[ ( KANSAI

PAINT NEROLAC
31st May, 2022

1. Corporate Relationship Department 2. Manager – Listing

BSE Limited. National Stock Exchange of India Ltd.
Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G,
Dalal Street, Bandra Kurla Complex, Bandra (E),
Mumbai - 400001. Mumbai - 400 051.

Sub.: Annual Report of Kansai Nerolac Paints Limited for the Financial Year 2021-22
along with the Notice of the 102nd Annual General Meeting.

Ref.: 1. Regulation 30 and 34 of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015
2. Scrip Codes : BSE - 500165, NSE - KANSAINER

Dear Sirs,

In terms of the provisions of Regulation 30 and Regulation 34 of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(“SEBI Listing Regulations”), the Annual Report of Kansai Nerolac Paints Limited for the
Financial Year 2021-22 (“Annual Report”) along with the Notice of the 102nd Annual
General Meeting (“AGM”) is enclosed herewith. The Notice of the AGM is given on
Page nos. 100 to 112 of the Annual Report.

The Annual Report contains the information to be given and disclosures required to be made
in terms of Regulation 34(2) and 34(3) of the SEBI Listing Regulations.

We wish to inform you that the AGM will be held on Thursday, 23rd June, 2022 at
11 a.m. (IST), through Video Conferencing/Other Audio Visual Means. In view of the
COVID-19 pandemic and in compliance with the Circular No. 21/2021 dated
14th December, 2021 read with Circular No. 14/2020 dated 8th April, 2020,
Circular No.17/2020 dated 13th April, 2020, Circular No. 20/2020 dated 5th May, 2020,
Circular No. 02/2021 dated 13th January, 2021 issued by the Ministry of Corporate
Affairs (“MCA Circulars”) and Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11 dated
15th January, 2021 read with Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated
12th May, 2020 issued by the Securities and Exchange Board of India (“SEBI Circulars”) and
relevant provisions of the Companies Act, 2013 and SEBI Listing Regulations, the AGM will
be held without the physical presence of Shareholders at a common venue.

The Annual Report along with the Notice of the 102nd AGM is being sent by e-mail, to all
the Shareholders whose e-mail IDs are registered with the Company / Depository
Participant(s) in accordance with MCA Circulars and SEBI Circulars.

The Annual Report together with the Notice of the AGM is being dispatched to the
Shareholders, today. The same is also available on the website of the Company at
www.nerolac.com .

1
KANSAI NEROLAC PAINTS LTD.
Nerolac House, Ganpatrao Kadam Marg, Lower Parel. Mumbai - 400 013. Tel: +91 22 2499 2500 I www.nerolac.com
CIN: L24202MH1920PLC000825
[ ( KANSAI
PAINT NEROLAC
The agenda items proposed to be taken up at the AGM are as mentioned below:
Sr. Agenda proposed to be taken up Resolution to be passed
No.
Ordinary Business:
1. Adoption of audited financial statements (including the Ordinary Resolution
consolidated financial statements) of the Company for the
year ended 31st March, 2022 and the Reports of the
Board of Directors and the Auditors thereon.
2. Confirmation of interim dividend of ₹1.25 (125%) per Ordinary Resolution
Equity Share of the nominal value of ₹1 each already paid
and declaration of a final dividend of ₹1.00 (100%) per
Equity Share of the nominal value of
₹1 each for the year ended 31st March, 2022.
3. Appointment of a Director in place of Mr. Shigeki Ordinary Resolution
Takahara, Non-Executive Director (holding Director
Identification Number 08736626), who retires by rotation
and being eligible, offers himself for
re-appointment.
4. Appointment of a Director in place of Mr. Takashi Ordinary Resolution
Tomioka, Non-Executive Director (holding Director
Identification Number 08736654), who retires by rotation
and being eligible, offers himself for
re-appointment.
Special Business*:
5. Ratification of remuneration of the Cost Auditor, Ordinary Resolution
D. C. Dave & Co., Cost Accountants (Firm Registration
No. 000611), for the financial year ending 31st March,
2023, as recommended by the Audit Committee and
approved by the Board of Directors.
6. Appointment of Mr. Anuj Jain (holding Director Ordinary Resolution
Identification Number 08091524) as the Managing
Director for a period of 5 (five) years commencing from
1st April, 2022 and ending on 31st March, 2027 (both
days inclusive).
7. Re-appointment of Ms. Sonia Singh, Independent Special Resolution
Director (holding Director Identification Number
07108778) as an Independent Director to hold office for a
second term of 5 (five) years commencing from
29th July, 2022 and ending on 28th July, 2027
(both days inclusive).
* considered to be unavoidable by the Board of Directors of the Company.
Please take the above submission on record.

For KANSAI NEROLAC PAINTS LIMITED

G. T. GOVINDARAJAN
COMPANY SECRETARY
Encl: Annual Report, which contains the Notice of the AGM.

2
KANSAI NEROLAC PAINTS LTD.
Nerolac House, Ganpatrao Kadam Marg , Lower Parel, Mumbai - 400 013. Tel: +91 22 2499 2500 I www.nerolac.com
CIN L24202MH1920PLC000825
KANSAI
PAINT

Broadening horizons for a

Sustainable future
102nd Annual Report 2022 KANSAI NEROLAC PAINTS LIMITED
Broadening horizons for a
Sustainable future
AT KANSAI NEROLAC PAINTS LIMITED (KNPL), WE AIM TO BUILD
“A FUTURE WITH A FUTURE”.
A sustainable future for an organisation is one in Over the years, we have built an innovation-
which it can achieve the best possible balance driven organisation and have created several
between The 3 P’s People, Planet and Profit. technology differentiators to offer unique and
Here at KNPL, we focus on protecting and environment-friendly products and solution to
nurturing this triple bottomline. our customers. We have broadened our product
portfolio and expanded our service network to
As we enter the second century of our journey, meet the evolving needs and preferences of
we have increased our efforts to promote our customers.
a people-centric culture by expanding the
horizons of collaboration, innovation and
empowerment in the organisation.
Our progressive paradigm of innovation
In addition to the above, another horizon that and sustainability has always led to:
we are committed to consistently contribute • Better profits for our investors
to the society through our CSR initiatives.
We believe by doing so, we make significant • Nurturing and progressive culture for
contribution to the United Nations Sustainable our internal stakeholders
Development Goals (UN SDGs). • Planet-friendly process and products
for environment sustainability
We continue to instil an advanced sustainability
culture in the organisation. We have been
persistently stretching the limits of sustainability
in the industry and have been a front-runner
in reporting its ESG disclosures on global
platforms. In order to further our sustainable
development strategy, we majorly focus
on water positivity, increase contribution of
energy from renewable sources, reduction
in carbon footprints, reduction in hazardous
waste generation and sustainable sourcing of
raw materials.
Corporate Information

BOARD OF DIRECTORS CHIEF FINANCIAL OFFICER

Mr. Pradip Panalal Shah Mr. P. D. Pai
Chairman (Independent Director)
COMPANY SECRETARY
Mr. Harishchandra Meghraj
Mr. G. T. Govindarajan
Bharuka
Vice Chairman and Managing Director
(Up to 31st March, 2022)
BANKERS
AXIS BANK LTD.
Mr. Noel Naval Tata HDFC BANK LTD.
Non-Executive Director ICICI BANK LTD.
(Independent Director) STANDARD CHARTERED BANK
Broadening horizons for a
Mr. Anuj Jain STATUTORY AUDITORS
Managing Director
S R B C & CO LLP, Mumbai
(From 01st April, 2022)
Executive Director
(Up to 31st March, 2022) REGISTERED OFFICE
NEROLAC HOUSE
Mr. Hitoshi Nishibayashi Ganpatrao Kadam Marg,
Non-Executive Director Lower Parel, Mumbai-400 013,
Maharashtra.
Ms. Sonia Singh Tel: +91-22-24934001
Non-Executive Director Fax: +91-22-24936296
(Independent Director) Website: www.nerolac.com

Mr. Shigeki Takahara

INVESTORS RELATIONS
Non-Executive Director
E-mail ID: [email protected]
Mr. Takashi Tomioka Corporate Identity Number (CIN):
Non-Executive Director L24202MH1920PLC000825

1
 About the Report
REPORTING PERIOD, SCOPE AND REPORTING PRINCIPLE
BOUNDARY The financial and statutory information presented in
This Report contains the financial and non-financial this Report complies with the requirements of The
information of Kansai Nerolac Paints Limited Companies Act, 2013 (including the rules made
(hereafter referred to as ‘KNPL’ or the ‘Company’) thereunder), the Indian Accounting Standards
and its subsidiaries for the period 1st April, 2021 to and the Securities and Exchange Board of India
31st March, 2022, or the ‘reporting period’. (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
APPROACH TO REPORTING
The Report takes a broader approach of integrated The non-financial information is disclosed in
reporting by covering information beyond accordance with Global Reporting Initiative (GRI)
financial capital to five other capitals – natural, Standards: Core option. It is based on calculation
intellectual, manufacturing, social & relationship methodologies conforming to globally accepted
and human capital. standards and is presented in a succinct and
comparable manner to enhance the Report’s
Through this Report, we demonstrate the inter- value for all stakeholders. The assumptions,
linkage of these capitals and how the Company exclusions and restatements have been included
uses them in its business model to maximise value wherever applicable. Further, the Report also
creation for itself and all the stakeholders while follows the content and guiding principles
managing trade-offs, risks and material issues. guidelines of Integrated Reporting framework
This Report intends to serve as a concise and by the International Integrated Reporting
all-inclusive communication about the Company’s Council (IIRC).
value creation process using both financial and
non-financial resources. APPROACH TO MATERIALITY
The Report covers key material issues which
The Report further provides insights into the have been identified basis various stakeholder
Company’s operating context, the strategies engagements, their impact on value-creation
along with risks associated in achieving them process and the Company’s approach to address
and expectation of prospects and performance. them with a measurable target. This facilitates
Governance-related inputs have been covered stakeholders in making informed decisions with
to provide insights on how the Company protects regards to their engagement with the Company.
value and interests of stakeholders.
ASSURANCE
To make the Report inclusive and enable Assurance on selective non-financial disclosures
stakeholder better evaluate our performance and of KNPL have been assured by M/s Aneja
prospects, both qualitative and quantitative data Associates. The assurance has been given
have been captured. This will help them make against the disclosures’ adherence to the GRI’s
informed decision regarding their engagement Sustainability Reporting Standards.
with the Company.

2
Contents
CORPORATE OVERVIEW 1-99 STATUTORY REPORTS 100-239
Corporate Information 1 Notice 100
About the Report 2 Board’s Report including Management
Farewell note from Mr. H. M. Bharuka 4 Discussion and Analysis 113
Message from Managing Director 5 Report on Corporate Governance 205
Key Highlights 8 Business Responsibility Report 226
Performance Highlights 10
Corporate Profile 12 FINANCIAL STATEMENTS 240-357
Our Product Portfolio 14
Standalone Financial Statements
Our Operational Footprint 18
Independent Auditor’s Report 240
Our Strategy and Future Orientation 20
Balance Sheet 250
Our Value Creation Model 26
Statement of Profit and Loss 251
Staying Engaged with
Statement of Changes in Equity 252
the Stakeholders 28
Statement of Cash Flows 253
Materiality Assessment 30
Notes 255
Opportunities & Threats 34
Form AOC-1 300
Risk and Concerns 36
Nurturing our Capitals and Consolidated Financial Statements
ESG approach 38 Independent Auditor’s Report 301
Natural Capital 42 Balance Sheet 308
Intellectual Capital 58 Statement of Profit and Loss 309
Financial Capital 66 Statement of Changes in Equity 310
Manufacturing Capital 70 Statement of Cash Flows 311
Social and Relationship Capital 80 Notes 313
Human Capital 90 Summarised Standalone Statement
of Profit and Loss of 15 Years 357

For more details, please visit:

www.nerolac.com
102nd Annual Report 2022 KANSAI NEROLAC PAINTS LIMITED

Sustainable future
Broadening horizons for a

3
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Farewell note from

Mr. H. M. Bharuka
Dear Shareholders,
After 36 years of service, which include 21 years as Managing Director
of KNPL, I have superannuated from the position of Vice Chairman and
Managing Director on 31st March, 2022.

In the last 21 years, the Company has grown in leaps and bounds year
after year winning admiration across stakeholders.

We have created a resilient organisation, and in the process made

Nerolac a brand to reckon with. We have strategically invested in building
state-of-the-art manufacturing plants, superior IT and digital platforms,
strong corporate governance culture along with a caring value system
for employees and society.

I now pass the baton to our Executive Director Mr. Anuj Jain. Anuj
has been with KNPL for the past three decades having joined as a
Management Trainee.

Do join me in wishing him good luck

H. M. Bharuka

4
============================~-
Message from Managing Director 102nd Annual Report 2022

Message from Managing Director

Mr. Anuj Jain

Dear Shareholders, the integrated potential by creating an organisation built on

I humbly assume the august office of the Managing Director openness, collaboration, innovation, and empowerment.
of this great organisation. I am honoured and excited to be The Company will continue to invest in a variety of
given this opportunity to lead and serve Kansai Nerolac initiatives towards empowering people at all levels to create
Paints Limited and I am committed to raise our core strengths a committed organisation, and in the process, create great
of resilience and excellence. value for all stakeholders.

