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, 2024.

Financial Results

Financial Performance

Highlights of the Standalone Results:

a. Revenue from Operations for the year ended 31st March, 2024 was '10,002.93 Crore as against '9,470.62 Crore in the corresponding last financial year, representing an increase of 5.6% over the corresponding period of last financial year.

b. EBIDTA (excluding other income) for the year ended 31st March, 2024 was '1,671.67 Crore as against '1,345.85 Crore in the corresponding last financial year, representing an increase of 24.2% over the corresponding period of last financial year.

c. Net Profit for the financial year ended 31st March, 2024 was '1,015.05 Crore as against '828.39 Crore recorded in the previous financial year, representing an increase of 22.5% over the corresponding period of last financial year.

Highlights of the Consolidated Results:

a. Revenue from Operations for the year ended 31st March, 2024 was '11,198.92 Crore as against '10,567.84 Crore in the corresponding last financial year, representing an increase of 6% over the corresponding period of last financial year.

b. EBIDTA (excluding other income) for the year ended 31st March, 2024 was '1,861.32 Crore as against '1,487.20 Crore in the corresponding last financial year, representing an increase of 25.2% over the corresponding period of last financial year.

c. Net Profit for the year ended 31st March, 2024 was '1,169.82 Crore as against '860.40 Crore in the corresponding last financial year, representing an increase of 36% over the corresponding period of last financial year.

The Board of Directors have recommended a dividend of '3.50 per equity share of '1/- each fully paid up for the financial year

ended 31st March, 2024. Dividend is subject to approval of the shareholders.

Management Discussion and Analysis

Industry Structure and Development

The global economy is facing multiple challenges emanating from elevated inflation, tight monetary and financial conditions, escalating geopolitical tensions, rising geoeconomic fragmentation, disruptions in key global shipping routes, high public debt burdens and financial stability risks. Global financial markets are on edge with recurrent bouts of volatility as every incoming data increases uncertainty around monetary policy trajectories of major central banks.

According to International Monetary Fund (IMF), global growth decelerated to 3.2% during 2023 from 3.5% in 2022. The pace of economic activity was dragged down, inter-alia, by restrictive monetary policy stances to tame inflation, protracted geopolitical tensions and sluggish recovery in China. The potential impact of climate change became increasingly evident, with economic losses due to extreme weather events. Global inflation fell to 6.8% in 2023 from 8.7% in 2022 on the back of easing commodity prices, favorable supply conditions and monetary tightening across major economies, but still remained at its highest level in over two decades. Inflation in respect of core items and services remained elevated, exhibiting persistence in major economies amidst tight labour market conditions.

Against the backdrop of subdued global economic activity and multiple headwinds, the Indian economy expanded at a robust pace in 2023-24 with real GDP growth accelerating to 7.6% from 7% in the previous year. Growth in private consumption demand, on the other hand, stood at 3% as against 6.8% a year ago. Government consumption demand was also subdued tracking fiscal consolidation. The foreign reserves stood at robust $642.6 billion.

The G20 Indian Presidency under the Finance Track accorded primacy to the broad themes of climate change, digitalization, and concerns of the Global South with priorities cutting across various working groups. Realizing the vision of ‘Vasudhaiva Kutumbakam' - One Earth: One Family: One Future - the G20 Indian Presidency reaffirmed that the G20 remains the premier forum for global economic cooperation to steer the world through emerging challenges.

Indian Paint Industry

The global economic outlook remains beset by multiple headwinds: inflation persisting above target with the pace of disinflation losing momentum; elevated public debt in major systemic economies and their repercussions on the global economy in the case of disorderly adjustments; financial stability risks from the higher for longer interest rates scenario; protracted geopolitical tensions; inefficiencies from geoeconomic fragmentation; and accentuated climate shocks.

The Indian Paints and Coatings market size is estimated at USD 9.56 billion in 2024 and is expected to reach USD 15.00 billion in 2029, growing at a CAGR of 9.38% during the forecast period (2025-2029). COVID-19 hampered the paint industry market in India. With economic uncertainties and a slowdown in various sectors such as real estate, construction, and automotive, the demand for paints decreased significantly. After Covid, there was pent up demand which pushed up volume sales. Inflation in raw material prices was passed on resulting in 10% higher value growth compared to volume growth in 2022-23. In 2023-24, volume growth slowed down a bit, though still in double digits. However, with raw material prices dropping, we dropped our product prices. The mix also shifted towards lower priced products. As a result, our value growth was in mid-single digit.

The traction in construction activity is likely to be sustained, supported by both residential and non-residential real estate demand. Sectors like waterproofing and construction chemicals are growing rapidly with present market size of around ' 15000 Crore in India. The Company along with its subsidiary is one of the leading players in this sector.

Architectural coatings are used for both residential buildings and commercial purposes, such as office buildings, warehouses, retail convenience stores and shopping malls. These coatings can be applied on outer and inner surfaces and include sealers or specialty products. India has been experiencing rapid urbanization and infrastructure development, which has led to a surge in construction projects. Thus, this has directly increased the demand for architectural paints used in buildings and structures.

The residential sector in the country is on an increasing trend, with government support and initiatives that are permanently boosting the demand. The Ministry of Housing and Urban Development (MoHUA) allocated the funds for the construction of

houses. The Pradhan Mantri Awas Yojana, a flagship mission of the Government of India, aims at ensuring a pucca house to all eligible households thus boosting the demand for paints and coatings.

Also, the country is expanding its commercial sector, which has a positive impact on the architectural emulsion coatings market. Therefore, due to the factors mentioned, the demand for paints for the architectural segment is expected to witness robust growth in India in the upcoming period.

