Exchanges and other information for shareholders are given in the Corporate Governance Report as contained in the Annual Report.

COST AUDITORS

The Board of Directors at its Meeting held on 26th May, 2022 had re-appointed M/s N. Radhakrishnan & Co., Cost Accountants (Firm Registration No.000056), 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting audit of the cost records maintained under Section 148(1) of the Act for the Company’s factories situated at Howrah, Rishra, Goa, Puducherry, Jejuri and Naltali for the financial year 2022-23. M/s Shome & Banerjee, Cost Accountants (Firm Registration No. 000001), 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, have been entrusted with the responsibility of conducting cost audit of the cost records maintained under Section 148(1) of the Act for the Company’s factory situated at Jammu and the factories of British Paints division located at Sikandrabad and Hindupur for the financial year 2022-23.

The cost audit reports for the financial year 2021-22 were filed on 21st October, 2022 on receipt of advice from the Ministry of Company Affairs.

STATUTORY AUDITOR

The Statutory Auditor, Messrs S. R. Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 301003E/E300005) was re-appointed pursuant to the provisions of Sections 139, 142 of the Act and the Rules made thereunder from the conclusion of the 96th Annual General Meeting upto the conclusion of the 101st Annual General Meeting of the Company, at the Annual General Meeting held on 25th September, 2020. Accordingly, they would continue as the Statutory Auditor for the Financial Year 2023-24.

CAUTIONARY STATEMENT

There are certain statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions which may be read as “forward-looking statement” within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make difference to the Company’s operations include demand/supply conditions, raw material prices, changes in government policies, government laws, tax regimes, global economic developments and other factors such as pandemic situation, litigations and labour negotiations.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors Kuldip Singh Dhingra

Place: New Delhi Chairman

Dated: 15th May, 2023 (DIN: 00048406)


Mar 31, 2022

Your Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2022.

FINANCIAL RESULTS

('' in Crore)

Particulars

Financial Year

Standalone

Consolidated

2021-2022

2020-2021

2021-2022

2020-2021

Profit before Exceptional Items, Depreciation, Finance Cost and Tax

1245.65

1152.72

1395.66

1239.47

Add: Exceptional Item

-

(14.80)

-

-

Add: Share of Profit/Loss from Joint Ventures

-

-

3.86

(5.61)

Less:

Depreciation and Amortisation Expense

197.53

186.12

226.51

211.14

Finance Cost

42.93

33.22

50.72

44.10

Profit Before Tax

1005.19

918.58

1122.29

978.62

Less:

Provision for Taxation

255.33

237.80

289.34

258.90

Profit After Taxation

749.86

680.78

832.95

719.72

Add:

Other comprehensive income/(loss) for the year net of tax

0.82

0.01

(15.50)

12.53

Total comprehensive income

750.68

680.79

817.45

732.25

FINANCIAL PERFORMANCE Highlights of the Standalone Results:

a. Revenue from Operations for the year ended 31st March, 2022 was ''7740.93 crore as against ''6021.41 crore in the corresponding last financial year, representing an increase of 28.56% over the last financial year.

b. EBIDTA (excluding other income and exceptional item) for the year ended 31st March, 2022 was ''1182.53 crore as against ''1096.95 crore in the corresponding last financial year, representing an increase of 7.80% over the last financial year.

c. Net Profit for the financial year ended 31st March, 2022 was ''749.86 crore as against ''680.78 crore recorded in the previous financial year, representing an increase of 10.15% over the corresponding period of last financial year.

Highlights of the Consolidated Results:

a. Revenue from Operations for the year ended 31st March, 2022 was ''8761.78 crore as against ''6817.59 crore in the corresponding last financial year, representing an increase of 28.52% over the last financial year.

b. EBIDTA (excluding other income) for the year ended 31st March, 2022 was ''1331.07 crore as against ''1187.98 crore in the corresponding last financial year, representing an increase of 12.04% over the last financial year.

c. Net Profit for the year ended 31st March, 2022 was ''832.95 crore as against ''719.72 crore in the corresponding last financial year, representing an increase of 15.73% over the last financial year.

The Board of Directors have recommended a dividend of ''3.10 (310%) per equity share of ''1/- each fully paid up for the financial year ended 31st March, 2022. Dividend is subject to approval of the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE AND DEVELOPMENT

Just when the world was coming to terms with the loss of lives, disruptions, lock-downs, restrictions caused due to COVID 19 pandemic, fresh challenges are at our door step caused by the conflict in Europe. As the war draws on and sanctions and retaliatory actions intensify, shortages, volatility in commodity and financial markets, supply dislocations and most alarmingly, persistent and rapidly spreading inflationary pressures are becoming more acute day by day.

Over the first half of 2021, an uneven and divergent global recovery began to take shape with the ebbing of the ‘Delta’ variant driven COVID 19 infections and the gathering pace and scale of vaccination. In the second half of 2021, the global recovery became hostage to the ‘Omicron’ variant though the wave turned out to be short lived and global trade recovered amidst supply and logistics bottlenecks. The International Monetary Fund’s April, 2022 World Economic Outlook placed global GDP growth for the year at 6.1%.

The Indian Economy has shown resilience, drawing upon the innate strength of its underlying fundamentals and supported by a prudent and favourable policy mix. The rebound in domestic economic activity that took hold with the waning of the Omicron wave is turning out to be increasingly broad based. Private consumption is regaining traction on the back of recuperating contact-intensive services and rising of discretionary spending. Government consumption has crossed pre-pandemic levels and overall the Indian economy consolidated its recovery with most constituents surpassing pre-pandemic levels of activity.

INDIAN PAINT INDUSTRY

The Indian Paint Industry is today worth over INR 62000 crore (USD 8 billion), and is the fastest growing major paint economy the world over, with a consistent double digit growth over the last two decades except 2020 and 2021. The last two years have not been the best of times for the Indian paints and coatings industry due to multiple waves of COVID 19 pandemic though it did not retard the pace of new investments and capacity expansions in the Indian paint and coatings industry. Almost all major producers have announced and gone ahead with a slew of investments resulting in capacity expansions and greenfield projects.

The decorative paint category constitutes almost seventy-five percent of the overall market and includes multiple categories like exterior wall paints, interior wall paints, wood finishes and enamel as well as auxiliary products like primers and putty. The Industrial paint category constitutes the balance twenty-five percent of the paint market and includes a broad array of sectors like protective, automotive, general industrial, marine, powder, specialty coatings, etc.

The residential housing sector registered recovery in the fourth quarter of 2021-2022, with sales and construction launches improving sequentially, and inventory overhang declining to the lowest in eight quarters. The optimism in the sector was reflected in the number of units launched, the highest in the last fifteen quarters. The construction sector benefited from the thrust by the government on infrastructure coupled with activity in the housing segment. The Pradhan Mantri Awaas Yojana with a sizable allocation of funds is expected to support growth in construction sector along with generation of mass employment in the economy. In the last few years, the Construction Chemicals and Waterproofing segment has been growing fast and is one of the major contributors to the Paints and Coatings business.

COMPANY’S OPERATIONS

Berger’s consistent focus on transforming challenges into opportunities has been the pivot which has enabled the Company to do well even during tough times. The inherent challenges brought about by multiple waves of the COVID-19 pandemic and the escalation of geographical tensions resulting in war in Eastern Europe towards the end of the financial year made it imperative that we focus on our strengths and look for all available opportunities. Berger’s tremendous progress over the past decade has been possible because of

an organizational culture that encourages and rewards innovation and value to the customer. The ability of the teams to consistently craft and execute winning strategies while ensuring that the corporate governance standards are maintained at the highest levels have ensured robust and consistent growth of the Company. Despite the undeniable challenges, Berger has been agile, focused to adapt to the new normal and understanding to the core value of business - people, process and technology more than ever, thus strengthening its position in the paint industry.

Aggressive network expansion drives in the rural and up-country markets and renewed emphasis on the infrastructure and project segment in the urban markets helped the Company to stride forward. Paint and coatings skill remains an under-penetrated category in India with a huge scope of increasing our footprint in newer geographies. Focus was on increasing the number of Colorbank machines and entering new markets. At present, Berger has a network strength of 38,500 Colorbank machines. On top of this, the Company had undertaken a distributor initiative three years back which has further added to the spread. In all, the Company caters to a total network size of 50,000 dealers and retailers. Further, the sales teams underwent rigorous training programs that facilitated the network expansion efforts. The Company made use of technology to map the network including non-paint channels. The initiatives produced good results.

Initiatives taken to drive premium-luxury segment including launch of new products, new advertisements and revamping of existing portfolio helped drive up profitability and resulted in Operating profit growth which was more than the industry average. The Company registered good growth in numbers both in top-line as well as bottom-line. Margin pressure was there due to escalating raw material prices and the Company took series of steps to cut costs, improve margins and increase prices to mitigate the price increase pressure. The Company’s path breaking and leading products such as Easy Clean, Anti Dustt, Homeshield waterproof putty were revered and emulated by all.

The Company launched new products out of which significant ones are as follows:

“WeatherCoat Longlife Flexo” in addition to the existing WeatherCoat Longlife 7 and WeatherCoat Longlife 10 promises to be a high- performance exterior paint with elastomeric properties that help cover hairline cracks on exterior walls and silicon additives that help protect from heavy rains. Its superior dust pickup resistance comes with an eight-year performance warranty. “Luxol PU Enamel” formulated with specially designed proprietary polyurethane resins, gives a long lasting glossy finish with superior coverage suitable for metal, wood and masonry surface. “BP White Primer Lite”, a specially formulated economy acrylic primer for interiors, gives good performance at low cost. It has excellent whiteness and coverage coupled with good opacity. “BP Anti Corrosive 1K epoxy primer”, specially formulated with epoxy-based resin gives it excellent anti- corrosive properties and is superior to ordinary metal primers. “Berger Imperia BreatheEasy”, a zero smell, one component water based polyurethane is easy to apply on both new and pre-coated heritage furniture in clear opaque and transparent shades. “Woodkeeper Rainbow” and “Berger Imperia Polyster” add to our product range in terms of wood finishes. While the consumers spend more time in their homes, Berger launched a range of Do-It-Yourself products under the “i-Paint” umbrella. The product range turned out to be an instant success as it helped the customers make aesthetic changes to their accessories, furniture, and decor items on their own. “Bison Flex Wall Putty”, a white cement based premium putty fortified with polymers and additives is ideal for use on exterior and interior wall surfaces to provide a smooth aesthetic finish and an extended life to the topcoat.

Further, the Company also re-branded some of its products like ‘Silk Illusions’, premium range of interior textures now been rebranded as “Silk GlamArt”. The textures are designed to make your home a thing of beauty while defining your personality. The tagline “Live Your Style”, aims at making the home an ultimate style statement. The “Silk Glamor” range of products formulated using the crystal reflective technology to give walls a durable, glamourous and rich appearance for many years is being endorsed by Kareena Kapoor Khan. It is free from alkylphenol ethoxylates (APEO), formaldehyde and is low in VOC. Silk Glamor range is available in metallic and non-metallic shades.

Express Painting, a home painting service innovation from Berger Paints launched in 2015, has been growing from strength to strength. Express Painting™ became “Safe Express Painting” with the slogan “Faster-Cleaner-Safer” service with a safety upgrade and a contactless service availed of through a consumer friendly mobile application crafted to solve all the pain-points faced by a customer. Available pan-India, the service that enjoys a 95% Customer Satisfaction Score, delivered 35,000 beautiful homes to happy customers in 100 cities. Specialised personal consultancy, precision, mechanized tools and trained painters have truly transformed the journey of Express Painting consumers and Berger is a sought after brand when it comes to Express Painting.

With 47 iTrain painter training academies, Berger Paints manages the largest skilling activity in the industry and trained more than 1 lac people last year on painting skills. 19 mobile academies covered 2.65 lac km across the length and breadth of India visiting and training painters of 1040 towns. All 3 winners in the decorative painting category at the National Skills Competition were trained at various Berger iTrains.

Waterproofing and construction chemical business has grown by more than 50% overall; revenue has tripled in many markets as well. Berger Home Shield has now become one of the major players in this segment with strong presence in more than 30000 outlets across the country. Berger Homeshield has been able to establish itself as a scientific waterproofing specialist. Strong forays were made into industries, government, builders and repair segment. Scientific waterproofing solution has been provided across the country through more than 20000 trained applicators. Many prestigious projects have been executed with Berger Homeshield product range including housing, national highway, hydro-power, airport, bridges etc. A complete range of tile adhesive with ancillary products has also been launched under the prestigious “Homeshield” brand. Akshay Kumar is the Brand Ambassador for Berger Home Shield.

‘Berger Prolinks’ division provides customized painting solutions for India’s urban landmarks, old and new. Auditorium and cinemas, malls and multiplexes, high-end housing complexes, hotels and resorts, multi-speciality hospitals, international schools and university campuses, all have their unique needs and require considerable outlays to build and maintain. The professionalism and experience that Prolinks bring to the table has made it an ideal partner for such construction activity.

‘Berger Protecton’ has coated more than 500 railway and metro coaches using a coating system complying with Research Designs and Standards Organisation (RDSO) specification. Berger’s Protecton business is the undisputed leader in the protective coatings segment and has remained since its inception. Ranging from pipe coatings to refinery projects, railways, iron and steel plants, road marking business, thermal power plants, floor-coating, airports- Berger Protecton is present everywhere and is handling many prestigious projects during the year under review. This business registered record revenue in spite of great challenge bought about by escalating raw material prices which were passed on to the customers partially. The future for the Protecton business is extremely bright and with an array of innovative offerings, it is expected to grow rapidly.

The Auto, General Industrial and Powder Coating business faired satisfactorily during FY 2021-22. General Industrial in particular recorded a sizeable value growth during the period and a number of new OEMs were added during the year. Powder Coatings also grew considerably and commenced exporting to various countries.

The Research and Development (R&D) activity of the Company has been effectively supporting the business and is responsible for the Company’s robust growth. The differentiated product offerings have been possible because of the effects carried out by the R & D. R & D not only provides support to its existing businesses but contribute to profitability through constant innovation as well as focus on customer requirement and satisfaction. It further adds value when it comes to cost saving thus contributing towards increasing profitability of the Company. The Company has filed two patent applications during the year under review and plans to accelerate in this area.

Procurement and management of inventory, especially during the restrictions imposed due to the outbreak of the second wave and third wave of the COVID-19 pandemic posed a challenge like last year but was managed efficiently. Multiple waves of the pandemic,

supply chain and logistic disruptions, elevated inflation with the prices of crude, metals and fertilizers hitting the roof and bouts of financial market turbulence still throw open lot of uncertainty and efficient and effective management of resources are required to be made in order to ensure seamless supply of raw materials and finished goods. Judicious cash flow management ensured that Company operations were carried out smoothly.

The extent of digital adoption by the Indian consumers led to multiple transformational digital initiatives which were taken on the consumer, dealer and contractor front. Berger’s investments in IT and technology platforms to enhance ease of doing business for our sales team, channel partners and influencers and the supply chain initiatives have been worth their weight in gold. Distance today is no longer a barrier given the advancements in technology. The training and mentorship programs of our teams through digital platforms to deliver unsurpassed consumer engagements has been a key area of focus for us looking at the evolving market landscape both on competitiveness and aesthetics.

The manufacturing focus of the Company was on energy efficiency improvement, manpower optimization and related Environmental, Social and Governance (ESG) initiatives while maintaining COVID protocols. The manufacturing function successfully ensured that there is no dearth in supply of finished goods. Reduction of carbon emissions, roof top solar power plant, bio briquette fired thermic fluid heaters, LED lights are only a few sustainability and energy conservation initiatives among many other undertaken by the Company in all its manufacturing locations without compromising on health and safety of its work force.

Berger won “Deloitte India’s Best Managed Companies 2021” Award for overall business performance and sustained growth with the prestigious “Best Managed” title. Among several other awards and accolades received during the year, corporate EHS department won Environmental Protection Award 2021 by Greentech Foundation, as winner in gold category competing with large public sector organizations and multinational companies. This only indicates the Company’s constant endeavour towards a better environment and sustainability. Your organization also co-created a program called “Memorable Walls” to provide a platform to the budding designers to showcase their skills despite the limitations imposed by Covid-19.

The subsidiaries and joint ventures also contributed significantly to the overall growth of the Company with state-of-the-art manufacturing facilities, innovation and wide range of products, market penetration and economies of scale.

FOCUS AND OUTLOOK FOR 2022-23

With 86.8% of the adult population in India already vaccinated with the first and second dose, the Indian economy is relatively better placed to consolidate the recovery that is underway and improve the macro-economic prospects going forward. The pessimistic feeling is over and things look ‘back to normal’.

Berger as a brand, with its differentiated products, strong distribution network, state of the art technology backed by a strong research and development facility and always supported by an enthusiastic workforce is sufficiently equipped to handle competition and take long strides forward, penetrating into newer geographies, increasing sales and enriching customer experience. The Company is sufficiently equipped to tackle the situation and ensure smooth raw material supply, production, quality checks in order to ensure smooth distribution of its products and services. Efforts are constantly on to reduce cost through constant efforts without effecting the quality of products.

The pandemic for the last two years has been a huge lesson for us as regards maintaining health and hygiene and being vigilant about cleanliness at home and workplace. With an aim to keep our homes clean and free from infection, regular painting has now turned into a habit for many. The demand for protective coatings, water proofing, insulated floor coatings etc. are rising by every passing day. The demand for general industrial, automotive and powder coatings have recovered and it is expected that the Company would cater to an even large demography for consumers.

PROJECT

During the year under review, the Company successfully completed brownfield expansions in water-based paint at Hindupur, Goa, Jammu, Rishra and for solvent based paint in Jejuri and Hindupur. At Naltali unit, a raw material and finished goods warehouse has been constructed in sync with increased production volumes. Installation of large integrated production facility having decorative, industrial paint and wood coatings, resin, putty, emulsion and construction chemical manufacturing facility at Sandila Industrial Area, Hardoi, Lucknow (Uttar Pradesh) is expected to be commissioned during 2022 subject to receipt of statutory approval(s).

The Company also acquired land at Panagarh, Paschim Bardhaman District, West Bengal from the West Bengal Industrial Development Corporation Limited (WBIDC) for setting up a manufacturing unit for resin, construction chemicals and putty. Process of setting up of the factory is in full swing.

Rooftop solar power plants have been installed in Hindupur, Jejuri, Rishra, Naltali, VVN, Goa, Pondicherry and Sandila. The Company has successfully commissioned bio-briquette fire thermic fluid heaters in almost all its resin plants. LED lights along with automation in lighting system have been installed in order to save energy. Overall, the Company took a lot of initiatives and was able to generate substantial savings from various energy saving projects. Rainwater conservation initiatives at various manufacturing facilities provides alternative for freshwater consumption. Collected water is being reused in operations, gardening, toilets, floor-washing etc.

OPPORTUNITIES AND THREATS

The financial year 2021-22 has seen uncertainties and complexities which were never seen before, owing to the COVID 19 pandemic, war in Europe at the later part of the financial year which is still dragging on at the time of writing this report. Though the situation remains complicated, the paint and coatings industry in India, which is more than 100 years old, shows lot of growth potential.

Various legislations enacted by the government supported by a prudent and favourable policy mix along with the headroom for per capita paint consumption in India displays a favourable picture all around. With the government consumption crossing pre-pandemic levels, increased focus on home improvement, stress on having a cleaner and safer interior, culture of working from home which in turn translates to spending more time inside one’s house, all indicate significant opportunity for the paint and coatings industry. With differentiated products on offer especially water proofing, construction chemicals, wood coatings, protective coatings and home hygiene products the future looks even more promising. The overall thrust on housing for all/ affordable housing measures by the Government results in fresh demand for paints and future repainting jobs thus benefiting the paints and coatings business.

The threat caused due to COVID 19 pandemic and its mutant strains are still looming large and the continuing conflict in Eastern Europe adds to the anxiety and uncertainty coupled with rising prices of raw materials, crude oil, supply chain disruptions, inflationary pressures, employee health and wellness all of which will have an impact during the financial year 2022-23. With the paint and coatings industry doing well, it is expected that competition will be stiffer, with new entrants knocking at the door. The dearth of skilled labour force is one of the biggest threats being faced by the paint and coatings industry on account of the skill deficit wherein the skill gap is more apparent. There is a massive mismatch between the client’s demands and the services provided by the largely unskilled painters till date.

To sum up, it may be stated that digitization, planning and execution coupled with technological support, human resources, differentiated and innovative product offerings, active sales and service force with ever increasing market share puts the Company in a position to take advantage of the additional demand created both from the domestic and industrial consumers. Beyond the uncertainties, it is expected that the strong growth trajectory will soar higher on the wings of increasing market penetration, market share gains, new value added products and services. Strong brand equity will lead to a limited risk of disruption from peers and new entrants. The paint industry as a whole is expected to surge ahead in spite of such challenges.

RISKS AND CONCERNS

The Company has a Risk Management and Materiality Policy approved by the Business Process and Risk Management Committee, Audit Committee and the Board of Directors. The Policy provides a well-articulated framework for identification of risks inherent in the business operations of the Company and the methods of mitigation in a lucid manner on a continuous basis which are periodically reviewed and modified considering the size and the complexity of the business and the regulatory requirements from time to time. The Risk Management Policy has been renamed as Risk Management and Materiality Policy which can be viewed at the following https://www.bergerpaints.com/about-us/risk-management-policy.html.

Considering the huge uncertainties prevailing in the market due to war in Europe and the vagaries caused by the COVID 19 pandemic, the major economies of the world are passing through difficult times wherein many questions remain unanswered till date. There continues to be a concern with the rise of inflation, disruption in supplies, the fear of the COVID 19 pandemic coming back with the virus mutating itself and the length of the war in Europe which may result in the market feeling the pressure with the rise in the prices of raw materials and finished goods.

Fortunately, beyond the uncertainties, with proper and intricate planning and execution coupled with technological support, human resources, products, services and market presence, the Company is well positioned to take the advantage of additional demand generated both from domestic and industrial consumers. With its focus on digitization, data analytics, market penetration and strong brand image the Company is placed to tide over uncertainties. In spite of stiff competition and new entrants knocking at the door, the Company with its differentiated offerings and focus on transforming the living space into a safer and cleaner environment holds the key for its continued success.

With the major economies of the world having a tough time because of the war in Eastern Europe and also battling COVID uncertainties and surprises, the decision making and short term and long term strategies and goals need to be reviewed regularly in order to be ready and adaptable to change.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Internal Control Systems of the Company are robust and commensurate with the nature, size and complexity of its business. Well-designed internal financial control measures as laid down and adopted continue to be followed by the Company. Policies and procedures, as approved by the Board have been adopted by the Management of the Company for ensuring orderly and efficient conduct of its business, including adherence to Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Good governance, well defined systems and processes and policies, risk assessment, a vigilant control function, communication and monitoring and an independent internal audit function are the foundation of the internal control systems. The Internal Audit function of the Company continues to provide assurance on functioning and quality of internal controls along with adequacy and effectiveness through periodic reporting. The Internal Risk and Control function also evaluates organizational risk along with controls required for mitigating those risks. The control activities continue to incorporate, among others, continuous monitoring, routine reporting, digital business environment with minimum possible manual intervention, checks and balances, purchase policies, authorization and delegation procedures, audits including compliance audits, which are periodically reviewed by the Audit Committee and the Business Process and Risk Management Committee. The performance of the Internal Audit department is also reviewed by the Board and improvements advised. Your Company has a Code of Conduct for all employees and a clearly articulated and internalized delegation of financial authority. Your Company also takes prompt action on any violations of the Code of Conduct by its employees.

The Company’s Enterprise Resource Management Systems with Standard Operating Procedures based on work flows and process flow charts also provide a comfort in this regard. The Company is fully geared to implement any statutory recommendation which may be made in this regard.

Key Financial Ratios

Ratios

Standalone

Consolidated

FY 2021-22

FY 2020-2021

FY 2021-22

FY 2020-2021

Debtors'' Turnover

9.25

8.62

8.45

7.86

Inventory Turnover

(on material cost of goods sold)

2.82

2.76

2.91

2.84

Interest Coverage Ratio

23.07

27.10

21.89

22.11

Current Ratio

1.40

1.69

1.43

1.71

Debt Equity Ratio*

0.22

0.12

0.26

0.19

Operating Profit Margin %

12.72

15.13

12.65

14.25

Net Profit Margin

9.69

11.31

9.51

10.56

Return on Net Worth (RONW)

21.30

23.06

22.81

23.84

* Note: There was a 83.3% change in Company''s Standalone debt equity ratio as well as 26.92% change in Company''s Consolidated debt equity ratio on account of increase in debt balance.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial disclosures, which are reviewed by the Board and Audit Committee from time to time.

EMPLOYEE STOCK OPTION SCHEME

Your Company had earlier re-introduced the ESOP Scheme, aligned with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in the year 2016 in accordance with the approval of the members granted at the Annual General Meeting held on 3rd August, 2016, to reward eligible employees.

In accordance with the aforesaid scheme of 2016, the Compensation and Nomination and Remuneration Committee has granted 75,910 options on 8th November, 2021 to 216 eligible employees (including 1,300 to Mr Abhijit Roy, being Key Managerial Personnel) and also allotted 28,452 equity shares of ''1 each (face value) to eligible employees (including Key Managerial Personnel as per details below) upon exercise of their options earlier granted to them. The allotment of the aforesaid shares were made on 22nd December, 2021.

In accordance with Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014, the Company had allotted shares to Key Managerial Personnel (KMP) on 22nd December, 2021, on their exercising the options earlier granted to them and the details of the allotments made are given herein-

|NAME OF KMPs

DESIGNATION

NO. OF EQUITY SHARES ALLOTTED

MR ABHIJIT ROY

MANAGING DIRECTOR & CEO

678 shares

For further details, please refer to Annexure II to this report where detailed information required to be disclosed in terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014 are enclosed.

Please also visit the weblink: https://www.bergerpaints.com/investors/esop-disclosure.html for disclosures under Regulation 14 of the aforesaid Regulations.

HUMAN RESOURCES

The Company believes that building and nurturing a culture of innovation, execution excellence, collaboration and capability building are imperative to ensuring sustainable business growth and a future-ready organization.

The pandemic has accelerated workplace transformations worldwide to meet which we ushered-in digitalization of people-processes thus ensuring enhanced employee experience through data driven decision-making, delivering HR services “on the Go”, and create a connected and engaged workplace.

During the year, we launched our flagship developmental programmes for the Mid and Senior level Leadership “Top Gun’’ and “Dronacharya”. Co-crafted with institutes of global repute, these year-long capability building interventions are aimed at sharpening the Leadership and Functional capabilities of the participating members and cascading learnings across the Organization.

The Company believes in participative engagement across the entire hierarchy of the Organization. With a view to improve the productive participation of employees on the shop floor, a series of innovative programs were rolled out across all our manufacturing locations.

The overall Industrial Relations climate continued to remain harmonious and peaceful during the year. The number of employees as on 31st March, 2022 was 3,931 (31st March, 2021 - 3,814). The Industrial Relations were generally satisfactory during the financial year.

TRANSFER OF SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs (MCA) vide notification no. S.O.2866 (E) dated 5th September, 2017 enforced Sections 124(6) and 125 of the Companies Act, 2013 (hereinafter "the Act") read with the Investor Education and Protection Fund [IEPF] (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended), which require companies to transfer the underlying shares to the IEPF, in respect of which the dividends have remained unclaimed for a consecutive period of seven years. Accordingly, during the year under review, on 19th November, 2021 the Company had transferred 1,33,841 equity shares (0.01% of paid up capital) to the IEPF.

PREVENTION OF SEXUAL HARASSMENT

Pursuant to Section 134(3)(q) read with the Companies (Accounts) Rules, 2014, the Company has complied with the provisions relating to constitution of Internal Complaint Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee (“ICC”) formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. From the date of inception, there has been no such complaint received. During 2021, initiatives were taken to demonstrate the Company’s zero tolerance philosophy against discrimination and sexual harassment, which included easy to understand training and communication material which was made easily accessable. The Company also conducted online workshop for the employees to cover various aspects in this matter.

Currently, the ICC comprises the following members:-

1. Ms Rishma Kaur (Presiding Officer)

2. Mr Srijit Dasgupta

3. Mr Aniruddha Sen

4. Ms Kakoli Dey (NGO representative).

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 5 wholly-owned subsidiaries as on the date of this report: - (i) Beepee Coatings Private Limited (“Beepee Coatings”) in Gujarat; (ii) Berger Paints (Cyprus) Limited (“Berger Cyprus”) in Cyprus; (iii) Lusako Trading Limited (“Lusako Trading”) in Cyprus; (iv) Berger Jenson & Nicholson (Nepal) Private Limited (“BJN-Nepal”) in Nepal and (v) SBL Specialty Coatings Private Limited (“SCPL”) in Chandigarh.

The following companies are wholly-owned subsidiaries of the Company’s above named subsidiaries: - (i) Bolix S.A., Poland -wholly-owned subsidiary of Lusako Trading; (ii) Berger Paints Overseas Limited (“BPOL”), Russia - wholly-owned subsidiary of Berger Cyprus. Bolix S.A., Poland has 4 subsidiaries, viz.: Bolix UKRAINA sp.z.o.o., Ukraine (“Bolix Ukraine”), BUILD-TRADE sp.z.o.o.,Poland (“Build Trade Poland”), Soltherm External Insulations Limited, U.K. (“Soltherm U.K.”), Soltherm Isolations Thermique Exterieure SAS, France (“Soltherm France”).

Surefire Management Services Ltd., UK (“SMS”), is a joint venture of Bolix S.A., Poland with Green Dynamo Ltd., U.K. Details in respect of SMS are provided in Part B of AOC-1 forming a part of the Financial Statements.

The Company has three other subsidiaries viz., Berger Rock Paints Private Limited (the other shareholder being Rock Paints, Japan), Berger Hesse Wood Coatings Private Limited (the other shareholder being Hesse Shares GmbH, Germany) and STP Ltd. The statement relating to the above companies as specified in Sub-Section (3) of Section 129 of the Companies Act, 2013 is attached to the Report and Accounts of the Company.

Beepee Coatings Private Limited earned a revenue from operations of ''30.66 crore during the year under review.

Berger Paints (Cyprus) Limited ("Berger Cyprus") is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad and so is Lusako Trading Limited.

Bolix S.A. (including its subsidiaries) also posted encouraging results with a revenue from operations of ''374.58 crore.

During the year under review, BJN-Nepal showed good performance with a revenue from operations of ''255.88 crore.

SBL Specialty Coatings Private Limited (earlier known as Saboo Coatings Private Limited) continued to perform well with a revenue from operations of ''152.66 crore during the year 2021-2022.

The revenue from operations of Berger Paints Overseas Limited ("BPOL") was ''10 crore.

Berger Rock Paints Private Limited (“Berger Rock”), recorded revenue from operations of ''16.21 crore during the year ended 31st March, 2022.

Berger Hesse Wood Coatings Private Limited (“BHWCPL”) (earlier known as Saboo Hesse Wood Coatings Private Limited) recorded revenue from operations of ''16.89 crore during the year ended 31st March, 2022.

STP Limited recorded revenue from operation of ''244.90 crore during the year ended 31st March, 2022.

Berger Becker Coatings Private Limited, the Company’s joint venture with Becker Industrifarg, Sweden, showed good performance with revenue from operations of ''293.84 crore.

Berger Nippon Paint Automotive Coatings Private Limited (“BNPA”), the Company’s joint venture with Issac Newton Corporation, posted revenue from operations of ''182.79 crore.

The salient features of the financial statements of subsidiaries, associate companies and joint ventures are given in the Statement in Form AOC-1 forming a part of the financial statement attached to this Directors’ Report and pursuant to first proviso to Sub-section (3) of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

Pursuant to Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter “Listing Regulations”), a material subsidiary in a year shall be a subsidiary whose income or net worth exceeds 10% of the consolidated income or net worth respectively of the Company and its subsidiaries, in the immediately preceding accounting year. At present, there is no such material subsidiary of the Company within the meaning of the above Regulation.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Indian Accounting Standard 110, provisions of Regulation 33 of the Listing Regulations and Section 136 of the Act have been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2021-22.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the relevant provisions of the Listing Regulations.

Pursuant to the Listing Regulations, as amended, a certificate obtained from a Practising Company Secretary certifying that the Directors of the Company are not debarred or disqualified from being appointed or to continue as directors of companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs, forms part of the report as Annexure B to the Corporate Governance Report.

In terms of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on 26th May, 2021 appointed Messrs Anjan Kumar Roy & Co., Company Secretaries (FCS-5684/CP No.4557) as the Secretarial Auditor to conduct audit of the secretarial records for the financial year ended 31st March, 2022 and to submit the Secretarial Audit Report.

The Secretarial Audit Report as received from Messrs Anjan Kumar Roy & Co., Company Secretaries in the prescribed Form No. MR-3 is annexed to this Board’s Report and marked as Annexure V. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. An Annual Secretarial Compliance report as per Securities and Exchange Board of India circular dated 8th February, 2019 is also attached as Annexure VI as an additional disclosure.

COMPLIANCE WITH THE SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI). In this regard, the Company has devised proper systems to ensure compliance of SS-1 and SS-2 and that such systems are adequate and operating effectively.