I want to share my sincere thanks to Mr. Bharuka for creating Economic & Business Scenario
an extremely strong and vibrant organisation. In the year under review, the economic scenario witnessed
With great pleasure, I deliver our 102 nd
Annual Report a roller coaster ride. In the first quarter towards the end of
to you. April and throughout May, the industry saw muted volumes
due to curbs imposed on account of the second wave of
Organisation Philosophy COVID - 19 infections. The second and third quarter
The Company aspires to make its human capital the core witnessed good demand momentum in the decorative
of the business strategy. It endeavours to develop a culture segment. However, the automotive paint demand was
of collaboration and partnerships. The aim is to focus on affected by shortage of semiconductor chips. Material costs

5
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

continued to increase due to rising crude oil and chemical adhesives, rebar coatings, pipe coating, coil coatings to
prices which resulted in an unprecedented inflation. As a name a few. The Company witnessed strong growth in these
result, finished goods costs rose significantly during the year. segments. The Company has expanded the product portfolio,
In the fourth quarter, the world witnessed another crisis in distribution reach, dealer network and enhanced influencer
the form of war between Russian and Ukraine. This led to programmes. Various international product certifications like
crude oil prices reaching record highs, thus impacting prices REACH and WRAS helped us in business proliferations.
of chemicals and petrochemicals. Overall, the business
environment was extremely uncertain and volatile. Capacity Expansion and our Spread
We have invested in our manufacturing capabilities with
Performance Overview
backward-integrated plants across the country. These plants
Amidst the challenges, KNPL continued to expand its have in-house resin and emulsion manufacturing capabilities.
horizons by offering new products and solutions, expand During the year, we added resin facility in Sayakha and
its distribution network and enter new business segments, emulsion manufacturing facility in Amritsar (Goindwal Sahib).
resulting in top line growth of 24.7%. Due to steep inflation Both these investments will bring in operational efficiency
in material prices, the Company’s EBITDA is down by
and cut down logistics cost. KNPL has a manufacturing
23.3%. Hence, we sought price increases across all product
footprint that is spread across the country and provides
segments. In the Decorative segment, the price increase
next-door services to its institutional clients. We have created
has been sufficient to offset the inflation. However, in the
a distribution network of 99 depots and 7 distribution centres
Industrial segment, the price increases have been insufficient
to cater to our dealer network in the decorative business.
and short of countering the inflation.
The Board had declared and paid an interim dividend of Supply Chain Resilience
125% and proposed final dividend of 100%, aggregating to From raw material supplies to demand fulfilment, we have a
225% for the FY 2021-22. robust and responsive supply chain that is built on a strong IT
backbone. The team has done a phenomenal job in ensuring
Brand Proposition
continuity of supplies and ensured business continuity for its
In March this year, KNPL launched its new brand expression
customers despite numerous supply and logistics challenges.
“PAINT+”. The “+” here stands for our commitment to provide
KNPL focussed on ensuring higher OTIF (On Time in Full) for
our consumers with unique and additional product features.
our industrial customers and commissioned new distribution
The features built into our products offer benefits that resonate
centres for higher reach and service.
with emerging consumer needs and preferences. We have
also brought back the classic Nerolac jingle to revive the soul Digitalisation & Information Technology
of KNPL’s advertisements and media campaigns. Both these With the launch of multiple digital platforms, the organisation
initiatives will strengthen the Company’s market position in has made rapid progress in the digital arena. It has launched
the decorative segment in the coming year. several digital applications for both internal stakeholder i.e.
Employees and external stakeholders i.e. Dealer, Influencer
Technology & Innovation
and Customers. These initiatives were deployed across the
KNPL has a strong R&D set-up with cutting-edge technologies organisation to enhance agility, operational efficiencies,
in diverse business segments and coating applications. Our
visibility and real-time information.
parent company, Kansai Paint Co., Ltd., Japan and the entire
Kansai group of companies is a rich source of knowledge to During the year, KNPL upgraded its IT infrastructure with
upgrade our technical know-how. Our collaborations and tie- enhanced disaster recovery capabilities. We focussed on
ups with our overseas partners add to our intellectual capital governance and built sensitivity on cyber security amongst
and assets. We work closely with our customers to develop employees. We also conducted the external verification and
customised solutions. Development of sustainable and Vulnerability Analysis during the year.
environment-friendly products and solutions is a key focus
area for the R&D team. Care
I would like to offer my sincere condolences to all who
New Thrust Areas have suffered untimely bereavements because of the
KNPL has ventured into new business segments in the COVID-19 pandemic. This year, the second wave’s health
recent years including construction chemicals, wood-finish, consequences were far more severe. Despite this, we did our

6
Message from Managing Director 102nd Annual Report 2022

best to contain the spread of virus by providing our workers

and employees with vaccination drives and distribution of
We are on track to become water
safety equipment.
positive by FY 2024-25
People
As a testimony to the initiatives taken towards making KNPL
a congenial workplace, we were recognised as a “Great inculcates an individual feeling of social responsibility while
Place to Work” by the Great Place to Work institute for the also strengthening the Company’s community focus.
2nd time. The first certification was given in the year 2019,
and the second was given in the relevant year 2021. International Subsidiaries
In the international business too, there were similar
Integration challenges as seen in the domestic side with unprecedented
We have successfully integrated our subsidiaries, Marpol material price inflation coupled with supply challenges. Price
Private Limited (“Marpol”) and Perma Construction increases were targeted to offset the inflation. Focussed cost
Aids Private Limited (“Perma”), allowing us to derive reduction initiatives were undertaken to sustain margins.
significant benefits from synergies that have resulted in New product launches, marketing campaign, distribution
better operational efficiencies, market penetration, and expansion, CCD penetration and influencer programs
product mix for the Powder Coating and Construction initiatives too were undertaken during the year. Best practices
Chemicals business. in areas of productivity and sustainability were driven across
all the subsidiaries.
Sustainability Our international subsidiaries Bangladesh, Nepal and Sri
Strategy & Materiality Lanka have shown true resilience and have posted strong
topline growths. However, Sri Lanka is facing an economic
Sustainability has been one of the key focus areas for KNPL.
crisis, which has impacted business activity and peoples’
This year has seen furthering of these efforts to ensure
day-to-day lives. Under these circumstances, the Company
KNPL is topnotch in this area. KNPL practices sustainable
has taken measures to safeguard its business interest and
growth with a focus on protecting and nurturing our triple
its employees.
bottomline – People, Planet and Profit. As part of this
strategy, we are focussed on de-carbonisation, resource use,
Into the Future & Way Forward
Quality of life, Diversity and Governance as key
materiality areas. We are on track to become water positive We have embarked on a journey to place its people at
by FY 2024-25. centre of our strategy. We believe that by taking the “people
first” approach, we can create a positive and transparent
Climate Change workplace culture. A positive workplace culture leads to
high performance, both individually and organisation-wide.
We have reduced our carbon footprint in terms of energy
KNPL will foster a culture of collaboration, innovation and
usage and increasing the share of renewable energy. We
empowerment to create value for the organisation and
have created a framework for climate change management
its stakeholders.
with Board oversight. As part of this initiative, we are working
on inventorisation of Scope 3 emissions, Task Force on
In conclusion
Climate-related Financial Disclosures (TCFD) and adopting
Science Based Targets. We have also undertaken third-party Moving forward, the global economic scenario is changing
assurance for our sustainability initiatives in this year. with a more hopeful future ahead. We continue to strengthen
our core and broaden our horizons into the multiple
Community facets of the organisation. We are marching forward with
our People, Planet and Profit approach to create a
Community service and giving back to the society is an
sustainable tomorrow.
integral part of KNPL’s growth strategy. CSR initiatives
promote social growth with a focus on the vulnerable and
disadvantaged section of the community. We encourage Anuj Jain
and promote employee participation in CSR initiatives which Managing Director

7
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Key Highlights
BRANDING
This year, KNPL envisioned its new brand expression
of “PAINT+”.

PAINT+ is a testament to our commitment to offer world-

class products with added features. The “+” represents
our promise to provide products that go beyond standard
EROLAC
market offerings. It exemplifies our dedication to leverage
our Japanese expertise and legacy of over 100 years in
becoming the brand that goes beyond colour and finish.
PAINT+
ESG In 2021, Corporate Sustainability Assessment (CSA)
has ranked KNPL in the top quartile of the S&P ESG Index
KNPL has put environmental, social, and governance (ESG) in the chemical space. KNPL was also ranked No. 1 in
at the forefront of its strategy. It has been a front-runner in the paint industry and in top quartile in manufacturing
ESG disclosures. Global ESG Indices such S&P Gobal and space in the CRISIL ESG Compendium launched
FTSE have assessed the ESG performance of KNPL. in 2021.

E S G
;t @ ~
~ ~ ·~

8
 Key Highlights 102nd Annual Report 2022

-
DIGITAL RECOGNITION
Developed Pragati app for Influencers. Painters use this for
Gr,eat
redemption of loyalty points and receive payments in real Place
time. The application also has useful tools such as colour
KNPL was certified as a Great
To
picker, estimator, tool tips & knowledge bank comprising of
tutorial videos.
Place to Work for the second Work ,.
time by the Great Place to Work
Institute. Gertified
INNOVATION & PRODUCT JUL W21- ,UL 2022
CERTIFICATIONS IKDIA

In pipe coatings, amongst the new products developed

this year was “Neropoxy Solvent Free Coating” for Water
Pipeline Internal coatings, which has been certified by Water MANUFACTURING FOOTPRINT
Regulations Approval Scheme Ltd, UK. The Company successfully completed merger of Marpol
Private Limited and Perma Construction Aids Private Limited
Also, our NC range in wood finish segment was awarded
(previously Indian subsidiaries of KNPL). The manufacturing
REACH certification.
footprint now comprises 8 plants across different parts
Introduction of coating technologies for new substrates like of India.
Plastic, Aluminium Die Castings in Auto Segment.
Also, new emulsion manufacturing facility was commissioned
Developed a range of products like the C5 Fluoro Polymer in Goindwal Sahib plant and new resin manufacturing
Coatings, IPNet, Polysiloxane and anti-carbonation systems facility commissioned at Sayakha plant. Both this will render
under High performance coatings. operational and logistic efficiency.

-=
•I

9
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Performance Highlights

FINANCIAL HIGHLIGHTS

NET TURNOVER

`5,948.9 `4,770.9 24.7%

Crores Crores

EBITDA MARGIN

-680
10.9% 17.7%
Change Base
Points

PAT

`374.3 `530.6 -29.5%

Crores Crores

10
Performance Highlights 102nd Annual Report 2022

NON-FINANCIAL HIGHLIGHTS

TOTAL EMISSIONS (SCOPE 1+ SCOPE 2)

CAPACITY IN MILLION LITRES (MT OF CO2)

583 547 6.6% (ORGANISATION-WIDE)

39,410* 33,056 19.2%

R&D EXPENSE

`33.0 `30.6 7.8%

Crores Crores SPECIFIC WATER CONSUMPTION
(KL/KL OF FG) (MANUFACTURING FACILITIES)
CSR SPEND
-1.7%
1.16 1.25 -7.2%
`14.06 `14.3
Crores Crores

ELECTRICITY CONSUMPTION ENERGY CONSUMPTION

THROUGH RENEWABLE SOURCES IN % THROUGH RENEWABLE SOURCES IN %
(MANUFACTURING FACILITIES) (ORGANISATION-WIDE)

31 30 100 52 46 600

Change Base Change Base

Points Points

(* Increase in absolute emissions is due to the merger

of Marpol Private Limited and Perma Construction Aids FY 2021-22 FY 2020-21 Change
Private Limited with the Company.)

Note: Performance Highlights are based on standalone performance.

11
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Corporate Profile
A subsidiary of Kansai Paint Co., Ltd., Japan, Kansai Nerolac Paints Limited (KNPL) is one of
India’s leading players in the Paint industry, catering to the evolving need for newer Coating
solutions of customers. A future-focussed Company rooted in innovation, KNPL bespeaks
quality and manufacturing excellence that makes it a preferred choice of a growing and ever-
evolving customer base.

OUR VISION
0
OUR BRAND OUR MISSION
“We design Solutions that PROMISE We leverage superior technology
Protect, Inspire and Touch Lives to contribute to our Customers and
Renew Life
everyday” Society, in a sustainable manner,
with innovative Products and
Services, through a competent
workforce, built on a culture of
Customer Focus, Integrity and
Respect to our Stakeholders

OUR BRAND
EXPRESSION
PAINT+

OUR PURPOSE
Create Environments for a Healthy
and Beautiful future

12
----------------
Corporate Profile 102nd Annual Report 2022

Integrity
Customer Focus
We continuously strive to
understand and exceed
Customer expectations.
®
Accountability
We build strong trust We encourage organisation
with all stakeholders, by members to take responsibility
doing the right thing, and for their own actions and
by taking decisions that decisions, show commitment to
enhance the reputation ORGANISATIONAL all stakeholders, and accomplish
of the organisation in the
society. VALUES work in an appropriate and
efficient manner.
Core Values

-G- i care !

Respect
Innovation
We pioneer Innovation by We respect diversity and
engaging our collective wisdom embrace cultural and individual
and knowledge to create characteristics of organisation
new value propositions, and members, customers and
continuously strive to generate Entrepreneurial Mindset communities by showing empathy
original and novel solutions for and understanding the viewpoints
We facilitate the emergence of
products, services, and work of distinct beliefs, philosophies
entrepreneurial ideas that have a
processes. We experiment in and cultures. We encourage and
long-term perspective, originality
different and groundbreaking foster an environment of learning,
in thinking, and practicality of
ways to deal with value- teamwork and cooperation, that
execution, taking responsibility
creation opportunities or enables the development of all
to see these ideas through,
challenges, through a deep organisation members.
with ownership at all times.
understanding of We shall continue contributing
the issue at hand. to People and Society by
providing sustainable value to
all stakeholders.

13
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Our Product Portfolio

Our product proposition is designed to cater to the evolving needs of customers in the key
segments of Decorative and Industrial.