India's journey towards becoming a developed nation hinges significantly on improving its infrastructure, a cornerstone for fostering liveable, climate resilient and inclusive cities that drive economic growth. With more and more spending on roads and highways, railways, ports and airports the demand for protective coatings and construction chemicals would increase. Private sector partnerships have emerged as crucial enablers in this endeavour, bringing in much needed investment, innovation and efficiency. The Company is positioned number 1 in the Protective Coatings category.

The automotive sector has bounced back last year and has been growing at a faster rate than the previous year. There has been a strong growth in the car category while two-wheelers and commercial vehicles grew at a slower pace. Tractors had muted growth rate. The General Industrial category grew at a moderate pace. Meanwhile, powder coatings suffered due to change in norms in the fan industry but is back on growth path.

Company’s Operations

Berger began its operations a century ago in 1923 with only one manufacturing unit in Howrah, West Bengal. Presently, Berger holds the second position in India among all paint companies. This would not have been possible if our products were not in demand. The trust in our brand, repeat buying, no compromise in quality, regularly adding features to our products, innovative mindset, stable workforce are some highlights of our journey during the last 100 years.

We are proud that our entire team at Berger are passionately engaged with the Company. It cannot only be a transactional relationship since we believe that stability cannot be measured in terms of money. The challenges that we offer to our employees in terms of job content, conducive work environment including work life balance, exciting challenges with an open culture makes it one of the best organizations to be a part of and contribute, deliver results, exchange information and strive for an even better tomorrow.

Looking back at these 100 years journey, it can be said that the organisation has strong fundamentals. Berger family has been on the path of growth wherein money, technology, resources have mostly been generated by the Berger team itself. We always realize that there is a scope for improvement and that is how we have come up and established ourselves as the number two paint company in the country. We feel that competition will always be there, but we are confident that competition will not bother us. Our joint venture partners have remained with us for years and not a single joint venture has been cancelled only depicting the fact that we are reliable, transparent, adjusting and can stay strong even if there is rough weather. The tag line ‘Sadiyo se viswas, hamesha hamara saath' is an apt expression when we are delighted to see that our shareholders, employees, dealers, consumers, contractors, JV partners, painters are mostly stuck to us for many, many years now.

At Berger, our mission is to deliver and innovate high-quality painting solutions that enhance the aesthetics and protection of every space we touch. Our vision is to be a global leader in the paint industry, setting benchmarks in technology, quality and customer service. We are committed to sustainability, customer satisfaction and continuous improvement driving us to create products and services that not only meet but exceed the expectations of our valued customers. Our core values of integrity, excellence and innovation guide us in every endeavour, ensuring we remain a trusted and respected name in the industry.

The Company launched many new products during the year out of which, significant ones are as follows:

In the luxury emulsion interior category, we launched “Glamor Dazzle,” a shiny addition to our Glamor range. This product delivers an ultra-high sheen finish with unmatched washability, targeting the super luxury segment and reinforcing our position in the interior luxury market, especially for the sheen-loving eastern Indian consumer. Additionally, we introduced “Easy Clean Silky Touch”, another luxury offering that combines the trusted washability of Easy Clean with a new, smooth finish. Positioned in the entry luxury interior emulsion segment, this product aims to consolidate our footprint across India. Expanding our premium exterior emulsion segment, we launched “Anti Dustt Kool,” which keeps exterior surfaces dust-free while cooling indoor temperatures by up to 5 degrees Celsius, addressing the needs of India's warm and dusty climate.

In the economy segment, we launched “Berger Ceiling White,” a bright white matt finish paint designed specifically for ceilings, which is expected to significantly boost our volume business.

Under the Berger Home Shield brand, we introduced three innovative products: “Roof Kool & Seal,” utilizing PU Acrylic Hybrid technology to waterproof roofs and cool them by upto 10 degrees Celsius; “Acrylic Sealant,” a versatile product replacing traditional methods for sealing cracks and gaps, paintable and flexible enough to fill gaps up to 20mm on both interior and exterior surfaces, and “Epoxy Tile Grout,” a UV-resistant, crack-free grout offering waterproofing for tiles and stones with a semi-gloss finish and a range of colors to match various tiles.

Berger continues to thrive and grow with several well-established products recognized for their technological advancements and superior performance. Products such as “Berger Silk Glamor” and “Berger Easy Clean” are renowned for their premium quality and durable finishes. Our “Berger WeatherCoat Long Life 10,” and “Berger WeatherCoat Long Life

15” incorporate nano-technology and PU Silicon chemistry, offering long-lasting protection with warranties up to 15 years, and have received excellent responses from launch markets. “Berger WeatherCoat Anti Dustt” and “Berger WeatherCoat Anti Dustt Kool” utilise dust guard and heat reflective nano-technology, ensuring long-lasting cooling and dust-free exteriors, making them ideal for the Indian climate.

Berger Paints “Express Painting” was launched in 2015 and has revolutionised the painting industry by combining innovative techniques with a customer-centric approach. Express Painting service is preferred for its reliability, convenience, and premium quality. By integrating advanced tools and equipment, we have streamlined traditional painting methods, significantly reducing painting time and delivering a flawless, professional finish. Our reputation for excellence and differentiated products has been crucial to the success of Express Painting. With trained painters using cutting-edge technology, we provide durable, visually appealing results that exceed customer expectations. Understanding the challenges associated with painting, it offers an environmentally friendly and hassle-free experience.

We, at Berger have introduced the ‘iTrain Program' as a CSR initiative 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.