TECHNOLOGY AGREEMENTS

Your Company has a Technical License Agreement with Nippon Paint Automotive Coatings Co, Ltd. of Japan.

FIXED DEPOSIT

The Company had earlier discontinued acceptance of fixed deposits since 2002 and accordingly, no fresh deposit was accepted during the year. As per the provisions of Section 125 of the Act, all unclaimed deposits have been transferred to Investor Education and Protection Fund (IEPF).

WEBLINK OF ANNUAL RETURN

The draft Annual Return (e-form MGT-7) for the financial year ended 31st March, 2022 is placed on the website of the Company i.e., https://www.bergerpaints.com/investors/annual-returns.html which is in compliance with the Companies (Amendment) Act, 2017, effective from 28th August, 2020. The e-form MGT-7 shall be filed with the MCA upon the completion of the 98th Annual General Meeting of the Company as required under Section 92 of the Companies Act, 2013 and the Rules made thereunder and a copy of the same shall be furnished on the website of the Company.

BUSINESS RESPONSIBILITY REPORT

SEBI had made it mandatory to publish a Business Responsibility Report by the top 1000 listed companies based on market capitalization in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations with the stock exchanges. The Company accordingly complied with the requirement and had framed a Business Responsibility Policy in line with the suggested framework as provided by SEBI based on the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses published by the Ministry of Corporate Affairs. The said Policy was adopted at the Board Meeting held on 30th May, 2017 and can be viewed at https://www.bergerpaints.com/about-us/business-responsibility-policy.html. Mr Abhijit Roy, Managing Director and CEO is the Director responsible for implementing the Business Responsibility Policy and Mr Arunito Ganguly, Vice President and Company Secretary is the Business Responsibility Head. As required, the BRR for 2021-22 is attached to this report as Annexure VIII.

In terms of amendment to Regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May, 10, 2021, SEBI has instructed companies to replace the Business Responsibility Report (BRR) with a Business Responsibility and Sustainability Report (BRSR). The Company has accordingly initiated steps to adopt and publish Business Responsibility and Sustainability Report for the year 2022-23 in the Annual Report for the year 2022-23.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2022 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis,

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively,

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

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Company has formulated a Remuneration Policy pursuant to the provisions of Section 178 and other applicable provisions of the Act and Rules thereof. The policy is based on the guiding principle aimed towards retaining and rewarding performers. There has been no change in the said policy during the financial year ended 31st March, 2022.

The Policy is available at the following weblink: www.bergerpaints.com/about-us/remuneration-policy.html.QUALIFICATION OR RESERVATIONS IN THE STATUTORY/SECRETARIAL AUDIT REPORTS

Your Board has the pleasure in confirming that no qualification, reservation, adverse remark or disclaimer has been made by the Statutory Auditors and the Company Secretary in Practice in their Audit Reports issued to the members of the Company. The Statutory Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143 (12) of the Act.

SHARE CAPITAL

The Authorised Share Capital of your Company as on 31st March, 2022 stood at ''120,00,00,000 divided into 120,00,00,000 equity shares of ''1/- each. The Issued Share Capital of your Company is ''97,13,86,517 divided into 97,13,86,517 equity shares of ''1/- each and the subscribed and paid-up capital is ''97,13,23,489 divided into 97,13,23,489 equity shares of ''1/- each fully paid-up.

CREDIT RATING

During the year under review, CRISIL Limited has reaffirmed the credit rating of the Company’s Bank Loan Facilities as CRISIL AAA (Long Term Rating) and CRISIL A1 (Short Term Rating). CARE Ratings Ltd, during the year under review, has reaffirmed the credit rating of the Company’s Commercial Paper instrument as CARE A1 .

LOANS, COMMITMENTS AND CONTINGENCIES, INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statements (please refer Notes 7,8,13 and 46 of the standalone financial statements).

RELATED PARTY TRANSACTIONS

The Company has always been committed to good corporate governance practices, including in matters relating to Related Party Transactions (RPTs). Endeavour is consistently made to have only arm’s length transactions with all parties including Related Parties. The Board of Directors of the Company had a "Policy on Related Party Transactions" in terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 188 of the Companies Act, 2013 since 26th September, 2014. However, in light of the various impactful changes pursuant to several amendments in the Listing Regulations and most of which have been made effective from 01.04.2022, it was necessary to amend the existing policy to align it with the changes as introduced by SEBI recently. The new policy is available at the following weblink: https://www.bergerpaints.com/about-us/rpt-policy.html. The Company has also developed a Related Party Transactions (‘RPTs’) Manual and Standard Operating Procedures to identify and monitor RPTs.

All transactions with related parties are placed before the Audit Committee for approval and Board as applicable. Prior omnibus approval of the Audit Committee is obtained for all the RPTs, which are foreseeable and repetitive and/or entered in the ordinary course of business and are at arm’s length basis.

All related party transactions during the year have been carried out at arms’ length basis in the ordinary course of business except for one instance where the transaction was carried out at an arms'' length basis though not in the ordinary course of business. Since, the said transaction/arrangement was not material in terms of the provisions of Listing Regulations therefore it has not been reported in Form AOC-2 under the provisions of Section 134(3)(h) of the Companies Act, 2013.

POLICY TO DETERMINE MATERIAL EVENTS

As per the Listing Regulations, the Company has framed a policy for determination of materiality, based on criteria specified in the regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-determme-material- events.html.

POLICY FOR PRESERVATION OF DOCUMENTS

As per Regulation 9 of Listing Regulations, the Company has framed a policy for Preservation of Documents, based on criteria specified in the said Regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-preservation-documents.html.

SIGNIFICANT CHANGES

During the financial year 2021-22, no significant change has taken place which could have an impact over the financial position of the Company. Further, except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e., 31st March, 2022 and the date of this Report.

DIVIDEND

The total comprehensive income of the Company is ''750.68 for the year 2021-22.

Your Directors have recommended a dividend of ''3.10 (310%) per equity share of ''1/- each for the financial year ended 31st March, 2022. Dividend is subject to approval of the shareholders at the ensuing Annual General Meeting. The dividend, if approved, will absorb an amount of ''301.11 (compared to ''271.96 in the previous year), based on the current paid-up capital of the Company. The dividend will be paid to those members holding shares in the physical mode whose names appear in the Register of Members as on 26th August, 2022 and for shares held in electronic form, to those whose names appear in the list of beneficial holders furnished by respective Depositories as at the end of business hours on 19th August, 2022.

The Company has not transferred any amount to the General Reserve during the financial year ended 31st March, 2022.

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. The Dividend Distribution Policy (though optional) is annexed to this Report (marked as Annexure I). The Policy is available at the following weblink: https://www.bergerpaints.com/about-us/dividend-distribution-policy.html.

In terms of the provisions of Section 124 of the Act, your Company has transferred an amount of ''70,55,011 for 2013-14 (Final) and ''38,31,385 for 2014-15(Interim) to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed or unpaid for more than seven years from the date they became due.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, as on 31st March, 2014.

Pursuant to the changes introduced by the Finance Act, 2020 in the Income-tax, Act 1961, the dividend paid or distributed by a Company shall be taxable in the hands of the shareholders. Accordingly, in compliance with the said provisions, your Company shall make the payment after necessary deduction of tax at source.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 (as amended), is annexed as Annexure VII of this report.

Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings and Outgo of the Company are ''8.66 crore and ''1167.45 crore respectively. Primarily, earnings were from exports and consultancy services and outgo was towards import payments.

Particulars of Employees

In terms of the provisions of Section 197(12) read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 particulars of certain category of employees have been set out in Annexure IV of this report.

STATEMENT OF EVALUATION OF BOARD OF DIRECTORS AND COMMITTEES THEREOF

Your Company understands the requirements of an effective Board Evaluation process and accordingly conducts the Performance Evaluation every year in respect of the following:

i. Board of Directors as a whole.

ii. Committees of the Board of Directors.

iii. Individual Directors including the Chairman of the Board of Directors.

In compliance with the requirements of the provisions of Section 178 of the Act, the Listing Regulations and the Guidance Note on Board Evaluation issued by SEBI in January 2017, your Company has carried out an Online Performance Evaluation process for the Board/Committees of the Board/Individual Directors including the Chairman of the Board of Directors for the financial year ended 31st March, 2022. During the year under review, the Company has complied with all the criteria of Evaluation as envisaged in the SEBI Circular on ‘Guidance Note on Board Evaluation’.

The key objectives of conducting the Board Evaluation process were to ensure that the Board and various Committees of the Board have appropriate composition of Directors and they have been functioning collectively to achieve common business goals of your Company. Similarly, the key objective of conducting performance evaluation of the Directors through individual assessment and peer assessment was to ascertain if the Directors actively participate in the Board/Committee Meetings and contribute to achieve the common business goals of the Company.

The Directors carry out the aforesaid Online Performance Evaluation in a confidential manner and provide their feedback on a rating scale of 1 - 5. Duly completed formats were sent to the Chairman of the Board and the Chairman/Chairperson of the respective Committees of the Board for their consideration. The Performance Evaluation feedback of the Chairman was sent to the Chairman of the Compensation and Nomination and Remuneration Committee.

This year also, the outcome of such Performance Evaluation exercise was discussed at a separate meeting of the Independent Directors held on 9th February, 2022 and was later tabled at the Compensation and Nomination and Remuneration Committee meeting held on the same day. The Compensation and Nomination and Remuneration Committee forwarded their recommendation based on such Performance Evaluation Process to the Board of Directors and the same was tabled at the Board Meeting held on 9th February, 2022.

After completion of online evaluation process, the Board of Directors at its Meeting held on 9th February, 2022, also discussed the Performance Evaluation of the Board, its Committees and individual directors. The performance evaluation of Independent Directors of the Company were done by the entire Board of Directors, excluding the Independent Directors being evaluated and after being satisfied with the outcome, it was noted that the Committees were working effectively.

Pursuant to Section 178(3) of the Act and Regulation 19 of the Listing Regulations, the Remuneration Committee is entrusted with responsibility of formulating criteria for determining qualifications, positive attributes and independence of an Independent Director. This can be viewed at https://www.bergerpaints.com/about-us/criteria-policy.html.

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

Pursuant to Section 134(3)(q) of the Act read with Companies (Accounts) Rules, 2014, it is stated that no material order has been passed by any regulator, court or tribunal impacting the Company''s operations and its going concern status during the financial year 2021-22.

No application has been made under the Insolvency and Bankruptcy Code, 2016 against the Company; hence the requirement to disclose the details are not applicable. The requirement to disclose the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL

Your Company’s Board is duly constituted and in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.

COMPOSITION OF BOARD

The Board comprises 10 Directors of which, 3 are Executive Directors (2 of whom are part of the promoter group), 2 are NonExecutive (both are part of the promoter group) and 5 are Non-Executive, Independent Directors. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations read with Section 149 of the Act.

MEETINGS

During the year under review, a total of six Meetings of the Board of Directors of the Company were held, i.e., on 26th May, 2021, 22nd and 23rd June, 2021, 6th August, 2021, 10th November, 2021, 28th December, 2021 and 9th February, 2022. Also, the Board of Directors have passed 11 (eleven) Resolutions by Circulation. Details of Board composition and Board Meetings held during the financial year 2021-2022 have been provided in the Corporate Governance Report - Annexure IX which forms part of this Annual Report.

CHANGES IN BOARD COMPOSITION

Details of Directors'' appointment/reappointment and change in board composition during the financial year under review are as follows:

Sr

No.

Name of Director

Designation & Category

Reason and date of appointment/reappointment/retirement/ resignation

1.

Mr Kuldip Singh Dhingra (DIN:00048406)

Non-Executive, Chairman/ Promoter (Non-Independent)

Mr Kuldip Singh Dhingra, Chairman - Non Executive, Non-Independent Director of the Company retired by rotation and was re-appointed pursuant to Section 152(6) of the Act at the 97th Annual General Meeting held on 27th August, 2021. Pursuant to Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the applicable provisions of the Companies Act, 2013 and the relevant Rules framed thereunder (including any statutory modification(s)/amendment(s)/re-enactment(s) thereto) and with the approval of the Members, Mr Kuldip Singh Dhingra has been appointed as a Non-executive, NonIndependent Director of the Company liable to retire by rotation after attaining the age of 75 years on 2nd September, 2022.

2.

Mr Gurbachan Singh Dhingra (DIN: 00048465)

Non-Executive, Vice Chairman/ Promoter (Non-Independent)

Mr Gurbachan Singh Dhingra, Non-Executive Vice Chairman, Non-Independent Director of the Company retired by rotation and was re-appointed pursuant to Section 152(6) of the Act at the 97th Annual General Meeting held on 27th August, 2021.

3

Mr Abhijit Roy (DIN: 03439064)

Managing Director & CEO

Reappointed as Managing Director and CEO for a further period of 5 years w.e.f 1st July, 2022 pursuant to Sections 196, 197, 198, 203 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and Schedule V thereto and the Rules made thereunder and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, including any amendment(s) / statutory modification(s)/ re-enactment(s) for the time being in force and the Articles of Association of the Company.

Details of Directors seeking appointment/reappointment at the ensuing AGM are as follows:

Sr

No.

Name of Director

Designation & Category

Reason and date of appointment/reappointment/retirement/ resignation

1.

Mr Kuldip Singh Dhingra (DIN: 00048406)

Non-Executive, Chairman/ Promoter (Non-Independent)

Mr Kuldip Singh Dhingra, Chairman - Non Executive, Non-Independent Director of the Company is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment pursuant to Section 152(6) of the Act.

2.

Mr Gurbachan Singh Dhingra (DIN: 00048465)

Non-Executive, Chairman/ Promoter (Non-Independent)

Mr Gurbachan Singh Dhingra, Vice Chairman - Non Executive, Non-Independent Director of the Company is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment pursuant to Section 152(6) of the Act.

3.

Mr Naresh Gujral (DIN:00028444)

Non-Executive (Independent Director)

Mr Naresh Gujral was appointed as a Non-Executive, Independent Director of the Company on 3rd August, 2015 for a period of five consecutive years from 20th August, 2014 to 19th August, 2019. Mr Gujral was re-appointed as an Independent Director for second term of five years with effect from 20th August, 2019 to 19th August, 2024 at the Annual General Meeting of the Company held on 5 th August, 2019. His second term as an Independent Director is due to expire on 19th August, 2024.

Mr Gujral will attain the age of 75 (seventy five) years on 19th May, 2023 and the continuation of his directorship will be subject to approval by the members by way of a Special Resolution and hence, the approval of the members is sought for the continuation of his directorship on the Board of the Company even after attaining the age of 75 (seventy five) years.

KEY MANAGERIAL PERSONNEL

Mr Abhijit Roy (DIN: 03439064), Managing Director & CEO and Mr Srijit Dasgupta, Director - Finance and Chief Financial Officer and Mr Arunito Ganguly, Vice President and Company Secretary are the Key Managerial Personnel (KMP) of the Company.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The following are the Independent Directors of your Company as on 31st March, 2022:

1) Mrs Sonu Halan Bhasin

2) Mr Naresh Gujral

3) Mr Pulak Chandan Prasad

4) Mr Anoop Hoon

5) Dr Anoop Kumar Mittal

The Company has received declarations from Independent Directors that they meet the criteria of independence as prescribed u/s 149(6) of the Act and as required under the Listing Regulations. In the opinion of the Board, they fulfil the condition for appointment/ re-appointment as Independent Directors on the Board.

The Board of Directors confirms that the Independent Directors have affirmed compliance with the Code for Independent Directors as prescribed in Schedule IV to the Act and also with the Company’s Code of Conduct applicable to all the Board Members and Senior Management Personnel of the Company for the financial year ended on 31st March, 2022.

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).

All the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs (IICA) as was notified and required under Section 150(1) of the Act.

COMMITTEES OF THE BOARDA. AUDIT COMMITTEE

The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The composition of the Audit Committee has been disclosed in the Corporate Governance Report which forms part of the Board''s Report (Annexure IX). The terms of reference of the Audit Committee have been duly approved by the Board of Directors.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 of the Act and the Rules framed therein read with Regulation 22 of the Listing Regulations, your Company has a Vigil Mechanism/Whistle Blower Policy in place for directors and employees of the Company through which genuine concern regarding various issues relating to inappropriate functioning of the organization can be raised. The Vigil Mechanism/ Whistle Blower Policy has been uploaded on the website of the Company https://www.bergerpaints.com/about-us/ whistleblower-policy.html.

B. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Company has spent an amount of ''17.37 crore during the financial year 2021-2022 as against its 2% obligation amounting to ''17.16 crore, thereby exceeding its entire CSR obligation. The required details as specified in Companies CSR Policy Rules, 2014 are given in Annexure III.

The CSR Policy as recommended by the CSR Committee and as approved by the Board is available on the website of the Company and can be accessed at https://www.bergerpaints.com/about-us/csr-policy.html. The composition of the CSR Committee and a brief outline of the CSR Policy is annexed to this report (Annexure III).

The Company’s CSR activities majorly comprises iTrain programme aimed at skilling/ upskilling painters. The programme is carried out from fixed iTrain centers spread across the country and mobile iTrain centers which visit far flung areas for imparting

this skill development exercise. During the year under review, the Company entered into a Memorandum of Understanding with Smile Foundation, a reputed NGO. In future, Smile Foundation will carry out the mobile iTrain programme and is expected to add value to the same based on their expertise.

While, the Company had donated two medical oxygen generation systems as a part of its CSR obligation during the second wave of the COVID 19 pandemic in May, 2021, an oxygen pipeline system and oxygen manifold and distribution system was also donated in June, 2021 for the benefit of covid affected patients.

C. COMPENSATION AND NOMINATION AND REMUNERATION COMMITTEE

The constitution of the Company’s Compensation and Nomination and Remuneration Committee is given in the Report on Corporate Governance - Annexure IX.

D. SHAREHOLDERS’ COMMITTEES

The constitution of the Company’s Shareholders’ Committees is given in the Report on Corporate Governance - Annexure IX.

E. BUSINESS PROCESS AND RISK MANAGEMENT COMMITTEE

The constitution of the Company’s Business Process and Risk Management Committee is given in the Report on Corporate Governance - Annexure IX.

Structure of the Board of Directors

Name of Directors

Non-Executive

Executive

Independent

Lady

Mr Kuldip Singh Dhingra

Y

N

N

N

Mr Gurbachan Singh Dhingra

Y

N

N

N

Mr Abhijit Roy

N

Y

N

N

Ms Rishma Kaur

N

Y

N

Y

Mr Kanwardip Singh Dhingra

N

Y

N

N

Mr Naresh Gujral

Y

N

Y

N

Mr Pulak Chandan Prasad

Y

N

Y

N

Mr Anoop Hoon

Y

N

Y

N

Mrs Sonu Halan Bhasin

Y

N

Y

Y

Dr Anoop Kumar Mittal

Y

N

Y

N

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company believes that the best training is imparted when dealing with actual roles and responsibilities on the job. To this extent, the Company arranges detailed presentation by Business and Functional Heads on various aspects including the business environment, economy, performance of the Company, industry scenario, sales and marketing, production, raw materials, research and development, financial controls, the Company’s strategy, etc. Visits to factories, business units are also undertaken from time to time. Details of Familiarization Programmes imparted during the year under review has been uploaded on the Company’s website and is available at the following weblink: https://www.bergerpaints.com/about-us/familiarization-program.html.

INFORMATION AS TO REMUNERATION OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the following disclosures are made:

1) Ratio of remuneration of Directors/KMP to the median remuneration of the employees:

Name of Directors/KMPs

Remuneration Received O

Ratio as to that of the Median Employee

Percentage increase in Remuneration

Mr Kuldip Singh Dhingra

18,00,000

2.99:1

20.00

Mr Gurbachan Singh Dhingra

10,00,000

1.66:1

19.76

Mr Abhijit Roy

5,78,64,885 1

96.29:1

38.53

Mr Kanwardip Singh Dhingra

56,11,464

9.34:1

7.76

Ms Rishma Kaur

56,64,987

9.43:1

8.88

Mr Pulak Chandan Prasad

-

-

-

Mr Naresh Gujral

7,20,000

1.20:1

20.00

Mr Anoop Hoon

7,20,000

1.20:1

20.00

Mrs Sonu Halan Bhasin

7,20,000

1.20:1

20.00

Dr Anoop Kumar Mittal

7,20,000

1.20:1

20.00

Mr Srijit Dasgupta

1,87,27,022

31.16:1

7.70

Mr Arunito Ganguly

53,20,810

8.85:1

15.72

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration -The average percentile increase in salaries of employees was 10.58% as compared to an average percentile increase of 32.51% of managerial remuneration. The increase of managerial remuneration is based on growth criteria.

6) Pursuant to the requirement of Section 197(14) of the Act, the following disclosure is made in respect to remuneration received by the Whole time Directors:

Particulars of Directors

Nature of Transaction

Amount (?)

Ms Rishma Kaur, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakh

Mr Kanwardip Singh Dhingra, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakh

Affirmation

It is hereby affirmed by the Chairman of the Company that the remuneration paid to all the employees, Directors and Key Managerial Personnel of the Company during the Financial Year 2021-22 are as per the Remuneration Policy framed by the Compensation and Nomination and Remuneration Committee of the Company.

LISTING WITH STOCK EXCHANGES

Your Company is listed with National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited and has paid the listing fees to each of the Exchanges. Your Company’s short term debt instruments (Commercial Papers) were listed with National Stock Exchange of India Limited as was required vide - SEBI Circular SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated 22nd October, 2019 w.e.f 24th December, 2019. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors at its Meeting held on 26th May, 2021 re-appointed M/s N. Radhakrishnan & Co. (Firm Registration No. 000056), 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting audit of the cost records maintained under Section 148(1) of the Act for the Company’s factories situated at Howrah, Rishra, Goa, Puducherry, Jejuri and Naltali for the financial year 20212022. M/s Shome & Banerjee (Firm Registration No. 000001), 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, have been entrusted with the responsibility of conducting cost audit of the cost records maintained under Section 148(1) of the Act for the Company’s factory situated at Jammu and the factories of British Paints division located at Sikandrabad and Hindupur for the financial year 2021-22.

The cost audit reports for the financial year 2020-21 were filed on 20th October, 2021 on receipt of advice from the Ministry of Company Affairs.

STATUTORY AUDITOR

The Statutory Auditor, Messrs. S. R. Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 301003E/E300005) was re-appointed pursuant to the provisions of Sections 139, 142 of the Act and the Rules made thereunder from the conclusion of the 96th Annual General Meeting upto the conclusion of the 101st Annual General Meeting of the Company at the Annual General Meeting held on 25th September, 2020. Accordingly they would continue as the Statutory Auditor for the Financial Year 2022-23.

CAUTIONARY STATEMENT

There are certain statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions which may be read as “forward-looking statement” within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make difference to the Company’s operations include demand/supply conditions, raw material prices, changes in government policies, government laws, tax regimes, global economic developments and other factors such as pandemic situation, litigations and labour negotiations.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors Kuldip Singh Dhingra

Place: Kolkata Chairman

Dated: 26th May, 2022 (DIN: 00048406)

1

Remuneration does not includes value of ESOP’s granted.

Note - The median employee remuneration for 2021-22 is: ''6,00,940 p.a.

2) Percentage (%) increase in remuneration during the financial year 2021-22: Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the financial year 2021-22: 6.22%

4) Number of permanent employees on the rolls of the Company as on 31st March, 2022: 3,931


Mar 31, 2021

REPORT OF THE DIRECTORS AND MANAGEMENT DISCUSSION AND ANALYSIS

Your Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2021.

FINANCIAL RESULTS

C in Crore)

Particulars

Financial Year

Standalone

Consolidated

2020-2021

2019-2020

2020-2021

2019-2020

Profit before Exceptional Items, Depreciation, Finance Cost and Tax

1152.72

1108.62

1239.47

1129.51

Add: Exceptional Item

(14.80)

-

-

-

Add: Share of Profit/Loss from Joint Ventures

-

-

(5.61)

(8.30)

Less:

Depreciation and Amortisation Expense

186.12

170.52

211.14

191.01

Finance Cost

33.22

32.68

44.10

47.04

Profit Before Tax

918.58

905.42

978.62

883.16

Less:

Provision for Taxation

237.80

206.37

258.90

227.06

Profit After Taxation

680.78

699.05

719.72

656.10

Add:

Other comprehensive income/(loss) for the year net of tax

0.01

(6.52)

12.53

(19.00)

Total comprehensive income

680.79

692.53

732.25

637.10

FINANCIAL PERFORMANCE

Highlights of the Standalone Results:

a. Revenue from Operations for the year ended 31st March, 2021 was ''6,021.41 crore as against ''5,691.69 crore in the corresponding last financial year, representing an increase of 5.8% over the last financial year.

b. EBIDTA (excluding other income and exceptional item) for the year ended 31st March, 2021 was ''1,096.95 crore as against ''957.80 crore in the corresponding last financial year, representing an increase of 14.5% over the last financial year.

c. Net Profit for the financial year ended 31st March, 2021 was ''680.78 crore as against ''699.05 crore recorded in the previous financial year. The net profit for the quarter ended 31st March, 2021 included ''3.92 crore as other income from dividend as against ''100.09 crore in the previous financial year and hence the figures for both the financial years are not comparable.

Highlights of the Consolidated Results:

a. Revenue from Operations for the year ended 31st March, 2021 was ''6,817.59 crore as against ''6,365.82 crore in the corresponding last financial year, representing an increase of 7.1% over the last financial year.

b. EBIDTA (excluding other income) for the year ended 31st March, 2021 was ''1,187.98 crore as against ''1,060.99 crore in the corresponding last financial year, representing an increase of 12% over the last financial year.

c. Net Profit for the year ended 31st March, 2021 was ''719.72 crore as against ''656.10 crore in the corresponding last financial year, representing an increase of 9.7% over the last financial year.

The Board of Directors have recommended a dividend of ''2.80 (280%) per equity share of ''1/- each fully paid up for the financial year ended 31st March, 2021. Dividend is subject to approval of the shareholders.

MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE AND DEVELOPMENT

Just about a year ago when the World Health Organisation (WHO) declared Covid-19 a pandemic and various countries imposed strict lock-downs, a deep despondency and risk psychosis became pervasive. Since then, lives have been lost, surviving life has been disrupted and lifestyles have been fundamentally altered.

While the pandemic was sudden and devastatingly swift, the policy response was unprecedented and expansive in its reach. Governments and Central Banks across the globe fashioned measures in the form of additional public expenditure, foregone revenues, capital injections and facilitating additional avenues of lending adding upto US$16 trillion or 15.3% of world GDP. Economies across the world fell off a virtual cliff in the second quarter of 2020, plunging to depths of contraction not fathomed before, but in the second half of the year a robust recovery materialised, relatively faster than anticipated.

In India, a calibrated policy stimulus began with direct assistance in cash and kind to the economically distressed and progressively broadened into a comprehensive package to provide support to the various sectors of the economy in 2021. It cumulated to 15.7% of GDP including liquidity and other measures taken by the Reserve Bank of India. In the first wave, the pandemic fury was at its height in Quarter 1 (2020-21). The Indian economy contracted 24.4% year on year, the deepest downturn amongst the G20 countries. In Quarter 2, however, the contraction started to ease reflecting vigorous efforts to revive the economy with gradual relaxation of mobility restrictions, monetary and liquidity easing and fiscal support. By Quarter 3 (Financial Year 2020-21) India had pulled out from a technical recession. The cumulative effect of supply disruptions, the health crisis, an unparalleled interstate movement of migrant labour and a hostile global environment took a heavy toll on the Indian economy but could not suppress the indomitable spirit of entrepreneurship of Indians. A cyclical slowdown had preceded the pandemic, causing a sequential deceleration in the real GDP growth rates since 2017-18, which subsequently slumped into contraction under the onslaught of corona virus.

INDIAN PAINT INDUSTRY

The Private Financial Consumption Expenditure (PFCE) contracted by 9% in 2020-21 reflecting an impact of stringent nationwide lock-downs and social distancing norms coupled with heightened uncertainty as a result of transitory and permanent job losses. The construction activity remained subdued during the first half of 2020-21. Apart from being affected by the pandemic, construction was throttled by a nationwide lock-down, followed by intermittent lock-downs and restrictions, migration of workers from urban construction sites, a large inventory overhang coupled with stressed liquidity conditions in the early part of the pandemic. This was also reflected in bellwether indicators, steel consumption and cement production. Infusion of liquidity helped arrest the deterioration and housing and construction activity rebounded in the later half of the financial year with a revival in sales primarily due to favourable interest rates, steep discounts by developers to liquidate inventory and reduction in stamp duty by a few states. The industrial and services sector contracted by 8.6% and 7.6% respectively on account of the pandemic. Brent crude oil price went up during the year with the same clocking at US$ 65.41 per barrel in March 2021. Inflation remained elevated having tested the upper tolerance level during June to November, 2020. The position was further aggregated by large scale disruption in the global supply chain with shipping line capacities and container availability posing a major challenge.

However, the GDP in Quarter 4 grew by 1.6%. The equity markets became more buoyant with Sensex staging a V-shaped recovery and rising over 91% by end March 2021 from the lows of March 2020 backed by a strong corporate performance in Quarter 2 and

Quarter 3 of 2020-21. The paint industry also contributed significantly after having a weak first quarter in financial year 2020-21 though the overall economic conditions were depressed during the financial year 2020-21.

In recent times, growth in India’s paint sector has been an outlier in the overall domestic space and in the face of the global crisis it once again proved its mettle. The Industry has been witnessing a gradual shift in terms of consumer preferences from traditional whitewash to better quality premium products. It is also attracting healthy competitive environment, where players are applying different strategies to tap growing demand in the market space. This has resulted in India’s paint industry being a 500 billion industry with decorative paint category constituting almost 75 percent of market share. Urbanisation and nuclearization of families, value migration, shortening of re-painting cycle over the last decade, growing demand from smaller towns and rural areas, housing for all/ affordable housing projects, spending on large scale infrastructure projects, innovation, up-gradation and growth in premium segment and availability and new initiatives by paint companies have been the key drivers to this growth.

COMPANY’S OPERATIONS

Berger’s primary differentiator is its ability to innovate in products, services and processes with focus on digitisation and a consumer friendly approach. These, together with smart team-work, planning and perseverance by the team members resulted in a robust growth in both revenue and EBIDTA during the year, further strengthening its position in the paint industry.

The Company was continuously in touch with its customers for identifying new opportunities and suitably adjusting targets. The Company was ready once the demands bounced back post lock-down and resources were reallocated. There was all round recovery in premium, mid-range and economy segments, based on geographies and this needed swift adjustment of supplies.

The Company ensured significant increase in footprints across the customer network throughout the country. The Company extended and ensured full support to the network by enhancing service levels which resulted in creation of goodwill in the influencer network. Inspite of the Covid-19 pandemic throwing up lot of uncertainties and restrictions all over, the Company declared that no manpower rationalisation would be carried out and if possible suitable increments will be awarded. These measures kept employees focused on opportunities rather than getting worried about jobs and increments. Further, the Company honoured all job offers made to prospective employees. Online transfer of funds to painters within fifteen days of commencement of the lock-down, prompt clearance of dealer credit notes helped the Company to bounce back when the situation improved.

The Company repositioned ‘Silk Breathe Easy’ as “Sirf Glamorous Nahin Caring Bhi” owing to its dual benefits of aesthetics and protection. The product endorsed by Kareena Kapoor Khan whose brand personality of being a ‘glamorous diva and a caring mother’ perfectly complemented the brand’s positioning. Silk Breathe Easy, the Luxury Interior Emulsion proved effective in restricting the spread of the virus through surface contact. The product, rigorously tested and certified from approved and accredited laboratories, became the basis of a new campaign launched for Silk on the dual benefits of Glamour & Protection. Berger ‘Silk Glamour’, ‘Silk Glow’, ‘Silk Hi Glow’ also provide a complete range of luxury products with a wide variety of choice for the consumers at the market place. In order to help the consumers to explore all shades, Silk Breathe Easy Look Book and the Silk shade card has been introduced recently which adds to the premium feel of this luxury interior emulsion brand.

Berger Easy Clean Luxury Interior Emulsion maintained its leadership position in its chosen category communicating the key brand promise of cleanability — “No Daag No Dhabba, Only Beautiful Walls”.

The Company’s popular consumer home-painting service, Express Painting™ became Safe Express Painting with the slogan "Faster-Cleaner-Safer" service with a safety upgrade and a contactless service availed of through a consumer friendly mobile app. Consumers

can now book a service, view body temperature of painters, get digital estimates, quotes and colour previews, get free home delivery of sanitized paints, avail of a trained painter team in full safety gear carrying out daily disinfection and post-painting clean up - all at market prices. The Safer Express Painting service got a warm welcome from consumers and was a contributory factor in our recovery from effects of the pandemic induced lock-down.

In order to overcome the difficulties posed on the consumers by the pandemic, the Company launched its “iPaint” range of ‘Do It Yourself (DIY)’ products which includes self-painting kit, basic repair kit, enamel kit, glow in the dark kit, wall stencil kit and aerosol spray kit. This can be purchased from popular online market places as well as the new e-com site of the Company for sale of its products.