DECORATIVE - (NEW LAUNCHES)

Excel Mica Beauty Ceiling Nerolac Perma Nerolac Zinc Nerolac PU

Marble Stretch & Emulsion AquaSmart Rapid Set Yellow Primer Enamel 10 in 1
Sheen

DECORATIVE
Interior Range Exterior Range

Impressions Impressions Impressions Excel Top Guard Excel Top Guard Excel
UHD HD Ultra Fresh (Topcoat) (Basecoat) Total

Beauty Gold Beauty Beauty Excel Mica Excel Anti Suraksha Dust
Washable Gold Sheen Marble Peel Resist

Beauty Beauty Little Suraksha Suraksha Suraksha

Smooth Master Sheen Plus Acrylic

14
____________________J_
Our Product Portfolio 102nd Annual Report 2022

Designer Range Primers

Ideaz Glitter Metallics Excel Alkali Exterior Ready

Primer Primer Mix
Enamel

Synthetic Satin Premium Primer Popular Primer

WB WB
Wood Finish Waterproofing

____
........ _.,.
Gloria 2K PU Italian 2K PU ICRO Range Nerolac Perma Nerolac Perma Nerolac Perma
Nodamp Damp Protect Damp Protect
Adhesives Exterior Interior

Nerolac Perma
Super 2K Nerolac Perma Nerolac Perma
Nerofix Nerofix Nerofix
Waterproof Putty Waterproof Putty
Gold Super
Solider

Nerofix
Smart Soldier Emulsion
Range

15
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Our Product Portfolio

INDUSTRIAL-NEW ADDITIONS

Automotive:

4-Wheeler 2-Wheeler Commercial Vehicle

Developed high solid anti-chip primer Matt Lacquer for Petrol tank of High Weatherable Topcoat for Three-
with reduction in VOC Motorcycle with superior mar & scrub Wheeler was launched with Superior
resistance Gloss & Finish product

Metallic colours process from existing Coating for Rotamould Nylon High performance Solid Monocoat
4C-1B converted to 3C-1B Technology Petrol tank technology with High durability and
which offers lean process, energy Chemical Resistance
conservation and high productivity
have been introduced

Performance Coating:

General Industrial (GI) High Performance (HPC) Powder Coating (PC)

Neropoxy Solvent Free Coating” Five coat anticorrosive system Bonded metallic for appliance which is
for Water Pipeline Internal Coating developed and commercialised for alternate to chrome plating which has
and approved by Water Regulations Mumbai Trans Harbour Bridge. Its top helped to reduce the toxicity
Approval Scheme Ltd, U.K. (WRAS) coat is Fluoro polymer based which
has Superior exterior durability

16
 Our Product Portfolio 102nd Annual Report 2022

-
INDUSTRIAL

Automotive Performance Coatings Liquid

(General Industrial + High Performance Coating)

Applications in Industries Applications in Industries

Passenger Vehicles, Commercial Vehicles, Tractors, Petroleum, Metal Industries, Chemicals and Fertiliser,
Two-Wheelers, Three-Wheelers, Wheels and Auto Infrastructure, Cement Industry, Railways, Pipes Pre-
Ancillaries Coated Steel, Bridges, Drums and Barrels, Cylinders,
Electricals, Helmet, Pre-engineered Buildings,
Key Products Construction Equipment.
• Cathodic Electro Deposition (CED) and Acrylic
Key Products
Cathodic Electro Deposition (ACED) Primers
• 3 Coat – 1 Bake System • Polyurethane (PU) Primer and Top Coats

• Medium Solid, Thermo Setting Acrylic (TSA), • Chlorinated Rubber Coatings

Polyester Amino • Epoxy Coatings Alkyds – Primers and Top Coats

• Monocoat Metallics • Zinc Rich Coatings

• High Mar Resistant Clear Coats • Heat Resistant Coatings

• Super Durable Monocoats • Floor Coatings

• Heat Resistant Paints • Pipe Coatings

• Auto Interior Coatings • Coil Coatings

• Polyurethane (PU) Coatings for Metal and Plastics • Polysiloxane

• Fluoropolymer Coatings
• IPNet Coatings
• DTM Coatings
• Monocoat Metallic Coatings

Powder Coatings Auto Refinish

Applications in Industries Applications in Industries

Refrigerators, Washing Machines, Air Conditioner, After Market Repainting and Touch-up for Passenger
Light Fixtures, Electrical, Auto Components, Pipes, Vehicles, Commercial Vehicles, Two-Wheelers,
Rebar Steel, Architectural. Three-Wheelers, Bus Body, Auto Parts and Furniture.

Key Products Key Products

• Epoxy Polyester Powder, Epoxy Powder, Pure • Polyurethane Paints - Retan PG Eco, Cardea,
Polyester Polyurethane Nerokan, Acric EZ, Perfect Match
• Heat Resistance Powder • Nitrocellulose (NC) and NC Acrylic - NAP
• Rebar Coatings, Pipe Coating Powders • Modified Hybrid Alkyd-Based - Nova Plus
• Super Durable Powders, Bonded Metallic Powders • Putty - NC, Polyester, Body Fillers
• High Performance Anti-Corrosion Powder System

17
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Our Operational Footprint

Our operational footprint spread across the length and breadth of the country. All manufacturing
units provide a strategic and geographical advantage in serving our OEM clients and customers.
It provides the Company with a strong competitive edge. This year, Marpol Pvt. Ltd. and
Perma Construction Aids Private Limited was merged with KNPL.

Sayakha Plant, Gujarat

18
Our Operational Footprint

-==-==- - 102nd Annual Report 2022

8 PLANTS
• Jainpur, Uttar Pradesh
• Lote, Maharashtra
• Bawal, Haryana
• Hosur, Tamil Nadu
Existing Plants • Sayakha, Gujarat
• Goindwal Sahib, Punjab
• Kakoda, Goa (Marpol)
Upcoming Plant
• Sarigam, Gujarat (Perma)

1 UPCOMING PLANT
Visakhapatnam, Andhra Pradesh
Map not to scale. For illustrative purposes only.

99
DEPOTS PAN-INDIA

19
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Our Strategy and Future Orientation

We, at KNPL, have structured

our strategic roadmap around
the goal of delivering strong and
sustainable financial performance,
while creating sustained value for
our stakeholders, responsibly and
transparently.

20
-------------------'-
Our Strategy and Future Orientation 102nd Annual Report 2022

Strategic objective
Strengthen the core while expanding horizons

Use innovation and market development to strengthen the core product

portfolio, while leveraging existing capabilities to create new growth
engines by expanding into nearby geographies and allied businesses,
for delivering long-term sustainable value to the stakeholders, built on a
strong platform of organisational capability

#1 #3
Strategic priority Strategic priority

Strengthening the core Building organisational capabilities

With customers at the heart of our value creation Cognizant of their importance to our strategic
model and strategy, it is our constant endeavour charter, we are continually investing in Information
to deliver to their evolving needs and aspirations. Technology (IT), digital, people and internal
To this end, we are continuously investing in, and efficiency improvement programmes, with the aim of
strengthening, the levers of technology and service building the capabilities and competencies needed
orientation, product innovation, distribution, brand, to execute our vision.
manufacturing, and marketing.

#2 #4
Strategic priority Strategic priority

Expanding the horizons Delivering long-term

Led by a two-pronged approach, we are focussed sustainable value
on creating new avenues of growth by exploring new Delivering long-term sustainable value to all our
opportunities amongst customers and consumers, stakeholders remains the overarching goal of our
and by expanding across the Indian subcontinent strategic roadmap. To achieve this, we are regularly
where we have a mandate to operate. Leveraging strengthening governance, compliance and risk
our core competencies is the key to our expansion management functions, besides building a robust
into new market opportunities and it is the same sustainability framework.
philosophy that has powered our expansion beyond
Decorative and Automotive markets, to foray into
Performance Coatings and then Auto Refinishes.

21
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

OUR STRATEGY IN ACTION

#1
Strategic priority
Strengthening the core

Actions initiated
Technology Orientation
• Creation of need-based unique solutions for customers through high-end technology deployment at in-house R&D
facilities, both centrally and across the plants located in customer proximity
Created several need-based unique solutions for customers. Given below are some of them:
BUSINESS Product
Commercial Vehicle High Weatherable Topcoat
Performance Coating • “Neropoxy Solvent Free Coating” for Water Pipeline
• Five-coat anticorrosive system for marine environment
• Bonded metallic (chrome finish) for appliances

Decorative • Excel Mica marble stretch and sheen
• Nerolac zinc yellow primer (chrome free)
• Beauty ceiling emulsion
• Nerolac PU Enamel 10 in 1
Construction Equipment • Damp Protect Exterior
• Damp Protect Interior
• Rapid Set
Adhesive • Nerofix Super
• Nerofix Smart
Nerofix AquaSmart
Wood Coating Nerolac Wonderwood-2K PU interior

• Close collaboration with Kansai Paint Co., Ltd., Japan, to bring in high-end, homegrown technology solutions, to cater to
the specific needs of the modern Automotive Industry and other end-user industries
Several Product/Solution created for automotive customers in close collaboration with Kansai Paint Co., Ltd.,
Japan
Segment Product / Solution
4-Wheeler Developed high solid anti-chip primer with reduction in VOC
Metallic colours with 3C-1B Technology which offers lean process, energy
conservation and high productivity have been introduced
2-Wheeler • Matt Lacquer for Petrol tank of Motorcycle with superior mar & scrub resistance
• Coating for Rotamould Nylon Petrol tank
3-Wheeler • High Weather endurance topcoat

• Development of new solutions for diversified end users and industries by leveraging the vast unique technical capabilities
of Kansai Paint Co., Ltd., Japan and its group companies, Oshima Kogyo Co. Ltd., Japan, Cashew Co. Ltd., Japan, and
Protech Chemicals Limited, Canada

22
 Our Strategy and Future Orientation 102nd Annual Report 2022

New Products developed by leveraging the vast unique technical capabilities of:
Partner Development
Oshima Kogyo Co. Ltd., Japan Products Pyrosin STACK F150, Pyrosin PX 3103 & STACK ACT 250 are taken from
M/s Oshima & supplied to prestigious company for Chimneys which are exposed to
high heat temperatures & chemical atmosphere internally.

Service Orientation
• Unique service offerings for Industrial customers built on decades of know-how, and experience of working with
most Automotive lines in India and Japan, which is translating into enhanced value proposition for customers, led
by cost savings, reduced environmental impact and improved productivity resulting from value addition / value
engineering (VAVE)
Cost Saving, Reduced Environmental Impact & Improved Productivity (HM & MM)
Cost Saving Reduced Improved
Environmental Impact Productivity
No. of Product systems 6 12 5
developed with impact on

• High quality service with quick turnaround, coupled with convenience for Decorative customers
(dealers and influencers).

Dealer Painter / Influencer

ML Saathi App Database Migrated to version 2.0, which will help Upgraded “THE PRAGATI APP”, which will help
to increase Visibility and strategy alignment, along with better the painter to get the visibility about reward points,
Digital Connect with deco dealers. redemption, customised offers, real-time notification,
painter profile and painter dashboard.
Initiatives like enhanced loyalty programs, training
workshops and painter meets.

Product Innovation Nerolac Beauty Ceiling Emulsion is made with a

b) 
specifically modified silicon acrylic binder that provides
• Continued focus on pioneering innovative, revolutionary
outstanding whiteness and resistance to splatter. This
and globally best-in-class products in diverse market
white ceiling paint’s excellent concealing power and
segments, enabling dramatic improvements across key
smooth texture assist to conceal small surface flaws. It
parameters of finish quality, reduced cost of ownership,
dries rapidly to a matte sheen that is pleasing to the eye.
consumption, baking time, and environment-friendliness
We have provided details of product innovation in the Multiple Teams
Intellectual Capital of the capital section.
• Alignment of organisational teams and skills across the
value creation process to sharpen emphasis on varied
• In the decorative industry, Augmentation of our
environment-conscious “Healthy Home Paints” client groups in order to seamlessly serve their individual
positioning with a complete line of 100% Heavy Metal demands and ensure that the business model is tailored
Free by Design and Low VOC products that provide to the transforming market dynamics.
holistic painting solutions to consumers across a variety
of pricing range, through introduction of innovative KNPL expanded into multiple niche segments and
technology-based, cost-effective items. strengthening its market position in recent years. As a
result, various teams were created to focus on each of these
Nerolac Excel Mica Marble Stretch and Sheen is a
a)  segments. With the addition of new products, the team
highly durable water-based high-performance exterior ensured that the product portfolio was strengthened. These
paint designed with a unique flexible film technology that teams successfully developed full product range, expand
allows it to stretch up to 0.5mm to cover hairline paint distribution network, increase reach, and establish KNPL’s
cracks. It also comes with a 6-year-long warranty. presence in new markets.

23
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Backward Integrated Manufacturing Well-established Distribution Network

Facilities Pan-India presence through 99 sales locations and
30,500+ customers to reach out effectively to customers
• 8 (including Marpol & Perma) well-equipped
across regions.
manufacturing facilities for the production of paints, resins
and other intermediates, located strategically across
India, with most of them capable of serving a multiple Powerful Brand Focus
range of product streams, thus ensuring unwavering Nerolac PAINT+
customer confidence through uninterrupted service,
Our new brand expression of PAINT+ is a testament to our
including Just-in-Time (JIT) and cost competitiveness
commitment of providing world-class products that do more.
for Industrial customers
The “+” represents our promise of offerings products and
services that go beyond colour and meets evolving needs
Capacity Expansion of customers.
During the year, capacity expansions at our plants were
completed.
1. Sayakha - Resin Manufacturing facility
2. Goindwal Sahib - Emulsion manufacturing capacity

Expanding the horizons

New Market Segments

~ - - - #2 Strategic priority

For Adhesives, the company Nerofix set up in JV with the fact that the Company only entered this market a few
Polygel undertook many initiatives around strengthening years ago, its products have gained widespread acceptance.
and augmenting its product range, securing various Our coil appliances were commercialised this year and have
OEM approvals, developing connect with carpenters and gained momentum in the market quite well.
strengthening distribution. Investment in expanding portfolio
Tie-up with ICRO for high-end Wood Coating products
in PVA-based adhesives and masking tape has also been
For High-end Wood Coatings, KNPL further strengthened
made this year.
its tie-up with the Italian company ICRO Coatings. Focus
For Construction Chemicals, integration of channel partners on premium product range has increased significantly during
of Perma and the KNPL team has been completed. Further the year. To ensure a strong presence in wood coatings, the
the emulsion-based waterproof coating has yielded a great Company is augmenting its PU category wood-coatings range.
response and continues to be a growth driver. We entered new market areas with the goal of expanding
the product line and strengthening the Company’s reach
Increased focus on promising opportunities of coil / rebar /
and presence in other markets. The Company’s range of
floor / pipe coatings and other specialty coatings in Industrial
health and hygiene divisions was also broadened this year.
business, to deepen presence
(For further information, refer to the marketing section of the
The Company has witnessed significant growth in rebar
Management Discussion and Analysis Report (MDAR) of the
coatings & powder coatings. We have also expanded our
Board’s Report)
portfolio in pipe coatings through launching products for
Water Pipeline Internal coatings, which has been certified New Geographies
by Water Regulations Approval Scheme Ltd, UK. This Expansion beyond India through acquisitions in Nepal,
development places KNPL on a strong footing to enter Bangladesh and establishment of a Greenfield JV project in
this segment. Sri Lanka
In coil coatings, KNPL has introduced a unique collection Our progress on geographical presences is covered in the
of products that provide clients with unique value. Despite MDAR section under Indian subsidiaries and overseas
subsidiaries.