During the financial year 2023-24, the retail sales and distribution division of your Company made significant strides with several initiatives, achievements, and innovations. The division expanded its network through strategic initiatives, enhancing the reach and efficiency of distribution channels across urban and rural markets. During the year under review, your Company installed 7848 Color Bank machines. New Retail Outlets were opened. The distribution business continued to outperform, registering a growth of 30.4%. The home shield category also delivered a robust growth of 39% over the previous year. Many new ‘Kolor & Style' outlets were opened and attracted a lot of footfalls. During the year, our dealer channel and painter community had seen the benefits of several organization wide digitization projects. Solutions like WhatsApp ordering, App-based purchases by Painting Contractors, Last mile Delivery Tracking have all been implemented countrywide in a phased manner. This has resulted in far greater efficiencies and ease of doing business for our dealers and contractors.

Waterproofing and construction chemical business has increased many folds during 2023-24. Alongwith our subsidiary STP Limited, we are now a leading player in the construction chemicals and waterproofing category in India. We expect to be comfortably in top 3 in India in the construction chemicals and waterproofing by the end of 2024-25. A slew of new products was launched in this category. Roof Kool and Seal, Bitu Seal DPC and Sealants were some significant products which were introduced during the year. The Company has been able to add a lot of value to this space. Scientific waterproofing solutions have been provided across the country through trained applicators.

Prolinks, the project sales division of our Company, has been thriving amidst India's robust development across infrastructure, real estate, and industrial sectors. A dedicated focus on construction chemicals has been reinforced through the establishment of a specialized task force, enhancing our capability to cater to this critical segment. As we witness the resurgence of maintenance activities for buildings erected during the real estate boom of the past decade, there is a burgeoning opportunity in painting and waterproofing services. Prolinks is well-positioned to capitalize on these emerging needs. Furthermore, recognizing the potential in smaller projects in major urban areas, a dedicated team has been mobilized to target these opportunities effectively. With these strategic initiatives and favorable market dynamics, Prolinks stands poised for significant growth, expected to be a key contributor to the overall expansion of our Company.

In FY 2023-24, the Protective Coatings Division of Berger Paints ‘Protecton', demonstrated remarkable progress and growth across various parameters, reflecting its commitment to innovation and excellence. During the year under review, several new innovative products were introduced which enriched the product portfolio and enhanced market competitiveness. In the road marking segment, SIGMARK Smart was launched in November, 2023. This low-cost variant in the road marking sector was introduced due to its cost effectiveness and quality and very quickly it has become the preferred choice for many projects, being budget friendly. In protective coatings, Thermo Indicative Paint was introduced which successfully replaced the product which was earlier bought from the competitor. This paint has demonstrated superior performance in high temperature and has the ability to change color with temperature variations and provides an additional layer of safety. Responding to the demand of the chemical industry, the Protecton division with the assistance from the R&D developed a new range of high chemical resistance coating to provide superior protection against harsh chemicals and corrosive environments, ensuring the longevity and integrity of the equipment and structures they are applied to. Quick Drying Polyurethane Matt Finish has been introduced to cater to the needs of infrastructure projects requiring fast turnaround times. Its quick-drying properties significantly reduce downtime, making it ideal for large-scale projects such as airports and metro stations. Water Regulations Approval Scheme Certified Pipe Coating comply with rigorous health and safety standards, ensuring that they are safe for use in potable water systems. The introduction of this product helped the Company secure significant orders from major clients in the pipe manufacturing sector. Can and Cap Coating earmarked our entry into the food and beverage market, the coating is designed to provide excellent adhesion, flexibility, and corrosion resistance, ensuring the safety and longevity of canned goods. Several prestigious projects were handled during the year under review which included HRRL Rajasthan Refinery, IOCL J18 Expansion Project and Khurja Super Thermal Power Plant. In the infrastructure sector, Protecton division received orders from Lucknow Adani Airport, National Capital Region Transport Corporation (NCRTC) Rapid Metro Station and Jewar Airport, Noida. Orders were also received from Bharat Earth Movers Limited, Maruti Suzuki Kharkhoda, Titagarh Wagon Factory and also for the prestigious Vande Bharat coaches. In the road marking segment, orders were received for the prestigious Bhupen Hazarika Setu. In the chemical resistance coating segment, orders were received from Sriram Alkalies & Chemicals, Gujarat Fluoro Chemicals, ACG Chemicals and Privi Chemicals. Supply and Apply contracts for IOCL refineries, Rajdhani and AC coaches at MCF Raebarelli and ONGC offshore are being executed as per specification. The Protecton business is poised to further expand its product portfolio, increase footprints in international markets and invest in cutting-edge technologies such as nanotechnology and smart coatings to deliver superior performance and enhanced durability.

The Auto and General Industrial division of Berger made significant strides forward during FY 2023-24. The auto division entered the bus body business. The division has also entered the E - Rickshaw segment in a major way. In the GI segment, efforts are on to open more and more dealers to expand our business. Low bake/Energy saving product has been introduced for supplying to esteemed European and Japanese customers. Efforts are being made to obtain more share of business in the two-wheeler and tractor category.

Berger Paints Powder Coatings has all along been a dominant player in the market and has strong presence in major segments like automotive, electric fan, furniture, home appliances, architecture, dish antenna, storage solution, power solution, lighting fixtures etc. Berger's unwavering commitment to excellence, trust and innovation has propelled us forward, even during challenging times. Some key highlights for 2023-24 includes ‘REBACOAT', a brand synonymous with sustainability and functionality. Our fusion bonded epoxy powder coatings now serve TMT Bars (REBAR), Pipes, and more. We have collaborated with major REBAR manufacturers and vendors across India setting a new standard for quality and durability. Our breakthrough achievement lies in developing powder coatings that withstand extreme temperatures (650-700°C). The Applications span from Auto-Mufflers to Stove Tops and Barb-Q Grills. Our innovation aimed towards sustainability includes reducing fuel consumption by nearly 20% compared to conventionally cured coatings. By lowering temperatures, we have transformed industries like generators, air

conditioners and heavy earthmovers. We have received the best supplier award from M/S IFB Industries, Goa. We have also embarked on a mission to introduce brilliant metallic shades to major OEMs in home appliances, automotive, metal and furniture segments wherein customization meets excellence. We have also successfully partnered with new customers in the storage solution segment. Atomberg Technologies Pvt Ltd is in the business of revolutionizing India’s home appliances, known for its energy-efficient and innovative products. We have been a part of their journey from the outset and continue to be their trusted and major supplier of powder coatings for their electric fans.