The rebound also saw the advent of the exterior wall coatings segment and the water proofing segment. The Company launched campaigns featuring the renowned actor Mr Akshay Kumar, to support these segments. The “Loooong Life” campaign on brand WeatherCoat Longlife exemplifies the high durability of the product up to 10 years and the campaign on ‘HomeShield’ - “No Gyaan only Vigyaan” showcases the provision of a scientific solution using a moisture meter. In the exterior emulsion category, the Company re-affirmed its position in the premium segment with WeatherCoat Anti Dustt Emulsion having its unique dust guard technology.

Targeting the economy range, Bison Lite Interior Emulsion and Walmasta Lite Exterior Emulsion have been popular choices specially in the rural markets.

As a first step towards our fight against the Covid-19 pandemic, the Company focussed on launching a range of hand sanitizers during its severe shortage in the country followed by a full range of cleaners and disinfectants under the umbrella brand “Breathe Easy ”.

The Wood Coating segment with its array of products viz., Woodkeeper 1K PU for interiors and exteriors, Woodkeeper Melamine 24 Carat for exteriors, Woodkeeper Rainbow Premium 4:1 PU for interiors has done decent business during the year under review.

The Company’s protective coatings division maintained its leadership in India and diversified to newer segments like internationally certified potable water coatings and water based asphaltic paint for pipe coatings which has been successfully applied on water pipe fittings supplied to international customers. The introduction of polyurethane concrete and temporary moisture barrier coating in the floor coating range gained immediate momentum on launch and strengthened the Company’s position in the floor coating market. Bergerthane antimicrobial finish was promoted with its special feature of cleaners with solvents that are used as disinfectants to sterilise the surfaces for use over properly primed surface to makeshift partition sheets for isolation wards, railway coach interiors, hospitals and industrial installations where microbiologically induced corrosion resistance is the primary service condition. The Division has started training and certification of protective coating painters on online mode in collaboration with a reputed institute and extended apprenticeship programme. The training includes modules on safety and use of PPE.

Wide range of accessories were launched during the financial year 2020-21 ranging from paint brushes, masking tape, wet and dry sheets for wall and wood sanding, to name a few.

In spite of subdued demands in the automotive market, the Company continued to engage with major OEM customers. The Company made inroads in the Helmet, Measuring Tape, Toto/e-Rickshaw combines with its innovative range of products. The Powder Coating business of the Company maintained a decent EBITDA level.

Management of inventory which was in transit all across India at the time of announcement of the lock-down posed a challenge. With deployment of a core team to monitor and liaison with all depots and factories, the in-transit materials were unloaded as early as possible. Each transit was tracked and local teams were mobilised for this purpose, within the lock-down, keeping the authorities informed. With the supply chain disrupted due to the Covid-19 pandemic, right from demand mix to availability of raw material and packaging material, supply chain digitisation and automation were implemented speedily. Digital Warehouse Management Systems (WMS), installed in many of the factories and important warehouses, went a long way in ensuring that these disruptions did not affect the business.

The Research and Development (R&D) activity of the Company has been effectively supporting the business and is responsible for the Company’s robust growth. It not only provides support to its existing businesses but contribute to profitability by innovating constantly to retain competitive advantage as well as focus on customer requirement and satisfaction. There has been a constant endeavour on the part of R&D to offer products with health and hygiene benefits having anti-bacterial and anti-viral properties coupled with focus on green products with low VOC and extended service life with warranty. R&D contributed significantly with lean formulations whilst maintaining the quality of the product.

The manufacturing focus of the Company was on energy efficiency improvement, manpower optimisation and related Environmental, Social and Governance (ESG) initiatives, On Time in Full (OTIF) complaint operations, overall equipment effectiveness as well as maintaining strict Covid protocols during the Financial Year 2020-21. All these resulted in a growth in production despite the restrictions. There has been considerable savings on account of power and fuel cost compared to the previous financial year. There has been overall EHS improvements in all the factories. The manufacturing facilities have won various awards during the year including the prestigious award from Honda India Power Products Limited for its Covid care initiatives and adherence to Covid protocols.

The subsidiaries and joint ventures also contributed significantly to the overall growth of the Company with state-of-the-art manufacturing facilities, innovation and wide range of products, market penetration and economies of scale.

FOCUS AND OUTLOOK FOR 2021-22

COVID 19 pandemic created an unprecedented crisis in the history of mankind, creating huge disruptions around the world. It also set up an opportunity for change wherein quick adaptability was crucial to ensure business continuity and value creation for stakeholders. The need of the hour was to think differently against all odds, despite all obstacles. Riding on its strengths, the Company’s progress remained unabated even during these trying times, resulting in substantial growth over the previous financial year due to assiduous planning and relentless efforts among its ranks.

An early roll out of vaccination drive across major economies, including India during the last quarter of 2020-21 worked as a positive and confidence building measure throughout the world. Unpredictable behaviour of the virus though has left us embattling new waves of infections and the mutant strains of COVID 19 has once again introduced a pessimistic twist to the global and domestic outlook for all industries.

At the time of writing, the country is staring at huge case-loads of COVID 19 infections. There has been a quick acceleration in the vaccination drive in India and efforts are underway on a war footing to make good the gaps in medical supplies, raw materials and hospital infrastructure. However, in this uncertain scenario, the Company’s power lies in the quality of its products, the vast repository of experience and knowledge among its employees and stakeholders who participate in the business, the confidence in

the entire supply chain and the trust that it has generated over the years among the customers and the painting community. There has been strict adherence to pandemic protocols, enabling normalization of work processes even during stressed periods. The structure of the Company has been reinforced to make it sufficiently nimble to quickly adapt to the prevailing situation. The Company’s response to the pandemic challenges has been fast and timely and that has helped the Company to tide over the difficult times and achieve a sterling performance during F.Y. 2020-21. The Company’s operations cover the entire coatings and waterproofing industries, solutions as well as a slew of innovative products in the home hygiene segment. The Company believes that as and when the infection rate of the second wave of pandemic falls, the country will bounce back to daily normal life abiding by the pandemic protocols and safety measures coupled with accelerated vaccination drives which will lead to a surge in demand that will include home painting, infrastructure, waterproofing, industrial equipment and white goods segment among others.

The pandemic has been a huge lesson for us as regards maintaining health and hygiene and being vigilant about cleanliness at home and at the workplace. Regular painting of houses and apartments has been a part of tradition also to protect the inhabitants from microbes, insects and vermin. In the recent past, there has been a growth in interest in beautification and aesthetics. In the industrial and infrastructural space, there has been a surge in demand for anti-carbonation coatings, insulation floor coatings and other water proofing solutions.

The demand for general industrial, automotive and powder coatings is recovering and the Company with its innovative range of products is catering to the requirements of this sector and working closely with established OEM brands.

With its constant focus on cost cutting, digitization drive, planning and innovation coupled with effective marketing strategies supported by quality products and a strong manufacturing and distribution network, the Company caters to the needs of the domestic, infrastructure and industry requirements.

PROJECTS:

During the year under review, the Company successfully enhanced the automotive, industrial, protective coatings and resin capacity of its Jejuri plant. The plant is expected to commence commercial production of expanded capacities of automotive, industrial and shortly, upon receipt of all required clearances.

Installation of water and solvent based decorative, industrial and protective coatings, resin, putty, emulsion and construction chemical manufacturing facilities at Sandila Industrial Area, Hardoi, Lucknow (Uttar Pradesh) is expected to be commissioned in 2022, in spite of the disruptions caused due to the COVID-19 pandemic, subject to receipt of required consents and approvals . The integrated paint and intermediate manufacturing project at Sandila is being set up over a land area ad-measuring 35.91 acres at an investment of ''800 crore (approx.).

The Company also acquired a piece of land measuring 22 acres at Panagarh, Paschim Bardhaman District, West Bengal from the West Bengal Industrial Development Corporation Limited (WBIDC) for the purpose of setting-up of another manufacturing facility in the State of West Bengal focussed on construction chemicals, putty, tile adhesives etc.

The Puducherry plant was renovated and the renovated facilities were commissioned in October 2020.

There were various other initiatives across the Company including setting up of admixture manufacturing facilities at Rishra, Jejuri and Hindupur, installation of roof top solar power plants at various factories, facilities for reduction of specific power consumption, further extension of bio-briquette fired thermic fluid heater at plants, etc.

OPPORTUNITIES AND THREATS:

The financial year 2020-21 has seen uncertainties and complexities which were never seen before, owing to the COVID 19 pandemic creating disruptions all over. Though the situation remains complicated, the paint industry essentially affords potential for growth in view of pent up demand, safe painting solutions, development of rural markets with growth in sales of related non-premium range of products like putty and distempers and various new product launches, aided by a gradual shift from unorganized to organized players led by better consumer awareness.

The various legislations enacted by the Government, liquidity support to the MSME sector along with the head room for per capita paint consumption per kg in India is expected to boost the paint and coatings industry. Increased focus on home improvement, stress on keeping the family members safe from infections indicate opportunity for the paint and coating industry. The push on the part of the Government towards infrastructure growth, combined with the differentiated product offerings, waterproofing, construction chemicals, wood coatings and home hygiene products definitely provide an edge even during difficult times. The overall thrust on housing for all/affordable housing measures by the Government has aided fresh painting demand and will aid repainting demand in future.

With the threat caused due to the COVID 19 pandemic still looming large with sudden spikes in infection resulting in sporadic lockdowns adding to the anxiety and pressure of the world at large, the scenario still remains somewhat uncertain. Lock-down restrictions, supply chain disruptions, employee health and wellness are major factors which will have an impact during the financial year 202122. With the entry of new competitors, displacement of migrant workers, hardening of raw material prices including Brent crude oil derivatives and the emerging world economic and trade scenario, there are severe challenges but so far the Company has overcome these with dexterity. The increasing trend of working from home post COVID 19 exposes the organization to data loss/data thefts, domain-based threats and hacktivism. The Company is taking best possible measures to guard itself from such risks.

To sum up, it can be said that beyond the uncertainties, with proper and intricate planning and execution coupled with technological support, human resources, products services and market presence, the Company is well positioned to take advantage of the additional demand both from domestic and industrial consumers. The Indian coating industry is expected to attract the attention of new investors and is well poised to take the benefit of the favourable demand swing while following the COVID 19 protocols in the near future.

RISKS AND CONCERNS:

The Company has a Risk Management and Materiality Policy approved by the Business Process and Risk Management Committee, Audit Committee and the Board of Directors. The Policy provides a well-articulated framework for identification of risks inherent in the business operations of the Company, and the methods of mitigation in a lucid manner on a continuous basis which are periodically reviewed and modified considering the size and the complexity of the business and the regulatory requirements from time to time. The Risk Management Policy has been renamed as Risk Management and Materiality Policy which can be viewed at the following https://www.bergerpaints.com/about-us/risk-management-policy.html.

Considering the huge uncertainties prevailing in the market arising out of the vagaries caused by the COVID 19 pandemic, the major economies around the world are passing through difficult times where many questions remain unanswered till date. There continues to be a concern with the waves of the pandemic taking toll on people’s lives and livelihood and resulting in sporadic lock-downs and varied restrictions on economic activities.

Fortunately, the Company with its core values, ethics, meticulous business planning, adaptability to change, customer centric approach accompanied with its wide array of products and presence across all business verticals have been able to achieve growth even during these difficult times. The focus has all along been innovation, differentiated quality products, engaging with dealers, distributors and other customers, stabilizing the business processes, ensuring safety of consumers and well-being of the painter community at large.

While the major economies across the world are still battling with COVID, there are uncertainties and surprises in the areas of demand, supply of raw materials including stiffening of raw material prices, supply chain disruptions, foreign exchange rate fluctuations and subdued markets carrying the fear of infection. The flexibility in decision making and thought process holds the key to success in this ‘New Normal’ era. The Company continues to monitor the situation, setting newer targets and business goals keeping in mind the oddity of the present business horizon.

Rising oil prices, production cutbacks of international raw material suppliers, force majeure in some geographies, uncertainty in global vessel movement and supply-demand parity led to unprecedented increase in raw material prices and freight charges in the third and fourth quarters of the year under review. There has been significant inflation in crude derivatives as well as critical raw materials like titanium dioxide and monomers. While a part of these needs to be passed on, the Company always counters these through efficient sourcing and innovations in formulation. Any moderation in prices will have a positive effect on the margins.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Internal Control Systems of the Company are robust and commensurate with the nature, size and complexity of its business. Well-designed internal financial control measures as laid down and adopted continue to be followed by the Company. Policies and procedures, as approved by the Board have been adopted by the Management of the Company for ensuring orderly and efficient conduct of its business, including adherence to Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Good governance, well defined systems and processes and policies, risk assessment, a vigilant control function, communication and monitoring and an independent internal audit function are the foundation of the internal control systems. The Internal Audit function of the Company continues to provide assurance on functioning and quality of internal controls along with adequacy and effectiveness through periodic reporting. Internal Risk and Control function also evaluates organizational risk along with controls required for mitigating those risks. The control activities continue to incorporate, among others, continuous monitoring, routine reporting, digital business environment with minimum possible manual intervention, checks and balances, purchase policies, authorization and delegation procedures, audits including compliance audits, which are periodically reviewed by the Audit Committee and the Business Process and Risk Management Committee. The performance of the Internal Audit department is also reviewed by the Board and improvements advised. Your Company has a Code of Conduct for all employees and a clearly articulated and internalized delegation of financial authority. Your Company also takes prompt action on any violations of the Code of Conduct by its employees.

The Company’s Enterprise Resource Management Systems with Standard Operating Procedures based on work flows and process flow charts also provide a comfort in this regard. The Company is fully geared to implement any statutory recommendation which may be made in this regard.

Key Financial Ratios

Ratios

Standalone

Consolidated

FY 2020-2021

FY 2019-2020

FY 2020-2021

FY 2019-2020

Debtors Turnover

8.62

10.05

7.86

9.19

Inventory Turnover

(on material cost of goods sold)

2.58

2.91

2.67

2.97

Interest Coverage Ratio

29.10

28.71

23.19

19.77

Current Ratio

1.69

1.49

1.71

1.52

Debt Equity Ratio*

0.05

0.08

0.11

0.20

Operating Profit Margin %

19.14

19.48

18.10

17.61

Net Profit Margin

11.31

12.28

10.56

10.31

Return on Net Worth (RONW)

23.06

28.08

23.84

25.71

* Note: There was a 37.5% change in the Company''s standalone debt equity ratio as well as 45% change in Company''s consolidated debt equity ratio on account of the lock-down and liquidity crunch in the latter half of March 2020 when the borrowings had gone up. However, as liquidity improved in the latter half of FY 2020-21, substantial amount of working capital loans and some term loans were repaid.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial disclosures, which are reviewed by the Board and Audit Committee from time to time.

EMPLOYEE STOCK OPTION SCHEME

Your Company had earlier re-introduced the ESOP Scheme, aligned with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in the year 2016 in accordance with the approval of the members granted at the Annual General Meeting held on 3rd August, 2016, to reward eligible employees.

In accordance with the aforesaid scheme of 2016, the Compensation and Nomination and Remuneration Committee has granted 78,074 options on 14th January, 2021 to 197 eligible employees (including 1,486 to Mr Abhijit Roy, being Key Managerial Personnel) and further granted 2,574 options on 10th February, 2021 to 9 eligible employees and also allotted 75,257 equity shares of ''1 each (face value) to eligible employees (including Key Managerial Personnel as per details below) upon exercise of their options earlier granted to them. The allotment of the aforesaid shares were made on 28th December, 2020.

In accordance with Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014, the Company had allotted shares to Key Managerial Personnel (KMPs) on 28th December, 2020, on their exercising the options earlier granted to them and the details of the allotments made are given herein-

|NAME OF KMPs

DESIGNATION

NO. OF EQUITY SHARES ALLOTTED

MR ABHIJIT ROY

MANAGING DIRECTOR & CEO

1,926 shares

MR SRIJIT DASGUPTA

DIRECTOR-FINANCE & CFO

1,482 shares

For further details, please refer to Annexure II to this report where detailed information required to be disclosed in terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014 are enclosed.

Please also visit the weblink: https://www.bergerpaints.com/investors/esop-disclosure.html for disclosures under Regulation 14 of the aforesaid Regulations.

HUMAN RESOURCES

The employees and Human Resources team at Berger Paints India Limited had to go through the unique and unprecedented COVID situation that the entire world is going through this year. For many organisations, this has created enormous amount of disruptions. However, the Berger Paints India team has been trying to overcome this situation with a strong internal bonding, continuous communication and focussing on opportunities that will help grow the business.

As the pandemic hit us, we have ensured that we honour all the offers that were made, continue paying salaries to our employees and deploy our talent in upcountry locations which had growth potential. There were stringent COVID related safety protocols placed in our factories, offices and depots which helped us to commence manufacturing as well as sales operations as soon as the lock-down restrictions were relaxed. The strong adherence by all our employees has ensured continuity throughout the pandemic with many of our manufacturing locations clocking all time high production levels.

While the Berger India team has leveraged digital tools to engage seamlessly throughout, the Human Resources along with the Finance team has taken this opportunity to embark upon digitizing the HR, Payroll and Travel processes on a single platform. The digitization will help improve efficiencies, bring in better control and provide a better user experience of HR processes and systems for our employees. The team is committed to develop employee capability through specific initiative for mid-management and senior management so that the talent pipeline does not run dry, keeping in mind the business growth now and going forward. The business has looked at new areas for growth such as Home Hygiene, Construction Chemicals and Admixtures, which have been fully resourced by the Talent acquisition team.

The number of employees as on 31st March, 2021 was 3,814 (31st March, 2020 - 3,600). The Industrial Relations were generally satisfactory during the financial year.

As we look back, we would like to thank all employees for their support and commitment throughout the year, which has been distinct than other years in the recent past.

TRANSFER OF SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs (MCA) vide notification no. S.O.2866 (E) dated 5th September, 2017 enforced Sections 124(6) and 125 of the Companies Act, 2013 (hereinafter "the Act") read with the Investor Education and Protection Fund [IEPF] (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended), which require companies to transfer the underlying shares to the IEPF, in

respect of which the dividends have remained unclaimed for a consecutive period of seven years. Accordingly, during the year under review, on 2nd December, 2020 the Company had transferred 2,34,791 equity shares (0.02% of paid up capital) to the IEPF.

PREVENTION OF SEXUAL HARASSMENT

Your Company had framed a policy on Prevention of Sexual Harassment of Women at workplace pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which commits to provide a workplace that is free from all forms of discrimination, including sexual harassment. The Policy can be viewed at the following weblink: www. bergerpaints.com/about-us/sexual-harassment-policy.html.

Pursuant to Section 134(3)(q) read with the Companies (Accounts) Rules, 2014, the Company has complied with the provisions relating to constitution of Internal Complaint Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee (“ICC”) formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. From the date of inception, there has been no such complaint received.

Currently, the ICC comprises the following members:-

1. Ms Rishma Kaur (Presiding Officer)

2. Mr Srijit Dasgupta

3. Mr Aniruddha Sen

4. Ms Kakoli Dey (NGO representative)

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 5 wholly-owned subsidiaries as on the date of this report: - (i) Beepee Coatings Private Limited (“Beepee Coatings”) in Gujarat; (ii) Berger Paints (Cyprus) Limited (“Berger Cyprus”) in Cyprus; (iii) Lusako Trading Limited (“Lusako Trading”) in Cyprus; (iv) Berger Jenson & Nicholson (Nepal) Private Limited in Nepal (“BJN”) and (v) SBL Specialty Coatings Private Limited (“SCPL”) in Chandigarh.

The following companies are wholly-owned subsidiaries of the Company’s above named subsidiaries: - (i) Bolix S.A., Poland -wholly-owned subsidiary of Lusako Trading; (ii) Berger Paints Overseas Limited (“BPOL”), Russia - wholly-owned subsidiary of Berger Cyprus. Bolix S.A., Poland has 4 subsidiaries, viz.: Bolix UKRAINA sp.z.o.o.,Ukraine (“Bolix Ukraine”), BUILD-TRADE sp.z.o.o.,Poland (“Build Trade Poland”), Soltherm External Insulations Limited, U.K. (“Soltherm U.K.”), Soltherm Isolations Thermique Exterieure SAS, France (“Soltherm France”).

Surefire Management Services Ltd., UK (“SMS”), is a joint venture of Bolix S.A., Poland with Green Dynamo Ltd., U.K. Details in respect of SMS are provided in Part B of AOC-1 forming a part of the Financial Statements.

The Company has three other subsidiaries viz., Berger Rock Paints Private Limited (the other shareholder being Rock Paints, Japan), Berger Hesse Wood Coatings Private Limited (the other shareholder being Hesse Shares GmbH, Germany) and STP Ltd. The statement relating to the above companies as specified in Sub-Section (3) of Section 129 of the Companies Act, 2013 is attached to the Report and Accounts of the Company.

Beepee Coatings Private Limited earned a revenue from operations of ''24.72 crore during the year under review.

Berger Paints (Cyprus) Limited ("Berger Cyprus") is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad and so is Lusako Trading Limited.

Bolix S.A.(including its subsidiaries) also posted encouraging results with a revenue from operations of ''310.42 crore.

During the year under review, BJN-Nepal showed good performance with a revenue from operations of ''183.63 crore.

SBL Specialty Coatings Private Limited (earlier known as Saboo Coatings Private Limited) continued to perform well with a revenue from operations of ''106.31 crore during the year 2020-2021.

The revenue from operations of Berger Paints Overseas Limited ("BPOL") was ''8.20 crore.

Berger Rock Paints Private Limited (“Berger Rock”), recorded revenue from operations of ''10.87 crore during the year ended 31st March, 2021.

Berger Hesse Wood Coatings Private Limited (“BHWCPL”) (earlier known as Saboo Hesse Wood Coatings Private Limited) recorded revenue from operations of ''10.35 crore during the year ended 31st March, 2021.

STP Limited recorded revenue from operation of ''193.42 crore during the year ended 31st March, 2021.

Berger Becker Coatings Private Limited, the Company’s joint venture with Becker Industrifarg, Sweden, showed good performance with revenue from operations of ''220.15 crore.

Berger Nippon Paint Automotive Coatings Private Limited (“BNPA”), the Company’s joint venture with NPAU, Japan posted revenue from operations of ''137.85 crore. Its performance will improve once the overall automotive business picks up.

The salient features of the financial statements of subsidiaries, associate companies and joint ventures are given in the Statement in Form AOC-1 forming a part of the financial statement attached to this Directors’ Report and pursuant to first proviso to Sub-section (3) of Section 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014.

Pursuant to Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter “Listing Regulations”), a material subsidiary in a year shall be a subsidiary whose income or net worth exceeds 10% of the consolidated income or net worth respectively of the Company and its subsidiaries, in the immediately preceding accounting year. At present, there is no such material subsidiary of the Company within the meaning of the above Regulation.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Indian Accounting Standard 110, provisions of Regulation 33 of the Listing Regulations and Section 136 of the Act have been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2020-21.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the relevant provisions of the Listing Regulations.

Pursuant to the Listing Regulations, as amended, a certificate obtained from a Practising Company Secretary certifying that the Directors of the Company are not debarred or disqualified from being appointed or to continue as directors of the companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs, forms part of the report as Annexure B to the Corporate Governance Report.

In terms of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), your Board at its meeting held on 23rd June, 2020 appointed Messrs Anjan Kumar Roy & Co., Company

Secretaries (FCS-5684/CP No.4557) as the Secretarial Auditor to conduct audit of the secretarial records for the financial year ended 31st March, 2021 and to submit the Secretarial Audit Report.

The Secretarial Audit Report as received from Messrs Anjan Kumar Roy & Co., Company Secretaries in the prescribed Form No. MR-3 is annexed to this Board’s Report and marked as Annexure V. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. An Annual Secretarial Compliance report as per Securities and Exchange Board of India circular dated 8th February, 2019 is also attached as Annexure VI as an additional disclosure.

COMPLIANCE WITH THE SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI). In this regard, the Company has devised proper systems to ensure compliance of SS-1 and SS-2 and that such systems are adequate and operating effectively.

TECHNOLOGY AGREEMENTS

Your Company has a Technical License Agreement with Nippon Paint Automotive Coatings Co, Ltd. of Japan.

FIXED DEPOSIT

The Company had earlier discontinued acceptance of fixed deposits since 2002 and accordingly, no fresh deposit was accepted during the year. As per the provisions of Section 125 of the Act, all unclaimed deposits have been transferred to Investor Education and Protection Fund (IEPF).

WEBLINK OF ANNUAL RETURN

Pursuant to Ministry of Corporate Affairs (MCA) Notification No. GSR 538 (E) dated 28th August, 2020, a Company shall not be required to attach the extract of the Annual Return with the Board’s Report in Form No. MGT-9 in case the web link of such Annual Return has been disclosed in the Board’s Report in accordance with Companies (Amendment) Act, 2017.

Accordingly, the draft Annual Return (e-form MGT-7) for the financial year ended 31st March, 2021 is placed on the website of the Company i.e. https://www.bergerpaints.com/investors/annual-returns.html which is in compliance with the Companies (Amendment) Act, 2017, effective from 28th August, 2020. The e-form MGT-7 shall be filed with the MCA upon the completion of the 97th Annual General Meeting of the Company as required under Section 92 of the Companies Act, 2013 and the Rules made thereunder and a copy of the same shall be furnished on the website of the Company.

BUSINESS RESPONSIBILITY REPORT

SEBI had made it mandatory to publish a Business Responsibility Report by the top 1000 listed companies based on market capitalization in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations with the stock exchanges. The Company accordingly complied with the requirement and had framed a Business Responsibility Policy in line with the suggested framework as provided by SEBI based on the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses published by the Ministry of Corporate Affairs. The said Policy was adopted at the Board Meeting held on 30th May, 2017 and can be viewed at https://www.bergerpaints.com/about-us/business-responsibility-policy.html. Mr Abhijit Roy, Managing Director and CEO is the Director responsible for implementing the Business Responsibility Policy and Mr Arunito Ganguly, Vice President and Company Secretary is the Business Responsibility Head. As required, the BRR for 2020-21 is attached to this report as Annexure VIII.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2021 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis,

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively,

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

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Company has formulated a Remuneration Policy pursuant to the provisions of Section 178 and other applicable provisions of the Act and Rules thereof. The policy is based on the guiding principle aimed towards retaining and rewarding performers. There has been no change in the said policy during the financial year ended 31st March, 2021.

The Policy is available at the following weblink: www.bergerpaints.com/about- us/remuneration-policy.html. QUALIFICATION OR RESERVATIONS IN THE STATUTORY/SECRETARIAL AUDIT REPORTS

Your Board has the pleasure in confirming that no qualification, reservation, adverse remark or disclaimer has been made by the Statutory Auditors and the Company Secretary in Practice in their Audit Reports issued to the members of the Company. The Statutory Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143 (12) of the Act.

SHARE CAPITAL

The Authorised Share Capital of your Company as on 31st March, 2021 stood at ''120,00,00,000 divided into 120,00,00,000 equity shares of ''1/- each. The Issued Share Capital of your Company is ''97,13,86,517 divided into 97,13,86,517 equity shares of ''1/- each and the subscribed and paid-up capital is ''97,12,95,037 divided into 97,12,95,037 equity shares of ''1/- each fully paid-up.

CREDIT RATING

During the year under review, CRISIL Limited has reaffirmed the credit rating of the Company’s Bank Loan Facilities as CRISIL AAA (Long Term Rating) and CRISIL A1 (Short Term Rating). CARE Ratings Ltd, during the year under review, has reaffirmed the credit rating of the Company’s Commercial Paper instrument as CARE A1 .

LOANS, COMMITMENTS AND CONTINGENCIES, INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statements (please refer Notes 6,7,12 and 45 of the standalone financial statements).

RELATED PARTY TRANSACTIONS

The Company has always been committed to good corporate governance practices, including in matters relating to Related Party Transactions (RPTs). Endeavour is consistently made to have only arm’s length transactions with all parties including Related Parties. The Board of Directors of the Company had adopted the Related Party Transaction Policy regarding materiality of related party transactions and also on dealings with Related Parties in terms of Regulation 23 of the Listing Regulations and Section 188 of the Act. The policy is available at the following weblink: https://www.bergerpaints.com/about-us/rpt-policy.html.

Pursuant to the amended Listing Regulations, a policy on materiality of related party transactions and on dealing with related party transactions has to include clear threshold limit duly approved by the Board and such policy has to be reviewed by the Board once in every three years and updated accordingly. Accordingly, the Board had amended and adopted a new policy and the said policy had been uploaded on the website of the Company at https://www.bergerpaints.com/about-us/rpt-policy.html.

All related party transactions have been carried out at arms’ length basis in the ordinary course of business. There is no material related party transaction i.e. transaction exceeding 10% of the annual consolidated turnover as per the last audited financial statements of the Company or a transaction involving payments made to a related party with respect to brand usage or royalty, which exceed 5% of the annual consolidated turnover of the Company as per last audited financial statements of the Company, entered during the year by your Company and accordingly, the disclosure of Related Party Transaction as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable.

POLICY TO DETERMINE MATERIAL EVENTS

As per the Listing Regulations, the Company has framed a policy for determination of materiality, based on criteria specified in the regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-determine-material- events.html.

POLICY FOR PRESERVATION OF DOCUMENTS

As per Regulation 9 of Listing Regulations, the Company has framed a policy for Preservation of Documents, based on criteria specified in the said Regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-preservation-documents.html.

SIGNIFICANT CHANGES

During the financial year 2020-21, no significant change has taken place which could have an impact over the financial position of the Company. Further, except those disclosed in this Annual Report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e., 31st March, 2021 and the date of this Report.

DIVIDEND

The total comprehensive income of the Company is ''680.79 crore for the year 2020-21.

Your Directors have recommended a dividend of ''2.80 (280%) per equity share of ''1/- each for the financial year ended 31st March, 2021. Dividend is subject to approval of the shareholders at the ensuing Annual General Meeting. The dividend, if approved, will absorb an amount of ''271.96 crore (compared to ''251.20 crore in the previous year), based on the current paid-up capital of the Company. The dividend will be paid to those members holding shares in the physical mode whose names appear in the Register of Members as on 27th August, 2021 and for shares held in electronic form, to those whose names appear in the list of beneficial holders furnished by respective Depositories as at the end of business hours on 20th August, 2021.

The Company has not transferred any amount to the General Reserve during the financial year ended 31st March, 2021.

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. The Dividend Distribution Policy is annexed to this Report (marked as Annexure I). The Policy is available at the following weblink: https://www.bergerpaints.com/about-us/dividend-distribution-policy.html.

In terms of the provisions of Section 124 of the Act, your Company has transferred an amount of ''56,79,061 (Final) to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed or unpaid for more than seven years from the date they became due, i.e., for the year ended 31st March, 2013.

Pursuant to the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, as on 31st March, 2013.

Pursuant to the changes introduced by the Finance Act, 2020 in the Income-tax, Act 1961, the dividend paid or distributed by a Company shall be taxable in the hands of the shareholders. Accordingly, in compliance with the said provisions, your Company shall make the payment after necessary deduction of tax at source.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014 (as amended), is annexed as Annexure VII of this report.

Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings and Outgo of the Company are ''7.41 crore and ''672.17 crore respectively. Primarily, earnings were from exports and consultancy services and outgo was towards import payments.

Particulars of Employees

In terms of the provisions of Section 197(12) read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 particulars of certain category of employees have been set out in Annexure IV of this report.

STATEMENT OF EVALUATION OF BOARD OF DIRECTORS AND COMMITTEES THEREOF

Your Company understands the requirements of an effective Board Evaluation process and accordingly conducts the Performance Evaluation every year in respect of the following:

i. Board of Directors as a whole.

ii. Committees of the Board of Directors.

iii. Individual Directors including the Chairman of the Board of Directors.

In compliance with the requirements of the provisions of Section 178 of the Act, the Listing Regulations and the Guidance Note on Board Evaluation issued by SEBI in January 2017, your Company has carried out a Performance Evaluation process internally for the Board/Committees of the Board/Individual Directors including the Chairman of the Board of Directors for the financial year ended 31st March, 2021. During the year under review, the Company has complied with all the criteria of Evaluation as envisaged in the SEBI Circular on ‘Guidance Note on Board Evaluation’.

The key objectives of conducting the Board Evaluation process were to ensure that the Board and various Committees of the Board have appropriate composition of Directors and they have been functioning collectively to achieve common business goals of your Company. Similarly, the key objective of conducting performance evaluation of the Directors through individual assessment and peer assessment was to ascertain if the Directors actively participate in the Board/Committee Meetings and contribute to achieve the common business goals of the Company.

The Directors carry out the aforesaid Performance Evaluation in a confidential manner and provide their feedback on a rating scale of 1 - 5. Duly completed formats were sent to the Chairman of the Board and the Chairman/Chairperson of the respective Committees of the Board for their consideration. The Performance Evaluation feedback of the Chairman was sent to the Chairman of the Compensation and Nomination and Remuneration Committee.

This year also, the outcome of such Performance Evaluation exercise was discussed at a separate meeting of the Independent Directors held on 8th February, 2021 and was later tabled at the Compensation and Nomination and Remuneration Committee meeting held on the same day. The Compensation and Nomination and Remuneration Committee forwarded their recommendation based on such Performance Evaluation Process to the Board of Directors and the same was tabled at the Board Meeting held on 9th February, 2021.