24
_________________J_
Our Strategy and Future Orientation 102nd Annual Report 2022

#3
Strategic priority
Building organisational capabilities

Strategic IT Deployment
• Successful deployment of cutting-edge IT tools to • Driving synergies through Clarity of Vision, Purpose,
improve processes, gain business insight, set policies Core Values, Code of Conduct, Competencies,
and ensure process rigor and productivity two-way Communication, challenging roles and
assignments, transparent personalised Performance
• Enabling integrated IT across the supply chain to drive
Management System
deep value for customers
KNPL has considered people its biggest asset and works
Digital Thrust relentlessly for employee development and growth. Details
of employee development and benefits is covered in Human
• Utilisation of advanced digital tools, such as Machine
Capital of the Capital Section.
Learning, Robotic Process Automation, Internet of
Things (IoT) and Chatbots, to secure increased business
benefits Internal Efficiency Programme
• Cohesive Enterprise-wide savings programme, driven
• Enhancement of Decorative Paints manufacturing
through cross-functional teams of R&D, supply chain,
capabilities with commissioning of state-of-the-art Digital
procurement and finance
factory at Goindwal, Punjab
Several digital initiatives were undertaken during the year • Continuous efforts to drive efficiencies and increase
organisational capabilities across the value chain for
for every stakeholder. Same is mapped and detailed under
further business development and growth
Intellectual Capital of the Capital Section.
Comprehensive cost management initiatives are undertaken
Nurturing People at organisation level through cross-functional teams. Also,
collaborative projects are undertaken with value chain
• Professional approach, led by equal opportunity for
partners for cost reduction and efficiency across the chain.
all employees and investment in their alignment with
organisational strategy

#4
Strategic priority
Delivering long-term sustainable value

Governance, Compliance and Risk Management The Company tracks all regulatory compliances online,
through the Legatrix system. The system is constantly
• Maintenance of highest standards for all stakeholders
updated regularly with all the changes in the compliances
through adherence to values of strong and transparent
Corporate Governance, backed by robust practices and as they change. Online tracking and tracing of completion
disclosures helps ensure strict adherence to regulations. In addition,
the Company also tracks any legal cases through the
• Regular Internal Audits, and monitoring of Control Roznama system.
Efficiency Index and Robust Control Index
While ensuring compliance with the legislations and
• System-based controls, as well as compliance tracking regulations of the paint industry, KNPL continues to broaden
and reporting, to ensure full visibility to the Management its sustainable horizons.
• System-based Enterprise Risk Management Framework
Sustainability Programme
to actively track risks and chalk out mitigation strategies,
which are presented to the Board from time to time. • Robust sustainability programme, focussed around
environmental consciousness, safety, reduction in carbon
KNPL has developed a dashboard of key legislation changes
emissions, water conservation, waste management,
that are notified by various Government Authorities and is
renewable energy, livelihood and skill enhancement
tracked by the Management for with respect to requirements
and implementation. • Voluntary publishing of efforts on website since 2012.
This is covered under Materiality chapter, Our ESG Approach
and Natural Capital of the Capital Section.

25
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Our Value Creation Model

INPUT VALUE CREATION PROCESS

Financial Capital
Total borrowings NIL
Total equity `53.89 Crores
• Retained earnings `4,117.04 Crores OUR PURPOSE OUR VISION
• Capital expenditure `229.00 Crores Create Environment We design solutions that
for a healthy and Protect, Inspire and Touch
Manufacturing Capital
beautiful future Lives every day
Number of Plants (Nos.) 8
Property, plant and equipment
`1,701.27 Crores
• Material Cost `4,129.26 Crores
OUR MANUFACTURING PROCESS
Intellectual Capital
Spend on R&D (including capex)
`33.00 Crores
• Innovation and technical sessions
held in different forums 126 Nos.
• Royalty `16.87 Crores
Premixing Filling
Natural Capital
Total Energy Consumption
.. ..
444907 GJ (Within Organisation)
• Renewable Energy 231112 GJ
• Specific Water Consumption
1.16 KL/KL of (FG)
• Rainwater used in Process 8659 KL
- .
.. - ...
• Green Belt 33%

Human Capital
Permanent Employees 3,105
Grinding Tinting
Employee Training 4.2 .
..
(including safety)
in mandays / employee / year

Social and Relationship Capital

Raw Material Supplier Base
500+ Nos.
- .. - .
..
Thinning
• Total Suppliers audited 13 Nos.
• CSR Spend `14.06 Crores

26
------------'-
Our Value Creation Model 102nd Annual Report 2022

OUTPUT AND OUTCOMES

Financial Capital
Market Capitalisation `25,178 Crores
(As on 31st March, 2022)
OUR VALUES Revenue generated from Operations `5,948.90 Crores
EBITDA `647.34 Crores
PAT `374.33 Crores
Dividend paid including dividend distribution
tax `282.93 Crores (Paid during FY 2021-22)
Integrity Accountability
Manufacturing Capital
Increase in plant capacity 36 Million Litres

Intellectual Capital
No. of Patents Filed 3
Entrepreneurial Customer New Products Launched 46
Mindset Focus
Natural Capital
I • GHG emissions 39,410 MT of CO2 Eq.

if -G- (Scope 1+Scope 2)

• Hazardous Waste generated 0.23% of
Finished Goods
Respect Innovation • Liquid Discharged 817* KL
• GHG emission avoided 41%
• Recycled / reused water 22.7%
* (Including Marpol and Perma)

Human Capital
Revenue per Permanent Employee `1.92 Crores
BRAND PROMISE *GPTW Trust index 73%
Renew Life *Once in 2 years

Social and Relationship Capital

New Raw Material Suppliers Added 7 Nos.
Local sourcing 65%
BRAND EXPRESSION
Lives touched through CSR initiatives 95,065
PAINT+
Tax Paid `490.41 Crores

27
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Staying Engaged with the Stakeholders

Internal Stakeholders

Stakeholder 8
~ Shareholders &
Group t ,I. Business Partner ..-----+---,
Employees
Investors 888
~
Stakeholder Our parent company ‘Kansai They provide financial capital Employee skills, knowledge,
Importance Paint Co., Ltd., Japan’ gives for business growth and help experience and commitment
us technology know-how and improve business image guide our continued success
support product development for
automotive business

Channels of • Emails • Board Meetings • Review Meetings

communication • Board Meetings • Investor / Analyst Meets • Emails
• Company Functions • Annual Report • Appraisals (Contest - Nerolac
• Audits and Review Meets • Media Updates and Press Premier League)
• Multi-Stakeholder Platforms Releases • Employee Engagement
(Conferences, Knowledge- • Website Surveys
sharing Conclaves) • Work Line Portal, Training
Programmes, Idea
Management
• Monthly Newsletter
‘Impressions’
• Town Hall Meetings
• ‘Coffee with HR’
• Suggestion Schemes and
Quality Circles
• Advanced Business Skills
Modules
• Great Place to Work Survey
• I am Nerolac App
• Idea Management Portal

Purpose and • Business Growth & Strategy • Business Growth & Strategy • Training and Skill Development
scope of • Risk Management • Employee Well-being
engagement
• Risk Management
• Corporate Governance • Corporate Governance • Employee Experience
• Financial Performance • Financial Performance • Career Progression
• Operational Performance • Operational Performance • Occupational Health and Safety
• Technology Assistance

KNPL’s • Financial Capital • Financial Capital • Human Capital

response • Corporate Governance
discussed in
• Intellectual Capital
• Manufacturing Capital
• Natural Capital
• Human Capital
• Social and Relationship Capital
• Corporate Governance

28
-------------------'-
Staying Engaged with the Stakeholders 102nd Annual Report 2022

External Stakeholders

Stakeholder
Group Customers Suppliers Community

Stakeholder Our success and sustained They are a critical part of our Communities give us social
Importance business growth are defined by value chain, enabling us to scale licence to operate and it is our
meeting customer expectations in operational efficiency and exceed responsibility to uplift and foster
the given business climate customer demands strong relationships with them

Channels of • Emails • Emails • Community Welfare

communication • Meetings • Meetings Programmes
• Customer Satisfaction Survey • Supplier Portal • Community Visits / Meeting
• Multi-Stakeholder Platforms • Supplier Audits • Local Authority and Town
(Conferences, Knowledge- • Vendor Development Council Meetings
sharing Conclaves) Programmes
• Grievance Redressal • endor Performance /Rating
V
• Multi-stakeholder Platforms
(Conferences, Knowledge
Sharing Conclaves)
• Joint Value Creation
Programme for Cost
Competitiveness
• Supplier Surveys

Purpose and • Customer Satisfaction • 

Transparency • Improvements in Social
scope of • Timely Delivery • Sustainable Supply Chain Infrastructure
engagement
• Quality • Procurement Practices • Skill Development Programmes
• Product Performance • Capacity Building • Health & Environment
• Product Innovation • Timely Payment • Promoting Education
• Technology Advancement • Innovation • Sanitation and Safe Water Supply
• L ong-Term Value Creation & • Cost Reduction • Local Employment
Innovation • Grievance Redressal

KNPL’s • S ocial and Relationship Capital • Social and Relationship Capital • Social and Relationship Capital
response • Intellectual Capital
discussed in

29
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Materiality Assessment
Materiality is an important tool to identify key topics that are critical to our business performance
and also interests our stakeholders. Analysis of these material topics helps us define
our strategic goals and ambitions, and thereby institute an effective sustainability
framework. Our materiality processes are in line with the Global Reporting Initiative (GRI)
Standards Guidance.

MATERIALITY
DETERMINATION PROCESS
We conduct sectoral analysis, study industry peers,
Identification & seek guidance from sustainability standards and
frameworks, and based on our learnings from previous
Assessment of experiences, we identify a comprehensive list of material
topics. The identified material topics are then prioritised
Material Topics based on our engagements with key internal and
external stakeholders; and through senior management
interactions. A suitable action plan is then instituted
along with mapping of strategic goals and targets. The

~
performances against the set targets are monitored and
Prioritisation of action plan is revisited as required.
Material Topics

g Set Strategic Goals

and Targets

Develop Action
Plan

Review of
Performance

30
-------------------'-
Materiality Assessment 102nd Annual Report 2022

MATERIALITY
During the reporting period, we have categorised our material topics under 5 broad areas: Decarbonisation, Resource Use,
Quality of Life, Diversity and Governance

Decarbonisation Resource Use Quality of Life

• Energy Management • Water Management • Human Rights

• Emission Management • Waste Management • Occupational Health
• Climate Change • Product Stewardship and Safety
• Responsible Product • Employee Engagement
• Sustainable Supply and Well-being
Chain • Community development
• Customer Satisfaction

Diversity Governance

• Gender Diversity • Corporate Governance

• Inclusivity • Risk Management
• Compliances
• Innovation / IP
Management

31
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Materiality Assessment
MATERIAL TOPICS

Materiality Material Topic GRI Topic Boundary Capitals Impacted

Decarbonisation Energy Management • GRI 302: Energy Internal and External • Natural Capital
Emissions • GRI 305: Emissions Internal and External • Natural Capital
Management

Climate Change • Non-GRI Internal and External • Natural Capital

Resource Use Water Management • GRI 303: Water and Internal and External • Natural Capital
Effluents

Waste Management • GRI 306: Waste Internal and External • Natural Capital
Product Stewardship • GRI 416: Customer Internal and External • Intellectual Capital
Health & Safety • Manufacturing Capital
• Social and Relationship
Capital

Responsible Product • Non-GRI Internal and External • Intellectual Capital

• Manufacturing Capital
• Social and Relationship
Capital

Sustainable Supply • GRI 308: Supplier Internal and External • Social and Relationship
Chain Environmental Capital
Assessment • Natural Capital
• GRI 414: Supplier Social
Assessment

Quality of Life Human Rights • GRI 412: Human Rights Internal and External • Human Capital
• Social and Relationship
Capital

Occupational Health • GRI 403: Occupational Internal • Human Capital

and Safety Health and Safety

Employee • GRI 401: Employment Internal • Human Capital

Engagement and • GRI 404:Training and
Well-being Education

Community • GRI 413: Communities External • Social and Relationship

Development Capital

Customer • Non-GRI External • Social and Relationship

Satisfaction Capital

32
-------------------'-
Materiality Assessment 102nd Annual Report 2022

Materiality Material Topic GRI Topic Boundary Capitals Impacted

Diversity Gender Diversity • GRI 405: Diversity and Internal • Human Capital
Equal Opportunity

Inclusivity • GRI 406: Non- Internal • Human Capital

discrimination

Governance Corporate • GRI 102: General Internal • Financial Capital

Governance Disclosures • Human Capital
• Social and Relationship
Capital

Risk Management • GRI 102: General Internal • Financial Capital

Disclosures • Manufacturing Capital
• Intellectual Capital
• Natural Capital
• Human Capital
• Social and Relationship
Capital

Compliances • GRI 307: Environmental Internal and External • Financial Capital

Compliance • Manufacturing Capital
• GRI 419: Socio-
 • Natural Capital
economic Compliance • Social and Relationship
• Capital
Innovation / IP • Non-GRI Internal and External • Financial Capital
Management • Manufacturing Capital
• Intellectual Capital

33
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Opportunities & Threats

We define an opportunity as a set of circumstances with an uncertain outcome, requiring
commitment of resources. The paints industry faces numerous threats, some of which are
volatile and uncertain, requiring agile decision-making and effective strategies that mitigate
exposure and harness the available opportunities.

Per Capita Consumption

Policies Paint consumption per KG in
New Code on Wages, India is low as compared to
OHS&E, Social developing countries
Security, Plastic Waste Increased focus on Home
Management, Chemicals improvement due to work
Safety Management from home
Liquidity support to Growing preference for
MSME sector personal mobility
r;i
Infrastructure Thrust Rural Thrust
The government is expected Budget focussed on
to continue its push towards increased spending
infrastructure growth which towards agriculture
will provide great impetus to
Increase in income
the economy OPPORTUNITIES of rural consumer

Environment New Market sectors

Increase in legislation brings Forays into new opportunity
more consciousness in saving areas with huge potential for
cost, energy saving and growth such as Construction
sustainable paint product Chemicals, Adhesives, Coil
Specialty Niches
Coatings, and Health &
Reduction in energy Speciality products in the Hygiene
consumption at customer form of Speciality coatings
production lines through product represents an opportunity
and process innovations for the company to leverage
Growing use of renewable its technical strength i.e.
energy Coatings for water pipeline

34
Opportunities & Threats 102nd Annual Report 2022

THREATS

Pandemic
• Disruptive effect of COVID-19
pandemic on demand
• Looming threat of global recession
• Lockdown restrictions
• Supply chain disruptions
• Employee Health & Wellness

Geopolitical
Emerging geopolitical trade
restrictions and supply chain challenges

New Competition
New competitors are entering
the market

Climate change /
Unpredictable Monsoon
• Global warming
• Unpredictability of monsoon in India
and change in rainfall pattern

Financial
Volatility in Indian Rupee (`) and
US Dollar ($) exchange rates

Cyber-Security
• Data loss/Thefts
• Domain-based threats
• Hacktivism
• Site non-availability

7 35
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Risk and Concerns

In a business environment that is constantly under churn, Risk Management becomes a top
priority for KNPL in order to guard against any eventuality, while at the same time, being
able to extract maximum benefit out of favourable conditions. The Company follows a Risk
Management framework, where the risk committee meets regularly to identify imminent
and potential risks, as well as documenting risk mitigation measures to eliminate or reduce
the event.