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 to strengthen new technology platform, use new dispersion technology, leverage emulsion strength and improve industrial resin product development quality. During the year under review, 2 (Two) patents were granted against applications made by the Company earlier while 2 (Two) fresh patent applications were filed by the Company.

In the Information Technology front, the key initiatives during FY 2023-24 included the following: Implementation of business intelligence and analytics - Tableau 2.0 which has established itself as a powerful data visualization tool that allows users to connect to a wide range of data sources, including corporate databases, Customer Relationship Management (CRM) systems, excel files and web-based data. With Tableau, the users can create visually stunning dashboards that reveal patterns and insights for business intelligence analysis. Business analytics with Tableau can provide numerous benefits, including improved decisionmaking through data-driven insights, increased efficiency and productivity through automation of data analysis and enhanced collaboration and communication through shared dashboards and visualizations. Implementation of endpoint security solution across Berger's ecosystem to protect the Company’s cyber space. In the fiscal year 2023-24, CrowdStrike continued to provide exceptional Managed Detection and Response (MDR) services for servers and Endpoint Detection and Response (EDR) solutions for end-users. Our dedication to innovation, expertise and pursuit of excellence in cyber security has allowed us to effectively protect the organization from ever-changing cyber threats.

To summarise, the implementation of CrowdStrike's MDR and EDR solutions allow us to enhance cyber security, reduce risks, and protect our vital assets. We have also implemented integrated Oracle Warehouse Management System (WMS) with the efficiency of ABB machines for palletization and Automated Storage and Retrieval Systems (ASRS).

Last financial year had once again been an exhilarating one in supply chain and logistics domain at Berger. So true to Berger ethos and as we had institutionalized for some years now, we had continuously worked on systems and processes, bringing in new, better ways of doing challenging tasks. We have innovated, rediscovered and further improved operational efficiencies. The results were extremely encouraging when we look back and realize that we have consistent lowest number of days of finished goods inventory in retail business line, ever. Some path breaking processes and system level tweaks to tackle the problem of slow-moving goods were implemented which resulted in our slow moving percentage to sales going down to ever lowest numbers.

With the successes of O9 - our integrated supply chain platform, we have initiated to implement the same in our industrial business line as well. This is supposed to give remarkable operational efficiencies in our industrial business, same as we have already experienced in decorative business. Efforts are on towards digitization of primary logistics and procure to pay cycle, through another new-gen logistics platform ‘Pando'. Once this is fully operational, it will transform our primary transportation landscape. The ‘WMS' (Warehouse Management System) implementations in our factories and warehouses had continued relentlessly, as it happened in the earlier years. This makes our warehouse handling one of the best in the world and goes a long way in improving channel partner and customer experience.

The bold experiments done in supply chain and logistics space mostly paid off and helped us in navigating the challenges and improve our supply chain operations, aided to create customer delight and helped create an even stronger and knowledge driven team.

The procurement landscapes had remained challenging for strategic and important raw materials like titanium dioxide, monomers, Penta etc. Due to domestic policy environment, initiation of anti-dumping investigations, geo-political tensions induced sea-freight issues, the challenges were many. The challenges were effectively neutralized by proactively opening new sourcing geographies and planned Free-On-Board (FOB) movements.

In this digital space, AI driven MyColor app, Oracle HRMS, Salesforce-CRM, supply chain O9 helped us move forward significantly in term of sales, marketing and logistics.

The HR function at Berger during FY 2023-24 concentrated on succession planning, leadership capability training, employee survey and other engagement initiatives. The key focus and challenge would be to arrest attrition in front line sales force and better training and market readiness for new recruits.

While reflecting on a year of achievements and forward momentum, manufacturing spearheaded initiatives embodied our commitment to innovation, excellence, and sustainability, ensuring our continued endeavour towards achieving leadership position. We have emphasized digital manufacturing with live real-time manufacturing performance dashboards, online monitoring of statutory compliances, calibration tracking and many more. Our core strength, innovation, was reaffirmed by replacing conventional grinding methods with advanced technologies, significantly reducing process cycle times and enhancing operational safety as exemplified by the ongoing Project “All Out”. Our flagship ESG initiative, project JAL, has drastically reduced Effluent Treatment Plant load, specific water consumption, and groundwater intake, alongside lowering water treatment costs. Through our Clean to Green initiative and 4R activities, we have significantly reduced hazardous waste like washing solvents across all factories. Customer satisfaction remains paramount, leading to the launch of the T-24 initiative, ensuring customer complaint resolution within 24 hours by the nearest quality personnel. We have transitioned to alternative green fuels, including bio-briquettes and biomass sources replacing conventional fuels to reduce greenhouse gas emissions and enhance sustainability. Today almost all our manufacturing units are running on solar power. The Sanchayan project has been a gamechanger, maximizing yield and minimizing losses. It is now expanding to include subsidiaries, broadening its positive impact. Berger has set a new sustainability benchmark in the Indian Paint Industry with the introduction of a revolutionary Green STP at our plant, requiring zero electrical power, chemicals, or human intervention, at no additional cost. Our legacy of trust and ongoing innovation propels us towards a future of continued success and leadership.