After completion of internal evaluation process, the Board of Directors at its Meeting held on 9th February, 2021, also discussed the Performance Evaluation of the Board, its Committees and individual directors. The performance evaluation of Independent Directors of the Company were done by the entire Board of Directors, excluding the Independent Directors being evaluated and after being satisfied with the outcome, it was noted that the Committees were working effectively.

Pursuant to Section 178(3) of the Act and Regulation 19 of the Listing Regulations, the Remuneration Committee is entrusted with responsibility of formulating criteria for determining qualifications, positive attributes and independence of an Independent Director. This can be viewed at https://www.bergerpaints.com/about-us/criteria-policy.html.

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

Pursuant to Section 134(3)(q) of the Act read with Companies (Accounts) Rules, 2014, it is stated that no material order has been passed by any regulator, court or tribunal impacting the Company''s operations and its going concern status during the financial year 2020-21.

No application has been made under the Insolvency and Bankruptcy Code, 2016 against the Company; hence the requirement to disclose the details are not applicable. The requirement to disclose the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

BOARD OF DIRECTORS, BOARD MEETINGS AND KEY MANAGERIAL PERSONNEL

Your Company’s Board is duly constituted and in compliance with the requirements of the Act, the Listing Regulations and provisions of the Articles of Association of the Company. Your Board has been constituted with requisite diversity, wisdom, expertise and experience commensurate to the scale of operations of your Company.

COMPOSITION OF BOARD

The Board comprises 10 Directors of which, 3 are Executive Directors (2 of whom are part of the promoter group), 2 are Non-Executive (both are part of the promoter group) and 5 are Non-Executive, Independent Directors. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations read with Section 149 of the Act.

MEETINGS

During the year under review, a total of seven Meetings of the Board of Directors of the Company were held, i.e., on 24th April, 2020, 23rd June, 2020, 14th August, 2020, 7th October, 2020, 5th November, 2020, 18th December, 2020 and 9th February, 2021. Also, the Board of Directors have passed 5 (five) Resolutions by Circulation. Details of Board composition and Board Meetings held during the financial year 2020-2021 have been provided in the Corporate Governance Report - Annexure IX which forms part of this Annual Report.

CHANGES IN BOARD COMPOSITION

Details of Directors'' appointment/reappointment and change in board composition during the financial year under review are as follows:

Sr

No.

Name of Director

Designation & Category

Reason and date of appointment/reappointment/retirement/ resignation

1.

Mr Kuldip Singh Dhingra (DIN:00048406)

Non-Executive, Chairman/ Promoter (Non-Independent)

Mr Kuldip Singh Dhingra, Non-Executive Chairman, Non-Independent Director of the Company retired by rotation and was re-appointed pursuant to Section 152(6) of the Act at the 96th Annual General Meeting held on 25th September, 2020.

2.

Mr Gurbachan Singh Dhingra (DIN: 00048465)

Non-Executive, Vice Chairman/ Promoter (Non-Independent)

Mr Gurbachan Singh Dhingra, Non-Executive Vice Chairman, Non-Independent Director of the Company retired by rotation and was re-appointed pursuant to Section 152(6) of the Act at the 96th Annual General Meeting held on 25th September, 2020.

3

Dr Anoop Kumar Mittal (DIN: 05177010)

Non-Executive (Independent Director)

Dr Anoop Kumar Mittal was appointed as a Non-Executive, Independent Director for a period of five consecutive years with effect from 19th March, 2020 as per Section 149 and 160 of the Act with effect from 19th March, 2020, pursuant to shareholders'' resolution passed at the 96th Annual General Meeting held on 25th September, 2020.

Details of Directors seeking appointment/reappointment at the ensuing AGM are as follows:

Sr

No.

Name of Director

Designation & Category

Reason and date of appointment/reappointment/retirement/ resignation

1.

Mr Kuldip Singh Dhingra (DIN: 00048406)

Non-Executive, Chairman/ Promoter (Non-Independent)

Mr Kuldip Singh Dhingra, Chairman - Non Executive, Non-Independent Director of the Company is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment pursuant to Section 152(6) of the Act .

Pursuant to Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the applicable provisions of the Companies Act, 2013 and the relevant Rules framed thereunder (including any statutory modification(s) / amendment(s) / re-enactment(s) thereto), approval of the Members will be sought for according approval towards the continuation of directorship of Mr Kuldip Singh Dhingra as a Non-executive, Non-independent Director of the Company, liable to retire by rotation after attaining the age of 75 years on 2nd September, 2022.

2.

Mr Gurbachan Singh Dhingra (DIN: 00048465)

Non-Executive, Chairman/ Promoter (Non-Independent)

Mr Gurbachan Singh Dhingra, Vice Chairman - Non Executive, Non-Independent Director of the Company is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment pursuant to Section 152(6) of the Act.

3.

Mr Abhijit Roy (DIN: 03439064)

Managing Director & CEO

Reappointment as Managing Director and CEO for a further period of 5 years w.e.f 1st July, 2022 pursuant to Sections 196, 197, 198, 203 and other applicable provisions, if any, of the Companies Act, 2013 (“the Act”) and Schedule V thereto and the Rules made thereunder and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, including any amendment(s) / statutory modification(s)/ re-enactment(s) for the time being in force and the Articles of Association of the Company.

KEY MANAGERIAL PERSONNEL

Mr Abhijit Roy (DIN: 03439064), Managing Director & CEO and Mr Srijit Dasgupta, Director - Finance and Chief Financial Officer and Mr Arunito Ganguly, Vice President and Company Secretary are the Key Managerial Personnel (KMP) of the Company.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The following are the Independent Directors of your Company as on 31st March, 2021:

1) Mrs Sonu Halan Bhasin

2) Mr Anoop Hoon

3) Mr Naresh Gujral

4) Dr Anoop Kumar Mittal

5) Mr Pulak Chandan Prasad.

The Company has received declarations from Independent Directors that they meet the criteria of independence as prescribed u/s 149(6) of the Act and as required under the Listing Regulations. In the opinion of the Board, they fulfil the condition for appointment/ re-appointment as Independent Directors on the Board.

The Board of Directors confirms that the Independent Directors have affirmed compliance with the Code for Independent Directors as prescribed in Schedule IV to the Act and also with the Company’s Code of Conduct applicable to all the Board Members and Senior Management Personnel of the Company for the financial year ended on 31st March, 2021.

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).

All the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs (IICA) as was notified and required under Section 150(1) of the Act.

COMMITTEES OF THE BOARD

A. AUDIT COMMITTEE

The Board of Directors of your Company has duly constituted an Audit Committee in compliance with the provisions of Section 177 of the Act, the Rules framed thereunder read with Regulation 18 of the Listing Regulations. The composition of the Audit Commitee has been disclosed in the Corporate Governance Report which forms part of the Board''s Report (Annexure IX). The terms of reference of the Audit Committee has been duly approved by the Board of Directors.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In terms of the provisions of Section 177 of the Act and the Rules framed therein read with Regulation 22 of the Listing Regulations, your Company has a vigil mechanism/whistle blower in place for directors and employees of the Company through which genuine concern regarding various issues relating to inappropriate functioning of the organization can be raised. The Vigil Mechanism/ Whistle Blower Policy has been uploaded in the website of the Company at https://www.bergerpaints.com/about-us/whistleblower-policy.html.

B. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Your Company has spent an amount of ''15.61 crore during the financial year 2020-2021 as against its 2% obligation amounting to ''15.49 crore, thereby exceeding its entire CSR obligation. The required details as specified in Companies CSR Policy Rules, 2014 are given in Annexure III.

The Ministry of Corporate Affairs has vide notification dated 22nd January, 2021 number G.S.R.40(E) advised corporates to realign their CSR activities. The Company has accordingly adopted a CSR Policy pursuant to the recommendations made by the CSR Committee and approved and duly adopted by the Board of Directors at its meeting held on 26th May, 2021. The amended policy can be visited at https://www.bergerpaints.com/about-us/csr-policy.html. The composition of the CSR Committee and a brief outline of the CSR Policy is annexed to this report (Annexure III).

Due to sudden surge of infections in the wake of the second wave of the COVID 19 pandemic, the Company as a responsible corporate citizen donated two medical oxygen generation systems as a part of its CSR obligation during May, 2021.

C. COMPENSATION AND NOMINATION AND REMUNERATION COMMITTEE

The constitution of the Company’s Compensation and Nomination and Remuneration Committee is given in the Report on Corporate Governance - Annexure IX.

D. SHAREHOLDERS’ COMMITTEES

The constitution of the Company’s Shareholders’ Committee is given in the Report on Corporate Governance - Annexure IX.

E. BUSINESS PROCESS AND RISK MANAGEMENT COMMITTEE

The constitution of the Company’s Business Process and Risk Management Committee is given in the Report on Corporate Governance - Annexure IX.

Structure of the Board of Directors

Name of Directors

Non-Executive

Executive

Independent

Lady

Mr Kuldip Singh Dhingra

Y

N

N

N

Mr Gurbachan Singh Dhingra

Y

N

N

N

Mr Abhijit Roy

N

Y

N

N

Ms Rishma Kaur

N

Y

N

Y

Mr Kanwardip Singh Dhingra

N

Y

N

N

Mr Naresh Gujral

Y

N

Y

N

Mr Pulak Chandan Prasad

Y

N

Y

N

Mr Anoop Hoon

Y

N

Y

N

Mrs Sonu Halan Bhasin

Y

N

Y

Y

Dr Anoop Kumar Mittal

Y

N

Y

N

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company believes that the best training is imparted when dealing with actual roles and responsibilities on the job. To this extent, the Company arranges detailed presentation by Business and Functional Heads on various aspects including the business environment, economy, performance of the Company, industry scenario, sales and marketing, production, raw materials, research and development, financial controls, the Company’s strategy, etc. Visits to factories, business units are also undertaken from time to time. Details of Familiarization Programmes imparted during the year under review has been uploaded on the Company’s website and is available at the following weblink: https://www.bergerpaints.com/about-us/familiarization-program.html.

INFORMATION AS TO REMUNERATION OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended), the following disclosures are made:

1) Ratio of remuneration of Directors/KMP to the median remuneration of the employees:

___ __ Remuneration Ratio as to that of the Percentage increase in

Name of Directors/KMPs

Received ('') Median Employee Remuneration

Mr Kuldip Singh Dhingra 15,00,000 2.65:1 (16.66)

Mr Gurbachan Singh Dhingra 8,35,000 1.48:1 (16.50)

Mr Abhijit Roy 4,17,69,439 * 73.83:1 6.70

Mr Kanwardip Singh Dhingra 52,07,257 9.20:1 3.15

Ms Rishma Kaur 52,02,796 9.20:1 3.72

* Remuneration does not includes value of ESOP’s granted.

Name of Directors/KMPs

Remuneration Received O

Ratio as to that of the Median Employee

Percentage increase in Remuneration

Mr Pulak Chandan Prasad

-

-

-

Mr Naresh Gujral

6,00,000

1.06:1

(16.67)

Mr Anoop Hoon

6,00,000

1.06:1

(16.67)

Mrs Sonu Halan Bhasin

6,00,000

1.06:1

(16.67)

Dr Anoop Kumar Mittal @

6,00,000

1.06:1

-

Mr Srijit Dasgupta

1,73,87,609 *

30.73:1

5.33

Mr Arunito Ganguly #

45,97,914

8.13:1

-

@ Appointed as a Director wef 19th March, 2020.

# Appointed as Vice President and Company Secretory wef 1st April, 2020.

Note - The median employee remuneration for 2020-2021 is: ''5,65,776 p.a.

2) Percentage (%) increase in remuneration during the financial year 2020-2021: Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the financial year 2020-2021: 0.16%

4) Number of permanent employees on the rolls of the Company as on 31st March, 2021: 3,814

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration -The average percentile increase in salaries of employees was 6.97% as compared to an average percentile increase of 6.03% of managerial remuneration. The increase of managerial remuneration is based on growth criteria.

6) Pursuant to the requirement of Section 197(14) of the Act, the following disclosure is made in respect to remuneration received by the Whole time Directors:

Particulars of Directors

Nature of Transaction

Amount O

Ms Rishma Kaur, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakh

Mr Kanwardip Singh Dhingra, Executive Director and also

Consultancy fees received from U.K. Paints India

a Director in U.K. Paints India Private Limited (Holding

Private Limited for consultancy rendered to U.K.

33 Lakh

Company)

Paints India Private Limited

Affirmation

It is hereby affirmed by the Chairman of the Company that the remuneration paid to all the employees, Directors and Key Managerial Personnel of the Company during the Financial Year 2020-21 are as per the Remuneration Policy framed by the Compensation and Nomination and Remuneration Committee of the Company.

LISTING WITH STOCK EXCHANGES

Your Company is listed with National Stock Exchange of India Limited, BSE Limited and The Calcutta Stock Exchange Limited and has paid the listing fees to each of the Exchanges. Your Company’s short term debt instruments (Commercial Papers) were listed with

National Stock Exchange of India Limited as was required vide - SEBI Circular SEBI/HO/DDHS/DDHS/CIR/P/2019/115 dated 22nd October, 2019 w.e.f 24th December, 2019. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors at its Meeting held on 23rd June, 2020 re-appointed M/s N. Radhakrishnan & Co. (Firm Registration No. 000056), 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting audit of the cost records maintained under Section 148(1) of the Act for the Company’s factories situated at Howrah, Rishra, Goa, Puducherry, Jejuri and Naltali and the factories of British Paints division located at Hindupur and Nalbari for the financial year 2020-2021. M/s Shome & Banerjee (Firm Registration No. 000001), 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, have been entrusted with the responsibility of conducting cost audit of the cost records maintained under Section 148(1) of the Act for the Company’s factory situated at Jammu and the factories of British Paints division located at Jammu, Sikandrabad and Surajpur for the financial year 2020-21.

The cost audit reports for the financial year 2019-20 were filed on 15th December, 2020 on receipt of advice from the Ministry of Company Affairs as to the formats and enabling gateways.

STATUTORY AUDITORS

The Statutory Auditor, Messrs. S. R. Batliboi & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 301003E/E300005) was re-appointed pursuant to the provisions of Sections 139, 142 of the Act and the Rules made thereunder from the conclusion of the 96th Annual General Meeting upto the conclusion of the 101st Annual General Meeting of the Company at the Annual General Meeting held on 25th September, 2020. Accordingly they would continue as the Statutory Auditor for the Financial Year 2021-22.

CAUTIONARY STATEMENT

There are certain statements which have been made in the Management Discussion and Analysis Report describing the estimates, expectations or predictions which may be read as “forward-looking statement” within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed or implied. The important factors that would make difference to the Company’s operations include demand/supply conditions, raw material prices, changes in government policies, government laws, tax regimes, global economic developments and other factors such as pandemic situation, litigations and labour negotiations.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors Kuldip Singh Dhingra

Place: Kolkata Chairman

Dated: 26th May, 2021 (DIN: 00048406)


Mar 31, 2019

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2019.

FINANCIAL RESULTS

(Rs. in Crore)

Particulars

Financial Year ended

Standalone

Consolidated

2018-19

2017-18

2018-19

2017-18

Profit before Exceptional Items, Depreciation, Finance Cost and Tax

863.82

789.93

941.60

852.86

Add: Exceptional Item

(28.60)

-

-

-

Add: Share of Profit/Loss from Joint Ventures

-

-

(0.90)

0.64

Less:

Depreciation and Amortisation Expense

122.17

111.92

137.77

124.21

Finance Cost

20.79

16.20

32.33

24.55

Profit Before Tax

692.26

661.81

770.60

704.74

Less:

Provision for Taxation

253.23

229.97

273.15

243.91

Profit After Taxation

439.03

431.84

497.45

460.83

Add:

Other comprehensive income (loss for the year net of tax)

(2.05)

1.16

(10.73)

34.44

Total comprehensive income

436.98

433.00

486.72

495.27

FINANCIAL PERFORMANCE

Highlights of the Standalone Results:

a. Revenue from Operations (excluding GST and excise duty, as applicable) for the year ended 31st March, 2019 was Rs.5,515.55 crore (previous year: Rs.4,705.09 crore), representing an increase of 17.23%.

b. PBDIT (Profit Before Exceptional Items, Depreciation, Interest and Tax) for the year ended 31st March, 2019 was Rs.863.82 crore as against Rs.789.93 crore in the year 2017-18, representing an increase of 9.35%.

c. Net profit for the year ended 31st March, 2019 was Rs.439.03 crore as against Rs.431.84 crore in the previous year, representing an increase of 1.66%.

d. The Exceptional Item in the statement of Profit and Loss for the standalone results above is the impairment adjustment of Rs.28.60 crore recognised in the current year towards carrying value of the Company’s investment in its wholly owned subsidiary, Berger Paints Cyprus Limited, Cyprus, on account of accumulated losses sustained by the ultimate wholly owned subsidiary, Berger Paints Overseas Limited, Russia due to downturn in the Russian economy. However, this does not have any impact on the consolidated financial results of the Company since year-wise losses have been fully recognised in the respective consolidated financial results in the normal course.

Highlights of the Consolidated Results:

a. Revenue from operations (excluding GST and excise duty, as applicable) for the year ended 31st March, 2019 was Rs.6,061.86 crore (previous year : Rs.5,147.16 crore) - an increase of 17.77%.

b. PBDIT (Profit Before Exceptional Items, Depreciation, Interest and Tax) for the year ended 31st March, 2019 was Rs.941.60 crore as against Rs.852.86 crore in the year 2017-18, representing an increase of 10.40%.

c. Net profit for the year ended 31st March, 2019 was Rs.497.45 crore as against Rs.460.83 crore in the previous year, representing an increase of 7.95%.

d. It is to be noted that the Company acquired 51% of the paid up equity share capital of Saboo Hesse Wood Coatings Private Limited (“SHWCPL”) after close of business hours on 28th January, 2019. Accordingly, the consolidated financial results incorporate the financial results of SHWCPL for the relevant period.

The Board recommended dividend ofRs.1.90 (190%) per equity share ofRs.1/- each for the financial year ended 31st March, 2019.

POLICY FOR PREVENTION OF SEXUAL HARASSMENT

Your Company has framed a policy on the Prevention of Sexual Harassment of Women at workplace which commits to provide a workplace that is free from all forms of discrimination, including sexual harassment. The Policy can be viewed at the following weblink: www.bergerpaints.com/about-us/sexual-harassment-policy.html

As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee (“ICC”) formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. There was no such complaint during the year. ICC comprises the following members who have been reappointed by the Board for another period of 3 years with effect from 1st February, 2018as per the Regulations:

1. Ms Rishma Kaur (The Presiding Officer)

2. Mr Srijit Dasgupta

3. MrAniruddhaSen

4. Ms Supama Mitra (NGO representative).

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 5 wholly-owned subsidiaries as on the date of this report: - (i) Beepee Coatings Private Limited (“Beepee Coatings”) in Gujarat; (ii) Berger Paints (Cyprus) Limited (“Berger Cyprus”) in Cyprus; (iii) Lusako Trading Limited (“Lusako Trading”) in Cyprus; (iv) Berger Jenson & Nicholson (Nepal) Private Limited, Nepal (“BJN”) and (v) Saboo Coatings Private Ltd (now renamed SBL Specialty Coatings Private Limited).

The following companies are wholly-owned subsidiaries of the Company’s above named subsidiaries: - (i) Bolix S.A., Poland -wholly-owned subsidiary of Lusako Trading; (ii) Berger Paints Overseas Limited (“BPOL”), Russia - wholly-owned subsidiary of Berger Cyprus. Bolix S.A., Poland has 4 subsidiaries, viz.: Bolix UKRAINA sp.z.o.o.,Ukraine (“Bolix Ukraine”), BUILD-TRADE sp.z.o.o.,Poland (“Build Trade Poland”), Soltherm External Insulations Limited, U.K. (“Soltherm U.K.”), Soltherm Insolations Thermique Exterieure SAS, France (“Soltherm France”).

Surefire Management Services Ltd., UK (“SMS”), clarified as Subsidiary in the previous year, is determined to be a Joint Venture of Bolix S.A., Poland with Agility Eco Systems Limited, UK, based on the criteria of joint control. Details in respect of SMS are provided in Part B of AOC-1 forming a part of the Financial Statement.

The Company now has two other subsidiaries viz., Berger Rock Paints Private Limited and Saboo Hesse Wood Coatings Private Limited.

The statement relating to the above companies as specified in Sub-section (3) of Section 129 of the Companies Act, 2013 is attached to the Report and Accounts of the Company.

During the year under review, BJN-Nepal showed good performance with a revenue from operations ofRs.197.2 crore.

Saboo Coatings Private Ltd (now renamed SBL Specialty Coatings Private Limited) continued to perform well with a revenue from operations ofRs.106.3 crore during the year 2018-19. The name of Saboo Coatings Private Limited has been changed to SBL Specialty Coatings Private Limited with effect from 6th May, 2019.

Bolix S.A.(including its subsidiaries) also posted encouraging results with a revenue from operations ofRs.251.4 crore.

The performance ofBeepee Coatings was satisfactory, with a revenue from operations ofRs.24.9 crore.

Berger Paints Cyprus Limited (“BPCL”) is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad. So is Lusako Trading Limited.

As mentioned earlier in the report, considering the accumulated losses of Berger Paints Overseas Limited (“BPOL”), the Company’s investments in Berger Paints Cyprus Limited, Cyprus, the holding company of BPOL, were assessed on a prudent basis for impairment provision of Rs.28.60 crore in the year 2018-19. This appears as an exceptional item in the standalone financial results, towards carrying value of the Company’s investments in Berger Paints Cyprus Limited. However, this does not have any impact on the consolidated

financial results of the Company since year wise losses have been fully recognised in the respective consolidated financial results in the normal course. The revenue from operations ofBerger Paints Overseas Limited (“BPOL”) was Rs.9.8 crore.

Berger Rock Paints Private Limited (“Berger Rock”), which had just started operations, recorded revenue from operations of Rs.1.5 crore during the year ended 31st March, 2019. It had commenced sales in January, 2019.

Saboo Hesse Wood Coatings Private Limited (“SHWCPL”) recorded revenue from operations ofRs.1.35 crore during the year ended 31st March, 2019, after acquisition of its shares by the Company after close ofbusiness hours on 28th January, 2019.

Berger Becker Coatings Private Limited, the Company’s joint venture with Becker Industrifarg, Sweden, showed good performance with revenue from operations ofRs.365.1 crore.

Berger Nippon Paint Automotive Coatings Private Limited (“BNPA”), the Company’s joint venture with Nippon Paint Automotive Coatings Co., Ltd. of Japan (“NPAU”) posted revenue from operations ofRs.156.6 crore. BNPA now supplies coatings to 4 wheeler passenger cars and SUVs, 3 wheelers and related ancillaries, apart from coatings for plastic automotive substrates. It plans to progressively enhance its capabilities in this area over the next few years. During the year, the Company invested an amount of Rs.39.20 crore in BNPA by way of subscription to 3,92,000 equity shares of BNPA of face value ofRs.1,000 each. NPAU also subscribed to 4,08,000 equity shares of BNPA. The funds will be used for the proposed expansion of BNPA’s facilities to cater to its new customers and increasing businesses.

The salient features of the financial statements of subsidiaries, associate companies and joint ventures are given in the Statement in Form AOC-1 forming a part of the financial statement attached to this Directors’ Report, pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014.

Pursuant to Regulation 16(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a material subsidiary in a year shall be a subsidiary whose income or net worth exceeds 10% of the consolidated income or net worth respectively of the Company and its subsidiaries, in the immediately preceding accounting year. At present, there is no such material subsidiary of the Company within the meaning of the above Regulation.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Indian Accounting Standard 110, provisions ofRegulation 36 ofSecurities and Exchange Board oflndia (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 136 of the Companies Act, 2013 have been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2018-19.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the relevant provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, a certificate obtained from a practising Company Secretary certifying that the Directors of the Company are not debarred or disqualified from being appointed or continue as directors of the companies by the Securities and Exchange Board of India/Ministry of Corporate Affairs, forms part of the report as Annexure D.

During the year under review, your Company has carried out the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report is attached as Annexure 4A to this Report. An Annual Secretarial Compliance report as per Securities and Exchange Board oflndia circular dated 8th February, 2019 is also attached as Annexure 4B as an additional disclosure.

The Board of Directors has appointed Messrs Anjan Kumar Roy & Co., Practising Company Secretaries (FCS No. 5684, CP. No. 4557), as the Secretarial Auditor to conduct audit of the secretarial records for the financial year 2018-19 and 2019-20.

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the SEBI (Prohibition of Insider Trading) Regulations, 2015 were amended during the year and the Company is taking all steps to comply with the requirements thereof.

TECHNOLOGY AGREEMENTS

Your Company has a Technical License Agreement with Nippon Paint Automotive Coatings Co, Ltd. of Japan.

FIXED DEPOSIT

The Company had earlier discontinued acceptance of fixed deposits since 2002 and accordingly, no fresh deposit was accepted during the year. As per the provisions of Section 125 of the Companies Act, 2013, all unclaimed deposits have been transferred to Investor Education and Protection Fund (IEPF) Account.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return of the Company as on 31st March, 2019 in Form MGT 9 in accordance with Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www.bergerpaints.com/investors/annual-reports.html and is set out in Annexure 1 to this Report.

MEETINGS OF THE BOARD OF DIRECTORS AND ATTENDANCE THEREAT

The details of meetings of the Board and attendance of Directors are given in the Report on Corporate Governance - Annexure B.

A. AUDIT COMMITTEE

The details of Audit Committee are given in the Report on Corporate Governance - Annexure B. The Board has accepted and implemented all recommendations of the Audit Committee.

WHISTLE BLOWER POLICY

Pursuant to Section 177 of the Companies Act, 2013 the Company along with its subsidiaries have complied with the laws and the codes of conduct applicable to them and have ensured that the business is conducted with integrity and that the Company’s financial information flow is accurate. In case of any violation or complaint, a report may be made under the Whistle-Blower Policy established by the Company. The said policy has been modified pursuant to the amended Regulations of the SEBI (Prohibition oflnsider Trading) Regulations, 2015. Also, the “Prevention of Insider Trading Code” in Corporate Governance Report contains highlights of the same. The Policy can be accessed at https://www.bergerpaints.com/about-us/whistleblower-policy.html

B. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has constituted a Corporate Social Responsibility Committee in accordance with the terms of reference of Section 135 of the Companies Act, 2013. The details of the Committee are given in the Report on Corporate Governance - Annexure B. The required details as specified in Companies CSR Policy Rules, 2014 is given in Annexure 2.

C. COMPENSATION & NOMINATION & REMUNERATION COMMITTEE

The details of the Committee are given in the Report on Corporate Governance - Annexure B.

D. SHAREHOLDERS’ COMMITTEES

The details of the Committees are given in the Report on Corporate Governance - Annexure B.

BUSINESS RESPONSIBILITY REPORT

SEBI has made it mandatory to publish a Business Responsibility Report (BRR) by the top 500 companies based on market capitalization in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations with the stock exchanges. The Company accordingly complied with the requirement and had framed a Business Responsibility Policy in line with the suggested framework as provided by SEBI based on the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses published by the Ministry of Corporate Affairs. The said Policy was adopted at the Board Meeting held on 30th May, 2017 and can be viewed at https://www.bergerpaints.com/about-us/business-responsibility-policy.html Mr Abhijit Roy, Managing Director and CEO has been nominated as the director responsible for implementing the Business Responsibility Policy and Mr Aniruddha Sen, Senior Vice President and Company Secretary has been nominated as the Business Responsibility Head. As required, the BRR for 2018-19 is attached to this report as Annexure 6.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2019 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis,

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively,

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

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The following are the Independent Directors of your Company:-

1) Mr Dhirendra Swarup

2) Mr Gopal Krishna Pillai

3) Mr Pulak Chandan Prasad

4) MrKamalRanjanDas

5) Mr Naresh Gujral

6) Mr Anoop Hoon*

7) Mrs Sonu Halan Bhasin*

* Appointed with effect from 1st February, 2019

The Company has received declarations from all the Independent Directors confirming that they meet the criteria for independence in the required format under the Companies Act, 2013 and as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Company has formulated a Remuneration Policy pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereof.

The Policy is available at the following weblink: www.bergerpaints.com/about-us/remuneration-policy.html

QUALIFICATION OR RESERVATIONS IN STATUTORY AUDIT REPORTS

Your Board has the pleasure in confirming that no qualification, reservation, adverse remark or disclaimer has been made by the Statutory Auditors or Company Secretary in Practice in their Audit Reports issued to the Company.

LOANS, COMMITMENTS AND CONTINGENCIES, INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statement (please refer Notes 5a, 5b, 9a and 34 of the standalone financial statement).

RELATED PARTY TRANSACTIONS

The Company has always been committed to good corporate governance practices, including in matters relating to Related Party Transactions (RPTs). Endeavour is consistently made to have only arm’s length transactions with all parties including Related Parties. The Board of Directors of the Company has adopted the Related Party Transaction policy regarding materiality of related party transactions and also on dealings with Related Parties in terms of Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with Stock Exchanges and Section 188 of the Companies Act, 2013. The policy is available at the following weblink:https://www.bergerpaints.com/about-us/rpt-policy.html

Pursuant to the amended Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 a policy on materiality of related party transactions and on dealing with related party transactions has to include clear threshold limit duly approved by the Board and such policy has to be reviewed by the Board once in every three years and updated accordingly. Accordingly, the Board has amended and adopted a new policy and the said policy has been uploaded on the website of the Company at https://www.bergerpaints.com/about-us/rpt-policy.html

All related party transactions have been carried out at arms’ length basis in the ordinary course of business. There is no material related party transaction i.e. transaction exceeding 10% of the annual consolidated turnover as per the last audited financial statements of the Company or a transaction involving payments made to a related party with respect to brand usage or royalty, which exceed 2% of the annual consolidated turnover of the Company as per last audited financial statements of the Company, entered during the year by your Company and accordingly, the disclosure of Related Party Transaction as required under section 134(3)(h) of the Companies Act, 2013in Form AOC-2 is not applicable.

POLICY TO DETERMINE MATERIAL EVENTS

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has framed a policy for determination of materiality, based on criteria specified in the regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-determine-material-events.html

POLICY FOR PRESERVATION OF DOCUMENTS

As per Regulation 9 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 the Company has framed a policy for Preservation of Documents, based on criteria specified in the said Regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-preservation-documents.html

SIGNIFICANT CHANGES

During the Financial Year 2018-19, no significant change has taken place which could have an impact over the financial position of the Company. However, during the year, as reported earlier in this Report, there were formation ofBerger Rock Paints Private Limited and acquisition of shares of Saboo Hesse Wood Coatings Private Limited.

DIVIDEND

The total comprehensive income of the Company is Rs.436.98 crore for the year 2018-19.

Your Directors recommend a dividend of Rs.1.90 per share i.e. @190% for the year under review. This, if approved, will absorb an amount ofRs.222.44 crore (compared to Rs.210.71 crore in the previous year), including Dividend Distribution Tax, based on the current paid-up capital of the Company and will be paid to those members holding shares in the physical mode whose names appear in the Register of Members as on 5th August, 2019 and for shares held in electronic form, to those whose names appear in the list ofbeneficial holders furnished by respective Depositories as at the end ofbusiness hours on 29th July, 2019.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy. The Policy is available at the following weblink: https://www.bergerpaints.com/ about-us/dividend-distribution-policy.html

In terms of the provisions of Section 124 of the Companies Act, 2013, your Company has transferred an amount ofRs.17,83,245 (Interim) and Rs.28,91,075 (Final) to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed/ unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2011.

Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of Information Regarding Unpaid and Unclaimed Amounts Lying with Companies) Rules, 2012, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, ason31st March, 2011.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed to Annexure 5 of this report.

Foreign Exchange Earnings and Outgo

Foreign Exchange Earning and Outgo of the Company are Rs.8.07 crore and Rs.740.29 crore respectively. Primarily, earnings were from exports and consultancy services and outgo was towards import payments.

Particulars of Employees

In terms of the provisions of Section 134 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 particulars of certain category of employees have been set out in Annexure 3 of this report.

STATEMENT OF EVALUATION OF BOARD OF DIRECTORS AND COMMITTEES THEREOF

The Company follows the provisions of the Companies Act, 2013 and Securities & Exchange Board oflndia (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) in relation to Directors’ appointments, qualifications and independence.

Pursuant to Section 178(3) of the Companies Act, 2013 and the relevant provisions of the Listing Regulations, the Compensation and Nomination and Remuneration Committee is entrusted with responsibility of formulating criteria for determining qualifications, positive attributes and independence of a Director. The same is available at the following link: https:/bergerpaints.com/about-us/ criteria-policy.html

The Compensation and Nomination and Remuneration Committee have laid down the following criteria for evaluating the performance of the Board ofDirectors. The same is available at the following link: https:/bergerpaints.com/about-us/criteria-policy.html

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

Pursuant to Section 134(3)(q) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, it is stated that no material order has been passed by any regulator, court or tribunal impacting the Company’s operations and its going concern status during the Financial Year 2018-19.

DIRECTORS

Pursuant to Article 112 of the Articles of Association of the Company, Mr Kuldip Singh Dhingra (DIN: 00048406) and Mr Gurbachan Singh Dhingra (DIN: 00048465) retire by rotation and being eligible, offer themselves for re-appointment.