STRATEGIC RISK FINANCIAL RISK

These risks revolve around Competition (existing Financial risks originating out of currency fluctuations
and New), brand, growth and profitability, technology, and market volatility have the potential to affect
and service strategy during normal and force Company bottomline directly. Thus, these risks are
majeure situations. Strategic risk identification and dealt with advance planning, taking necessary steps
mitigation remains a top priority activity at KNPL, and for hedging against such outcomes.
contingency measures are put in place for issues
emanating out of the same.

OPERATIONAL RISK STATUTORY RISK

While pursuing innovative product offerings and With a network spanning across India and overseas,
radical business models, there are certain risks KNPL makes sure that the business operates within
associated with product delivery, Service Level the ambit of law and necessary legal compliances
Agreement adherence, quality, and environmental are followed. Combining in-house expertise and
impact amongst others. In order to tackle these knowledge of statutory compliances along with
risks, KNPL has developed robust mechanisms that professional legal services, KNPL ensures that
ensure that while being innovative, key operational there are no lapses on the regulatory front, and the
parameters are never compromised and we deliver Company functions within the legal and statutory
on the promise that we make to customers and framework.
stakeholders in a sustainable and safe manner.

36
Risk and Concerns 102nd Annual Report 2022

SYSTEM RISK PEOPLE RISK

With all operations conducted using business With the industry growing at a fast pace and demand
software, ensuring high availability of systems, for experienced and trained manpower outstripping
disaster management and cybersecurity along with supply, the ability to retain existing talent and attract
maintaining proper controls to ensure that operations new professional talent assumes crucial importance.
are not compromised, remains a top management The Company has a structured process for potential
priority. The Company takes many steps proactively identification, talent management and development.
to ensure that potential risks are minimised.

COMMODITY RISK CLIMATE CHANGE

There are several raw materials which are directly Impact due to Climate change has been identified as
driven by crude oil. These are monitored on regular an organisation risk and can impact our reputation and
basis using pricing trends and forecast from growth in the long-term. The company has created an
internationally reputed news agencies. Appropriate organisational structure and framework with Board
coverage is taken on rising trends and inventory is oversight to manage the climate change. As part of our
cut in declining trends. Wherever direct correlation mitigation plan to reduce the risk due to climate change,
exists, cost sheet is monitored to calculate delta we plan to reduce the environmental impact of our
changes and accordingly purchase prices are operations through use of renewable energy, reducing
decided. For metal-related buying, price indices our energy consumed per unit of paint produced,
such as London Metal Exchange (LME) are used to develop environment-friendly products, develop
check on trends. Additionally, import data is tracked products with efficient resource use, collaborate with
to compare average import prices and buying our supply chain partners and customers for reducing
prices. Accordingly, appropriate actions are taken to the carbon footprint in the whole value chain.
minimise commodity risks.

37
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Nurturing our Capitals and ESG approach

We follow a triple bottomline (3P – People, Planet and Profit) approach and judiciously
manage the six capitals (Natural, Human, Financial, Manufactured, Intellectual and Social
& Relationship) to achieve our strategic objectives. As a responsible corporate citizen, we
have mapped our capitals to the relevant United Nations Sustainable Development Goals
(UN SDGs).

Natural Capital Social and Relationship Capital

Intellectual Capital

Financial Capital
Human Capital

II
I

■m■
.,: m
Manufacturing Capital
~ l I
' , I
J----- I I 'I

Ill! " Iii '

1"11
I
I
• I.

38
-------------------'-
Nurturing our Capitals and ESG approach 102nd Annual Report 2022

... Governance

Manufacturing
Capital

Financial Intellectual
Capital Capital
PROFIT

Sustainability

Human
Capital Natural
Capital
PEOPLE PLANET

Social &
Relationship
Capital

Ris k
kM wor
anagement Frame

39
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

ENVIRONMENTAL
Reducing Our Environmental Impact & Sourcing Sustainably

DECARBONISATION RESOURCE USE

Approach: Approach:

Increase contribution of energy from renewable • Reduce our water footprint by increasing water
sources efficiency, rain water and recycled water consumption
within our operations
• Adopt targets in line with Science-Based Target
initiative (SBTi) • Improvingwater availability in the communities
where we operate through watershed development
• Undertake risk assessment as per Task force on Climate projects
related Financial Disclosures (TCFD) framework

• Reduce Specific Power Consumption (SPC) • Co-processing of waste across all plants
• Green Belt Development • Incremental Specific Water Consumption (SWC)
and Specific Hazardous Waste Generation (SHWG)
Commitment: reduction targets

• 
RE 70 (70% Electricity from Renewable source) • Leveraging our R&D strength to develop green,
by 2030 sustainable, and responsible products

• Carbon Neutrality Commitment:

• Reduce Specific Power Consumption 
Being Water Positive by FY 2024-25
• Divert waste away from landfill

Increase sustainable product portfolio

SOCIAL
Empowering People & Communities

QUALITY OF LIFE DIVERSITY

Approach: Approach:
• Community Development • Fostering
diversity and nurturing inclusivity by
• Promote Equality promoting advancement for our colleagues, culture,
and communities
• Employee Engagement
• Promote Human Rights • Ensured no discrimination on the basis of gender,
race, age, religion and ethnicity
• 
Robust Code of Conduct
• 
Dedicated Internal Complaints Committee (IC) Commitment:
• Promote Safe and Healthy Working Conditions
• Achieve 2.5% gender diversity by Mar’24
Commitment: • Achieve 0.25% for differently abled by Mar’24
Zero human rights abuse
• Zero incident-accident
• Foster behavioural-based safety culture

40
____________________J_
Nurturing our Capitals and ESG approach 102nd Annual Report 2022

GOVERNANCE
Empowering People & Communities

GOVERNANCE

Approach: Commitment:
• Enterprise Risk Management • Zero non-compliances
• Board Oversight • Reduce Enterprise Risk
• Statutory Compliances
• Fair Practices across Value-Chain

S&POOwJOi'.lff
lndleos
IC. . . . . . . .. . . . . . .
S&P
Featured in the
-
CRISIL
Recognition

.II D l ' ~O:qaa,

CRISIL ESG Gauge
- - - -- ---
Ranked in Top Quartile
NSE 50
Featured in NSE 50
Top Quartile of in Indian perspective Companies evaluated
Global Chemical on ESG landscape - for ESG footprint
Industry S&P Manufacturing space
ESG Index in and rated #1 in Paint
CSA 2021 Sector

CDP
-
Responded to the CDP for Climate Change
Participation
t- - - - ---
FTSE4Good
Remaining a constituent of the
& Water Security FTSE4Good Index

- Assurance
- - - -- ---
Our disclosures on Key ESG parameters are independently assured by a third-party external agency (M/s Aneja
Associates) based on International Standard on Assurance Engagement (ISAE) 3000. Additionally, the assurance has been
given against the disclosures’ adherence to the GRI’s Sustainability Reporting Standards.
The assurance report can be accessed at our sustainability web-link:
https://www.nerolac.com/corporate-sustainability/downloads.php

41
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Natural Capital

42
 Natural Capital 102nd Annual Report 2022

As one of the most trusted and admired

brands, we recognise our role in driving change
for better. At KNPL, we have always been
a front-runner in adopting newer concepts
and manage our natural resources efficiently.
With environmental stewardship at the core of
our sustainable strategy, we are consistently
focussing on the highest priority ESG issues. We
are strengthening our long-term resilience by
adopting a holistic approach and implementing
pioneering initiatives in the areas of resource
optimisation, carbon footprint reduction, circular
economy, thereby building a sustainable value
creation model.

Note:
For FY 21-22
Manufacturing Facilities includes 8 plants (including plants of merged entities - Marpol
Private Limited and Perma Construction Aids Private Limited)
Organisation-wide includes 8 plants, R&D centre and Head Office

43
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Natural
Capital
Backdrop Response
These challenging times have made every individual and With robust systems, structured processes and exacting
an enterprise realise the dynamic nature of changing global standards in place, we take large strides towards attaining
environmental issues and its impact on the ecosystem, as environmental stewardship. We adopt an end-to-end
whole. Resource scarcity, climate change and environmental approach and consistently track our performance against
pollution have become pressing issues not only for livelihood the well-established comprehensive KPIs. Addressing the
but also for business and the planet at large. The World environmental issues has not only enabled us to ensure our
Economic Forum in their latest global risks perception compliances but also enhanced our brand reputation and
survey has ranked 4 out of 5 top risks in terms of likelihood thereby fostered our business growth. Our ESG commitment
as environmental risks. At KNPL, with our strategic is reflected through our policies and frameworks; and is driven
commitments we strive to minimise our environmental by our organisational ethos, our leadership’s vision as well as
footprint and incorporate best practices to achieve our set our long-term action plans. We have adopted a company-
goals and targets. wide OHSE (Occupational Health, Safety and Environment)
policy aligning with ISO 14001 and ISO 45001 standards.

IMPACT ON SDGs

FOCUS OF OUR RESPONSE

 Material Management  Water Management

 Sustainable sourcing  Reduce Specific Water Consumption (SWC) by
 Quality raw material procurement reducing freshwater consumption

 Increase resource efficiency  Increase usage of rainwater in process

 Water replenishment through watershed development
 Energy Management projects under CSR in neighbouring areas
 Energy-efficient operations across facilities through
varied ENCON initiatives  Waste Management
 Maximising our renewable portfolio in our total  Reduce Specific Hazardous Waste Generation
energy consumption (SHWG) by reducing process waste generation
 Divert Waste away from Landfill
 Emission Management and Climate Change
 ZERO Liquid Discharge
 Reduce GHG Emission Intensity
 Reduction of Plastic waste in line with Extended
 Improved air quality Producer Responsibility
 Commitment to Science Based Target initiative
(SBTi)  Greenbelt Development

 Ensuring Environmental Compliances

44
____________________J_
Natural Capital 102nd Annual Report 2022

Material Management Performance

Being a paint manufacturing industry, our major input Packing Materials
raw materials comprise pigments, binders, additives and In FY 2021-22, we consumed 32,348 MT of packing material
solvents. We consciously use these materials and embrace which included metal tins, drums, plastic barrels, containers,
resource efficiency. We continuously strive to reduce our plastic bags among others. At present, we have initiated
material losses and achieve the conversion of raw materials using recycled plastic in our plastic containers for specific
into finished goods to the maximum extent. products and going forward we intend to increase the content
of recycled materials in our packaging and extend to other
range of products as well. We are closely working with our
Thrust areas value chain partners to meet the common goal and drive
sustainable packaging.
Sustainable Sourcing
• Focus on identification and adoption of materials
derived from renewable source
During the reporting period, we
• Engaging suppliers on ESG and procuring quality
materials from suppliers who have a sustainability recovered approximately 17.6 MT
program in place. of TiO2 with De-dusting machines
across KNPL.

Performance
Over 65% of our materials are sourced from suppliers
Energy Management
who have a formal sustainability program in place.
Energy efficiency enhancement is one among the key
environmental indicator for us. We continue to remain
Thrust areas committed in reducing our energy footprint and are constantly
driven to undertake varied energy-saving initiatives; moving
Resource Efficiency to environmental friendly and cost-effective options.
• Process automation for improved accuracy and
reduced material loss Thrust areas
• Close-loop manufacturing process
• Robust controls on material additions Energy Efficiency Enhancement
• Adoption/promotion of various reuse and recovery • Adoption of measures to reduce energy
initiatives consumption and augment per watt productivity
• Reduce Energy intensity - Specific Fuel
Consumption (SFC) and Specific Power
Consumption (SPC)

45
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Approach: Specific Fuel Consumption (SFC) - Manufacturing

Facilities (LT/Ton of Resin)
At KNPL, progress in energy management is measured
through key indicators of specific power consumption,
FY 21-22 49
specific fuel consumption, Green Power capacity addition,
% Green Power, Power factor controls, Fuel mapping and FY 20-21 48
switching to greener options.
FY 19-20 46
Performance
FY 18-19 50
In FY 2021-22, we consumed 4,44,907 GJ of energy within
the organisation, while our overall energy intensity was 1.24 FY 17-18 49
GJ/ KL of FG.
FY 16-17 53

FY 15-16 57
Method of Calculation
Energy Intensity is ratio of Total energy (Fuel + Power +
Heat and Steam) consumed within factory premises
organisation-wide (Manufacturing facilities, R&D centre Method of Calculation
and Head Office) to Total Production of Finished Goods Specific Fuel Consumption is ratio of fuel consumption
during specified period. in boilers at Plants to Total Resin Production during
specified period.

Specific Power Consumption (SPC)

14% reduction
(KWh/KL of FG)

FY 21-22

FY 20-21

FY 19-20
- 171

180

184
r
Specific Fuel Consumption (Manufacturing
facilities) since FY 2015-16

FY 18-19 185 Focussed approach and consistent work along the lines of
“Energy security” theme has helped us reduce our energy
FY 17-18 182 cost Y-o-Y; at the same time adopt environment-friendly
technologies thereby reducing our Carbon footprint. In the
FY 16-17 183
current year, our focus was to improve the efficiency of
FY 15-16 188 systems at plants. Replacement of conventional pumps/
motors with energy efficient options, conversion of motors
starters to star / delta based on loading pattern, installation
of cyclic timers on mixers, descaling of water jackets were
Method of Calculation
undertaken thereby reducing overall power consumption
Specific Power Consumption is ratio of electricity which led to improvement of energy efficiency.
consumed (from all sources) at Plants to Total
Production of Finished Goods during specified period.