Focus and Outlook for 2024-25

The Indian economy is navigating the drag from an adverse global macroeconomic and financial environment. Real GDP growth is robust on the back of solid investment demand which is supported by healthy balance sheets of banks and corporates, the government's focus on capital expenditure and prudent monetary, regulatory and fiscal policies. As headline inflation eases towards the target, it will spur consumption demand especially in rural areas.

Digital payments would be shaped through the pillars of integrity, inclusion, innovation, institutionalisation and internationalisation. India is poised to actively contribute to the sharing of knowledge regarding Digital Public Infrastructures, facilitating the creation of similar frameworks in other emerging nations. Furthermore, forward looking initiatives such as the establishment of a cloud facility for the Indian financial sector and the creation of a FinTech repository are expected to enhance operational efficiency, reduce complexity and promote financial innovations.

The domestic economy exhibited growth in 2023-24, underpinned by strong investment activities, amidst subdued external demand. The GDP growth stood at 7.6%. The GDP growth constituted of investment growth of 10% and a muted consumption growth of 4%. Generally, the paint and coatings industry's volume growth is 1.5 to 2% of the consumption growth in India. Going by this logic, the paint and coatings industry’s volume growth should have been 8% whereas we have grown by 12%. However, the value growth was lower by 6% due to price drop and product mix change. The Company gained market share in the listed space in India by 0.5% during FY 2023-24 and the same stood at 19.7%.

The growth outlook remains buoyant, given the government's sustained focus on capital expenditure while maintaining fiscal consolidation. Strong corporate balance sheets, rising capacity utilisation, double digit credit growth, healthy financial sector, and the ongoing disinflation are likely to be other growth levers. Lingering geopolitical tensions, geo-economic fragmentation and adverse climate shocks impart downside risks to the outlook.

India’s construction sector, currently ranking as the world’s third largest, posted strong growth in 2023-24. Steel consumption and cement production expanded by 11.9% and 9.1% respectively, in 2023-24. Pent-up demand and robust consumer sentiment for home ownership seen since the pandemic, maintained momentum in 2023-24.

Projects

Odisha Industrial Infrastructure Development Corporation (Government of Odisha Undertaking) has allotted a piece of land measuring about 80 acres in mouza Kalibeti under Khurdha Tahasil in the District of Khurdha, Odisha for setting up a manufacturing unit by the Company for paints, intermediates and allied products with annual capacity of approximately 4,10,000 KL/MT. The Company plans to put up a modern technology - based environmentally sustainable unit for manufacture of paints, coatings, construction chemicals, intermediates including emulsions, resins and related products in the land allotted.

The Company has acquired 29.907 acres of land at Panagarh Industrial Park, Paschim Bardhaman District, West Bengal for the purpose of setting up a construction chemical plant, putty plant and also a resin manufacturing unit. This plant is expected to be commissioned by the end of 2025 subject to receipt of requisite approvals from the government, regulatory bodies.

Opportunities and Threats

The Paint and coatings industry in India has experienced fast growing consumer demand. With a hike in per capita income, a few big players have decided to explore the paint and coatings business. A post pandemic boom of investments and infrastructure development has resulted in a demand spike from the real estate sector which roughly accounts for about 70% of the total coating demand in India.

The demand from real estate is expected to be robust in 2024-25 on expectations of significant project completions and increased government spending on affordable housing and infrastructure. With the promises made by the government under the PM Awas Yojana in addition to 40 million houses already under construction, the demand for paint and coatings would only gain momentum, encouraging new players to bait on the sector.

Demand for repainting, which accounts for 80% of the total decorative paint demand, is also expected to pick up due to factors such as growing population, increased rental homes, and growth in the income levels of consumers.

Given India’s strong economic fundamentals, future growth potential, and zeal for ‘Make in India’ the Indian paint industry is poised for a colourful future. Digital transformation initiatives, AI driven applications, focus on ‘Reimagining’ or adopting a fresh and innovative approach for sustainable growth are key trust areas for India’s paint and coatings industry.

The threat caused due to COVID-19 pandemic are still in our memories and the continuing conflict in eastern Europe and a part of middle east adds to the anxiety and uncertainty. With the paint and coatings industry doing well, the competition is expected to be stiffer with a number of business conglomerates planning to enter this sector. Moreover, the growth of this industry largely depends on the growth of real estate in the constructive industry as also the repainting cycle. Berger is well positioned to handle competition with its innovative mindset, digital interventions including AI, skilled workforce, scientific, training modules, planning ahead of time, ably supported by government policies and continued stress on sustainability initiatives.

With massive capex investments planned, coupled with green field and brown field projects, capacity expansion with continued stress on sustainability initiatives, the paint industry as a whole is expected to grow 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/policies/risk-management-materiality-policy.

The last five years has seen many uncertainties and challenges with the war in Europe still continuing and the people of the world coming to terms with the disruptions caused due to the COVID-19 pandemic. The global inflation fell to 6.8% in 2023 from 8.7%

in 2022 but still remained at its highest level in over two decades with inflation in respect of core items and services being on the higher side which meant that intricate planning had to be made and executed at each stage of business so that the growth 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 need 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 the 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, 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.

Note: *There was a 59.73% change in Company's Standalone Interest Coverage Ratio as well as 58.64% change in

Company's Consolidated Interest Coverage Ratio on account of reduction in finance cost.

@There was a 32.83% change in Company's Standalone Current Ratio as well as 30.71% change in Company's Consolidated Current Ratio on account of decrease in current liabilities in current financial year as compared to previous financial year due to decrease in short term borrowings.

#There was a 52% change in Company's Standalone Debt Equity Ratio as well as 46.15% change in Company's Consolidated Debt Equity Ratio on account of decrease in borrowings in current financial year as compared to previous financial year.