Mr Kuldip Singh Dhingra is an industrialist and promoter of the Company. He has over 50 years of experience in paint and related industries and his contribution to the paint industry is well known and internationally acclaimed. Mr Kuldip Singh Dhingra is a science graduate from Hindu College, University of Delhi and Chairman of the Board of Directors of the Company. Mr Kuldip Singh Dhingra is 72 years old.

Mr Gurbachan Singh Dhingra is a graduate from Punjab University and an industrialist. He is a promoter of the Company, holds the position of Vice-Chairman of the Board of Directors and has almost 50 years of experience in the paint industry. He has practical experience in building and commissioning of many paint factories and also has experience in the technical aspects of paint industry. Mr Gurbachan Singh Dhingra is 69 years old.

Mr Naresh Gujral (DIN: 00028444) (‘Mr Gujral’), Mr Dhirendra Swarup (DIN: 02878434) (‘Mr Swarup’) and Mr Gopal Krishna Pillai (DIN: 02340756) (‘Mr Pillai’) are Independent Directors of the Company, appointed pursuant to approval of Members under provisions of the Companies Act, 2013 through resolutions passed at the Annual General Meeting held on 3rd August, 2015. Their terms up to five years on the Board of Directors of the Company will expire on 19th August, 2019, 7th September, 2019 and 11th September, 2019 respectively.

The Company was received notice from a member proposing the candidature of Mr Gujral as Director. As per Section 149 and other applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to the recommendation of the Compensation and Nomination and Remuneration Committee, the Board of Directors of the Company has recommended re-appointment of Mr Gujral for a second term of five years from 20th August, 2019 to 19th August, 2024 for approval of the members at the forthcoming Annual General Meeting, by way of a special resolution. Mr Gujral will not be liable to retire by rotation.

Mr Naresh Gujral is a fellow member of the Institute of Chartered Accountants of India. He is the founder of Span India Group, one of the leading exporter of high-end fashion garments to Europe from India. He is an eminent industrialist and social activist. Mr Gujral was a non-executive Director of the Company from 12th February, 2003 to 25th August, 2011. After a brief hiatus, he was appointed Independent Director on 20th August, 2014. Mr Gujral holds 7,000 equity shares ofRs.1/- each of the Company. Mr Gujral is71 years old.

At the recommendation of the Compensation and Nomination and Remuneration Committee, the Board had appointed Mrs Sonu Halan Bhasin (DIN: 02872234) (“Mrs Bhasin”) and Mr Anoop Hoon (DIN: 00686289) (“Mr Hoon”) as additional Directors on the Board in non-executive, independent positions with effect from 1st February, 2019, to hold office up to the date of the next Annual General Meeting. The Company has received notices in writing from two members proposing the candidatures of Mrs Bhasin and Mr Hoon as Directors. As per Sections 149 and 160 and other applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and pursuant to the recommendation of the Compensation and Nomination and Remuneration Committee, the Board of Directors of the Company has recommended the appointment of Mrs. Bhasin and Mr Hoon for five years till 31st January, 2024. Accordingly, approval has been sought from the members at the forthcoming Annual General Meeting for appointment of Mrs Bhasin and Mr Hoon as Independent Directors for the aforesaid period. Mrs Bhasin and Mr Hoon will not be liable to retire by rotation.

Mrs Bhasin is a B.Sc (Hons), Mathematics, St Stephen’s College, Delhi University and MBA: Faculty of Management Studies (FMS), Delhi University. She has a wide professional experience and was the Chief Operating Officer of Tata Capital Ltd. Before that, she worked with YES Bank, ING Barings Pvt Bank and ING Vysya Bank and Tata Administrative Services in senior positions. She is the Founder and Managing Partner of FAB-Families and Business and Editor-in-Chief of Families and Business Magazine. She has authored the book - The Inheritors - Stories of Entrepreneurship and Success. Mrs Bhasin was appointed a member of the Audit Committee on 1st February, 2019 and its Chairman on 30th May, 2019. She does not hold any share of the Company. Mrs Bhasin is 56 years old.

Mr Hoon is a graduate in Economics and post graduate in Industrial Relations and Personnel Management from XLRI, Jamshedpur. He was associated with Century Plywood (India) Ltd. as President (Marketing & OD) during the period 2008 to 2015. He was earlier associated with Bells Control Ltd., BOC Gases Ltd., Fortis Health Care Ltd., The Gramophone Co. of India (HMV) Ltd. (as the CEO), Dunlop Tyres, Asian Paints and others. He has experience in marketing, sales, organisational development, HR, supply chain and branch commercial functions and had served as Business Head of several businesses while in the companies in which he had worked. Mr Hoon was appointed member of the Business Process and Risk Management Committee and Compensation and Nomination and Remuneration Committee on 1st February, 2019. Mr Hoon does not hold any share of the Company. Mr Hoon is 64 years old.

Ms Rishma Kaur (Ms Kaur) (DIN : 00043154) and Mr Kanwardip Singh Dhingra (Mr Dhingra) (DIN: 02696670) were appointed as Directors in whole-time employment of the Company designated as Director & National Business Development Manager, Retail and Director & National Business Development Manager, Industrial respectively for a period of five years up to 2nd August, 2019at the Annual General Meeting held on 3rd August, 2015. Their terms of appointment will expire on 2nd August, 2019.

Ms Kaur holds a B.Sc. in Business Studies from University of Buckingham, U.K. Ms Kaur has been working with the Company since April, 2011 and has successfully led Business Development efforts in the Company in respect of Retail Business in addition to providing guidance and handling various other matters such as Marketing and Corporate Affairs. Ms Kaur is a member of the Business Process and Risk Management Committee and CSR Committee of the Board. Ms Kaur holds 6,00,000 equity shares of Rs.1/- each of the Company.

Mr Dhingra holds a Bachelor’s Degree in Chemical Engineering from University of Akron, Akron, Ohio, U.S.A with specialization in Polymer Engineering and Minor in Chemistry. Prior to joining the Company, Mr Dhingra gathered working experience in the field of paints and specialty coatings in The Rohm & Haas Company, Texas, USA and The Sherwin Williams Company, Ohio, U.S.A. Mr Dhingra has been working with the Company since April, 2011 and has successfully led business development efforts in the Company in respect of Industrial Business in addition to providing guidance and handling various other matters such as Projects and Procurements. Mr Dhingra is a member of the Business Process and Risk Management Committee and CSR Committee of the Board. Mr Dhingra holds 6,00,000 equity shares ofRs.1/- each of the Company.

Since 2015, both Ms Kaur and Mr Dhingra had assumed major responsibilities in the business and operations of the Company and had engaged themselves in wide areas of activities. In recognition of their initiatives and in terms of the recommendation made by the Compensation and Nomination and Remuneration Committee, the Board of Directors increased their monthly remuneration to an amount not exceeding Rs.46,00,000 per annum with effect from 1st April, 2018 till the date of the next Annual General Meeting, subject to approval of the shareholders under Section 196 of the Companies Act, 2013 and designated them as Executive Directors.

The said increase in remuneration of Ms Kaur and Mr Dhingra will not fall within the purview of Section 188 of the Act and since their remuneration, individually or taken together with previous transactions during a financial year would not exceed ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company they will not qualify as a material related party transaction under the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).

Upon recommendation of the Compensation and Nomination and Remuneration Committee and pursuant to the provisions of Sections 196, 197, Schedule V and all other relevant provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has re-appointed Ms Kaur and Mr Dhingra as Executive Directors in whole-time employment of the Company for a period of five years with effect from 3rd August, 2019 to 2nd August, 2024, subject to approval of the shareholders at the forthcoming Annual General Meeting at a remuneration to be fixed by the Compensation and Nomination and Remuneration Committee subject to a ceiling of Rs.1,00,00,000 (Rupees one crore) per annum. As mentioned earlier, the aforesaid appointment and payment of remuneration will not attract the provisions of Section 188 of the Companies Act, 2013. They will also not qualify as material related party transaction under the provisions of Listing Regulations as long as their remuneration, individually or taken together with previous transactions during a financial year do not exceed ten percent of the annual consolidated turnover of the Company as per the last audited financial statements.

Structure of the Board of Directors

Name of Directors

Non-executive

Executive

Independent

Lady

Mr Kuldip Singh Dhingra

Y

N

N

N

Mr Gurbachan Singh Dhingra

Y

N

N

N

Mr Abhijit Roy

N

Y

N

N

Ms Rishma Kaur

N

Y

N

Y

Mr Kanwardip Singh Dhingra

N

Y

N

N

Mr Kamal Ranjan Das

Y

N

Y

N

Mr Naresh Gujral

Y

N

Y

N

Mr Gopal Krishna Pillai

Y

N

Y

N

Mr Pulak Chandan Prasad

Y

N

Y

N

Mr Dhirendra Swarup

Y

N

Y

N

Mr Anoop Hoon *

Y

N

Y

N

Mrs Sonu Halan Bhasin *

Y

N

Y

Y

*Appointed wef 1st February, 2019

FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company believes that the best training is imparted when dealing with actual roles and responsibilities on the job. To this extent, the Company arranges detailed presentation by Business and Functional Heads on various aspects including the business environment, economy, performance of the Company, industry scenario, sales and marketing, production, raw materials, research and development, financial controls, the Company’s strategy, etc. Visits to factories are also undertaken from time to time. This can be seen at the following weblink:https://www.bergerpaints.com/about-us/familiarization-program.html

INFORMATION AS TO REMUNERATION OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197 of the Companies Act, 2013 (“the Act”) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following disclosures are made:-

1) Ratio of remuneration of Directors/KMP to the median remuneration of the employees:

Name of Directors/KMPs

Remuneration

Ratio as to that of the

Percentage increase in

Received (Rs.)

Median Employee

Remuneration

Mr Kuldip Singh Dhingra

10,00,000

1.83:1

0.00

Mr Gurbachan Singh Dhingra

10,00,000

1.83:1

0.00

Mr Abhijit Roy

3,01,04,164*

55.09:1

18.23

Mr Kanwardip Singh Dhingra

45,32,366

8.29:1

94.40

Ms Rishma Kaur

45,35,787

8.30:1

93.50

Mr Kamal Ranjan Das

3,00,000

0.55:1

0.00

Mr Pulak Chandan Prasad

-

-

-

Mr Naresh Gujral

7,20,000

1.32:1

0.00

Mr Dhirendra Swarup

7,20,000

1.32:1

0.00

Mr Gopal Krishna Pillai

7,20,000

1.32:1

0.00

Mr Srijit Dasgupta

1,48,54,179*

27.18:1

7.82

Mr Aniruddha Sen

1,07,72,312*

19.71:1

16.83

Mr Anoop Hoon #

-

-

-

Mrs Sonu Halan Bhasin #

-

-

-

* Remuneration does not include value ofESOP’s granted.

# Appointed wef 1st February, 2019.

Note - The median employee remuneration for 2018-19 is : Rs.5,46,446 p.a.

2) Percentage (%) increase in remuneration during the Financial year 2018-19 : Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the Financial year 2018-19 : 4.14 %

4) Number of permanent employees on the rolls of the Company as on31st March, 2019: 3,450

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration -The average percentile increase of employee was 15.88% as compared to an average percentile increase of 29.98% of managerial remuneration. The increase of managerial remuneration is based on growth criteria.

6) Pursuant to the requirement of Section 197(14) of the Act, the following disclosure is made in respect to remuneration received by Directors:

Name

Nature of Transaction

Amount (Rs.)

Ms Rishma Kaur, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakhs

Mr Kanwardip Singh Dhingra, Executive Director and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

27 Lakhs

Affirmation

It is hereby affirmed by the Chairperson of the Company that the remuneration paid to all the employees, Directors and Key Managerial Personnel of the Company during the Financial Year 2018-19 are as per the Remuneration policy framed by the Compensation and Nomination and Remuneration Committee of the Company.

LISTING WITH STOCK EXCHANGES

Your Company is listed with The Calcutta Stock Exchange Limited, BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed M/s N. Radhakrishnan & Co., 11A, Dover Lane, Flat Bl/34, Kolkata - 700029, for conducting cost audit at the Company’s factories at Howrah, Rishra, Goa, Puducherry, Jejuri, Naltali and at the Nalbari and Hindupur factories of the Company’s British Paints Division and M/s Shome & Banerjee & Co., 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, for conducting cost audit at its Jammu factory and for the factories of British Paints Division at Jammu, Surajpur and Sikandrabad under Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 for the year 2019-20.The said reports for the year 2017-18 were filed on 13th October, 2018.

STATUTORY AUDITORS

The Statutory Auditors, Messrs. S.R. Batliboi & Co. LLP, Chartered Accountants, were appointed pursuant to the provisions of Sections 139,142 of the Companies Act, 2013 and the Rules made thereunder from the conclusion of the 91st Annual General Meeting up to the conclusion of the Sixth Annual General Meeting to be held after the 91st Annual General Meeting. Pursuant to Section 40 of the Companies Amendment Act, 2017 made effective from 7th May, 2018, ratification at every Annual General Meeting by Members is no longer necessary till the conclusion of the Sixth Annual General Meeting. The Statutory Auditors had furnished their eligibility to continue as Auditors from the conclusion of the ensuing Annual General Meeting till the subsequent Annual General Meeting.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors

Place: Kolkata Kuldip Singh Dhingra

Dated: 30th May, 2019 Chairman


Mar 31, 2018

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on31st March, 2018.

FINANCIAL RESULTS

(Rs. in crore)

Particulars

Financial Year ended

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Profit before Exceptional Items, Depreciation, Finance Cost and Tax

789.93

710.43

852.86

773.10

Add: Exceptional Items

-

58.67

-

44.20

Add: Share of Profit from Joint Ventures

-

-

0.64

10.05

Less:

Depreciation

111.92

98.00

124.21

108.05

Finance Cost

16.20

7.76

24.55

16.22

Profit Before Tax

661.81

663.34

704.74

703.08

Less:

Provision for Taxation

229.97

219.25

243.91

229.42

Profit After Taxation

431.84

444.09

460.83

473.66

Add:

Other comprehensive income (loss for the year net of tax)

1.16

(1.44)

34.44

(18.94)

Total comprehensive income

433.00

442.65

495.27

454.72

FINANCIAL PERFORMANCE

Highlights of the Standalone Results:

a. Revenue from Operations (excluding GST and excise duty on sales, as applicable) for the year ended 31st March, 2018 was Rs.4,705.09 crore (previous year: Rs.4,228.86 crore), representing an increase of 11.3%.

b. PBDIT (Profit Before Exceptional Items, Depreciation, Interest and Tax) for the year ended 31st March, 2018 was Rs.789.93 crore against Rs.710.43 crore inthe year 2016-17, representing an increase of 11.2%.

c. Profit before tax and net profit for the year ended 31st March, 2018 are not comparable with those for the year 2016-17 since the same included exceptional items viz., profit on transfer of the Company’s paint division relating to 4 wheeler passenger cars and SUV’s, 3 wheelers and related ancillaries and impairment provision on the carrying value of investment in a wholly owned subsidiary.

Highlights of the Consolidated Results:

a. Revenue from operations (excluding GST and excise duty on sales, as applicable) for the year ended 31st March, 2018 was Rs.5,147.16 crore (previous year: Rs.4,555.79 crore) - an increase of 13.0%.

b. PBDIT (Profit Before Exceptional Items, Depreciation, Interest and Tax) for the year ended 31st March, 2018 was Rs.852.86 crore against Rs.773.10 crore inthe year 2016-17, representing an increase of 10.3%.

c. Profit before tax and net profit for the year ended 31st March, 2018 are not comparable with those for the year 2016-17 since the same included the exceptional items of profit on transfer of the Company’s paint division relating to 4 wheeler passenger cars and SUV’s, 3 wheelers and related ancillaries.

d. It is to be noted that the Company acquired 100% of the paid up equity share capital of Saboo Coatings Private Limited (“SCPL”) after close of business hours on 5th June, 2017. Accordingly, the consolidated financial results incorporate the financial results of SCPL for the relevant period and are not, as such, comparable with those for the same period, previous year.

ACQUISITION OF SABOO COATINGS PRIVATE LIMITED

The Company acquired 100% of the paid-up equity shares of Saboo Coatings Private Limited (“SCPL”) at a total cash consideration ofRs.82.85 crore, on 5th June, 2017. SCPL is thus a wholly owned subsidiary of the Company. SCPL is engaged in the business of manufacturing specialty liquid coatings in the segments of agricultural and construction equipment, fans, electronics, general industrial, elevators, handicrafts and home furnishing, hardware, automotive parts and specially the clear coatings used by industrial dealers for substrates such as metal, glass and fibre-reinforced plastic (FRP), etc. It has a factory at Dera Bassi near Chandigarh and a manufacturing set up in Chennai. It is known for its quality and delivery standards. The business and the expertise of SCPL will gainfully supplement the Company’s industrial coatings business where the two entities can support each other in various areas such as manufacturing, selling, distribution, procurement, technology, etc., thus resulting in mutual benefit to both the companies. The Company’s intimation in this regard pursuant to Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 can be viewed at the following weblink: https://www.bergerpaints.com/media/media.

AMALGAMATION WITH BJN PAINTS INDIA LIMITED

In terms of its Order dated 27th February 2018, the Hon’ble National Company Law Tribunal, Kolkata Bench (“NCLT”), sanctioned the Scheme of Amalgamation of BJN Paints India Limited (“the Transferor Company”), a wholly owned subsidiary of Beepee Coatings Private Limited (which itself is a wholly owned subsidiary of the Company) with the Company with effect from 1st April, 2017, being the Appointed Date for the purpose. The Company and BJN Paints India Limited have submitted the necessary forms INC 28 with certified copies of the said Order to the Registrar of Companies, West Bengal. The amalgamation will enable appropriate consolidation of the activities of BJN Paints India Limited and the Company with pooling and more efficient utilisation of their resources, greater economies of scale, reduction in overheads and other expenses and improvement in various operating parameters. The same will result, inter alia, from better inventory management, reduction of working capital requirements, and lower cost of production and better integration of operations which will be facilitated by and will follow the amalgamation, which has taken place. The business of the BJN Paints India Limited stands fully integrated with the business of the Company consequent to the amalgamation. This will enable the potential of the said businesses to be realized more fully.

INCREASE OF AUTHORISED SHARE CAPITAL

Consequent to and as part of the said amalgamation, as approved by the Hon’ble NCLT, the Authorised Share Capital of BJN Paints India Limited stands merged into and combined with the Authorised Share Capital of the Company, without any further act or deed, and without payment of any registration or filing fee on such combined Authorised Share Capital, the respective companies having already paid such fees. Accordingly, the Authorised Share Capital of the Company is now Rs.120,00,00,000/- divided into 110.00.00.000 Equity Shares ofRs.1/- each and 1,00,00,000 Equity Shares ofRs.10/- each. Further, such resulting Authorised Share Capital ofRs.120,00,00,000/- stands reorganized into 120,00,00,000 Equity Shares ofRs.1/- each and Clause V of the Memorandum of Association and Article 3 of the Articles of Association of the Transferee Company stand altered accordingly as under:

Clause No. V of the Memorandum of Association of the Company stands substituted as under:

“The Authorised Share Capital of the Company is Rs.120,00,00,000 (Rupees One Hundred and Twenty Crore only) divided into 120.00.00.000 Equity Shares ofRs.1/- (Rupee One) each.”

Article 3 of the Articles of Association of the Transferee Company stands substituted as under:

“The Authorised Share Capital of the Company is Rs.120,00,00,000 (Rupees One Hundred and Twenty Crore only) divided into 120.00.00.000 Equity Shares ofRs.1/- (Rupee One) each.”

ADEQUACY OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

The Company has policies and procedures for ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detention of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial disclosures, which are reviewed by the Board and Audit Committee from time to time.

EMPLOYEE STOCK OPTION SCHEME

Your Company re-introduced the ESOP Scheme, aligned with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 in the year 2016 in accordance with the approval of the members granted at the Annual General Meeting held on 3rd August, 2016, to reward eligible employees. Pursuant to the said scheme, the Remuneration Committee had approved a fresh grant of 1,61,184 options convertible into equity shares to 157 employees. One-third of the options granted to the employees will vest on 8th November 2018, 2019 and 2020 each year, which they are entitled to exercise on or after the said dates as per the ESOP Scheme. This includes the following options granted to the Key Managerial Personnel:

NAME OF KMP

DESIGNATION

NO. OF OPTIONS GRANTED

MR. ABHIJIT ROY

MANAGING DIRECTOR & CEO

3,744 options

MR. SRIJIT DASGUPTA

DIRECTOR-FINANCE & CFO

2,880 options

MR. ANIRUDDHA SEN

SR. VICE PRESIDENT & COMPANY SECRETARY

1,920 options

In accordance of the aforesaid scheme of 2016, the Remuneration Committee approved allotment of 44,781 equity shares of face value ofRs.1/- each to 130 employees upon exercise of their options earlier granted to them. The allotment of the said shares was made on 7th December, 2017.

Further, in accordance with Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014, the Company also allotted shares to Key Managerial Personnel (KMPs) on 7th December, 2017, on their exercising the options earlier granted to them and the details of the allotments made are as follows:

NAME OF KMP

DESIGNATION

NO. OF EQUITY SHARES ALLOTTED

MR. ABHIJIT ROY

MANAGING DIRECTOR & CEO

1,200 shares

MR. SRIJIT DASGUPTA

DIRECTOR-FINANCE & CFO

923 shares

MR. ANIRUDDHA SEN

SR. VICE PRESIDENT & COMPANY SECRETARY

616 shares

The information required to be disclosed in terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014 is enclosed as per Annexure A to this report. Please also visit the weblink: https://www.bergerpaints.com/investors/esop-disclosure. html. for disclosures under Regulation 14 of the aforesaid Regulations.

HUMAN RESOURCES

Human resources are considered to be the Company’s most valuable assets and it recognises that its growth would not have been possible without the dedication, loyalty and hard work of its people at all levels. In order to sustain these, the Company offers an environment which promotes creativity, fellowship, teamwork, strategic vision, meritocracy, learning and ambition. An objective appraisal process takes into account all the factors for determination of a reward considering the performances of the economy, the industry, the Company and the individual concerned. This has enabled the Company to develop an inclusive organisation which is multi-cultural and generates a sense of contentment and belonging, which does not relate to monetary compensation only.

Identifying and recruitment of an appropriate candidate and retention of an employee continue to be the greatest challenges faced by the Indian industry. Apart from the usual methods such as campus interview and taking services of placement consultants, the Company adopts innovative processes which include referral schemes and social media campaigns. The Company collaborates with recognised institutes for the purpose of specific project related work and has programmes leading to awards. Training, including on the job training, is given the highest priority and the Company measures the time and efficacy of all kinds of training provided to the employees which includes e-leaming modules. As a result of these, the attrition rate and recruitment cost have been continuously climbing down and employee satisfaction surveys are showing positive results.

The number of people employed as on 31st March, 2018 was 3,130 (31st March, 2017: 2,993). The Industrial Relations were generally satisfactory during the year. The trade union at the Company’s Goa factory had called a strike on 10th May, 2017. The factory was operating at a reduced scale and the strike was withdrawn on 25th July, 2017. There was no significant effect on the operations of the Company as a result of the strike.

Your Company wishes to put on record its deep appreciation of the co-operation extended and efforts made by all employees.

TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

The Ministry of Corporate Affairs (MCA) vide - notification no. S.0.2866 (E) dated 5th September, 2017 enforced sections 124(6) and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 [IEPF], which require companies to transfer the underlying shares to the IEPF, in respect of which the dividends have remained unclaimed for a consecutive period of seven years. Accordingly, during the year under review, the Company had transferred 56,27,559 equity shares (0.58% of paid up capital) covering 1,362 folios to IEPF on 27th November, 2017. On 27th April, 2018, the Company had further transferred 2,95,496 equity shares (0.03% of paid up capital) to IEPF.

SEXUAL HARASSMENT POLICY

Your Company has framed a policy on Sexual Harassment of Women at workplace which commits to provide a workplace that is free from all forms of discrimination, including sexual harassment. The Policy can be viewed at the following weblink: www.bergerpaints.com/about-us/sexual-harassment-policy.html.

As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee (“ICC”) formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. There was no such complaint during the year. ICC comprises the following members who have been reappointed by the Board for another period of 3 years with effect from 1st February, 2018as per the Regulations:

1. Mrs. Rishma Kaur (The Presiding Officer)

2. Mr. Srijit Dasgupta

3. Mr. AniruddhaSen

4. Ms. Supama Mitra (NGO representative).

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 5 wholly-owned subsidiaries as on the date of this report: - (i) Beepee Coatings Private Limited (“Beepee Coatings”) in Gujarat; (ii) Berger Paints (Cyprus) Limited (“Berger Cyprus”) in Cyprus; (iii) Lusako Trading Limited (“Lusako Trading”) in Cyprus; (iv) Berger Jenson & Nicholson (Nepal) Private Limited (“BJN”) in Nepal; (v) Saboo Coatings Private Limited in Chandigarh.

The following companies are wholly-owned subsidiaries of the Company’s above named subsidiaries:- (i) Bolix S.A., Poland - wholly-owned subsidiary of Lusako Trading; (ii) Berger Paints Overseas Limited (“BPOL”), Russia - wholly-owned subsidiary of Berger Cyprus. Bolix S.A., Poland has 5 subsidiaries, viz.: Bolix UKRAINA OOO, Ukraine, BUILD-TRADE BIS sp.z.o.o., Poland, Soltherm External Insulations Limited, United Kingdom, Soltherm Insulations Thermique Exterieure SAS, France and Surefire Management Systems Ltd., United Kingdom.

The statement relating to the above companies as specified in Sub-section (3) of Section 129 of the Companies Act, 2013 is attached to the Report and Accounts of the Company.

During the year under review, BJN-Nepal showed good performance with a revenue from operations of Rs.170.82 crore.

Bolix S.A. also posted encouraging results with a revenue from operations of Rs.199.90 crore.

The performance ofBeepee Coatings was satisfactory, with a revenue from operations of Rs.24.44 crore.

On 17th November, 2017, Bolix formed a joint venture company incorporated in the United Kingdom with Agility Eco Ltd. of the United Kingdom for the purpose of executing wall insulation supply and application contracts compliant with the European regulatory approvals for procurement frameworks for specified public works, by the name of Surefire Management Services Ltd (“SMS”). Bolix currently holds 75% of the share capital of SMS comprising 75 fully paid up equity shares of a face value of 1 GBP each aggregating 75 GBP. By virtue of its voting power, Bolix is a holding company of SMS. SMS has just started business.

Saboo Coatings Private Ltd, acquired by the Company during the year, as mentioned above, recorded revenue from operations of Rs.87.29 crore during the full year 2017-18. The consolidated results of the Company take into account revenue from operations amounting to Rs.71.51 crore for the relevant period after acquisition of SCPL.

Berger Paints Cyprus Limited is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad. So is Lusako Trading Limited.

The revenue from operations ofBerger Paints Overseas Limited (BPOL) was Rs.7.93 crore.

Berger Becker Coatings Private Limited, the Company’s joint venture with Becker Industrifarg, Sweden, showed good performance with revenue from operations of Rs.293.66 crore.

Berger Nippon Paint Automotive Coatings Private Limited (“BNPA”), the Company’s joint venture with Nippon Paint Automotive Coatings Co., Ltd. of Japan (NPAU) posted revenue from operations ofRs.123.10 crore. BNPA now supplies coatings to 4 wheeler passenger cars and SUVs, 3 wheelers and related ancillaries, apart from coatings for plastic automotive substrates. It plans to progressively enhance its capabilities in this area over the next few years.

The salient features of the financial statements of subsidiaries, associate companies and joint ventures are given in the Statement in Form AOC-1 forming a part of the financial statement attached to this Directors’ Report, pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014.

Pursuant to Regulation 16(c) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a material subsidiary in a year shall be a subsidiary whose income or net worth exceeds 20% of the consolidated income or net worth respectively of the Company and its subsidiaries, in the immediately preceding accounting year. At present, there is no such material subsidiary of the Company within the meaning of the above regulation.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Accounting Standards 21 and 7, provisions of Regulation 36 ofSecurities and Exchange Board oflndia (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 136 of the Companies Act, 2013 have been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2017-18.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the provisions of Regulation 17 to 27, clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Annexure-B & C).

During the year under review, your Company has carried out the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report is attached as Annexure 4 to this Report.

The Board of Directors has appointed Messrs Anjan Kumar Roy & Co., Practising Company Secretaries (FCS No. 5684, CP. No. 4557), as the Secretarial Auditor to conduct audit of the secretarial records for the financial year 2018-19 and 2019-20.

TECHNOLOGY AGREEMENTS

Your Company has a Technical License Agreement with Axalta Coating Systems India Private Limited, LLC in the area of Automotive Coatings.

FIXED DEPOSIT

The Company had earlier discontinued acceptance of fixed deposits since 2002 and accordingly, no fresh deposit was accepted during the year. As per the provisions of Section 125 of the Companies Act, 2013, all unclaimed deposits have been transferred to Investor Education and Protection (IEPF) Account.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Companies Act, 2013, extract of Annual Return is attached as Annexure 1 to the Directors’ Report.

MEETINGS OF THE BOARD OF DIRECTORS AND ATTENDANCE THEREAT

The details of meetings of the Board and attendance of Directors are given in the Report on Corporate Governance - Annexure B.

A. AUDIT COMMITTEE

The details of Audit Committee are given in the Report on Corporate Governance - Annexure B. The Board has accepted and implemented all recommendations of the Audit Committee.

VIGIL MECHANISM

Pursuant to Section 177 of the Companies Act, 2013 the Company along with its subsidiaries have complied with the laws and the codes of conduct applicable to them and have ensured that the business is conducted with integrity and that the Company’s financial information flow is accurate. In case of any violation or complaint, a report may be made under the Vigil Mechanism system established by the Company. The said policy is uploaded on the Company’s website and can be accessed at: https://www.bergerpaints.com/about-us/whistleblower-policy.html.

B. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has constituted a Corporate Social Responsibility Committee in accordance with the terms of reference of Section 135 of the Companies Act, 2013. The details of the Committee are given in the Report on Corporate Governance - Annexure B. The required details as specified in Companies CSR Policy Rules, 2014is given in Annexure 2.

C. COMPENSATION & NOMINATION & REMUNERATION COMMITTEE

The details of the Committee are given in the Report on Corporate Governance - Annexure B.

D. SHAREHOLDERS’ COMMITTEES

The details of the Committees are given in the Report on Corporate Governance - Annexure B.

BUSINESS RESPONSIBILITY REPORT

SEBI has made it mandatory to publish a Business Responsibility Report (BRR) by the top 500 companies based on market capitalization in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations with the stock exchanges. The Company accordingly complied with the requirement and had framed a Business Responsibility Policy in line with the suggested framework as provided by SEBI based on the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses published by the Ministry of Corporate Affairs. The said Policy was adopted at the Board Meeting held on 30th May, 2017 and can be viewed at https://www.bergerpaints.com/about-us/business-responsibility-policy.html. Mr. Abhijit Roy, Managing Director and CEO has been nominated as the director responsible for implementing the Business Responsibility Policy and Mr. Aniruddha Sen, Senior Vice President and Company Secretary has been nominated as the Business Responsibility Head. As required, the BRR for2017-18is attached to this report as Annexure 6.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2018 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis,

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively,

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

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The following are the Independent Directors of your Company:-

1) Mr. Dhirendra Swarup;

2) Mr. Gopal Krishna Pillai;

3) Mr. Pulak Chandan Prasad;

4) Mr. Kamal Ranjan Das;

5) Mr. Naresh Gujral.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria for independence in the required format under the Companies Act, 2013.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Company has formulated a Remuneration Policy pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereof.

The Policy is available at the following weblink: www.bergerpaints.com/about-us/remuneration-policy.html.

QUALIFICATION OR RESERVATIONS IN STATUTORY AUDIT REPORTS

Your Board has the pleasure in confirming that no qualification, reservation, adverse remark or disclaimer has been made by the Statutory Auditors or Company Secretary in Practice in their Audit Reports issued to the Company.

LOANS, COMMITMENTS AND CONTINGENCIES, INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statement (please refer Notes 5a, 5b, 9a, 34 & 35b of the standalone financial statement).

RELATED PARTY TRANSACTIONS

The Company has always been committed to good corporate governance practices, including in matters relating to Related Party Transactions (RPTs). Endeavour is consistently made to have only arm’s length transactions with all parties including Related Parties. The Board of Directors of the Company has adopted the Related Party Transaction policy regarding materiality of related party transactions and also on dealings with Related Parties in terms of Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 188 of the Companies Act, 2013. The policy is available at the following weblink:https://www.bergerpaints.com/about-us/rpt-policy.html.

All related party transactions have been carried out at arms’ length basis in the ordinary course of business. There is no material related party transaction i.e. transaction exceeding 10% of the annual consolidated turnover as per the last audited financial statements, entered during the year by your Company and accordingly, the disclosure of Related Party Transaction as required under section 134 (3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

MATERIALITY POLICY

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has framed a policy for determination of materiality, based on criteria specified in the Regulations. The Policy is available at the following web link: https://www.bergerpaints.com/about-us/policy-determine-material-events.html.