9% reduction
Electricity consumption is sum of electricity received
from grid (i.e. state electricity board), electricity
generated from DG set and electricity from renewable
energy sources at respective manufacturing facility. Specific Power Consumption (Manufacturing
facilities) since FY 2015-16

46
__ ________
Natural Capital 102 _ __
Annual Report J_
2022 nd

Energy is also used in the form of steam and heat in our Heat & Steam generation through
manufacturing processes. Most of the steam and heat Biomass based Boiler
requirements are being met through biofuel and biomass
based solid fuel boiler.
17,293
Thrust areas ____ Q
Diversification of Energy-mix
Total steam
consumption (MT)

• Increasing renewable portfolio – Solar and Wind

1,93,807
power
• Transitioning to cost-effective and environment-
friendly cleaner fuels
• Sustaining our consumption of heat and steam
through biofuels and biomass based boiler
rw"\ Total heat consumption
(Lakh Kcal)

Approach:
We constantly search for alternate sources to increase our
share for green-energy and accordingly plan our initiatives
based on the feasibility and applicability. This in turn allows
our facilities to be increasingly self-reliant in their energy
needs, and thereby reduce the carbon footprint.

Performance
In FY 2021-22, the total renewable energy consumed was
2,31,112 GJ which accounts to 52% of our total energy
consumption.

% of Electricity from Renewable sources -

Manufacturing Facilities

FY 21-22 31

FY 20-21 30

FY 19-20 23

FY 18-19 19

FY 17-18 14

FY 16-17 6

FY 15-16 3

47
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

% of Process Heat & Steam - Way Forward

Manufacturing Facilities Energy Efficiency enhancement
Going ahead, we have an action plan in place for Energy
FY 21-22 100
efficiency improvement:
FY 20-21 98 • EMS implementation for real-time monitoring of Energy
trends and timely corrections for any deviations
FY 19-20 98
• Auto synchronisation of DG sets based on load for better
FY 18-19 92 efficiency
FY 17-18 90 • New Technologies - Infinite uptime real-time vibration
monitoring system for complete analysis of rotating
FY 16-17 83
equipments for energy usage optimisation
FY 15-16 82 Additionally, we have undertaken multi-year plan for
Implementation of IoT-based energy management system
across KNPL comprising of energy dashboards and trends
which will giving meaningful insights.

During the reporting period, the following

Diversification of energy-mix
Carbon Neutrality projects were commissioned
which enabled us to further increase our green Solar Capacity augmentation

footprint in the overall energy mix. We have gone with two-pronged approach for solar capacity
augmentation wherein we plan to replace hazardous
• Increasein green power quantum through 3rd party
asbestos roof sheets with Galvanised colour coated sheets
sourcing at Hosur plant
and subsequently add on solar power panels.
• Increase in quantum through Group captive wind power • 
Solar rooftop capacity addition of 1.2 MW at Bawal
at Hosur plant
• 
Solar rooftop capacity addition of 0.6 MW at Jainpur
• Switchingto Piped Natural Gas at Bawal which is a
clean and environment friendly fuel Our current solar power capacity stands at 5.3 MW, and
through above implementation we plan to increase the solar
power capacity by 7.1 MW.

Captive Wind Power augmentation

Renewable Group Captive at Jainpur • 
Captive wind turbine at Hosur of 4.2 MW
Energy cost is a major contributor in an overall operating
cost of a manufacturing plant. “Group captive” offers dual Alternate power sourcing
benefits - cost optimisation and increase in green power. • 
Group Captive Power sourcing capacity of 5.7 MW at
“Group Captive” mode is one of the OPEN ACCESS Jainpur plant
arrangements, wherein we can purchase power at lower • 
Third-party Power sourcing of ~1.25 MW at Lote
tariff as compared to State Electricity Board tariff. By FY 2022-23, we aim to source 41% of our total energy
In order to reap the benefits of the same, we have consumption through renewable energy sources.
executed a Power Purchase Agreement (PPA) and a
Shareholders Agreement (SHA) with one of the reputed OUR COMMITMENT
developers. Under this arrangement, we have tied up for

70%
5.75 MW solar power sourcing equivalent to 6.7 Lac units
of renewable contribution in
a month. Through this partnership, we aim to achieve a
Achieve our overall power mix
cost savings of `190 Lacs.

48
 Natural Capital 102nd Annual Report 2022

Climate Change and Emission Management

Climate change is a global risk with nations and businesses urged to move towards low-carbon economy and meet goals
determined under UN SDG 13 – Climate Action. At KNPL, we understand our responsibility of tackling climate change
and therefore set over-arching targets to reduce our carbon footprint through our operations, sensitise our value chain
on the impact and have Board-level oversight to mitigate the forecasted risks. In addition to GHG emissions, we also
track and curb other significant air emissions caused due to our operations.

Thrust area
GHG Emission Reduction
• Increasing renewable portfolio – Solar and Wind Power, Cleaner Fuels
• Consistent tracking and monitoring of our GHG emissions through customised GHG Accounting Tool
• Dedicated EHS and Climate Change Framework
• Detailed Scope 3 inventorisation
• Establish GHG reduction targets in line with Science Based Target initiative

Approach:
At KNPL, we undertake varied energy conservation initiatives and have deployed plans to gradually increase our green energy
portfolio. We also have a dedicated EHS and Climate Change framework comprising of EHS & Climate Change Apex Committee
and EHS & Climate Change Task force that periodically monitors the progress and performance.

Performance:

GHG Emissions Data – Organisation-wide

Total Emissions
Financial Emission Intensity (MT
Scope 1 Scope 2 (Scope1+2)
Year of CO2 eq/KL of FG)
(MT of CO2 eq)
2015-16 6886 36532 43418 0.16
2016-17 6449 38273 44722 0.16
2017-18 5461 40228 45689 0.15
2018-19 4111 40672 44783 0.14
2019-20 1419 36721 38140 0.13
2020-21 1087 31969 33056 0.11
2021-22 2777 36633 39410 0.11

Increase in absolute emissions is due to the incorporation of 2 additional Manufacturing facilities – Marpol (Goa) and Perma (Sarigam) in
our scope

Types of GHG Emissions Activities

Method of Calculation
accounted
GHG Emission Intensity is the ratio of GHG emissions
(Scope 1 + Scope 2) to Total Production of Finished Scope 1 GHG Emissions: 
Captive power generation
Goods during specified period. Direct GHG emissions from DG

HSD consumption in

31% reduction
boilers
Scope 2 GHG Emissions: 
Power imported from grid
GHG Intensity (Organisation-wide) Indirect GHG emissions
since FY 2015-16

49
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

r We undertake an incremental target of reducing our GHG

The GHG emissions are estimated based on guidelines emission Intensity by 5% year-on-year.
defined in the World Resource Institute’s (WRI)
Greenhouse Gas (GHG) Protocol and CEA (Central
Electrical Authority) database. Relevant industry standard
emission factors and emission factors prescribed by the During the reporting period, we responded
Intergovernmental Panel on Climate Change (IPCC) have to CDP questionnaire for Climate
been used appropriately to determine GHG emissions. change and secured a rating of C (Awareness:
Knowledge of impacts on, and of, climate issues). As a
responsible organisation, we aim to improve this rating
Note: in coming years.

Till FY 2020-21, we published Scope 3 emissions as well

including the following categories:

• Category 4: Upstream Transportation and Distribution Thrust areas

• Category 6: Business Travel Improved Air Quality
• Category 7: Employee Commuting • Diligent monitoring – Ambient air quality, stack
emissions, VOC levels
• Category 9: Downstream Transportation and Distribution
• Deployment of advanced air pollution control
However, this year, we have partnered with subject-matter devices
experts to evaluate our detailed Scope 3 inventorisation to • Adoption of refrigerant gas with zero ozone
ensure completeness and correctness of the total emissions. depleting potential
We have identified the relevant categories applicable to our
organisation:

• Category 1: Purchased Goods and Services Approach:

• Category 2: Capital Goods The emissions and air quality levels are periodically monitored
by external agencies. All our manufacturing sites have requisite
• Category 3: Fuel- and Energy-Related Activities Not Included controls and measures in place to manage these emissions
in Scope 1 or Scope 2
and ensure the levels well within the prescribed limits. We
• Category 4: Upstream Transportation and Distribution ensure compliance with limits recommended in the National
Ambient Air Quality Standards (NAAQS) 2009.
• Category 5: Waste Generated in Operations
• Category 6: Business Travel In addition to conventional air pollution control devices like
Air Handling Units (AHUs), Dust Collectors, Fume Extractors,
• Category 7: Employee Commuting and Forced Draft Ventilation systems, we have also installed
• Category 8: Upstream Leased Assets Scrubbers in the resin area and Cyclone Separator in solid
fuel boilers to reduce Suspended Particulate Matter (SPM).
• Category 9: Downstream Transportation and Distribution Our vents are equipped with Activated carbon filter to filter air
• Category 10: Processing of Sold Products emissions before discharge into ambient atmosphere.

• Category 11: Use of Sold Products For continuous monitoring, provision of online stack
monitoring systems are made to ensure compliance with
At present, we are in the process of evaluating our Scope permissible limits.
3 emissions under these categories and would update the
same on our web-link post completion. This exercise would In regards to ODS emissions, ozone depleting R-22 refrigerant
also help us establish emission reduction targets in line with is in use only in limited quantities at old facilities for work-
Science based Target initiative (SBTi), establish an Internal area air conditioning; while R-134a and R-407c, refrigerant
Carbon Price (ICP) and move closer to the target of becoming gas with zero ozone depleting potential is majorly used
Carbon Neutral. organisation-wide.

50
-------------------'-
Natural Capital

•
102nd Annual Report 2022

CO2

Performance: OUR COMMITMENT

Ambient Air Quality (μg/m3) - Organisation-wide Roadmap to

Carbon Neutrality
80
SO2
17
Water and Waste-water Management
80
NOx Rapid growth in global population, industrialisation, climate
24 change is adding pressure on the most precious resource
– water. Water scarcity, access to quality fresh-water and
60 increased water cost has emerged as a global risk in
PM2.5
35 these unprecedented times. At KNPL, we understand our
responsibility and set stringent water management goals.
100 Owing to the nature of our industry, we consume water not only
PM10 for our utilities, cleaning, horticulture and domestic purpose,
67

- -
but it is also a critical raw material for our water-based paints.

Statutory Limits FY 2021-22 Our freshwater requirement is met through - groundwater,

State Industrial Development Corporation (SIDC) water supply
For the reporting period, our VOC Concentration was 21 ppm. and third-party water supply.

Way Forward Third-party water

17%
With an objective of improving our performance in emission
reduction and minimising the impact of climate change,
we have already initiated multiple actions with a subject-
matter expert – detailed scope 3 inventorisation, alignment
of disclosures in line with the Task-force on Climate related
Financial Disclosures (TCFD) framework and establishing
targets for emission reduction in line with Science Based Fresh Water
Target initiative (SBTi). This would not only help us Source
in achieving completeness in GHG reporting but also
develop a Decarbonisation Roadmap and embrace the
Groundwater
concept of Internal Carbon Pricing to shift investments to low- SIDC water
32%
carbon alternatives. 51%

51
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Thrust areas
Reduce Freshwater Consumption Our major manufacturing facilities are ZERO Liquid Discharge
(ZLD) facilities. For effluent management, we adopt a two-
• Diligent monitoring of freshwater consumed
pronged strategy – reduction at source and reuse. We have
• Adoption of sustainable water management dedicated treatment facilities for domestic and industrial
measures to limit our water footprint effluents and in-house laboratory to monitor the quality of
• Increase usage of recycled water and rainwater effluent across all our major manufacturing facilities. Our
through water management projects and initiatives ETP treated water is reused for utility make-up while the STP
within our operational limits treated water is reused for gardening and toilet flushing.

• Periodic review of water-related risks During the reporting period, we have internally conducted an
exhaustive water risk assessment. Through this assessment
we have identified and prioritised our key water-related risks
Approach: and its impact on our stakeholders. Based on the current
In regards to water management, we continue to adopt water mitigation and control measures, we have drafted our action
conservation initiatives within our operations and ensure plan to reduce the risk levels and ensure water security
horizontal deployment of same across all our facilities based alongside our business growth.
on the feasibility. We continuously measure and track our fresh
water withdrawal and total water consumption through a water Performance:
accounting tool. This helps us not only to improve our water Water Withdrawal
efficiency but set internal as well as external benchmarks to In FY 2021-22, our figure for organisation-wide water
achieve highest level of water security. We take a continuous withdrawal stood at 4,21,658 KL.
target of to reduce our Specific water consumption (freshwater)
by 5% per year for gradual improvement. Water Consumption
Our organisation-wide total water consumption for the reporting
period was 5,56,369 KL, of which 8,659 KL was rainwater
Key Water Conservation Initiatives while 1,26,052 KL was recycled water. Our organisation-wide
Specific Water Consumption (SWC) was 1.18 KL/KL of FG
• Drip irrigation system while our Specific Water Consumption for our manufacturing
• Faucet-type and sensor-based taps facilities accounted to 1.16 KL/KL of FG.
• Reuse of Utility RO reject water and AC
condensate water in process Our recycled water consumption increased from 10% to 23%
since FY 2015-16.
• Provision of filter at cooling tower area for
recycling of reactor drained water
Specific Water Consumption -
Manufacturing Facilities (KL/KL of FG)
We also conducted third-party water audits at our Jainpur and
Hosur facilities in line with the Central Ground Water Authority FY 21-22 1.16
(CGWA) guidelines. These audits have helped us identify
FY 20-21 1.25
areas of improvement and shall enable us to improve our
water efficiency further. FY 19-20 1.4

In FY 2021-22, we continued to use rainwater within our factory FY 18-19 1.58

premises for process as well as other non-process use at Lote
FY 17-18 1.49
and Sayakha. Aligning to our water management goals, we
are in the process of increasing the rainwater usage within our FY 16-17 1.56
operational bounds at other locations as well.
FY 15-16 1.56

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 Natural Capital 102nd Annual Report 2022

Method of Calculation One of our manufacturing facilities is located

Manufacturing Facilities - Specific Water Consumption at Goindwal Sahib which is identified as
is ratio of fresh water consumed in Plants to Production water-stressed area.
of Finished Goods during specified period.
• Water withdrawal (fresh water) – 37,573 KL
Organisation-wide - Specific Water Consumption • Water consumption – 41,742 KL
is ratio of fresh water consumed organisation-wide
• % water recycled – 10%
(Plants + R&D centre + Head Office) to Production of
Finished Goods during specified period. • Specific water consumption (SWC) (freshwater) –
0.94 KL/KL of FG
• 13% reduction in SWC

26% reduction
0
• Ensured ZERO Liquid Discharge

Specific Water Consumption

(Manufacturing Facilities) since FY 2015-16

Rainwater usage in process (KL) - ~CDP During the year, we attained a ‘B-‘ rating
Manufacturing Facilities (Management: Taking coordinated
action on water issues) for our response to
FY 21-22 8,659 Carbon Disclosure Project (CDP) – Water Security
questionnaire.
FY 20-21 7,800

FY 19-20 10,361
Thrust areas
FY 18-19 8,574
Water restoration
FY 17-18 5,834
• Water replenishment through watershed
FY 16-17 6,476 development projects in the areas we operate in
under CSR.
FY 15-16 4,300

Water discharge:
We have ZLD across our major manufacturing facilities; Approach:
however our newly merged unit at Sarigam collects domestic As a responsible corporate citizen, we have continued our
effluent generated from the facility in a septic tank. The effluent efforts to offset our freshwater consumption and help nearby
is then transported through a tanker and discharged outside communities by providing access to quality fresh water.
factory premises. Our total waste water discharge for the We undertake offsite watershed management projects like
reporting period was 817 KL. pond restoration, deepening and desilting of water bodies
among others. These projects help us to stay in tune with
our strategic long-term commitment of becoming Water
positive organisation.