## There was a 28.38% change in Company's Consolidated Net Profit Margin on account of increase in net profit. **There was a 6.18% change in Company's Standalone Return on Net Worth as well as 15.93% change in Company's Consolidated Return on Net Worth on account of increase in average total equity.

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 1,24,249 options on 8th November, 2023 to 283 eligible employees including the following Key Managerial Personnel: -

The Compensation and Nomination and Remuneration Committee has also allotted during the year 89, 067 equity shares of '1 each (face value) to eligible employees (including Key Managerial Personnel) upon exercise of options earlier granted to them. The allotment of the aforesaid shares was made on 18th December, 2023 (36,858 equity shares), on 31st January, 2024 (25,884 equity shares) and on 18th March, 2024 (26,325 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 and Sweat Equity) Regulations, 2021 are enclosed.

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

Human Resources

At Berger Paints, our employees are the bedrock of our success. They are the embodiment of our legacy of trust and the driving force behind our commitment to innovation.

Our legacy of trust is built on a foundation of our culture pillars and core values of accountability, customer orientation, ethics, integrity, trust and respect. At Berger, we strive to create an environment where our employees feel valued, supported and empowered to reach their full potential.

We are committed to nurturing talent and ensuring seamless leadership transitions to drive our future success. In the fiscal year 2023-24, we have intensified our focus on building capability and succession planning, recognizing that our people are our most valuable asset.

At Berger, we develop talent through structured and immersive learning journeys for building and enhancing leadership capabilities for Dronacharyas and TopGuns. ‘Dronacharyas' comprising General Managers, Associate Vice Presidents, Senior Vice Presidents, Vice Presidents, are led by the Managing Director and CEO as a forum for mentoring and developing our TopGuns (Key Talents). The ‘Line Manager Capability' programme has been developed for employees in the managerial cadre and aim at enhancing their functional understanding of Berger's way of leading teams. We continue to explore newer channels of learning with platforms like LinkedIn Learning, UpGrad and CoursePlay. We have seen a shift in consumption of learning which is now byte sized modules consumed on the go. Our campus engagement focuses on strengthening ties with top universities across the country with an aim to cultivate future talent. Our internship and graduate programmes like sales training programme, summer internship programme, (IGNITE), future leaders' acceleration and management excellence (FLAME) for management trainees aim to build a strong leadership pipeline and offer students practical experience, allowing them to apply their academic knowledge in a real-world setting. Interns and trainees are paired with mentors who guide them through their projects and help them develop their skills.

As a part of digital transformation, we have integrated our DarwinBox HRMS and digitalized the entire employee lifecycle management along with all other employee processes. During the financial year 2023-24, we have placed a strong emphasis on employee engagement, recognising its critical role in fostering a motivated, committed, and high performing workforce. Our Managing Director and CEO conducts annual town halls to discuss Company performance, share strategic updates, and answer employee questions. We have also introduced spotlight awards to highlight the top sales incentive earners in retail sales function. Our long service awards recognize and honour employee’s dedication and loyalty to the organization, celebrating their significant contributions over 15, 20 and 25 years. The annual employee engagement survey to assess and measure the overall level of engagement, satisfaction, and motivation among employees within the organization not only gathers feedback directly from employees but also helps organization in informed strategic decision making, human resources policies and organizational initiatives to better align with employee needs and expectations.

At Berger, we strive to promote diversity and inclusion. Our ‘Stree Shakti' initiative has been a success story all along. We practise implementing fair and unbiased recruitment and promotion processes. We regularly assess and address any potential biases in policies and practices.

We are excited about the journey ahead and are confident that with our dedicated and talented team, we will continue to shine brightly, setting new standards of excellence in the industry. Together, we are not just preserving a legacy - we are building a future.

The overall Industrial Relations climate continued to remain harmonious and peaceful during the year. The number of employees as on 31st March, 2024 was 4,445 (31st March, 2023 - 4,088). 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, 2016 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 29th April, 2023, and on 9th November, 2023, the company had transferred 1,94,746 equity shares and 1,09,860 equity shares respectively, totalling 3,04,606 equity shares to the IEPF. Additionally, 12,31,402 bonus shares were also transferred to the IEPF totalling 15,36,008 equity shares.

Prevention of Sexual Harassment

The Company has adopted zero tolerance for Sexual Harassment at Workplace and has formulated a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder for Prevention and Redressal of Complaints of Sexual Harassment at Workplace. Awareness programmes were conducted by the Company.

Berger Paints - Prevention of Sexual Harassment of Women at Workplace Policy can be viewed at: https://www.bergerpaints.com/about-us/policies/sexual-harassment-women-workplace-policy.

The Company has complied with the provisions laid in the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has set up such committee and the complaints with regard to Sexual Harassment at Workplace are placed before the committee for investigation.

During the year under review, one complaint relating to Sexual Harassment was received and investigated. The complaint has been closed and necessary action has been taken by 31st March, 2024.

Subsidiaries 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 UKRAINE 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”), was 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 as on 31st March, 2024. In April, 2024 Bolix S.A. acquired the balance 25% shares of SMS from Green Dynamo Ltd., U.K. Consequently, SMS has now become a wholly owned subsidiary of Bolix S.A.

The Company has three other subsidiaries viz., Berger Rock Paints Private Limited (the other shareholder being Rock Paints Co. Ltd., Japan), Berger Hesse Wood Coatings Private Limited (the other shareholder being Hesse Shares GmbH, Germany) and STP 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.

Beepee Coatings Private Limited earned a revenue from operations of '34.86 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.

The consolidated revenue from operations of Lusako Trading Limited and Bolix S.A. (including its subsidiaries) is '442.35 Crore during the year under review. During the year under review, BJN-Nepal showed good performance with a revenue from operations of '205.12 Crore.

