Berger Paints India Ltd
Directors Reports
#MDStart#
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,
2022.
FINANCIAL RESULTS
(Rs. 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-
| NO. OF EQUITY SHARES ALLOTTED |
NAME OF KMPs |
DESIGNATION |
| 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 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 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 |
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 * |
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 |
* 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
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) |
#MDEnd#