Performance:
In FY 2021-22, we undertook watershed development
projects (4 nos.) at Sayakha and Hosur and provided rain
water harvesting facility at Nursing College and DC Office at
Goindwal Sahib. Through these projects, we have been able
to create a storage capacity of 1.89 Lac KL.

Zero Liquid Discharge

53
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Way Forward
We would continue to work in following key areas: reduce
Pond restoration at Vohrasamni and Argama Villages freshwater consumption; increase usage of recycled/reused
at Sayakha: water; increase usage of rainwater in process; and water
Under the Gujarat Government driven ‘Sujalam-Sufalam’ replenishment in nearby villages through CSR to stay in tune
scheme, we have adopted two village ponds for restoration with our commitment and achieve our Water-positive Target.
and increase rainwater recharge. We have carried out
deepening and desilting activity to increase the water
storage capacity of the water bodies and construction of OUR COMMITMENT
protection wall, thereby increasing the supply of water to
nearby villages for irrigation purpose. Through this, the
natural percolation of water would also increase thus
Water Positive by
raising the groundwater level as well. In addition, we have FY 2024-25
also planted 800 trees along the periphery of the ponds.
Through these projects, over 4,500 people in nearby
villages would be benefited. Waste Management
Conscious waste management has become pivotal for every
business as it not only impacts the ecology but also has a hit
on business growth due to its management cost. We realise
that our operations generate a significant quantity of waste;
both hazardous as well as non-hazardous and therefore we
adopt industry best practices and set challenging goals for
effective waste management.

Before - Pond Renovation (Argama Village) Hazardous waste generated due to our operations mainly
includes distillation residue, Effluent Treatment Plant (ETP)
sludge, paint sludge, dirty resin, contaminated barrel/tins, filter
cartridge, and contaminated cotton waste.

Thrust areas
Judicious Waste Management
• Dedicated storage for category-wise waste in
After - Pond Renovation (Argama Village) scrap yard across all plants
• Systematic tracking of the quantity of waste
generated and waste disposed

Lake expansion at Rangopanditha Agraharam and • Ensure proper waste disposal – diverting waste
Moranapally Villages at Hosur: away from landfill

With an objective to expand the existing lake by removing

• Imbibing the principle of 3R – Reduce, Reuse and
Recycle
the encroachment around the lake and clearing the
bushes, we were successful in not only expanding the • Sensitisation of employees on waste handling
waterbody but also restoring it. We have carried out methods
deepening and desilting activity to increase the water
storage capacity of the water bodies which would also
increase the percolation thereby raising the groundwater
level in the village area. To improve the landscaping Approach:
around the lake, we have also planted around 1,000 trees We believe the best way to reinforce judicious waste
along the along the periphery of the lakes. management is to reduce waste generation at source, reuse
Through these projects, over 20,000 people in nearby and recycle to the maximum extent. During the reporting
villages would be benefited. period, we undertook several initiatives for waste minimisation
and diversion of waste away from landfill.

54
 Natural Capital 102nd Annual Report 2022

Reduce Reuse Recycle

• Material Wastage • Reusable cartridge in the Barrels/Tins are recycled

• 
Larger production Batch-size filtration process through authorised vendors
• 
Improved accuracy and • Cleaning solvents of all major Plastic waste, corrugated boxes
stringent controls on material resins are reused in the next and metal scrap generated
addition batch of same resins within factory premises is
• 
Closed loop manufacturing recycled through authorised
process
• In paint section, system controls
have been implemented to vendors
• Sticking Material Losses ensure reuse of paint filled
Raw materials procured in
• Procurement of bulk liquid in part filled cans in the next
recyclable packaging material
chemicals in tankers instead of compatible batch of paint
barrels, and are further stored E-waste sent through buy back
in tanks
• In operations, cleaning solvent
is reused after distillation programme
• 
Nitrogen purging in resin area process again for equipment
• Reduce Cleaning Frequency cleaning
• 
Product changeover • Paint Pigging wash water reuse
minimisation
• 
Same shade scheduling in line
• TIO2 recovery through de-
dusting
through advance planning
• Drums and barrels
• Other Measures
• Solvent Recovery Units • Take-back mechanism with
Eliminated entire pretreatment suppliers supplying raw
operation by developing materials in plastic bags
suitable coating system for
Barrel Industry

As a sustainability objective, we take an incremental target of 5% reduction of our Specific Hazardous Waste Generation
(SHWG) year-on-year.

Scrap Yard - Sayakha

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KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Performance: Waste Disposal:

At KNPL, the waste generated is segregated and then
Waste Generation:
disposed as per statutory requirement and applicable norms
In FY 2021-22, our organisation-wide total waste generation
to authorised Treatment, Storage and Disposal Facilities
was 12,579 MT, of which 827 MT was hazardous waste, 21
(TSDFs), who then dispose, reuse or recycle it as applicable.
MT was e-waste, 0.09 MT was bio-medical waste while the
We have been successful in diverting most of our hazardous
rest was non-hazardous waste.
waste away from landfill through adoption of co-processing of
Our organisation-wide Specific Hazardous Waste Generation hazardous waste to cement kilns.
(SHWG) was 2.31 Kg/KL of FG while our Specific Hazardous
Waste Generation for our manufacturing facilities accounted
to 2.30 Kg/KL of FG.
35%
Specific Hazardous Waste Generation - of the total waste generated is recycled or
Manufacturing Facilities (Kg/KL of FG) reused within factory premises.

FY 21-22 2.30
r
FY 20-21 2.47
We have deployed bio-composting machines
FY 19-20 2.70 across our major manufacturing locations.
Through these machines, we converted 29 MT
FY 18-19 2.71
of organic canteen/food waste into 14 MT of high
FY 17-18 2.98 quality manure which is used internally in gardens and
horticulture purpose.
FY 16-17 3.07
This has not only helped us to manage organic waste
FY 15-16 3.12 efficiently but also reduce our carbon emissions,
minimise methane formation and divert waste away
from landfills.

Method of Calculation
Manufacturing Facilities - Specific Hazardous Waste
No hazardous waste was transported (imported or exported)
Generation is ratio of hazardous waste generated in
internationally from the sites. During the year, there have
Plants to Production of Finished Goods during specified
not been any cases of significant spillage at any of our
period.
manufacturing sites.
Organisation-wide - Specific Hazardous Waste
Generation is ratio of hazardous waste generated in Plastic Waste Management:
Plants and R&D centre to Production of Finished Goods At KNPL, we have taken concerted efforts to reduce our plastic
during specified period. waste generation through our manufacturing facilities. Through
rigorous due-diligence process and constant communication,
we encourage suppliers to substitute plastic with alternate

26% reduction
materials or implement a take back mechanism. During the

llili
reporting period, we ensured zero procurement and usage of
packing material less than the thickness limit in microns set by
Specific Hazardous Waste Generation the regulatory bodies.
(Manufacturing Facilities) since FY 2015-16

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Natural Capital 102nd Annual Report 2022

Compliance with the 33% Greenbelt requirement of CPCB is

Extended Producer Responsibility (EPR) ensured across all manufacturing facilities.

With the evolving regulatory landscape around plastic Going ahead, we have planned tree tagging exercise across
waste management, the new rules and obligations under all locations to have the traceability and ensure the survival
the provision of Extended Producer Responsibility has set rate of the trees planted within our operational limits. We have
over-arching EPR targets for Producers, importers and also taken a target of planting 5,000 trees outside factory
Brand-owners. We, at KNPL, have initiated our efforts to premises in FY 2022-23.
meet the targets laid under EPR and tackle the challenge
of eliminating plastic waste from the ecosystem to the
maximum extent. We are currently in the process of our
registering ourselves on the newly launched centralised
e-portal by Central Pollution Control Board (CPCB). We
have also associated with external agency to ensure
diligent collection, treatment and disposal of post-
consumer plastic waste in line with the EPR target and
maximum traceability. Our technical team is also working
closely with our packing material suppliers to increase
recycled plastic content and optimise the packaging
weight, without affecting the performance characteristics
of the packaging. Tree Plantation

Environmental Compliances
Way Forward At KNPL, adherence to compliances is diligently tracked
Going ahead, we plan to achieve maximum waste reduction at and monitored on periodic basis. We have stringent systems
source and undertake a detailed waste inventorisation study and controls in place to ensure all our operations are fully
to align our waste-related disclosures with the requirements of compliant with all applicable environmental laws and
varied frameworks. We also plan to associate with other waste regulations. During the reporting year, no monetary fines or
to energy plants and cement industries so as to achieve zero forms of non-monetary sanctions were levied upon us for any
waste to landfill through co-processing in coming years. non-compliance with environmental laws and regulations.

EHS Expenditure
OUR COMMITMENT For procurement and upgradation of assets for environmental
monitoring, effluent treatment, water conservation, energy
Diversion of waste away efficiency, harnessing renewable energy, emergency
from Landfill preparedness and safety equipment at existing plants, a
capital expenditure of `7.07 Crores was spent. An additional
amount of `5.32 Crores was spent in the form of revenue
Greenbelt Development expenditure at our existing plants.
We understand the importance of green-cover as it not only
helps to improve air quality but also tackles other environmental
issues like climate change, soil degradation and wildlife Our disclosures for energy management, GHG
conservation. At KNPL, we undertake various tree plantation emissions, water management and waste management
drives not only within our operational bounds but also beyond have been independently assured by a third-party
our operational limits. Tree plantation outside factory premises external agency based on International Standard on
are carried out under CSR activities. Assurance Engagements (ISAE) 3000. Additionally,
At present, a total of 53,811 trees are planted inside factory the assurance has been given against the disclosures’
premises across all locations of which 6,564 trees were planted adherence to the GRI’s Sustainability Reporting
in FY 2021-22. Also against the target of planting 5,000 trees Standards.
outside factory premises, we have planted 6,760 trees.

57
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Intellectual Capital

58
Intellectual Capital 102nd Annual Report 2022

Over our 102 years of existence, KNPL has

built a repertoire of intangible and knowledge-
based assets. Innovation and technology
integration are strategic cornerstones for
Enhanced Performance and Business
Excellence at KNPL. We aim to meaningfully
engage with our parent company Kansai Paint
Co., Ltd., Japan and Kansai Group companies
to provide world-class technology and deliver
best-in-class sustainable solutions goods to our
consumers. Product innovation, technological
advancement, process improvement, and
expanding digital capabilities are all part of our
innovation management.

59
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Intellectual
Capital
Our deep-rooted understanding of Paints & Coatings; our brand, which evoke feelings of Trust
& Care in the minds of our consumers is what we accomplish as the most essential aspects of
our intellectual capital. This capital supports our objective of discovering growing markets and
improving engagement with all stakeholders, as well as our image as a company that achieves
greatness through knowledge.

Backdrop Response
We understand that our potential to adapt to the ever- We meet our customer needs through pioneering innovative
changing business environment and increasingly competitive and globally best-in-class products and solutions across
market is critical to our long-term success. Customer-centric diverse market segments. We resolve to strengthen
innovation is critical to a company’s success. Customers’ our in-house capabilities by leveraging the vast unique
needs and preferences is constantly evolving in today’s world. knowledge resource of Kansai Paint Co., Ltd., Japan, and
Our key obligation is to keep up with these shifts and provide its group companies across the world. We would continue
our customers with unique products and solutions. We make to collaborate with our global technology partners Oshima
a concerted effort to improve our core strengths, innovation Kogyo Co. Ltd, Japan, Cashew Co. Ltd, Japan, and Protech
and technology while focussing on portfolio expansion. Chemicals Limited, Canada to develop unique products and
solutions for our customers.

IMPACT ON SDGs
FOCUS OF OUR RESPONSE
4 QUALITY
EDUCATION 12 CONSU""'
RESPONSIBlE
10N
13 CLIMATE
ACTION
ANDPROIJUCJDj  Creating a product & service portfolio that are

00 & best-in-class, sustainable, and user-friendly

 To be one of the country’s most advanced and

technology-driven organisations

 To develop advanced solutions in niche

segments (adhesives, construction chemicals)
Intellectual parameters of our response

Investments in R&D to
Best-in-class R&D perform ground-breaking
infrastructure, research, facilitate Constant efforts to
including sophisticated creative product develop new and value-
technologies & cutting- creation, and produce added products
edge equipment high-quality products for
well-being of people and
environment

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Intellectual Capital 102nd Annual Report 2022

Augmenting R&D
We try to upscale our R&D capabilities by constantly investing Concrete DFT meter- For anti Carbonation
in the R&D infrastructure, development of human capital, The PosiTector 200 C Ultrasonic Coating Thickness
research and analysis. We use our R&D strengths as a Gauge (Standard or Advanced) is ideal for measuring
winning strategy in the marketplace through development of most paint and coatings on concrete applications. With
unique products and solutions. We are aware of the constantly a paint thickness measurement range of 50 to 3,800 µm
changing external environment and shape our competencies (2 to 150 mils), this thickness gauge is recommended
accordingly to launch new solutions. Advocating the brand’s for customers desiring a single non-destructive
new expression of “Paint+”, this year, KNPL has launched measurement solution for most applications. The
products with additional features, thus meeting the constantly instrument requires little or no calibration adjustment
evolving needs and preferences of the consumer. Our for most applications.
R&D team has undertaken product developments keeping
sustainability at its core. Our products constantly raise
the bar of being environmental friendly, resource efficient
and sustainable.