SBL Specialty Coatings Private Limited (earlier known as Saboo Coatings Private Limited) continued to perform well with a revenue from operations of '176.04 Crore during the year 2023-2024.

The consolidated revenue from operations of Berger Paints (Cyprus) Limited and its subsidiary Berger Paints Overseas Limited (“BPOL”) was '17.74 Crore.

Berger Rock Paints Private Limited (“Berger Rock”), recorded revenue from operations of '31.26 Crore during the year ended 31st March, 2024.

Berger Hesse Wood Coatings Private Limited (“BHWCPL”) (earlier known as Saboo Hesse Wood Coatings Private Limited) recorded revenue from operations of '23.05 Crore during the year ended 31st March, 2024.

STP Limited recorded revenue from operations of '362.74 Crore during the year ended 31st March, 2024.

Berger Becker Coatings Private Limited, the Company's joint venture with Becker Industrial Coatings Holding AB, Sweden, showed good performance with revenue from operations of '266.22 Crore.

Berger Nippon Paint Automotive Coatings Private Limited (“BNPA”), the Company's joint venture with Issac Newton Corporation, posted revenue from operations of '341.55 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 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 2023-24.

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 Companies 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 15th May, 2024 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 2024-25, 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 IV. 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 V 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, 2024 is placed on the website of the Company i.e., https://www.bergerpaints.com/investors/download 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 100th 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 placed on the website of the Company.

Business Responsibility and Sustainibility Report

SEBI has made it mandatory to publish a Business Responsibility and Sustainability Report (BRSR) by the top 1000 listed companies based on market capitalisation in their Annual Report in terms of Regulation 34(2)(f) of the Listing Regulations and file the same with the stock exchanges w.e.f FY 2022-23. SEBI vide circular dated 12th July, 2023 has updated the format for Business Responsibility and Sustainability Report, where it introduced BRSR Core for assurance by top 150 listed entities based on market capitalisation. The BRSR Policy can be viewed at https://www.bergerpaints.com/about-us/policies/business-responsibility-and-sustainability-policy. The BRSR report alongwith the assurance forms part of this report and is marked as Annexure VII.

Particulars of Employees

The information required under Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the report and financial statements are being sent to Members and others entitled thereto, excluding the information on employees' particulars, which will be available for inspection up to the date of the AGM. Members can view such information by sending an email to sumandey@bergerindia.com / rajibde@bergerindia.com.

Further, we confirm that no employee employed throughout the financial year or part thereof received remuneration in the financial year that, on the aggregate, was more than that drawn by the Managing Director and Whole-time Directors and holds by himself or along with his spouse and dependent children more than 2 per cent of the equity shares of the Company.

The Managing Director and CEO and Whole-time Directors of the Company have not received any remuneration or commission from any of the subsidiary companies.

Directors’ Responsibility Statement

Your Directors wish to inform that the Audited Accounts containing Financial Statements for the financial year ended 31st March, 2024 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 Indian 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, 2024.

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

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, 2024 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 '1,16,58,87,529 divided into 1,16,58,87,529 equity shares of '1/- each and the subscribed and paid-up capital is '116,57,96,049 divided into 116,57,96,049 equity shares of '1/- each fully paid-up. The subscribed and paid-up equity share capital as on 31st March, 2024 consists of bonus issue of 19,42,84,497 equity shares and 89,067 equity shares allotted under ESOP scheme of the Company.

Issue of Bonus Shares

The Board of Directors at its meeting held on 9th August, 2023, decided to obtain consent of the shareholders through Postal Ballot under Section 110 of the Companies Act, 2013 read with Rules 20 and 22 of the Companies (Management and Administration) Rules, 2014 and relevant circulars as issued by the Ministry of Corporate Affairs from time-to-time, in respect of the Special Resolution for issue of fully paid up bonus shares to the eligible shareholders of the Company in the proportion of 1:5 i.e., One (1) new fully paid-up equity share of '1/- (One) each for every Five (5) existing equity share(s) of '1/- (One) by capitalizing the sum standing to the credit of ‘Securities Premium Account' of the Company, as per the audited financial statements of the Company for the financial year ended March 31,2022. The shareholders approved the issue of bonus shares in the proportion of 1:5 through postal ballot, result of which was declared on 8th September, 2023. Pursuant to approval of the shareholders, the Company on 25th September, 2023 had allotted 19,42,84,497 bonus shares of '1/- (One) each (fully paid up) in the proportion of 1:5 to the eligible shareholders whose names appeared in the Register of Members as on 23rd September, 2023, being the record date fixed for this purpose. Following completion of all necessary formalities, the aforesaid bonus equity shares were credited to eligible shareholders account on 5th October, 2023. As a result of the bonus issue, the paid-up capital of the Company increased to '116,57,06,982 consisting of 116,57,06,982 equity shares of '1/- each from 97,14,22,485 equity shares of '1/- each.

Credit Rating

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

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 statements (please refer Note Nos. 9 and 18 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 has 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. The policy is available at the following weblink: https://www.bergerpaints.com/about-us/policies/policy-materiality-related-party-transactions-and-dealing-related-party. The Company has also developed a Related Party Transactions (‘RPTs') Manual and Standard Operating Procedures to identify and monitor RPTs and is in the process of adopting digitalisation in the matter of capturing 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 abiding by Transfer Pricing norms.

All related party transactions entered during the year were in ordinary course of the business and at 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 weblink of the policy is https://www.bergerpaints.com/about-us/policies/policy-determine-material-events.

Policy for Preservation of Documents

As per Regulation 9 of the 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 weblink: https://www.bergerpaints.com/about-us/policies/policy-preservation-documents.