POLICY FOR PRESERVATION OF DOCUMENTS

As per Regulation 9 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 the Company has framed a policy for Preservation of Documents, based on criteria specified in the said Regulations. The Policy is available at the following weblink:https:// www.bergerpaints.com/about-us/policy-preservation-documents.html.

SIGNIFICANT CHANGES

During the Financial Year 2017-18, no significant change has taken place which could have an impact over the financial position of the Company. However, the year under review observed an amalgamation of BJN Paints India Limited with the Company and acquisition of Saboo Coatings Private Limited, which have been discussed earlier in this report.

DIVIDEND

The total comprehensive income of the Company is Rs.433.00 crore for the year 2017-18.

Your Directors recommend a dividend ofRs.1.80 per share i.e. @180% for the year under review. This, if approved, will absorb an amount ofRs.210.71 crore (compared to Rs.204.52 crore in the previous year), including Dividend Distribution Tax, based on the current paid-up capital of the Company and will be paid to those members holding shares in the physical mode whose names appear in the Register of Members as on 3rd August, 2018 and for shares held in electronic form, to those whose names appear in the list of beneficial holders furnished by respective Depositories as at the end ofbusiness hours on 27th July, 2018.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy. The Policy is available at the following web link: https://www.bergerpaints.com/ about-us/dividend-distribution-policy.html.

In terms of the provisions of Section 124 of the Companies Act, 2013, your Company has transferred an amount of Rs.35,86,899 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed/unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2018.

Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of Information Regarding Unpaid and Unclaimed Amounts Lying with Companies) Rules, 2012, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, as on 7th November, 2017 with the Ministry of Corporate Affairs.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed to Annexure 5 of this report.

Particulars of Employees

In terms of the provisions of Section 134 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 particulars of certain category of employees have been set out in Annexure 3 of this report.

STATEMENT OF EVALUATION OF BOARD OF DIRECTORS AND COMMITTEES THEREOF

The Company follows the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) in relation to Directors’ appointments, qualifications and independence. Pursuant to Section 178(3) of the Companies Act, 2013 and Regulation 17(10) of Listing Regulations, the Compensation and Nomination and Remuneration Committee is entrusted with responsibility of formulating criteria for determining qualifications, positive attributes and independence of a Director. The same is available at the following link: https:/bergerpaints.com/about-us/criteria-policy.html.

The Compensation and Nomination and Remuneration Committee have laid down the following criteria for evaluating the performance of the Board ofDirectors. The same is available at the following link: https:/bergerpaints.com/about-us/criteria-policy.html.

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

Pursuant to Section 134(3)(q) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, it is stated that no material order has been passed by any regulator, court or tribunal impacting the Company’s operations and its going concern status during the Financial Year 2017-18.

DIRECTORS

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Kuldip Singh Dhingra (DIN: 00048406) and Mr. Gurbachan Singh Dhingra (DIN: 00048465) retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Kuldip Singh Dhingra is an industrialist and promoter of the Company. He has over 50 years of experience in paint and related industries. Mr. Kuldip Singh Dhingra is a science graduate from Hindu College, University of Delhi and Chairman of the Board of Directors of the Company.

Mr. Gurbachan Singh Dhingra is a graduate from Punjab University and an industrialist. He is a promoter of the Company, holds the position of Vice-Chairman of the Board of Directors and has 48 years of experience in the paint industry. He has practical experience in building and commissioning of many paint factories and also has experience in the technical aspects of paint industry.

Mr. Kamal Ranjan Das (DIN: 00048491) (‘Mr. Das’) and Mr. Pulak Chandan Prasad (‘Mr. Prasad’) (DIN: 00003557) are Independent Directors of the Company, appointed pursuant to approval of Members under provisions of the Companies Act, 2013 through resolutions passed at the Annual General Meeting held on 3rd August, 2015. Their first term upto five consecutive years on the Board ofDirectors of the Company would expire on 31st March, 2019. As per Section 149 of the Companies Act, 2013 read with Schedule I of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to the recommendation of the Compensation and Nomination and Remuneration Committee, the Board of Directors of the Company have proposed the re-appointments of Mr. Das and Mr. Prasad for a second term from 1st April, 2019 to 31st March, 2020 and 1st April, 2019 to 31st March, 2024 respectively, subject to the approval of the Members of the forthcoming Annual General Meeting. Accordingly, approval has been sought from the members at the forthcoming Annual General Meeting for re-appointment of Mr. Das and Mr. Prasad as Independent Directors for the aforesaid period. Mr. Das and Mr. Prasad will not be liable to retire by rotation.

Mr. Das is a science graduate with honours. He began his career in the year 1951. Mr. Das was appointed as a Wholetime Director on the Board with effect from 1st April, 1989. Mr. Das retired in 1994 as Executive Director. Since then, Mr. Das has been a non-executive Director of the Company. Mr. Das is now a Management Consultant and the Company greatly benefits from his counsel and guidance in view of his experience in the industry. Mr. Das is a member of the Audit Committee, Compensation and Nomination and Remuneration Committee, Business Process and Risk Management Committee, Share Transfer Committee and Stakeholders’ Relationship and Investor Grievance Committee of the Company. He is also the Chairman of Compensation and Nomination and Remuneration Committee and Stakeholders’ Relationship and Investor Grievance Committee of the Company. Mr. Das holds 84,272 equity shares of Rs.1/- each of the Company.

Mr. Prasad is a B.Tech from IIT and IIM Ahmedabad alumni. He was the Managing Director and co-head of the India office of Warbug Pincus and a Management Consultant with McKinsey & Company, USA and South Africa prior to that. He was first appointed as an Additional Director on 13thNovember, 2009. Mr. Prasad is a Member of the Audit Committee and Compensation and Nomination and Remuneration Committee of the Company. The Company greatly benefits from the advice and counsel of Mr. Prasad in view ofhis experience. Mr. Prasad does not hold any share in the Company.

Structure of the Board of Directors

Name of Director

Non-executive

Executive

Independent

Lady

Mr. Kuldip Singh Dhingra

Y

N

N

N

Mr. Gurbachan Singh Dhingra

Y

N

N

N

Mr. Abhijit Roy

N

Y

N

N

Mrs. Rishma Kaur

N

Y

N

Y

Mr. Kanwardip Singh Dhingra

N

Y

N

N

Mr. Kamal Ranjan Das

Y

N

Y

N

Mr. Naresh Gujral

Y

N

Y

N

Mr. Gopal Krishna Pillai

Y

N

Y

N

Mr. Pulak Chandan Prasad

Y

N

Y

N

Mr. Dhirendra Swarup

Y

N

Y

N

FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company believes that the best training is imparted when dealing with actual roles and responsibilities on the job. To this extent, the Company arranges detailed presentation by Business and Functional Heads on various aspects including the business environment, economy, performance of the Company, industry scenario, sales and marketing, production, raw materials, research and development, financial controls, the Company’s strategy, etc. Visits to factories are also undertaken from time to time. This can be seen at the following weblink:https://www.bergerpaints.com/about-us/familiarization-program.html.

INFORMATION AS TO REMUNERATION OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following disclosures are made:-

1) Ratio of remuneration of Directors / KMP to the median remuneration of the employees:

Name of Director / KMP

Remuneration

Ratio as to that of the

Percentage increase in

Received (Rs.)

Median Employee

Remuneration

Mr. Kuldip Singh Dhingra

10,00,000

1.91:1

0.00

Mr. Gurbachan Singh Dhingra

10,00,000

1.91:1

0.00

Mr. Abhijit Roy

2,54,62,3451

48.52:1

20.97

Mr. Kanwardip Singh Dhingra

23,31,427

4.44:1

(11.95)

Mrs. Rishma Kaur

23,44,057

4.47:1

(11.81)

Mr. Kamal Ranjan Das

3,00,000

0.57:1

9.10

Mr. Pulak Chandan Prasad

-

-

-

Mr. Naresh Gujral

7,20,000

1.37:1

9.10

Mr. Dhirendra Swarup

7,20,000

1.37:1

9.10

Mr. Gopal Krishna Pillai

7,20,000

1.37:1

9.10

Mr. Srijit Dasgupta (KMP)

1,37,77,021*

26.25:1

13.62

Mr. Aniruddha Sen (KMP)

92,20,513*

17.57:1

11.16

2) Percentage (%) increase in remuneration during the financial year 2017-18: Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the financial year 2017-18: 6.1

4) Number of permanent employees on the rolls of the Company as on31st March, 2018: 3,130

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification there of and point out if there are any exceptional circumstances for increase in the managerial remuneration - The average percentile increase of employee was 11.69 % as compared to an average percentile increase of 14.35% of managerial remuneration. The increase of managerial remuneration is based on growth criteria.

6) Pursuant to the requirement of Section 197(14), the following disclosure is made in respect to remuneration received by Directors:

Name

Nature of Transaction

Amount (Rs.)

Mrs. Rishma Kaur, Director and National Business Development Manager- Retail and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

33 Lakhs

Mr. Kanwardip Singh Dhingra, Director and National Business Development Manager-Industrial and also a Director in U.K. Paints India Private Limited (Holding Company)

Consultancy fees received from U.K. Paints India Private Limited for consultancy rendered to U.K. Paints India Private Limited

27 Lakhs

Affirmation

It is hereby affirmed by the Chairperson of the Company that the remuneration paid to all the employees, Directors and Key Managerial Personnel of the Company during the Financial Year 2017-18 are as per the Remuneration Policy framed by the Compensation and Nomination and Remuneration Committee of the Company.

LISTING WITH STOCK EXCHANGES

Your Company is listed with the Calcutta Stock Exchange Limited, BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed/appointed M/s N. Radhakrishnan & Co., 11A, Dover Lane, Flat Bl/34, Kolkata - 700029, for conducting cost audit at the Company’s factories at Howrah, Rishra, Goa, Puducherry, Jejuri, at the newly set up plant at Naltali and Hindupur and Nalbari factories of the Company’s British Paints Division and M/s Shome & Banerjee & Co., 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, for conducting cost audit at its Jammu factory and for the factories of British Paints Division at Jammu, Surajpur and Sikandrabad under Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 for the year 2018-19. The remuneration payable to the respective Cost Auditors for conducting cost audit/certification engagement is required to be approved by the Members at the ensuring AGM and accordingly forms a part of the business to be transacted thereat. The due date for filing Cost Auditors’ Report for the year 2016-17 was 30th September, 2017. The said reports for the year 2016-17 were filed on 26th September, 2017.

STATUTORY AUDITORS

The Statutory Auditors, Messrs. S.R. Batliboi & Co. LLP, Chartered Accountants, were appointed pursuant to the provisions of Sections 139, 142 of the Companies Act, 2013 and the Rules made thereunder from the conclusion of the 91st Annual General Meeting up to the conclusion of the Sixth Annual General Meeting to be held after the 91st Annual General Meeting. Pursuant to the Companies Amendment Act, 2017 made effective from 7th May, 2018, ratification at every Annual General Meeting by Members is no longer necessary till the conclusion of the aforesaid Sixth Annual General Meeting. The Statutory Auditors have furnished their eligibility to continue as Auditors from the conclusion of the ensuing Annual General Meeting till the subsequent Annual General Meeting.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors

Place: Kolkata Kuldip Singh Dhingra

Dated: 30thMay, 2018 Chairman


Mar 31, 2017

Your Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2017.

FINANCIAL RESULTS

(Rs, in crores)

Particulars

Financial Year ended

Standalone

Consolidated

2016-17

2015-16

2016-17

2015-16

Profit before Exceptional Items, Depreciation, Finance Cost and Tax

711.51

643.81

773.10

679.42

Add: Exceptional Items

58.67

-

44.20

-

Add: Share of Profit from Joint Ventures

-

-

10.05

5.69

Less:

Depreciation

97.07

88.07

108.05

98.65

Finance Cost

7.41

17.05

16.22

27.28

Profit Before Tax

665.70

538.69

703.08

559.18

Less:

Provision for Taxation

219.25

182.43

229.42

188.62

Profit After Taxation

446.45

356.26

473.66

370.56

Add:

Other comprehensive income (loss for the year net of tax)

(1.20)

(0.44)

(18.94)

(14.55)

Total comprehensive income

445.25

355.82

454.72

356.01

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2017, the Company achieved net consolidated revenue from operations of Rs, 5050.45 crores as against Rs, 4638.85 crores in the previous year registering a growth of 8.9%. The profit before exceptional items, depreciation, interest and tax was Rs, 773.10 crores as against Rs, 679.44 crores in the previous year, recording an improvement of 13.8%. The profit before tax was Rs, 703.08 (2015 -16 : Rs, 559.18 crores) and the profit after tax was Rs, 473.66 crores (2015 - 16 : Rs, 370.56 crores), representing an increase of 25.7% and 27.83% respectively. The consolidated profit before tax would be Rs, 658.88 crores (18% of growth) without considering the proportionate share of profit, being Rs, 44.20 crores, arising out of the transfer of a business to BNPA, as mentioned below.

The Exceptional Items in the statement for the standalone results above comprise a profit of Rs, 86.67 crores on account of transfer of business and Rs, 28 crores of impairment in the carrying value of investment in Berger Paints Cyprus Limited. The aforesaid impairment has no impact on consolidated results.

The Company’s paint division (“the Business”) relating to 4 wheeler passenger cars and SUVs, 3 wheelers and related ancillaries was transferred to BNB Coatings India Private Limited (now renamed, Berger Nippon Paint Automotive Coatings Private Limited or “BNPA”), an existing joint venture between Berger Paints India Limited and Nippon Paint Automotive Coatings Co., Ltd., Japan after the close of business hours of 30th June, 2016 on a slump sale basis at a consideration of '' 90 crores, paid in cash. The annual turnover of the Business was about Rs, 29 crores in the year ended 31st March, 2016. BNPA does not belong to the promoter group. By virtue of being a joint venture where Berger Paints India Limited holds 49% of the paid up share capital, BNPA may be deemed to be a related party and the transaction was done at an arm’s length basis. The “Exceptional Item” head in standalone results for the year ended 31st March, 2017 includes profit of Rs, 86.7 crores on transfer of the business which is subject to tax. In June 2016, the Company had acquired 8,96,700 equity shares of BNPA at the face value of Rs, 1,000 each, aggregating Rs, 89.67 crores to finance 49% of the acquisition of the “Business” and another business acquired from a third party by BNPA.

During the quarter ended 31st March, 2017 the Company has provided for impairment in the standalone financial statements, in the carrying value of its investment in its wholly owned subsidiary, Berger Paints Cyprus Limited (BPCL) on account of losses sustained by the ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL), due to downturn in Russian economy, which were hitherto only reflected in the consolidated financial position of the Company. The Company had made an assessment of the fair value of the investments in Berger Paints Overseas Limited taking into account past business performance, prevailing business conditions and revised expectations about future performance. Based on the above factors and as matter of prudence, a provision of Rs, 28 crores towards impairment of such investment has been recognized in the standalone accounts.

SEXUAL HARASSMENT POLICY

Your Company has also framed a policy on Sexual Harassment of Women at workplace which commits to provide a workplace that is free from all forms of discrimination, including sexual harassment. The Policy can be viewed at the following we blink : www.bergerpaints.com/ about-us/sexual-harassment-policy.html.

As per the Policy, any complaint received shall be forwarded to an Internal Complaint Committee (“ICC”) formed under the Policy for redressal. The investigation shall be carried out by ICC constituted for this purpose. There was no such complaint during the year. ICC comprises the following members as appointed by the Board:

1. Mrs. Rishma Kaur (The Presiding Officer)

2. Mr. Srijit Dasgupta

3. Mr. Aniruddha Sen

4. Ms. Suparna Mitra (NGO representative).

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 4 wholly-owned subsidiaries :- (i) Beepee Coatings Private Limited (“Beepee Coatings”) in Gujarat; (ii) Berger Jenson & Nicholson (Nepal) Private Limited (“BJN”) in Nepal; (iii) Berger Paints (Cyprus) Limited (“Berger Cyprus”) in Cyprus; (iv) Lusako Trading Limited (“Lusako Trading”) in Cyprus.

The following companies are wholly-owned subsidiaries of the Company’s above named subsidiaries: - (i) BJN Paints India Limited -wholly-owned subsidiary of Beepee Coatings; (ii) Bolix S.A., Poland - wholly-owned subsidiary of Lusako Trading; (iii) Berger Paints Overseas Limited (“BPOL”), Russia - wholly-owned subsidiary of Berger Cyprus. Bolix S.A., Poland has 4 subsidiaries, viz.: Bolix UKRAINA sp z.o.o., Ukraine, BUILD-TRADE BIS sp. z o.o., Poland, Soltherm External Insulations Limited, UK and Soltherm Insulations Thermique Exterieure, France.

The statement relating to the above companies as specified in Sub-section (3) of Section 129 of the Companies Act, 2013 is attached to the Report and Accounts of the Company.

BJN-India is a wholly owned step down subsidiary of the Company. It is engaged in the business of manufacturing and processing architectural paints and coatings, which it had acquired from Sherwin Williams Paints India Private Limited, with effect from the close of business hours on 31st March, 2013. The Boards of BJN-India and Berger Paints India Limited consider that the business of BJN-India can now be combined with and carried on in conjunction with the business of the Company (i.e., Berger Paints India Limited), more conveniently and efficiently. Accordingly, the Boards of BJN-India and the Company, at their respective meetings held in April, 2017, have approved a Scheme of Amalgamation of BJN-India as Transferor Company with Berger Paints India Limited as Transferee Company, pursuant to the provisions of Sections 230 and 232 of the Companies Act, 2013. The appointed date for the purpose is 1st April, 2017 (“Appointed Date”). The proposed amalgamation will enable appropriate consolidation of the activities of BJN India and the Company with pooling and more efficient utilization of their resources, greater economies of scale, reduction in overheads and other expenses and improvement in various operating parameters.

The aforesaid Scheme is conditional upon and subject to the approval by the requisite majority of the members of BJN-India and sanction of the same by the Hon’ble National Company Law Tribunal at Kolkata. Accordingly, it is provided that the aforesaid Scheme, although operative from the Appointed Date, shall become effective upon filing of certified copies of the aforesaid order of the Hon’ble NCLT sanctioning the aforesaid Scheme, as and when received, with the Registrar of Companies by BJN-India and Berger Paints India Limited.

During the year under review, BJN-Nepal showed robust performance with a turnover of Rs, 135.32 crores.

Bolix S.A. also posted encouraging results with a turnover of Rs, 190.22 crores.

NBCC (India) Ltd. and Bolix SA of Poland have signed a Memorandum of Business Exploration (MoBE) for jointly promoting, developing and adopting External Thermal Insulation and Composite Systems (ETICS) Solutions Technology in construction of highly energy efficient green/smart buildings in India. ETICS Technology is a robust and long lasting building energy performance solution developed to current standards over the last 40 years. It has proven to be highly cost effective, safe for inhabitants living in insulated houses and hugely beneficial for the environment. This technology is already in use in a big way in European countries and the experience suggests that offices, hospitals, hotels, schools etc. built in those countries by using this technology has substantially contributed towards reduction in energy consumption and carbon emission both in cold and hot climatic conditions. ETICS Technology conforms to a set of globally acknowledged standards which also take into account the procedures and installation techniques related with application. These standards were historically established in Europe and now being taken to all parts of the globe.

The system contains components including the basic insulation material (EPS - or Expanded Polystyrene Foam or Mineral Wool), layers of adhesive, mechanical fasteners, a reinforcing layer with fibre glass mesh, reinforcements and accessories, primers and plasters. Addition of the system to the wall of a structure can create a major impact towards reducing the amount of electricity needed for cooling/heating the interior of the building.

The benefits of using ETICS solution include:

- Electricity consumption reduction (even up to 35% in moderate climates) for cooling/heating

- Environment protection effect due to the reduction of CO2 emission and other pollutants arising out of the generation of electricity in thermal power plants/diesel generating sets

- Improvement of the aesthetics of the building facade

- Increased comfort, improved microclimate.

- Extended life of the building and increased weather resistance.

- ETICS installations typically do not need any cement plastering before application of the installation envelope and accordingly, this cost too can be saved.

- Where the source of electricity is diesel generating sets this also implies savings of foreign exchange against crude oil imports.

- ETICS reduces the fluctuation of surface wall temperatures leading to fewer tendencies to form cracks.

- It reduces the capital cost of HVAC (Heating, Ventilation and Air-conditioning) costs by downsizing the initial requirement.

The MoBE between NBCC and Bolix shall facilitate import of this technology and its application in India and its neighbouring countries through NBCC which is a Govt. of India Navratna Enterprise and a leader in Indian Construction Industry.

The performance of Beepee Coatings was satisfactory, with a turnover of Rs, 24.9 crores.

Berger Paints Cyprus Limited is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad. So is Lusako Trading Limited.

The turnover of Berger Paints Overseas Limited (BPOL) was Rs, 5.36 crores.

Berger Becker Coatings Private Limited, the Company’s joint venture with Becker Industrifarg, Sweden, showed impressive performance with turnover of Rs, 294.06 crores. and a net profit of Rs, 14.56 crores.

BNB Coatings India Private Limited (BNB), renamed as “Berger Nippon Paint Automotive Coatings Private Limited” (“BNPA”), the Company’s joint venture with Nippon Paint Automotive Coatings Co., Ltd. of Japan (NPAU) posted turnover of Rs, 106.11 crores and total comprehensive income of Rs, 6.21 crores.

Pursuant to Regulation 16(c) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, a material subsidiary in a year shall be a subsidiary whose income or net worth exceeds 20% of the consolidated income or net worth respectively of the Company and its subsidiaries, in the immediately preceding accounting year. At present, there is no such material subsidiary of the Company within the meaning of the above regulation.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Accounting Standards 21 and 27, provisions of Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 136 of the Companies Act, 2013 have been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2016-17.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the provisions of Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Annexures-B & C).

During the year under review, your Company has carried out the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report is attached as Annexure 4 to this Report.

TECHNOLOGY AGREEMENTS

Your Company has Technology Agreements in the area of Automotive Coatings.

FIXED DEPOSIT

The Company had earlier discontinued acceptance of fixed deposits since 2002 and accordingly, no fresh deposit was accepted during the year. As per the provisions of Section 125 of the Companies Act, 2013, all unclaimed deposits have been transferred to Investor Education and Protection (IEPF) Account.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Companies Act, 2013, extract of Annual Return is attached as Annexure 1 to the Directors’ Report. MEETINGS OF THE BOARD OF DIRECTORS AND ATTENDANCE THEREAT

The details of meetings of the Board and attendance of Directors are given in the Report on Corporate Governance - Annexure B.

A. AUDIT COMMITTEE

The details of Audit Committee are given in the Report on Corporate Governance - Annexure B. The Board has accepted and implemented all recommendations of the Audit Committee.

VIGIL MECHANISM

Pursuant to Section 177 of the Companies Act, 2013 the Company along with with its subsidiaries have complied with the laws and the codes of conduct applicable to them and have ensured that the business is conducted with integrity and that the Company’s financial information flow is accurate. In case of any violation or complaint, a report may be made under the Vigil Mechanism system established by the Company. The said policy is uploaded on the Company’s website and can be accessed at: https://www.bergerpaints. com/about-us/whistleblower-policy.html.

B. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company has constituted a Corporate Social Responsibility Committee in accordance with the terms of reference of Section 135 of the Companies Act, 2013. The details of the Committee are given in the Report on Corporate Governance - Annexure B. The required details as specified in Companies CSR Policy Rules, 2014 is given in Annexure 2.

C. COMPENSATION & NOMINATION & REMUNERATION COMMITTEE

The details of the Committee are given in the Report on Corporate Governance - Annexure B.

D. SHAREHOLDERS’ COMMITTEES

The details of the Committees are given in the Report on Corporate Governance - Annexure B.

BUSINESS RESPONSIBILITY REPORT

SEBI has made it mandatory to publish a Business Responsibility Report (BRR) by the top 500 companies based on market capitalization in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations with the stock exchanges. The Company accordingly complied with the requirement and had framed a Business Responsibility Policy in line with the suggested framework as provided by SEBI based on the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses published by the Ministry of Corporate Affairs. The said Policy was adopted at the Board Meeting held on 10th February, 2017 and can be viewed at https:// www.bergerpaints.com/about-us/business-responsibility-policy.html. Mr. Abhijit Roy, Managing Director and CEO has been nominated as the director responsible for implementing the Business Responsibility Policy and Mr. Aniruddha Sen, Senior Vice President and Company Secretary has been nominated as the Business Responsibility Head. As required, the BRR for 2016-17 is attached to this report as Annexure 6.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2017 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis.

v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively.

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

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS

The following are the Independent Directors of your Company:-

1) Mr. Dhirendra Swamp;

2) Mr. Gopal Krishna Pillai;

3) Mr. Pulak Chandan Prasad;

4) Mr. Kamal Ranjan Das;

5) Mr. Naresh Gujral.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria for independence in the required format under the Companies Act, 2013.

POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Company has formulated a Remuneration Policy pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereof.

The Policy is available at the following we blink : www.bergerpaints.com/about-us/remuneration-policy.html.

QUALIFICATION OR RESERVATIONS IN STATUTORY AUDIT REPORTS

Your Board has the pleasure in confirming that no qualification, reservation, adverse remark or disclaimer has been made by the Statutory Auditors or Company Secretary in Practice in their Audit Reports issued to the Company.

LOANS, COMMITMENTS AND CONTINGENCIES, INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (please refer Notes 5a, 8a and 33 of the standalone financial statement).

RELATED PARTY TRANSACTIONS

The Company has always been committed to good corporate governance practices, including in matters relating to Related Party Transactions (RPTs). Endeavour is consistently made to have only arm’s length transactions with all parties including Related Parties. The Board of Directors of the Company has adopted the Related Party Transaction policy regarding materiality of related party transactions and also on dealings with Related Parties in terms of Regulation 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 with Stock Exchanges and Section 188 of the Companies Act, 2013. The policy is available at the following we blink : https://www.bergerpaints.com/about-us/rpt-policy.html

All related party transactions have been carried out at arms’ length basis in the ordinary course of business. However, the transfer of “the Business” to BNPA was not in the ordinary course and was, therefore, approved by the Board of Directors and the Audit Committee. The transaction did not require approval of the shareholders under section 188 of the Companies Act, 2013 read with the provision of the Companies (Meetings of Board and its Powers) Rules, 2014 since the amount involved in the sale of goods was much lower than the threshold limits mentioned in the said Rules. There is no material related party transaction i.e. transaction exceeding 10% of the annual consolidated turnover as per the last audited financial statements, entered during the year by your Company and accordingly, the disclosure of Related Party Transaction as required under section 134(3)(h) of the Companies Act. 2013 in Form AOC-2 is not applicable.

MATERIALITY POLICY

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has framed a policy for determination of materiality, based on criteria specified in the regulations. The Policy is available at the following we blink:- https://www.bergerpaints.com/ about-us/policy-determine-material-events.html.

POLICY FOR PRESERVATION OF DOCUMENTS

As per Regulation 9 of SEBI (Listing Obligations and Disclosures requirements) Regulations, 2015 the Company has framed a policy for Preservation of Documents, based on criteria specified in the said Regulations. The Policy is available at the following we blink:- https:// www.bergerpaints.com/about-us/policy-preservation-documents.html.

SIGNIFICANT CHANGES

During the Financial Year 2016-17, no significant change has taken place which could have an impact over the financial position of the Company.

TRANSFER TO RESERVE AND DIVIDEND

The total comprehensive income of the Company is Rs, 445.25 crores for the year 2016-17.

Your Directors recommend a dividend of Rs, 1.75 per share i.e. @ 175% for the year under review. This, if approved, will absorb an amount of Rs, 169.93 crores (compared to Rs, 114.43 crores in the previous year), net of Dividend Distribution Tax, based on the current paid-up capital of the Company and will be paid to those members holding shares in the physical mode whose names appear in the Register of Members as on 4th August, 2017 and for shares held in electronic form, to those whose names appear in the list of beneficial holders furnished by respective Depositories as at the end of business hours on 28th July, 2017.

In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy. The Policy is available at the following weblink:- https://www.bergerpaints.com/about-us/ dividend-distribution-policy.html.

In terms of the provisions of Section 124 of the Companies Act, 2013, your Company has transferred an amount of Rs, 16,50,033 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2008.

Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, as on 7th November, 2016 with the Ministry of Corporate Affairs.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134(3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed to Annexure 5 of this report.

Particulars of Employees

In terms of the provisions of Section 134 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 particulars of certain category of employees have been set out in Annexure 3 of this report.

STATEMENT OF EVALUATION OF BOARD OF DIRECTORS AND COMMITTEES THEREOF

The Company follows the provisions of the Companies Act, 2013 and Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) in relation to Directors’ appointments, qualifications and independence.

Pursuant to Section 178(3) of the Companies Act, 2013 and Regulation 17(10) of Listing Regulations , the Compensation and Nomination and Remuneration Committee is entrusted with responsibility of formulating criteria for determining qualifications, positive attributes and independence of a Director. The same is available at the following link: https:/bergerpaints.com/about-us/criteria-policy.html.

The Compensation and Nomination and Remuneration Committee have laid down the following criteria for evaluating the performance of the Board of Directors. The same is available at the following link: https:/bergerpaints.com/about-us/criteria-policy.html.

SIGNIFICANT AND MATERIAL ORDER PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND OPERATIONS OF THE COMPANY

Pursuant to Section 134(3)(q) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, it is stated that no material order has been passed by any regulator, court or tribunal impacting the Company’s operations and its going concern status during the Financial Year 2016-17.

DIRECTORS

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Gurbachan Singh Dhingra retires by rotation and being eligible, offers himself for re-appointment.

Mr. Gurbachan Singh Dhingra is a graduate from Delhi University and an industrialist, promoter of the Company and the Vice-Chairman of the Board of Directors of the Company. He has considerable experience in paint and related industries, particularly their technical aspects.

Structure of the Board of Directors

Name of Director

Non-executive

Executive

Independent

Lady

Mr. Kuldip Singh Dhingra

Y

N

N

N

Mr. Gurbachan Singh Dhingra

Y

N

N

N

Mr. Abhijit Roy

N

Y

N

N

Mrs. Rishma Kaur

N

Y

N

Y

Mr. Kanwardip Singh Dhingra

N

Y

N

N

Mr. Kamal Ranjan Das

Y

N

Y

N

Mr. Naresh Gujral

Y

N

Y

N

Mr. Gopal Krishna Pillai

Y

N

Y

N

Mr. Pulak Chandan Prasad

Y

N

Y

N

Mr. Dhirendra Swarup

Y

N

Y

N

FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS

The Company believes that the best training is imparted when dealing with actual roles and responsibilities on the job. To this extent, the Company arranges detailed presentation by Business and Functional Heads on various aspects including the business environment, economy, performance of the Company, industry scenario, sales and marketing, production, raw materials, research and development, financial controls, the Company’s strategy, etc. Visits to factories are also undertaken from time to time. This can be seen at the following we blink : https://www.bergerpaints.com/about-us/familiarization-program.html.

INFORMATION AS TO REMUNERATION OF DIRECTORS AND EMPLOYEES

Pursuant to Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following disclosures are made:-

1) Ratio of remuneration of Directors / KMP to the median remuneration of the employees:

Name of Director / KMP

Remuneration received (Rs,)

Ratio as to that of the median employee

Percentage increase in remuneration

Mr. Kuldip Singh Dhingra

10,00,000

2.02:1

0

Mr. Gurbachan Singh Dhingra

10,00,000

2.02:1

0

Mr. Abhijit Roy

2,10,49,348*

42.56:1

26.62

Mr. Kanwardip Singh Dhingra

26,47,855

5.35:1

13.28

Mrs. Rishma Kaur

26,58,265

5.37:1

13.03

Mr. Kamal Ranjan Das

2,75,000

0.56:1

10

Mr. Pulak Chandan Prasad

-

-

-

Mr. Naresh Gujral

6,60,000

1.33:1

10

Mr. Dhirendra Swarup

6,60,000

1.33:1

10

Mr. Gopal Krishna Pillai

6,60,000

1.33:1

10

Mr. Srijit Dasgupta

1,21,25,275*

24.52:1

23.26

Mr. Aniruddha Sen

82,95,013*

16.77:1

13.31

*Remuneration does not include value of ESOP’s granted.

Note - The median employee remuneration for 2016-17 is - Rs, 4,94,560 p.a.

2) Percentage (%) increase in remuneration during the Financial year 2016-17 :- Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the Financial year 2016-17 :- 3.53%

4) Number of permanent employees on the rolls of the Company as on 31st March, 2017 - 2993

5) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration - The average percentile increase of employee was 16.74% as compared to a average percentile increase of 23.65% of managerial remuneration. The increase of managerial remuneration is based on growth criteria.

6) Pursuant to the requirement of Section 197(14), the following disclosure is made in respect to remuneration received by Directors:-

Name

Nature of Transaction

Amount (Rs,)

Mrs. Rishma Kaur, Director and National Business Development Manager - Retail and also a Director in U.K.Paints India Private Limited (Holding Company)

Consultancy fees received from U.K.Paints India Private Limited for consultancy rendered to U.K.Paints India Private Limited

33 Lakhs

Mr. Kanwardip Singh Dhingra, Director and National Business Development Manager-Industrial and also a Director in U.K.Paints India Private Limited (Holding Company)

Consultancy fees received from U.K.Paints India Private Limited for consultancy rendered to U.K.Paints India Private Limited

27 Lakhs

7) Affirmation

It is hereby affirmed by the Chairperson of the Company that the remuneration paid to all the employees, Directors and Key Managerial Personnel of the Company during the Financial Year 2016-17 are as per the Remuneration policy framed by the Compensation and Nomination and Remuneration Committee of the Company.