Significant Changes

During the financial year 2023-24, 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, 2024 and the date of this Report.

Dividend

The total comprehensive income of the Company is '1015.19 Crore for the year 2023-24.

Your Directors have recommended a dividend of '3.50 per equity share of ' 1/- each for the financial year ended 31st March, 2024. Dividend is subject to approval of the shareholders at the ensuing Annual General Meeting. The dividend, if approved, will

absorb an amount of ' 408.03 Crore (compared to '310.86 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 12th August, 2024 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 5th August, 2024.

The Company has not transferred any amount to the General Reserve during the financial year ended 31st March, 2024.

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/policies/dividend-distribution-policy.

In terms of the provisions of Section 124 of the Act, your Company has transferred an amount of '31,63,404 for 2015-16 (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 become 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, 2016 (Interim).

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 VI of this report.

Foreign Exchange Earnings and Outgo

Foreign Exchange Earnings and Outgo of the Company are '4.35 Crore and '1145.29 Crore respectively. Primarily, earnings were from exports and consultancy services and outgo was towards import payments.

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, 2024. 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 6th February, 2024 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 6th February, 2024.

After completion of online evaluation process, the Board of Directors at its Meeting held on 6th February, 2024, 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/policies/criteria-determining-qualification-positive-attributes-and-independence.

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 Rule 8 of 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 2023-24.

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 five Meetings of the Board of Directors of the Company were held, i.e., on 20th and 21st April, 2023, 15th May, 2023, 09th August, 2023, 02nd November, 2023, and 06th February, 2024. Also, the Board of Directors have passed 9 (nine) resolutions by circulation. Details of Board composition and Board Meetings held during the financial year 2023-2024 have been provided in the Corporate Governance Report - Annexure VIII which forms part of this Annual Report.

3) Mr Pulak Chandan Prasad*

4) Mr Anoop Hoon

5) Dr Anoop Kumar Mittal

6) Mr Gopal Krishna Pillai

7) Mr Subir Bose**

*Mr Pulak Chandan Prasad ceased to be Non-Executive, Independent Director on the Board of Directors of the Company upon completion of his term on 1st April, 2024.

** Mr Subir Bose was appointed as a Non-Executive, Independent, Additional director, w.e.f. 15th May, 2024.

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 confirm 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, 2024.

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 have 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 Company has reconstituted the Audit Committee due to the cessation of Mr Pulak Chandan Prasad as a member of the Board of Directors with effect from 1st April, 2024. The details of the re-constitution of the Audit Committee are disclosed in the Corporate Governance Report which forms part of the Board's Report (Annexure VIII). The terms of reference of the Audit Committee have been duly approved by the Board of Directors. The Board has accepted and implemented all recommendations of the Audit Committee.

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 and can be viewed at https://www.bergerpaints.com/about-us/policies/whistleblower-policy.

B. Corporate Social Responsibility Committee

The composition of the CSR Committee and a brief outline of the CSR Policy is annexed to this report (Annexure III).

Your Company has spent an amount of '20.79 Crore during the financial year 2023-2024 as against its 2% obligation amounting to '20.25 Crore, thereby exceeding its entire CSR obligation. The required details as specified in Companies CSR 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/policies/corporate-social-responsibility-policy.

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 CSR activities of the Company and the NGO is carrying out the CSR activities in a proper manner.

C. Compensation and Nomination and Remuneration Committee

The Company has reconstituted the Compensation and Nomination and Remuneration Committee due to the cessation of Mr Pulak Chandan Prasad as a member of the Board of Directors with effect from 1st April, 2024. The details of the re-constitution of the Compensation and Nomination and Remuneration Committee are disclosed in the Corporate Governance Report which forms part of the Board's Report (Annexure VIII).

D. Shareholders’ Committees

The constitution of the Company's Shareholders' Committees is given in the Report on Corporate Governance Annexure VIII.

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 VIII.

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 committee has been reconstituted due to the resignation of Mr Shrirang M Pangarkar, Group Head- Materials, and subsequent appointment of Mr A Chander as Head-Materials on 1st September, 2023. The details of the re-constitution of the Environmental, Social and Governance Committee are disclosed in the Corporate Governance Report which forms part of the Board's Report (Annexure VIII).

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, business units are also undertaken from time to time. Details of Familiarisation 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/investors/download.

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:

Note: * Mr Pulak Chandan Prasad ceased to be Non-Executive, Independent Director on the Board of Directors of the Company upon completion of his term on 1st April, 2024.

** Mr Kaushik Ghosh was appointed as the Chief Financial Officer w.e.f. 12th January, 2023. For financial year 2022-23, his remuneration from 12th January, 2023 to 31st March, 2023 was considered. For financial year 2023-24, remuneration for full year, from 1st April, 2023 to 31st March, 2024 is considered.

*** Mr Subir Bose was appointed as a Non-Executive, Independent, Additional director, w.e.f. 15th May, 2024.

# Remuneration does not include value of ESOPs granted.

Note: The median employee remuneration for 2023-24 is: ' 9,00,004 p.a.

2) Percentage (%) increase in remuneration during the financial year 2023-24: Please see (1) above.

3) Percentage (%) increase in the median remuneration of employees during the financial year 2023-24: 15.6%

4) Number of permanent employees on the rolls of the Company as on 31st March, 2024: 4445

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 14.1% as compared to an average percentile increase of 16.56% of managerial remuneration. The increase in 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:

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 2023-24 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 15th May, 2023 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 2023-24. 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 Sandila and the factories of British Paints division located at Sikandrabad and Hindupur for the financial year 2023-24.

The cost audit report for the financial year 2022-23 was filed with the Ministry of Corporate Affairs on 11th October, 2023.

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 2024-25.

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, and 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.