LISTING WITH STOCK EXCHANGES

Your Company is listed with The Calcutta Stock Exchange Limited, BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges. As per Regulation 109(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 every issuer or the issuing company which has previously entered into agreement(s) with a recognized stock exchange to list its securities shall execute a fresh listing agreement with such stock exchange within six months of the date of notification of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.The Company executed fresh agreements with the following Stock Exchanges where its shares are listed :-

NSE - On 17th December, 2015

BSE - On 4th January, 2016

CSE - On 17th February, 2016

The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed/appointed M/s N. Radhakrishnan & Co., 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting cost audit at the Company’s factories at Howrah, Rishra, Goa, Puducherry, Jejuri, at the newly set up plant at Naltali and Hindupur factory of the Company’s British Paints Division and M/s Shome & Banerjee & Co., 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, for conducting cost audit at its Jammu factory and for the factories of British Paints Division having their factories at Jammu, Surajpur and Sikandrabad under Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 for the year 2017-18. The due date for filing Cost Auditors’ report for the year 2015-16 was 30th September, 2016. The said reports for the year 2015-16 were filed on 20th October, 2016.

STATUTORY AUDITORS

The Statutory Auditors, Messrs. S.R. Batliboi & Co. LLP, Chartered Accountants, were appointed pursuant to the provisions of Sections 139, 142 of the Companies Act, 2013 and the Rules made there under from the conclusion of the 91st Annual General Meeting up to the conclusion of the Sixth Annual General Meeting to be held after the 91st Annual General Meeting . This year’s notice includes a proposal for ratification of such appointment.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors

Kolkata Kuldip Singh Dhingra

Dated: 30th May, 2017 Chairman


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2014.

FINANCIAL RESULTS & APPROPRIATIONS

(Rs. in crores) Particulars BPIL Consolidated

2013-14 2012-13 2013-14 2012-13

Profit before Depreciation, Finance Cost 420.23 367.08 467.32 402.62 and Tax

Less:

Depreciation 58.27 46.28 70.71 56.72

Finance Cost 34.26 27.67 46.63 37.66

Profit Before Tax 327.70 293.13 349.98 308.24

Less:

Provision for Taxation 93.45 83.33 100.59 89.84

Profit After Taxation 234.25 209.80 249.39 218.40

Add:

Profit brought forward from the previous 510.80 394.91 519.12 394.63 year

Available for appropriation 745.05 604.71 768.51 613.03

Appropriations:

Transfer to General Reserve 23.42 20.98 23.42 20.98

Dividend (Proposed) 76.23 62.33 76.23 62.33

Tax on dividend 12.95 10.60 12.95 10.60

Balance carried to Balance Sheet 632.45 510.80 655.91 519.12

745.05 604.71 768.51 613.03

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2014, the Company achieved net consolidated revenue from operations of Rs. 3,870 crores as against Rs. 3,346 crores in the previous year registering a growth of 16%. The profit before depreciation, interest and tax was Rs. 467 crores as against Rs. 403 crores in the previous year, recording an improvement of 16%. The profit before tax was Rs. 350 crores (2012 – 13 : Rs. 308 crores) and the profit after tax was Rs. 249 crores (2012 – 13 : Rs. 218 crores), representing increases of 14% in each case.

DIVIDEND

Your Directors recommend a dividend of Rs. 2.20 per share i.e. @ 110 % for the year under review. This, if approved, will absorb an amount of Rs. 76.23 crores (compared to Rs. 62.33 crores in the previous year), net of Dividend Distribution Tax, and will be paid to those members whose names appear in the Register of Members as on the conclusion of the book closure on 1st August, 2014.

In terms of the provisions of Section 205C of the Companies Act, 1956, (equivalent to Section 124 of The Companies Act, 2013), your Company transferred an amount of Rs. 60,05,389 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2007.

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 4 wholly-owned subsidiaries :- (i) Beepee Coatings Private Limited ("Beepee Coatings") in Gujarat; (ii) Berger Jenson & Nicholson (Nepal) Private Limited ("BJN") in Nepal; (iii) Berger Paints (Cyprus) Limited ("Berger Cyprus") in Cyprus; (iv) Lusako Trading Limited ("Lusako Trading") in Cyprus.

The following companies are wholly-owned subsidiaries of the Company''s above named subsidiaries:- (i) BJN Paints India Limited – wholly-owned subsidiary of Beepee Coatings; (ii) Bolix S.A., Poland – wholly-owned subsidiary of Lusako Trading; (iii) Berger Paints Overseas Limited ("BPOL"), Russia - wholly-owned subsidiary of Berger Cyprus. Build Trade sp z.o.o., Poland, Bolix Ukraine Limited Liability, Ukraine and Build Trade SKA, Poland are three subsidiaries of Bolix S.A.

The statement relating to the above companies as specified in Sub-section (3) of Section 129 of The Companies Act, 2013 is attached to the Report and Accounts of the Company.

The name of Brushworks Paints Limited, wholly-owned subsidiary of Beepee Coatings Private Limited has been changed to BJN Paints India Limited w.e.f. 31st October, 2013.

The Ministry of Corporate Affairs vide General Circular No. 2/2011, dated 8th February, 2011 had granted general exemption to companies from seeking approval of Central Government under Section 212 of the Companies Act, 1956 from annexing to this Report, the Annual Reports of the subsidiaries subject to compliance of certain conditions specified therein. Hence, the Annual Reports of the subsidiary companies have not been annexed herewith. The Consolidated Financial Statement includes the results of these subsidiary companies duly audited by their respective statutory auditors. Annual Accounts of the subsidiary companies and related detailed other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Head office of the Company by any investor during working hours.

Results of BJN-Nepal, a wholly owned subsidiary of the Company, were encouraging and the Company, with two factories and a distribution network, continues to fourish. During the year under review, BJN-Nepal achieved a turnover of Rs. 78.71 crores and net profit of Rs. 12.20 crores.

There was improvement in margin for Bolix S.A. The net profit posted by Bolix S.A. during the year was Rs. 5.78 crores.

The performance of Beepee Coatings, a wholly owned subsidiary with its entire manufacturing facilities dedicated to processing the Company''s products, was satisfactory. The new emulsion plant has stabilised. The company posted a net profit of Rs. 2.15 crores.

Berger Cyprus is a special purpose vehicle for the purpose of making investments in your Company''s interests abroad. So is Lusako Trading. These companies are not affected by recent banking related problems in Cyprus.

The actions to correct the performance of Berger Paints Overseas Limited ( BPOL) in Russia have commenced and this Company (i.e., Berger Paints India Limited) is now also exporting paints to BPOL for sale in Russia.

Berger Becker Coatings Private Limited, the Company''s joint venture with Becker Industrifarg, Sweden, posted a net profit of Rs. 7.84 crores (48.98% of the same is considered in the consolidated accounts of your Company).

BNB Coatings India Limited (BNB), the Company''s joint venture with Nippon Bee Chemicals Co. Ltd. of Japan (NBC) for manufacture of coatings for plastic substrates performed well and posted a net profit of Rs. 2.49 crores during the year (49% of the same is considered in the consolidated accounts of your Company).

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Accounting Standards 21 and 27, provisions of Clause 32 of the Listing Agreement and Section 136 of The Companies Act, 2013 have been prepared after considering the audited financial statements of your Company''s subsidiaries and appear in the Annual Report of the Company for the year 2013-14.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the provisions of Clause 49 of the Listing Agreement (Annexures I & II).

During the year under review, your Company has voluntarily carried out a Secretarial Audit. The Secretarial Audit Report forms a part of the Annual Report.

Also, the Company has voluntarily adopted the Secretarial Standards 1 to 8 and 10 published by the Institute of Company Secretaries of India, as far as may be practicable, in the best interest of the Company, its members and the stakeholders. The Company has also carried out a voluntary audit of the adoption of the Secretarial Standards and such audit report forms a part of the Annual Report.

The Company has a Whistle Blower Policy (Vigil Mechanism), copy of which is available on the Company''s website.

TEChNICAL LICENSE AGREEMENT

Your Company has a Technical License Agreement with Axalta Coating Systems, LLC in the area of Automotive Coatings. Products manufactured with the know-how of the collaborator have been well received by the concerned customers.

FOREIGN EXChANGE

Your Company earned foreign exchange of Rs. 3.23 crores from export of goods and consultancy fees/royalty. Details of Foreign Exchange outgo and earnings appear in notes 36 and 39 of the Accounts for the year under review.

FIXED DEPOSIT

There is no outstanding public deposit in the Company as on 31st March, 2014, except those lying unclaimed. The Company had earlier discontinued acceptance of fresh deposits and renewal of deposits.

INFORMATION PURSUANT TO SECTION 217 OF ThE COMPANIES ACT, 1956 ("the Act")

A. Conservation of Energy & Technology Absorption

Information pursuant to Section 217(1)(e) of the Act, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors'' Report for the financial year ended 31st March, 2014 are given in Annexure III to the Report.

B. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Act and the Companies (Particulars of Employees) Rules, 1975, particulars of a certain category of employees have been set out in annexure IV of this report.

C. Directors'' Responsibility Statement

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2014 are in full conformity with the requirements of the Act. They believe that the Financial Statements refect fairly, the form and substance of transactions carried out during the year and reasonably present your Company''s financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and suffcient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis.

DIRECTORS

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Kuldip Singh Dhingra retires by rotation and being eligible, offers himself for re-appointment.

Mr. Kuldip Singh Dhingra is a Science Graduate from Delhi University and an industrialist. He is a promoter of the Company and holds the position of Chairman of the Board of Directors and has considerable experience in the paint industry. He was appointed as a Director on the Board of the Company on 17th July, 1991 and became the Chairman of the Company on 17th June, 1994. He is on the Board of various other companies. Mr. Dhingra holds 1,07,385 equity shares of the Company.

For the purpose of compliance with the provisions of The Companies Act, 2013, Mrs. Rishma Kaur, wholetime employee and erstwhile Alternate Director to Mr. Kuldip Singh Dhingra and Mr. Kanwardip Singh Dhingra, wholetime employee and erstwhile Alternate Director to Mr. Gurbachan Singh Dhingra, have resigned from their respective offices of Alternate Directors with effect from 1st April, 2014. They continue to be in wholetime employment of the Company. The Board wishes to place on record their deep appreciation for the valuable contribution made by them during their tenure as Alternate Directors.

RELATED PARTY TRANSACTIONS

A Statement of related party transactions pursuant to Accounting Standard 18 forms a part of this Annual Report.

LISTING WITh STOCK EXChANGES

Your Company is listed with The Calcutta Stock Exchange Limited, BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed M/s N. Radhakrishnan & Co., 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting cost audit at Howrah, Rishra and Goa factories of the Company, Mr. Gopalakrishnan, 12 Third Street, Jeyanagar, Reddiar Palayam, Puducherry – 605010, for conducting cost audit at its Puducherry factory and M/s Shome & Banerjee & Co., 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, for conducting cost audit at its Jammu factory and for the factories of British Paints Division having their factories at Jammu, Surajpur and Sikandrabad under Section 233B of the Companies Act, 1956, subject to the approval of the Central Government for the year 2014-15. The due date for fling Cost Auditors'' report for the year 2012-13 was 30th September, 2013. The said reports for the year 2012-13 for Company''s factories at Jammu, Goa, Howrah, Rishra and Puducherry and for the Company''s British Paints Division factories at Jammu, Sikandrabad and Surajpur were fled on 27th September, 2013.

STATUTORY AUDITORS

The Statutory Auditors, Messrs Lovelock & Lewes, retire at the conclusion of the ensuing Annual General Meeting and being eligible under Section 141 of The Companies Act, 2013, offer themselves for re-appointment.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company''s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors Kolkata Kuldip Singh Dhingra

Dated: 30th May, 2014 Chairman


Mar 31, 2013

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2013.

FINANCIAL RESULTS & APPROPRIATIONS

(Rs. in crores)

Particulars BPIL Consolidated

2012-13 2011-12 2012-13 2011-12

Profit before Depreciation, Finance Cost, 367.08 308.10 402.62 333.97 Exceptional Items and Tax

Less:

Depreciation 46.28 37.56 56.72 47.18

Finance Cost 27.67 22.37 37.66 32.36

Exceptional Items - - - -

Profit Before Tax 293.13 248.17 308.24 254.43

Less:

Provision for Taxation 83.33 70.78 89.84 74.39

Profit After Taxation 209.80 177.39 218.40 180.04

Add:

Profit brought forward from the previous 394.91 291.57 394.63 288.64 year

Available for appropriation 604.71 468.96 613.03 468.68

Appropriations:

Transfer to General Reserve 20.98 17.73 20.98 17.73

Dividend (Proposed) 62.33 48.46 62.33 48.46

Tax on dividend 10.60 7.86 10.60 7.86

Balance carried to Balance Sheet 510.80 394.91 519.12 394.63

604.71 468.96 613.03 468.68

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2013, the Company achieved net consolidated revenue from operations of Rs. 3,346 crores as against Rs. 2,948 crores in the previous year, registering a growth of 14%. The profit before depreciation, interest and tax was Rs. 403 crores as against Rs. 334 crores in the previous year, recording an improvement of 21%. The profit before tax was Rs. 308 crores (2011 - 12 : Rs. 254 crores) and the profit after tax was Rs. 218 crores (2011 - 12 : Rs. 180 crores), representing increase of 21% in each case.

EMPLOYEE STOCK OPTION SCHEME

Your Company had framed an Employee Stock Option Scheme (ESOP Scheme) for its employees and its Directors. The Board had formulated the ESOP Scheme in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the shareholders had approved the said scheme at the Annual General Meeting held on 29th July, 2010 to issue shares not exceeding 5% of the paid up capital of the Company as on 31st March, 2010. In practice, ESOP is granted to employees and wholetime Directors. Pursuant to the aforesaid scheme, the Compensation Committee of the Board of Directors at its meeting held on 1st August, 2012 has approved grant of 1,91,397 options (2011-12 : 1,88,064 options and 2010-11 : 2,88,750 options) convertible into equity shares to 105 employees including grant of 5,001 options each to Mr. Abhijit Roy, Managing Director and Mr. Srijit Dasgupta, Director and Chief Financial Officer. During the year 2012-13, 1,36,684 equity shares were allotted to 106 employees on their exercising the options. This includes allotment of 4,000 equity shares to Mr. Abhijit Roy, Managing Director and 4,000 equity shares to Mr. Srijit Dasgupta, Director and Chief Financial Officer.

The information required to be disclosed in terms of the provisions of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is enclosed as per Annexure ''A'' to this report.

HUMAN RESOURCES

The number of people employed as on 31st March, 2013 was 2,464. The Industrial Relations were satisfactory during the year.

Your Company recognises the fact that talent and skills are increasingly becoming scarce and it requires considerable effort to identify, engage and retain such talents. Your Company is paying increasing attention to these aspects and also to training. Per employee training hours in the year was 15. The Company recognises the fact that salary alone is not the criteria for satisfaction of deserving employees and offers a participative work environment and an open culture. The attrition rate in the Company was much lower than the national average. During the year, the Company implemented the Human Resources Management Systems (HRMS), which is commensurate with the size of its operations and should facilitate processes to a great degree.

Your Company continues to place highest importance to environment, occupational health and safety. The Risk Assessment and Minimization Committee of your Company monitors the situation obtaining in the Company and makes recommendations, which are implemented.

Your Company wishes to put on record its deep appreciation, co-operation and efforts of all employees for the betterment of the organization.

CORPORATE SOCIAL RESPONSIBILITY

The Company is a multi-locational and multi-cultural company having plants and branches all over India. The Company is commit- ted to discharging its obligations to its stakeholders. The Company believes that operating with accountability and transparency all over India and elsewhere in the globe, respecting the customs, practices and laws, providing honest means of livelihood to people and adding to wealth of nations, are by themselves self-fulfilling.

As part of the Company''s social responsibilities, following are few of the activities carried out during the year:

- Child sponsorship programmes

- Education materials for schools

- Renovation and painting of schools in the vicinity of our presence

- Supporting children with special needs

- Organizing Health Camps

- Assistance to the aged

- Developing areas around the manufacturing sites/offices in the form of upkeep of roads, parks, water pumps, tube wells, etc.

- Celebration of Environment Day

- Plantation of saplings and gifting plants to local communities

- Spreading awareness of a greener environment through schools and educational institutions

- Organization and participation of awareness programmes at the adjacent areas/vicinity of the manufacturing locations

- Supporting seminars, research work in regard to environment.

DIVIDEND

Your Directors recommend a dividend of Rs. 1.80 per share i.e. @ 90% for the year under review. This, if approved, will absorb an amount of Rs. 62.33 crores (compared to Rs. 48.46 crores in the previous year), net of Dividend Distribution Tax, and will be paid to those Members whose names appear in the Register of Members as on the conclusion of the book closure on 2nd August, 2013.

In terms of the provisions of Section 205C of the Companies Act, 1956, your Company transferred an amount of Rs. 39,15,543 to the Investor Education and Protection Fund, in respect of final and interim dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2005 and 31st March, 2006 respectively.

ACQUISITION OF SHERWIN WILLIAMS PAINTS INDIA PRIVATE LIMITED

Your Company acquired the architectural operations of Sherwin Williams Paints India Private Limited, through Brushworks Paints Limited, with effect from the close of business hours on 31st March, 2013. Beepee Coatings Private Limited, a 100% subsidiary of your Company, holds 99.90% of the paid up capital of Brushworks Paints Limited. Thus, Brushworks Paints Limited is a subsidiary of the Company. This transaction significantly increases the Company''s presence in key markets and builds on the Company''s strat- egy to grow its architectural paint business throughout India. It brings a high quality, committed team of employees to the Berger Paints family, a 24,000 MTPA paints plant at Taloja in Maharashtra and relevant brands. The integration process with the erstwhile architectural paints business of Sherwin Williams Paints India Private Limited was carried out at a fast pace and Mr. Jairaj Hegde, who was in charge of that company earlier, continues to be the CEO of Brushworks Paints Limited.

SUBSIDIARY AND JOINT VENTURES

Your Company has the following 4 wholly-owned subsidiaries :- (i) Beepee Coatings Private Limited ("Beepee Coatings") in Gujarat; (ii) Berger Jenson & Nicholson (Nepal) Private Limited ("BJN") in Nepal; (iii) Berger Paints (Cyprus) Limited ("Berger Cyprus") in Cyprus; (iv) Lusako Trading Limited ("Lusako Trading") in Cyprus.

The following companies are wholly-owned subsidiaries of the Company''s above named subsidiaries:- (i) Brushworks Paints Limited - wholly-owned subsidiary of Beepee Coatings; (ii) Bolix S.A., Poland - wholly-owned subsidiary of Lusako Trading; (iii) Berger Paints Overseas Limited ("BPOL"), Russia - wholly-owned subsidiary of Berger Cyprus. Build Trade sp z.o.o., Poland and Bolix Ukraine Limited Liability, Ukraine are two subsidiaries of Bolix S.A.

The statement relating to the above companies as specified in Sub-section (3) of Section 212 of the Companies Act, 1956 is attached to the Report and Accounts of the Company.

The Ministry of Corporate Affairs vide General Circular No. 2/2011, dated 8th February, 2011 has granted general exemption to companies from seeking approval of Central Government under Section 212 of the Companies Act, 1956 from annexing to this Report, the Annual Reports of the subsidiaries subject to compliance of certain conditions specified therein. Hence, the Annual Reports of the subsidiary companies have not been annexed herewith. The Consolidated Financial Statement includes the results of these subsidiary companies duly audited by their respective statutory auditors. Annual Accounts of the subsidiary companies and related detailed other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Head Office of the Company by any investor during working hours.

Results of BJN-Nepal, a wholly-owned subsidiary of the Company, were encouraging and the Company, with two factories and a distribution network, continues to flourish. During the year under review, BJN-Nepal achieved a turnover of Rs. 66.15 crores and net profit of Rs. 9.45 crores.

There was improvement in margin for Bolix S.A. though the sales remained somewhat flat. This was a conscious step to shore up profitability once the market share was strengthened in the previous year. The net profit posted by Bolix S.A. during the year was Rs. 3.85 crores.

The performance of Beepee Coatings, a wholly owned subsidiary with its entire manufacturing facilities dedicated to processing the Company''s products, was satisfactory. The new emulsion plant has stabilised. The company posted a net profit of Rs. 0.26 crores.

Berger Cyprus is a special purpose vehicle for the purpose of making investments in your Company''s interests abroad. So is Lusako Trading. These companies are not affected by recent banking related problems in Cyprus.

The actions to correct the performance of Berger Paints Overseas Limited ( BPOL) in Russia have commenced and this Company (i.e., Berger Paints India Limited) is now exporting paints to BPOL for sale in Russia.

Berger Becker Coatings Private Limited, the Company''s joint venture with Becker Industrifarg, Sweden, posted a net profit of Rs. 8.03 crores (in consolidated accounts, 48.98% of the same is considered).

BNB Coatings India Limited (BNB), the Company''s joint venture with Nippon Bee Chemicals Co. Ltd. of Japan (NBC) for manufacture of coatings for plastic substrates performed well and posted a net profit of Rs. 1.31 crores during the year (in consolidated accounts, 49% of the same is considered).

INCREASE OF PUBLIC SHAREHOLDING

Pursuant to the directives of the Securities and Exchange Board of India (SEBI), members of the promoter group of your Company sold an aggregate of 18,72,222 shares through the Offer For Sale (OFS) method prescribed by SEBI. As a result of this sale of shares by promoters, public shareholding of the Company has come up to 25%.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Accounting Standards 21 and 27 and provisions of Clause 32 of the Listing Agreements has been prepared after considering the audited financial statements of your Company''s subsidiaries and appear in the Annual Report of the Company for the year 2012-13.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a section on Corporate Governance and benchmarks your Company with the provisions of Clause 49 of the Listing Agreements (Annexures I & II).

During the year under review, your Company has voluntarily carried out a Secretarial Audit. The Secretarial Audit Report forms a part of the Annual Report.

Also, the Company has voluntarily adopted the Secretarial Standards 1 to 8 and 10 published by the Institute of Company Secretaries of India, as far as may be practicable, in the best interest of the Company, its members and the stakeholders. The Company has also carried out a voluntary audit of the adoption of the Secretarial Standards and such audit report forms a part of the Annual Report.

TECHNICAL LICENSE AGREEMENT

Your Company has a Technical License Agreement with DuPont Performance Coatings in the area of Automotive Coatings. Products manufactured with the know-how of the collaborators have been well received by the concerned customers.

FOREIGN EXCHANGE

Your Company earned foreign exchange of Rs. 4.24 crores from export of goods and consultancy fees/royalty. Details of Foreign Exchange outgo and earnings appear in note 36 and 39 of the Accounts for the year under review.

FIXED DEPOSIT

There is no outstanding public deposit in the Company as on 31st March, 2013, except those lying unclaimed. The Company had earlier discontinued acceptance of fresh deposits and renewal of deposits.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956 ("the Act")

A. Conservation of Energy & Technology Absorption

Information pursuant to Section 217(1)(e) of the Act, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors'' Report for the financial year ended 31st March, 2013 are given in Annexure III to the Report.

B. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Act and the Companies (Particulars of Employees) Rules, 1975, particulars of a certain category of employees have been set out in Annexure IV of this report.

C. Directors'' Responsibility Statement

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2013 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company''s financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given;

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period;

iii) Proper and sufficient care has been taken 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;

iv) The Accounts have been prepared on a going concern basis.

DIRECTORS

Mr. Abhijit Roy was appointed as the Managing Director of the Company for a period of 5 years with effect from 1st July, 2012 at the last Annual General Meeting, as approved by the Members at the Annual General Meeting held on 2nd August, 2012.

The term of appointment of Mr. Subir Bose ("Mr. Bose") as Managing Director expired on 30th June, 2012. Thereafter, he was appointed Director of the Company.

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Kamal Ranjan Das and Mr. Pulak Chandan Prasad retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Kamal Ranjan Das is a science graduate with honours. He joined the Company in 1975 and then after 20 years of service, retired in 1994 as Executive Director. He is a management consultant. Mr. Das holds 33,312 equity shares of the Company. He has a long standing experience in the paint industry. He is on the Board of various other companies.

Mr. Pulak Chandan Prasad has been the Director of the Company since 2009. Mr. Prasad is a B.Tech from IIT and an IIM Ahmedabad alumnus. He is Director of Nalanda Capital Pte Ltd. (Singapore), Bharti Airtel and some other companies.

RELATED PARTY TRANSACTION

A statement of related party transactions pursuant to Accounting Standard 18 forms a part of this Annual Report.

LISTING WITH STOCK EXCHANGES

Your Company is listed with The Calcutta Stock Exchange Limited, BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed M/s N. Radhakrishnan & Co., 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting cost audit at Howrah, Rishra and Goa factories of the Company and M/s Shome & Banerjee & Co., 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, for conducting cost audit at its Jammu factory and for the factories of its British Paints Division having their factories at Jammu, Surajpur and Sikandrabad under Section 233B of the Companies Act, 1956, subject to the approval of the Central Government for the year 2013-14. For the Puducherry factory of the Company, the Board of Directors had earlier appointed Mr. Gopalakrishnan, 12 Third Street, Jeyanagar, Reddiar Palayam, Puducherry - 605010 but due to his bad health, he had expressed his incapability to perform the audit, and accordingly, the Board has appointed M/s N. Radhakrishnan & Co. for conducting cost audit for its Puducherry factory for the years 2012-13 and 2013-14. The due date for filing Cost Auditors'' report for the year 2011-12 was 30th September, 2012 which was extended upto 28th February, 2013 by the Ministry of Corporate Affairs(MCA). The said reports for the year 2011-12 were filed on 12th March, 2013.

The Cost Auditors'' Reports for the year 2012-13 will be filed as per applicable rules.

STATUTORY AUDITORS

The Statutory Auditors, Messrs Lovelock & Lewes, retire at the conclusion of the ensuing Annual General Meeting and being eligible under Section 224 (1B) of the Act, offer themselves for re-appointment.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company''s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors

Kolkata Kuldip Singh Dhingra

Dated: 30th May, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2012.

FINANCIAL RESULTS & APPROPRIATIONS

(Rs in million)

Particulars BPIL Consolidated 2011-12 2010-11 2011-12 2010-11

Profit before Depreciation, Finance Cost, 3,082 2,533 3,340 2,805 Exceptional Items and Tax

Less:

Depreciation 376 300 472 401

Finance Cost 224 122 323 243

Exceptional Items - - - -

Profit Before Tax 2,482 2,111 2,545 2,161

Less:

Provision for Taxation 708 628 744 660

Profit After Taxation 1,774 1,483 1,801 1,501

Add:

Profit brought forward from the previous 2,916 2,104 2,886 2,056 year

Available for appropriation 4,690 3,587 4,687 3,557

Appropriations:

Transfer to General Reserve 177 148 177 148

Dividend

-Interim - 173 - 173

-Final (Proposed) 485 277 485 277

Tax on dividend 78 73 78 73

Balance carried to Balance Sheet 3,950 2,916 3,947 2,886

4,690 3,587 4,687 3,557

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2012, the Company achieved net consolidated revenue from operations of Rs 29,477 million as against Rs 23,407 million in the previous year registering a growth of 26%. The profit before depreciation, interest and exceptional items was Rs 3,340 million as against Rs 2,805 million in the previous year, recording an improvement of 19%. The profit before tax was Rs 2,545 million (2010 - 11 : Rs 2,161 million) and the profit after tax was Rs 1,801 million (2010 - 11 : Rs 1,501 million), representing increases of 18% and 20% respectively.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as that of local communities and society at large.

As part of the above, the following are few of the activities carried out during the year:

a) Donation of medical equipment and installation of shallow pumps in villages and water coolers at various locations in the vicinity of its factories;

b) Partnering with India United to End Polio Now Campaign undertaken by Aidmatrix Foundation;

c) Partnering with SOS India for sponsorship of destitute children;

d) Donations to charitable institutions and social welfare organizations like Ramakrishna Mission, Missionaries of Charity, Tomorrow's Foundation and others working for the cause of the upliftment of the poor and the downtrodden;

e) Donation of books and reading materials for the students of pre-primary and primary school students in underdeveloped and tribal areas;

f) Clearing garbage dumps and development of green areas in the vicinity of the factories;

g) Spreading awareness for creating a greener tomorrow through celebration of Environment Day, plantation and distribution of saplings, awareness programmes, etc.

DIVIDEND

Your Directors recommend a dividend of Rs 1.40 per share i.e. @ 70% for the year under review. This, if approved, will absorb an amount of Rs 485 million (compared to Rs 450 million in the previous year), net of Dividend Distribution Tax, and will be paid to those members whose names appear in the Register of Members as on the conclusion of the book closure date on 2nd August, 2012.

In terms of the provisions of Section 205C of the Companies Act, 1956, your Company transferred an amount of Rs 89,000 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2005.

SUBSIDIARY AND JOINT VENTURES

The Statement of the holding Company's interest in the Subsidiary Companies namely Beepee Coatings Private Limited ("Beepee Coatings"), Berger Jenson & Nicholson (Nepal) Private Limited ("BJN - Nepal"), Berger Paints (Cyprus) Limited ("Berger Cyprus"), Cyprus, subsidiary of its subsidiary company Berger Cyprus - namely, Berger Paints Overseas Limited ("BPOL"), Russia, Lusako Trading Limited (Lusako), Cyprus, and subsidiary of its subsidiary company Lusako - namely Bolix S.A., Poland and Build - Trade sp.z.o.o., Poland and Bolix Ukraine Limited Liability, subsidiaries of Bolix S.A., as specified in Sub-section (3)of Section 212 of the Companies Act, 1956 ('the Act') is attached to the Report and Accounts of the Company.

The Ministry of Company Affairs vide General circular No. 2/2011, dated: 8th February, 2011 has granted general exemption to companies from seeking approval of Central Government under Section 212 of the Companies Act, 1956 from annexing to this Report, the Annual Reports of the subsidiaries subject to compliance of certain conditions specified therein. Hence, the Annual Reports of the subsidiary companies have not been annexed herewith. The Consolidated Financial Statement includes the results of these subsidiary companies duly audited by their respective statutory auditors. Annual Accounts of the subsidiary Companies and related detailed other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Head Office of the Company by any investor during working hours.

Results of BJN-Nepal, a wholly owned subsidiary of the Company, continued to show improvement. During the year under review, BJN-Nepal achieved a turnover of Rs 636 million and Profit Before Tax of Rs 106 million.

Even though Bolix increased market share and grew sales by 18%, margins came under pressure because of steep increases in raw material prices and adverse foreign exchange fluctuations on imported raw material prices, resulting in a loss of Rs 14 million. However, cash profit for the year amounted to Rs 51 million. The selling prices have been subsequently taken up and the first quarter of calendar year 2012 shows an improvement in margins and profitability. It may be noted that since the Company acquired Bolix in August 2008, Bolix has paid back high interest long term debts of Rs 524 million. Bolix is now helping the Company to develop External Insulation Finishing Systems for India as well as the full range of mineral and acrylic plasters. During the year, Bolix Ukraine Limited Liability was incorporated as a subsidiary of Bolix to further its business in Ukraine at an appropriate time.

The performance of Beepee Coatings, a wholly owned subsidiary with its entire manufacturing facilities dedicated to processing the Company's products, was satisfactory. The processing income amounted to Rs 122 million and the Loss Before Tax was Rs 4 million. However, cash losses for the year was nil. Beepee Coatings successfully commissioned the new emulsion (raw materials for water-based paints) manufacturing facility with a capacity of 20,000 tonnes per annum and processed 5,893 tonnes of emulsion during the year.

Berger Cyprus is a special purpose vehicle for the purpose of making investments in your Company's interests abroad. So is Lusako.

The Company has taken several long term strategies to shore up the nascent operations of Berger Paints Overseas Limited in Russia. This includes export of different categories of paints from India and restructuring of sales. As of now, the operation size is small and the cash losses were Rs 12 million. The new strategies are expected to yield positive results.

Berger Becker Coatings Private Limited, the Company's joint venture with Becker Industrifarg, Sweden, posted a Profit Before Tax of Rs 58 million (in consolidated accounts, 48.98% of the same is considered).

BNB Coatings India Limited (BNB), the Company's joint venture with Nippon Bee Chemicals Co. Ltd. of Japan (NBC) for manufacture of coatings for plastic substrates of automobiles continued to do well and posted a net profit of Rs 13 million during the year (in consolidated accounts, 49% of the same is considered).

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statements as required under the Accounting Standards 21 and 27 and provisions of Clause 32 of the Listing Agreement has been prepared after considering the audited financial statements of your Company's subsidiaries and appear in the Annual Report of the Company for the year 2011-12.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the provisions of Clause 49 of the Listing Agreement (Annexures I & II).

During the year under review, your Company has voluntarily carried out a Secretarial Audit. The Secretarial Audit Report forms a part of the Annual Report.

Also, the Company has voluntarily adopted the Secretarial Standards 1 to 8 and 10 published by the Institute of Company Secretaries of India, as far as may be practicable, in the best interest of the Company, its members and the stakeholders. The Company has also carried out a voluntary audit of the adoption of the Secretarial Standards and such audit report forms a part of the Annual Report.

TECHNICAL LICENSE AGREEMENT

Your Company has a Technical License Agreement with DuPont Performance Coatings in the area of Automotive Coatings. Products manufactured with the know-how of the collaborators have been well received by the concerned customers.

FOREIGN EXCHANGE

Your Company earned foreign exchange of Rs 3 million from export of goods and consultancy fees/royalty. Details of Foreign Exchange outgo and earnings appear in note 36 and 39 of the Accounts for the year under review.

FIXED DEPOSIT

There is no outstanding public deposit in the Company as on 31st March, 2012, except those lying unclaimed. The Company had earlier discontinued acceptance of fresh deposits and renewal of deposits. Deposits amounting to Rs 0.048 million which had matured for repayments are lying unclaimed, for which your Company has sent out reminders. During the year, an amount of Rs 89,000 has been transferred to the Investor Education and Protection Fund.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956 ("the Act")

A. Conservation of Energy & Technology Absorption

Information pursuant to Section 217(1)(e) of the Act, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report for the financial year ended 31st March, 2012 are given in Annexure III to the Report.

B. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Act and the Companies (Particulars of Employees) Rules, 1975, particulars of a certain category of employees have been set out in annexure IV of this report.

C. Directors' Responsibility Statement

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2012 are in full conformity with the requirements of the Act. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company's financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis.

DIRECTORS

The term of appointment of Mr. Subir Bose ("Mr. Bose") as Managing Director expires on 30th June, 2012, when Mr. Bose will also lay down office as Director. Mr. Bose was first appointed Managing Director of the Company in the year 1994 when the Company's turnover was Rs 1,794 million. In the current year, as Mr. Bose passes the baton to the new generation, the Company's turnover is Rs 26,621 million. Berger is now a household name, the second largest paint producer in India and an even more respected brand in all sense of the term. The Board wishes to place on record its deep appreciation of the able guidance and leadership of Mr. Bose for almost two decades and wishes him an equally fruitful retired life. Mr. Bose has kindly agreed to be associated with the Company and accordingly has been appointed an Additional Director effective 1st July, 2012. Mr. Bose will hold office till the date of the next Annual General Meeting. A notice has been received from a member under Section 257 of the Companies Act, 1956 signifying his intention to propose the candidature of Mr. Bose for the office of a Director. Mr. Bose has done his B.Tech from IIT, Kanpur and Post Graduate Diploma in Business Management from IIM, Ahmedabad. He started his career with Larsen and Toubro Limited and held various positions in Asian Paints Limited and Abucon Nigeria Limited before joining the Company in the year 1984. The notice for the forthcoming Annual General Meeting includes an ordinary resolution for appointment of Mr. Bose as a Director of your Company.

As announced earlier, at its meeting held on 30th May, 2012, the Board of Directors appointed Mr. Abhijit Roy ("Mr. Roy") as Managing Director of the Company for a period of 5 years with effect from 1st July, 2012. A separate resolution for appointment of and payment of remuneration to Mr. Roy has been put up in the Notice of the Annual General Meeting as a part of the special business for your approval. Mr. Roy is a Bachelor of Engineering (Mechanical) from Jadavpur University, Kolkata and holds Post Graduate Diploma in Business Management from Indian Institute of Management, Bangalore. Mr. Roy is currently the Director and Chief Operating Officer of the Company. Mr. Roy joined the Company in 1996 and has worked with the Company for 17 years. Prior to his appointment as Director, Mr. Roy was heading the Marketing function of the Company as Senior Vice President, Sales and Marketing. Mr. Roy has long and rich experience in the paint industry.

During the year, Mr. Naresh Gujral resigned as a Director of the Company effective from 25th August, 2011 on personal grounds. The Board wishes to place on record its deep appreciation for the valuable contribution made by Mr. Gujral during his tenure as a Director.

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Gurbachan Singh Dhingra, Mr. Gurcharan Das and Mr. Anil Bhalla retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Gurbachan Singh Dhingra is a graduate and an industrialist. He is a promoter of the Company and holds the position of Vice-Chairman of the Board of Directors. He has a long standing experience of over 4 decades in the paints and related industries and particularly, its technical aspects. He is on the Board of various other companies. Mr. Dhingra holds 864,960 equity shares of the Company.

Mr. Gurcharan Das is a Harvard graduate and was the CEO of Proctor & Gamble, India and the Managing Director of Proctor & Gamble, Worldwide. He is also a reputed author and management consultant and advises companies on various matters including sales & marketing and global strategies. Mr. Das is a well known figure in India and is also on the Board of various companies.

Mr. Anil Bhalla is a fellow member of the Institute of Chartered Accountants of India. He is the Senior Partner of J.C.Bhalla & Co. and also holds the position of a Director in many other companies. Mr. Bhalla holds 55,200 equity shares of the Company.

At the meeting of the Board of Directors held on 2nd August, 2011, the Board made changes in the remuneration of Mrs. Rishma Kaur, wholetime employee of the Company and Alternate Director to Mr. Kuldip Singh Dhingra, Chairman and Mr. Kanwardip Singh Dhingra, wholetime employee of the Company and Alternate Director to Mr. Gurbachan Singh Dhingra, Vice Chairman, subject to approval of the members at the next General Meeting. Accordingly, approval of the members has been sought for payment of revised remuneration to Mrs. Rishma Kaur and Mr. Kanwardip Singh Dhingra in the notice for the forthcoming Annual General Meeting.

RELATED PARTY TRANSACTION

A Statement of related party transactions pursuant to Accounting Standard 18 forms a part of this Annual Report.

LISTING WITH STOCK EXCHANGES

Your Company is listed with The Calcutta Stock Exchange Limited, BSE Limited and National Stock Exchange of India Limited and the Company has paid the listing fees to each of the Exchanges. The addresses of these Stock Exchanges and other information for shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed M/s N. Radhakrishnan & Co., 11A, Dover Lane, Flat B1/34, Kolkata - 700029, for conducting cost audit at Howrah, Rishra and Goa factories of the Company, Mr. Gopalakrishnan, 12 Third Street, Jeyanagar, Reddiar Palayam, Puducherry - 605010, for conducting cost audit at its Puducherry factory and M/s Shome & Banerjee & Co., 2nd Floor, 5A Narulla Doctor Lane, West Range, Kolkata - 700017, for conducting cost audit at its Jammu factory and for the factories of British Paints Division having their factories at Jammu, Surajpur and Sikandrabad under Section 233B of the Companies Act, 1956, subject to the approval of the Central Government for the year 2012-13. The due date for filing Cost Auditors' report for the year 2010-11 was 30th September, 2011. The said reports for the year 2010-11 were filed with Ministry of Corporate Affairs as per following details:-

For the Company's factories at Jammu, Goa, Howrah, Rishra and Puducherry - 27th September, 2011.

For the Company's British Paints Division factories at Jammu, Sikandrabad and Surajpur - 30th September, 2011.

The Cost Auditors' Reports for the year 2011-12 will be filed as per applicable rules.

STATUTORY AUDITORS

The Statutory Auditors, Messrs Lovelock & Lewes, retire at the conclusion of the ensuing Annual General Meeting and being eligble under Section 224(1B) of the Act, offer themselves for re-appointment.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company's dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors Kolkata Kuldip Singh Dhingra

Dated: 30th May, 2012 Chairman


Mar 31, 2011

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended on 31st March, 2011.

FINANCIAL RESULTS & APPROPRIATIONS

(Rs in million)

Particulars BPIL Consolidated

2010-11 2009-10 2010-11 2009-10

Profit before Depreciation, Interest, Exceptional 2,533 2,006 2,800 2,250

Items and Tax

Less:

Depreciation 300 264 401 358

Interest 122 48 238 172

Exceptional Items - - - -

Profit Before Tax 2,111 1,694 2,161 1,720

Less:

Provision for Taxation 628 493 660 516

Profit After Taxation 1,483 1,201 1,501 1,204

Add:

Profit brought forward from

the previous year 2,104 1,467 2,057 1,417

Available for appropriation 3,587 2,668 3,558 2,621

Appropriations:

Transfer to General Reserve 148 120 148 120

Dividend

- Interim 173 - 173 -

- Final (Proposed) 277 381 277 381

Tax on dividend 74 63 74 63

Balance carried to Balance Sheet 2,915 2,104 2,886 2,057

3,587 2,668 3,558 2,621

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2011, the Company achieved net consolidated sales of Rs 23,281 million as against Rs 18,913 million in the previous year registering a growth of 23%. The profit before depreciation, interest and exceptional items was Rs 2,800 million as against Rs 2,250 million in the previous year, recording an improvement of 24%. The profit before tax was Rs 2,161 million (2009 - 10 : Rs 1,720 million) and the profit after tax was Rs 1,501 million (2009 - 10 : Rs 1,204 million), representing increases of 26% and 25% respectively.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of local communities and society at large.

As a part of the commitment, the Company has already drawn up an approach towards fulfillment of corporate social responsibility for the benefit of the society. Different programmes have been implemented across various regions which include celebration of Environment Day, plantation and awareness activities, donations to charitable institutions and social welfare organizations and forging tie-ups with major NGOs/organizations and working on a partnership basis in the areas of health, education and promoting sporting activities. The Company has recently sponsored free education for children at SOS Children’s Villages of India and eradication of polio through Pulse Polio Immunisation Programme.

DIVIDEND

The Company paid an interim dividend of Rs 0.50 per share i.e. @ 25% for the year under review on 31st March, 2011.

Your Directors recommend a final dividend of Rs 0.80 per share i.e. @ 40% for the year under review. Together with the interim dividend, this would mean a total dividend of Rs 1.30 per share i.e. 65% for the financial year 2010 -11. This, if approved, will absorb an amount of Rs 450 million (compared to Rs 381 million paid in the previous year) net of Dividend Distribution Tax, and will be paid to those members whose names appear in the Register of Members as on the conclusion of book closure date on 2nd August, 2011.

In terms of the provisions of Section 205C of the Companies Act, 1956, your Company transferred an amount of Rs 125,000 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2004.

SUBSIDIARY AND JOINT VENTURES

The Statement of the holding Company’s interest in the Subsidiary companies namely Beepee Coatings Pvt. Limited ("Beepee Coatings"), Berger Jenson & Nicholson (Nepal) Private Limited ("BJN - Nepal"), Berger Paints (Cyprus) Limited ("Berger Cyprus"), Cyprus, subsidiary of its subsidiary company Berger Cyprus - namely, Berger Paints Overseas Limited ("BPOL"), Russia, Lusako Trading Limited (Lusako), Cyprus, and subsidiary of its subsidiary company Lusako - namely Bolix S.A., Poland and Build - Trade sp. z.o.o., Poland, a subsidiary of Bolix S.A., as specified in Sub-section (3) of Section 212 of the Companies Act, 1956 (‘the Act’) is attached to the Report and Accounts of the Company.

The Ministry of Company Affairs vide General Circular No. 2/2011, dated 8th February, 2011 has granted general exemption to companies from seeking approval of Central Government under Section 212 of the Companies Act, 1956 from annexing to this Report the Annual Reports of the subsidiaries subject to compliance of certain conditions specified therein. Hence, the Annual Reports of the subsidiary companies have not been annexed herewith. The Consolidated Financial Statement includes the results of these subsidiary companies, duly audited by their respective statutory auditors. Annual Accounts of the subsidiary companies and related detailed other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Head Office of the Company by any investor during working hours.

There were severe winter conditions in the first quarter of 2010 in Poland. The performance of Bolix for financial year 2010 showed marginal improvement over 2009 against this backdrop. The building construction industry continued to be sluggish in financial year 2010 though there are signs that the demand for External Insulation Finishing Systems (EIFS) products is improving gradually in the first quarter of 2011. Bolix has launched its new premium HD (Heavy Duty) range of EIFS products in the first quarter of financial year 2011 as well as exciting retrofitting renovation and repair solutions which have been received well in the market and will help to reinforce Bolix’s technology player platform. On 20th October, 2010, Build - Trade sp. z.o.o. (BT) was incorporated as a wholly owned subsidiary of Bolix S.A. for the purpose of trading in certain third party products relating to EIFS. Consequently, BT has become a wholly owned subsidiary of your Company. BT did not carry out any business in the financial year ended on 31st December, 2010.

Results of BJN-Nepal, a wholly owned subsidiary of the Company, showed substantial improvement. During the year under review, BJN-Nepal achieved a turnover of Rs 450.6 million and Profit Before Tax of Rs 74.6 million.

Beepee Coatings Private Limited, a wholly owned subsidiary of the Company, with its entire manufacturing facilities dedicated to processing the Company’s products, achieved an increase in the processing income from Rs 101.6 million to Rs 110 million. The erection of the emulsion plant under the aegis of Beepee Coatings has been completed and will start operations in the current year.

Berger Paints (Cyprus) Limited, Cyprus, is a special purpose vehicle for the purpose of making investments in your Company’s interests abroad and so is Lusako Trading Limited.

Berger Paints Overseas Limited in Russia, in spite of improvement in sales by 47.10%, posted a loss of Rs 13.5 million during the year on account of sustained pressures on margins arising out of increases in material cost.

Berger Becker Coatings Limited, the Company’s joint venture with Becker Industrifarg, Sweden is a preferred supplier in the coil coatings market and during the year under review, it posted a profit before tax of Rs 57.7 million.

BNB Coatings Limited, the Company’s joint venture with Nippon Bee Chemicals Company Limited, Japan substantially improved its business with a 46% increase in revenue and posted a net profit of Rs 12 million in its third year of operations.

Pursuant to an agreement with Punjab National Bank and Pnb Principal Insurance Broking Private Limited on 23rd June, 2010, the Company sold its entire holding of 125,000 equity shares of Rs 100 each, in Pnb Principal Insurance Broking Private Limited, originally purchased at face value, at a consideration of Rs 50,138,750 on 12th January, 2011.

CONSOLIDATED FINANCIAL STATEMENTS

The duly audited Consolidated Financial Statement as required under the Accounting Standards 21 and 27 and provisions of Clause 32 of the Listing Agreement has been prepared after considering the audited financial statements of your Company’s subsidiaries and appear in the Annual Report of the Company for the year 2010-11.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a Section on Corporate Governance and benchmarks your Company with the provisions of Clause 49 of the Listing Agreement (Annexures I & II).

During the year under review, your Company has voluntarily carried out a Secretarial Audit. The Secretarial Audit Report forms a part of the Annual Report.

Also, the Company has voluntarily adopted the Secretarial Standards 1 to 8 and 10 published by the Institute of Company Secretaries of India, as far as may be practicable, in the best interest of the Company, its members and the stakeholders. The Company has also carried out a voluntary audit of adoption of the Secretarial Standards and such audit report forms a part of the Annual Report.

TECHNICAL LICENSE AGREEMENT

Your Company has a Technical License Agreement with DuPont Performance Coatings in the area of Automotive Coatings. Products manufactured with the know-how of the collaborator have been well received by the concerned customers.

FOREIGN EXCHANGE

Your Company earned foreign exchange of Rs 8.98 million from export of paints and consultancy fees/royalty. Details of Foreign Exchange outgo and earnings appear in items (v) to (viii) of Schedule 21 of the Accounts for the year under review.

FIXED DEPOSIT

There is no outstanding public deposit in the Company as on 31st March, 2011, except those lying unclaimed. The Company had earlier discontinued acceptance of fresh deposits and renewal of deposits. Deposits amounting to Rs 0.137 million which had matured for repayments are lying unclaimed, for which your Company has sent out reminders. Out of the aforesaid unclaimed deposit, an amount of Rs 125,000 has been transferred to the Investor Education and Protection Fund.

INFORMATION PURSUANT TO SECTION 217 OF THE ACT

A. Conservation Of Energy & Technology Absorption

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors’ Report for the financial year ended 31st March, 2011 are given in Annexure III to the Report.

B. Particulars Of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, particulars of a certain category of employees have been set out in Annexure IV of this report.

C. Directors’ Responsibility Statement

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2011 are in full conformity with the requirements of the Companies Act, 1956. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Company’s financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) The applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) Proper and sufficient care has been taken 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,

iv) The Accounts have been prepared on a going concern basis.

DIRECTORS

At a meeting of the Board of Directors held on 11th February, 2011, Mr. Abhijit Roy ("Mr. Roy") and Mr. Srijit Dasgupta ("Mr. Dasgupta") were appointed Additional Directors in whole time employment and were designated Director and Chief Operating Officer and Director and Chief Financial Officer respectively. The aforesaid appointments have been made subject to the approval of the shareholders at the forthcoming Annual General Meeting.

Mr. Roy is a Bachelor of Engineering (Mechanical) from Jadavpur University, Kolkata and holds Post Graduate Diploma in Management from Indian Institute of Management, Bangalore. Mr. Roy has over 19 years of experience in paint industry. Prior to his elevation as Director, he was heading the Marketing function of the Company as Senior Vice President, Sales and Marketing. Mr. Roy will succeed Mr. Subir Bose as the Managing Director of the Company, upon Mr. Bose’s retirement on 30th June, 2012.

Mr. Dasgupta is a B.Sc. (Chemistry Hons.) from Calcutta University, an associate member of the Institute of Cost & Works Accountants of India and has passed the final examination conducted by the Institute of Company Secretaries of India. Mr. Dasgupta has over 27 years of work experience in all the areas of Finance and Accounts. Prior to his elevation as Director, he was heading the Finance function of the Company as Senior Vice President, Finance and Accounts.

It is believed that the knowledge, experience and expertise of Messrs Roy and Dasgupta would greatly benefit the Board.

Both Mr. Roy and Mr. Dasgupta hold office till the forthcoming Annual General Meeting. Notices have been received from members under Section 257 of the Companies Act, 1956 signifying their intentions to propose the candidatures of Mr. Roy and Mr. Dasgupta for the office of Director. The notice for the forthcoming Annual General Meeting includes ordinary resolutions for appointment of Mr. Roy and Mr. Dasgupta as Directors of your Company.

At a meeting of the Board of Directors of the Company held on 14th April, 2011, Mrs. Rishma Kaur ("Mrs. Kaur"), National Business Development Manager and wholetime employee of the Company, was appointed Alternate Director to Mr. Kuldip Singh Dhingra, Chairman of the Board of Directors of the Company, for a period of five years. Mrs. Kaur is the daughter of Mr. Kuldip Singh Dhingra.

Mrs. Kaur holds a Degree in Bachelor of Science (Hons.) in Business Studies from University of Buckingham, United Kingdom. Mrs. Kaur has also studied German Language in an Exchange Programme from the University of Augsberg, Bavaria, Germany. Mrs. Kaur has vast experience and was associated with Cementone Beaver Limited, Buckingham, UK, S C Johnson, Birmingham, UK, Deutsche Bank, New Delhi, U K Paints (India) Private Limited, New Delhi, CAPEXIL (Chemical & Allied Products Export Promotion Council), India and Malibu Estates Private Limited.

At the meeting of the Board of Directors of the Company held on 14th April, 2011, Mr. Kanwardip Singh Dhingra ("Mr. Dhingra"), Manager - Project Engineering and wholetime employee of the Company, was appointed Alternate Director to Mr. Gurbachan Singh Dhingra, Vice Chairman of the Board of Directors of the Company, for a period of five years. Mr. Dhingra is the son of Mr. Gurbachan Singh Dhingra.

Mr. Dhingra holds a Bachelors Degree in Chemical Engineering from the University of Akron, Ohio, USA with specialization in Polymer Engineering and Minor in Chemistry. He has working experience in Process Engineering with Rohm and Haas Company, Texas, USA and has also worked with Sherwin - Williams Company, Ohio, USA.

As mentioned earlier, your Company provides great importance to Human Resource Development issues and believes that succession planning is a vital ingredient of successful operations in a going concern. Appointments of Mr. Abhijit Roy, Mr. Srijit Dasgupta, Mrs. Rishma Kaur and Mr. Kanwardip Singh Dhingra are parts of the Company’s continuous efforts to ensure succession and continuity.

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Kuldip Singh Dhingra, Mr. Gerald Kenneth Adams and Mr. Naresh Gujral retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Kuldip Singh Dhingra is an industrialist and promoter of the Company. He has over 40 years of experience in paint and related industries. Mr. Dhingra is a science graduate from Hindu College, University of Delhi and a recipient of Distinguished Alumni Award for Excellence in Business and Industry.

Mr. Gerald Kenneth Adams has done his MBA from the Harvard Business School and thereafter was awarded a Bachelors Degree in Arts, Magna Cum Laude, Phi Beta Kappa by the University of Washington. Mr. Adams was the Managing Director of Orica Consumer Products (Dulux Paints) and held senior positions in Box USA, Amcor Limited and the Boston Consulting Group.

Mr. Naresh Gujral is a fellow member of the Institute of Chartered Accountants of India and is the founder of Span India Group, which is one of the leading exporters of high-end fashion garments to Europe from India. He is an eminent industrialist.

RELATED PARTY TRANSACTIONS

A Statement of related party transactions pursuant to Accounting Standard 18 forms a part of this Annual Report.

LISTING WITH STOCK EXCHANGES

Your Company is listed with The Calcutta Stock Exchange Association Limited, Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the Company has paid listing fees to each of the Exchanges. The addresses of these Stock Exchanges and other information for Shareholders are given in this Annual Report.

COST AUDITORS

The Board of Directors have re-appointed M/s N. Radhakrishnan & Co., Kolkata, Mr. Gopalakrishnan, Puducherry and M/s Shome & Banerjee & Co., Kolkata, as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, for its various factories across the country, subject to the approval of the Central Government for the year 2011-12. The Cost Auditors’ Reports will be forwarded to the Central Government as required under law.

AUDITORS

The Auditors, Messrs Lovelock & Lewes, retire at the conclusion of the ensuing Annual General Meeting and, being eligible under Section 224(1B) of the Companies Act, 1956, offer themselves for re-appointment.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company’s dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

On behalf of the Board of Directors

Gurbachan Singh Dhingra - Vice Chairman

Subir Bose - Managing Director

Anil Bhalla - Director & Chairman,

Audit Committee

Kolkata

Dated : 30th May, 2011


Mar 31, 2010

The Directors have pleasure in presenting the Annual Report of the Company, together with the audited accounts for the financial year ended 31st March, 2010.

FINANCIAL RESULTS & APPROPRIATIONS

(Rs. in million) Particulars BPIL Consolidated 2009-10 2008-09 2009-10 2008-09 Profit before Depreciation, Interest,1,989 1,501 2,230 1,562 Exceptional Items and Tax Less : Depreciation 264 204 358 251 Interest 31 124 152 186 Exceptional Items - - - - Profit Before Tax 1,694 1,173 1,720 1,125 Less : Provision for Taxation 493 286 516 297 Profit After Taxation 1,201 887 1,204 828 Add: Profit brought forward from the previous year 1,467 892 1,417 902 Available for appropriation 2,668 1,779 2,621 1,730 Appropriations : Transfer to General Reserve 120 89 120 89 Dividend (Proposed) 381 191 381 191 Tax on dividend 63 32 63 32 Balance carried to Balance Sheet 2,104 1,467 2,057 1,418 2,668 1,779 2,621 1,730

FINANCIAL PERFORMANCE

During the financial year ended 31st March, 2010, the Company achieved net sales of Rs. 16,842 million as against Rs. 15,083 million in the previous year registering a growth of 12%. The profit before depreciation, interest, exceptional items and tax was Rs. 1,989 million as against Rs. 1,501 million in the previous year, recording an improvement of 33%. The profit before tax was Rs. 1,694 million (2008 - 09 : Rs. 1,173 million) and the profit after tax was Rs. 1,201 million (2008 — 09 : Rs. 887 million), representing growths of 44% and 35% respectively.

The consolidated sales achieved during the financial year ended 31st March, 2010 was Rs. 18,913 million as against Rs. 16,239 million in the previous year showing a growth of 16%. The consolidated net profit, at Rs. 1,204 million was higher than that of the previous year (Rs. 828 million) by 45%.

DIVIDEND

Your Directors recommend a dividend @ 55 % i.e. Rs. 1.10 per share for the year under review. This, if approved, will absorb an amount of Rs. 381 million and will be paid to those members whose names appear in the Register of Members as on 29th July, 2010. The dividend payment for the year will therefore be Rs. 381 million as compared to Rs. 191 million in the previous year.

In terms of the provisions of Section 205C of the Companies Act, 1956, your Company transferred an amount of Rs. 801,461 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2002.

SUBSIDIARIES AND JOINT VENTURES

The statement of the holding companys interest in the subsidiary companies namely Beepee Coatings Private Limited ("Beepee Coatings"), Berger Jenson & Nicholson (Nepal) Private Limited ("BJN - Nepal"), Berger Paints (Cyprus) Limited ("Berger Cyprus"), Cyprus, subsidiary of its subsidiary company, Berger Cyprus — namely, Berger Paints Overseas Limited ("BPOL"), Russia, Lusako Trading Limited ("Lusako"), Cyprus, and subsidiary of its subsidiary company, Lusako -

namely Bolix S.A., Poland ("Bolix"), as specified in Sub-section (3) of Section 212 of the Companies Act, 1956 (the Act) is attached to the Report and Accounts of the Company.

The Company has made an application for obtaining exemption under Section 212 of the Act from the Ministry of Corporate Affairs from annexing to this Report the Annual Reports of the above subsidiaries for the year ended 31st March, 2010 and the approval is expected soon. The Consolidated Financial Statement includes the results of these subsidiary companies duly audited by their respective statutory auditors. Annual Accounts of the subsidiary companies and related detailed other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Head Office of the Company by any investor during working hours.

There was some slow down in business in Poland, albeit at a lower scale than most European countries, as a result of the global recession. Though this impacted the business of Bolix, one of the technology leaders in External Insulation Finishing Systems, it continued to perform well and posted a sales of Rs. 1,326 million and a profit before tax of Rs. 51.88 million during the year under review.

Results of BJN-Nepal, showed substantial improvement. During the year under review, BjN-Nepal achieved a turnover of Rs. 305.12 million and Profit Before Tax of Rs. 42.35 million. Its second decorative paint plant at Hetuada Industrial Area, having a capacity of 18,000 KL/MT per annum commenced operations during the year.

The performance of Beepee Coatings, a wholly owned subsidiary with its entire manufacturing facilities dedicated to processing the Companys products, was satisfactory. The processing income amounted to Rs. 101.55 million and the Profit Before Tax was Rs. 1.5 million. Beepee Coatings is on the verge of commissioning an emulsion plant with a capacity of 20,000 tonnes per annum.

Berger Paints (Cyprus) Limited, Cyprus, is a special purpose vehicle for the purpose of making investments in your Companys interests abroad. So is Lusako Trading Limited.

Berger Paints Overseas Limited in Russia, which had just started manufacturing operations, was impacted by substantial downfall in demand as a result of the global meltdown and posted a loss of Rs. 15.34 million during the year.

The Companys joint venture, Berger Becker Coatings Private Limited has established itself firmly in its niche market. This is evident in the results during the year under review in which it has posted a Profit Before Tax of Rs. 16.07 million.

BNB Coatings India Limited (BNB), the Companys joint venture with Nippon Bee Chemicals Co. Ltd. of Japan (NBC) for manufacture of coatings for plastic substrates of automobiles substantially increased its business in the second year of operations and has posted profits in the last two months of the year under review. This trend is expected to continue. During the year, the Company invested an amount of Rs. 19.6 million towards subscription to 19,600 equity shares of BNB of a face value of Rs. 1,000 each. The Companys equity holding in BNB continues to be 49%.

The Companys joint venture in the form of Pnb Principal Advisory Company Private Limited continued its business of direct broking.

CONSOLIDATED FINANCIAL STATEMENT

The duly audited Consolidated Financial Statement as required under the Accounting Standards 21 and 27 and provisions of Clause 32 of the Listing Agreement has been prepared after considering the audited financial statements of your Companys subsidiaries and appear in the Annual Report of the Company for the year 2009-10.

CORPORATE GOVERNANCE

Your Company re-affirms its commitment to the standards of corporate governance. This Annual Report carries a section on corporate governance and benchmarks your Company with the

provisions of Clause 49 of the Listing Agreement (Annexures I & II).

During the year under review, your Company has voluntarily carried out a Secretarial Audit. The Secretarial Audit Report forms a part of the Annual Report.

Also, the Company has voluntarily adopted the Secretarial Standards 1, 2, 3, 4, 5, 6, 7, 8 and 10 published by the Institute of Company Secretaries of India, as far as practicable, in the best interests of the Company, its members and other stakeholders. The Company has also carried out a voluntary audit of the adoption of the Secretarial Standards.

TECHNICAL C D LLABD RATI 0 N

Your Company collaborates with DuPont Performance Coatings in the area of Automotive Coatings. Products manufactured with the know-how of the collaborator has been well received by the concerned customers.

FOREIGN EXCHANGE

Your Company earned foreign exchange of Rs. 4.6 million from export of paints and consultancy fees/royalty. Details of foreign exchange outgo and earnings appear in items (v) to (viii) of Schedule 21 of the Accounts for the year under review.

FIXED DEPOSIT

There is no outstanding public deposit in the Company as on 31st March, 2010, except those lying unclaimed. The Company had earlier discontinued acceptance of fresh deposits and renewal of deposits. Deposits amounting to Rs. 0.302 million which had matured for repayment are lying unclaimed, for which your Company has sent out reminders. Out of the aforesaid unclaimed deposit, an amount of Rs. 57,000 has been transferred to the Investor Education and Protection Fund.

INFORMATION PURSUANT TO SECTION 217 OFTHE ACT

A. CONSERVATION OF ENERGY
Information pursuant to Section 217(l)(e) of the Act, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the financial year ended 31st March, 2010 are given in Annexure III to the Report.

B. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, particulars of a certain category of employees are required to be set out in the annexure of this report. However, as per provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the Annual Report sent to the members does not contain the said annexure. Any member desiring to obtain a copy of the said annexure may write to the Vice President & Company Secretary at the Registered Office of the Company.

C Directors Responsibility Statement

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2010 are in full conformity with the requirements of the Companies Act, 1956. They believe that the Financial Statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present your Companys financial condition and results of operations.

Your Directors further confirm that in preparation of the Annual Accounts:

i) the applicable accounting standards have been followed and wherever required, proper explanations relating to material departures have been given,

ii) 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 at the end of the financial year and of the profit or loss of the Company for that period,

iii) proper and sufficient care has been taken 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,

iv) the Accounts have been prepared on a going concern basis.

DIRECTORS

Mr. Pulak Chandan Prasad was appointed Additional Director effective 13th November, 2009, to hold office till the next Annual General Meeting. Mr. Prasad holds a Bachelors Degree in Technology from the Indian Institute of Technology, New Delhi and a Post-Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad. Currendy, Mr. Prasad is a Director of, among others, Bharti Airtel Limited and Nalanda India Fund Limited (Mauritius). Previously, he held the position of the Managing Director and co- head of the India office of Warburg Pincus, covering their India, South and South East Asian operations. Prior to that, he was a management consultant with McKinsey & Company in India, U.S.A. and South Africa. Pursuant to the provisions of Section 260 of the Companies Act, 1956, Mr. Prasad holds office till the forthcoming Annual General Meeting. A notice has been received from a member under Section 257 of the Companies Act, 1956 signifying his intention to propose the candidature of Mr. Prasad for the office of a Director. The notice for the forthcoming Annual General Meeting includes an ordinary resolution for appointment of Mr. Prasad as a Director of your Company.

Pursuant to Article 112 of the Articles of Association of the Company, Mr. Anil Bhalla and Mr. Kamal Ranjan Das retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Anil Bhalla is a Fellow Member of the Institute of Chartered Accountants of India. He is the Senior Partner of J.C. Bhalla & Co. and also holds the position of a Director in many other companies.

Mr. Kamal Ranjan Das is a science graduate and has a long experience in the paint industry. He is on the Board of many companies.

RELATED PARTY TRANSACTIONS

A statement of related party transactions pursuant to Accounting Standard 18 forms a part of this Annual Report.

LISTING WITH STOCK EXCHANGES

Your Company is listed with The Calcutta Stock Exchange Association Limited, Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the Company has paid the listing fee to each of the Exchanges. The addresses of these Stock Exchanges and other information for Shareholders are given in this Annual Report.

COST AUDITOR

The Board of Directors have re-appointed M/s N Radhakrishnan & Co., Kolkata, Mr. Gopalakrishnan, Pondicherry and M/s Shome & Banerjee & Co., Kolkata, as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, for its various factories across the country, subject to the approval of the Central Government for the year 2010-11. The Cost Auditors Reports will be forwarded to the Central Government as required under law.

AUDITORS

The Auditors, Messrs Lovelock & Lewes, retire at the conclusion of the ensuing Annual General Meeting and, being eligible under Section 224(1 B) of the Act, offer themselves for re-appointment.

APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Companys dealers and its customers for their unstinted commitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of the Company.

One behalf of the Board of Directors Kolkata Kuldip Singh Dhingra Dated: 18th June, 2010 Chairman Corporate Governance

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