Innovating across Business Segments

KNPL R&D team of researchers develop paints and
coatings solutions across business segments that are of
superior quality and are sustainable. Innovative science-
based programmes over the years have culminated in the
development of new technologies to reduce VOC, zero
inclusion of heavy metals and resource efficiency (low
energy requirements) during the application of sold products.
Systematic reductions in hazardous substances without
compromising on paint performance attributes, guided by
deep science-based approaches are being progressively
implemented.

Decorative

Our edge -
• Trendsetter of Low VOC products in the Indian market and zero heavy metals
• Relentless focus on developing novel and sustainable eco-friendly Green solutions
• Working on megatrends such as enhancing the life and performance of coatings
• Providing unique features in the products to address customer changing needs and preferences

61
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

New products launched in FY 2021-22

Nerolac Excel Mica Nerolac Metal Zinc Nerolac Perma

Marble Stretch & Yellow Primer Damp Protect
Sheen Exterior

Nerolac Excel Mica Marble Stretch Nerolac Zinc Yellow Primer provides This is an economy range of
and Sheen is an extremely durable excellent rust protection to metal waterproofing coating for exterior
water-based high performance surfaces keeping them corrosion- horizontal & vertical surfaces with
exterior paint developed with a free and beautiful for longer time. fibre reinforcement technology. This
unique stretchable film technology, product has 3 years warranty.
which allows it to cover hairline
cracks, with a 6-year performance
warranty.

Nerolac Beauty Nerolac PU Enamel Nerolac Perma

Ceiling Emulsion 10 in 1 Damp Protect
Interior

Nerolac Beauty Ceiling Emulsion is Nerolac PU Enamel 10 in 1 is a PU This is an acrylic copolymer based,
formulated with specially modified modified based Special enamel anti-damp and economic undercoat
silicon acrylic binder to give for the protection of Metal, Wood for interior surfaces.
excellent whiteness and spatter & Masonry substrate with 10
resistance. Excellent hiding and advantages.
smooth finish of this white ceiling
paint helps to hide minor surface
imperfections. It dries quickly to eye
soothing matt finish.

Nerolac Excel NeroFix Super Rapid Set

Texture (in Pail)

This can be applied on both interior Economy product with water This is an admixture for fast setting
and exterior walls of the house. It resistance. Easy to Spread. of cement plaster & concrete during
has been launched in three popular winter season.
finishes - rigor, dholpur and roller.
The texture design on the wall can
be customised by the applicator
according to the liking & preference
of the customer.

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Intellectual Capital 102nd Annual Report 2022

Automotive

Our edge -
• Best-in-class technical services and value-added solutions that are environment-friendly, energy-efficient and
have enhanced finish

• Medium high solids, low VOC products, Direct to Metal Anticorrosive Technologies, and Low Bake
Technology are all key industry differentiators

• Partnerships with experts and customers to foster innovation and colour trends

New products launched in FY 2021-22

•
4-Wheeler
• Developed high solid anti-chip primer
with reduction in VOC
•
2-Wheeler
• Matt Lacquer for Petrol tank of
Motorcycle with superior mar &
Commercial Vehicle
• High Weatherable Topcoat for
Three-Wheeler was launched with
• Pearl colours process from existing scrub resistance Superior Gloss & Finish product
4C-1B converted to 3C-1B • Coating for Rotamould Nylon • Highperformance Solid Monocoat
• Technology which offers lean process, Petrol tank technology with High durability and
energy conservation and high Chemical Resistance
productivity have been introduced

Performance Coating (Liquid and Powder)

Our edge -
• Intensified our efforts and commitment to provide environmentally friendly and energy-efficient products
• Cost-effective and customised solution to meet customer’s unique requirements
• Powder-coating know-how to shift 2W component industry from liquid paints to zero VOC powder-coating

New products launched in FY 2021-22

•
General Industrial (GI)
• Neropoxy Solvent Free Coating”
for Water Pipeline Internal
•
High Performance (HPC)
• Five-coat anticorrosive system
developed and commercialised for
Powder Coating (PC)
• Bonded metallic for appliance
which is alternate to chrome
Coating and approved by Water Mumbai Trans Harbour Bridge. Its plating which has helped to
Regulations Approval Scheme top coat is Fluoro polymer based reduce the toxicity
Ltd, U.K. (WRAS) which has superior exterior durability

63
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Design Philosophy
Our design philosophy has been to provide our customers with sustainable, resource efficient, differentiated
features and of high quality products and solutions. The products are designed and developed on this philosophy
and are tracked until the applications at the consumer end. Our expertise in polymer chemistry and paint
technology and an innovative mindset enable us to design sustainable and unique solutions for customers.

Increasing Digital Capabilities

Here at KNPL, we aim to build our digital capabilities to equip our stakeholders with a digital platform as today we have
advanced into a digital society. Throughout the year, we kept our focus on adopting newer digital technologies and using
technologies such as Machine Learning, Mobility, Visual Analytics, Internet of Things, Business Process Automation (Robotic
process automation), Chat-Bot, and Cloud Platform. Similarly, Artificial Intelligence-based solutions have been applied in the
fields of network and data security.

Initiative / Application

Influencers Dealer Consumer

Pragati App Dealer Saathi Application Colour my space

A loyalty engine for our influencers, All-in-one application for our channel As the name suggest, Colour my space
first-of-its-kind which enables the partners, empowering them to manage takes you from visualising to virtual
painters to convert their points to a their daily transactions, bill payments, reality of your home in vibrant colours
monetary value which in turn can be schemes, orders, Account statement and textures.
transferred to one’s back account in and information related to new
less than 30 seconds. The application products launched. The iOS version of
is accompanied by useful tools such the application was also launched for
as colour picker, estimator, tool tips the users.
& knowledge bank comprising of
tutorial videos.

Technical
Sales Team Vendors
Service

ML Saathi Application Upgrade Technical Service Application Vendor Invoice Management

A salesforce enablement platform for A mobile solution with ready reference Digitise the entire vendor invoice
our field sales team to plan & manage to provide quick resolution to customer process and will facilitate prompt
their day-to-day activities. Get useful line issues by referring to the global GST credit.
data insights on their mapped channel solution database.
partners for better decision-making.
The app is also equipped with an in-
build bot, the purpose of which is to
respond to all the data queries with
regards to his account.

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Intellectual Capital 102nd Annual Report 2022

Infrastructure and Security

Initiative Summary
Cloud Initiative Implemented cloud infrastructure for our Supply Chain initiative and DSA
application
Network Security VAPT assessment for the KNPL network has been completed
Analytics BO application was upgraded from the existing version to the latest version 4.3
IT Infrastructure Upgrade Network and infrastructure required for SAP Implementation have been upgraded
at both Marpol Private Limited and Perma Construction Aids Private Limited.
SAP was made live for along with key MIS

Industry Knowledge & Collaborations

Our parent company, Kansai Paint Co., Ltd., Japan (KPJ), continued to share best-in-industry practices and technological
developments. For specialised product and service offerings, we have strategic and technical partnerships with Oshima
Kogyo Co. Ltd., Japan, Cashew Co. Ltd., Japan, and Protech Chemicals Limited, Canada. Industry groups and collaborations,
we feel, will give a solid platform for growing the business, sharing information, and gathering fresh ideas for improvements.

Product advancements with our Technology Partners

Products Pyrosin STACK F150, Pyrosin PX 3103 & STACK ACT 250 are launched with support from M/s Oshima &
supplied to prestigious company for Chimney installations that are exposed to high heat & chemical atmosphere.

Way Forward – Enhancing products

KNPL will continue to seek chances to establish new value chains in the future, employing R&D insights from a variety of core
competencies. We will continue to provide superior quality and unique products and solutions to our customers. We will also
use capability building to boost innovation and business excellence, as well as continue to improve product performance with
sustainable solutions.

65
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Financial Capital

66
Financial Capital 102nd Annual Report 2022

One of our major competencies is cost

leadership, which is critical for establishing
operational excellence. We are always on the
lookout for profitable growth opportunities that
is supported by customer feedback, research
and development, sustainable solutions and
enhanced customer service. Financial capital
is viewed by us as a tool of building wealth
for our shareholders via the prudent use of
company and community resources.

67
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Financial
Capital

Backdrop Taking the Right Decisions

FY 2021-22 saw huge challenges because of unprecedented At KNPL, the Board of Directors makes all strategic economic
material inflation, which affected company performance. decisions, which are then carried out by Managing Director,
other management committee members, and department
Response heads as needed for day-to-day business operations.
The Company’s EBITDA was down to 10.9% for the year as
compared with 17.7% in the previous year. IMPACT ON SDGs
Data on financial capital performance is covered in the
statutory part and in the latter sections of this report. We
maintain an apolitical stance and do not support any specific
political party or candidate for political office. We did not offer
or provide any Company funds or property as donations to
any political party, candidate or campaign during the year.
II I

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Financial Capital 102nd Annual Report 2022

Net Revenue Strategic Capital Investment

`5,949 Crores `229 Crores

Net revenue which recorded a growth Spent towards capital expenditure

of 24.7% over the previous year. ` related to various projects.

Overheads EBITDA

The Company’s overheads

678.9 Crores to
647.3
G
` Crores
increased from `
` Reduction of 23.3% over the
` 827.9 Crores. previous year

Way Forward – Budgeting and Control

The agenda and preparations for the coming fiscal year are set at KNPL at the beginning of the year, and include the
development of a complete yearly business plan.

A detailed annual budget is prepared by the Management Committee, which includes functional heads, Managing Director,
and then approved by the Board of Directors, based on the annual business plan and macro environment, including currency
value, raw material costs, and energy costs, among other things.

The Company monitors the budget using several IT platforms and has devised multiple system checks to keep it
under control.

The functional heads and the Management Committee review the budget on a regular basis.

69
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Manufacturing Capital

70
Manufacturing Capital 102nd Annual Report 2022

KNPL is one of India’s most trusted paint

manufacturing companies. With innovation
and excellence deeply ingrained in our
manufacturing capability, we aim to
deliver products that enhance societal
development, conserves environment and
achieve profitable growth. We implement
state-of-the-art technologies, optimise
processes and enhance automation
to foster our manufacturing capital.
Additionally, we put safety at the front and
drive green initiatives across all aspects.

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KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Manufacturing
Capital

Backdrop
Our manufacturing capability, equipped with latest
technologies and robust operational control measures is key FOCUS OF OUR RESPONSE
imperative to our business and value-added portfolio. We
consistently focus on achieving manufacturing excellence
and imbibe healthy operational measures. For KNPL,  Inculcating Safety-must attitude in every aspect of
safety, quality, reliability, performance and innovation have our business
been the key drivers of our business reputation. We nurture
our capabilities with focussed initiatives to foster improved  Adopting and driving green initiatives
efficiencies across our manufacturing facilities.
 Improving Product Quality to enhance Customer
and Consumer Delight
IMPACT ON SDGs
 Enhancing Automation levels and Embracing Digital
Capabilities

 Enhancing Productivity and Operational Efficiency

 Optimising Overhead Costs

 Strengthening Integrated Supply Chain Function

Response
Adapting to the ever-changing business environment and  Sharing, implementing and sustaining KNPL best
delivering superior products with added advantages have practices for operational excellence at subsidiaries
helped us in consistently raising the bar. We are known for
industry-leading quality and trusted service commitment.
Backed with rich organisation-wide culture, technical know-
how, agility and innovation; we aim to showcase responsible
manufacturing in the paints sector.

Parameters of our response

8
strategically
located International
Primary 4 subsidiaries - subsidiaries
Manufacturing
operations 1 in India, located in Nepal,
Facilities, 98
in India 3 International Sri Lanka &
Depots and 7 RDCs
serving customers Bangladesh
PAN India

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Manufacturing Capital 102nd Annual Report 2022

Manufacturing Footprint
Our manufacturing facilities are located in areas that offer strategic and locational advantage. These facilities help us not only
to cater to our valued customers and OEM vendors, but also establish a country-wide strong network. Our products serve
diverse markets in decorative as well as industrial segments.

We continuously focus on strengthening our management systems to deliver operational excellence, ensure safe working
environment & provide highest level of service. To reinforce our operations, all our manufacturing plants are equipped
with state-of-the-art technologies, advanced processes, detection & protection mechanisms of highest standards. In
addition, various initiatives are implemented under the themes of productivity, cost optimisation, process safety and
environmental sustainability.

_____
( Decorative Segment ) ______
( Industrial Segment )
• Our Plants located at Bawal, Sayakha, Lote, Hosur, Jainpur and
• Our Plants located at Hosur, Jainpur, Lote,
Goindwal Sahib and Sarigam cater to this Marpol cater to this segment
segment • Product Offerings: Automotive Coatings, Powder Coatings,
Performance Coatings Liquid (General Industrial + High
• Product offerings: Interior Range, Exterior
Performance Coating) and Auto Refinish
Range, Designer Range, Enamel, Primers,
Wood Finishes, Water-proofing, Adhesives, • Our plants are equipped with state-of-the-artAuto paint manufacturing
Construction Chemicals along with niche infrastructure and high-end technology to manufacture need-based
products and Soldier Paints unique solutions for diversified industries.

• 
Our decorative paint manufacturing • High-end ROBOTIC Bell and paint booths to simulate OEM line
capability is defined by state-of-the-art conditions
manufacturing facilities with an ability to • 
All facilities ensure safe operations, enhanced operational
cater multiple range of environmental parameters and highest standard of quality in the products
conscious, economically viable and new offered
technology-based products
• Through Value Analysis / Value Engineering (VAVE), customers
• All facilities are capable of serving multiple are benefited with cost savings, reduced environmental impact
range of product streams and improved productivity

• 
Quality and manufacturing practices of • Close industrial collaboration with our parent company Kansai
highest standards are ensured at on shop- Paint Co., Ltd., Japan and its group companies to bring in high-
floor end, homegrown technology solutions by leveraging the vast
unique technical capabilities
• We have advanced systems and resources,
cutting-edge technologies and innovative • All facilities are capable of serving multiple range of product
tools and techniques deployed to deliver streams
operational excellence • Qualityand manufacturing practices of highest standards are
ensured on shop-floor
• Utilisation of advanced digital enablers and technologies to drive
manufacturing excellence

73
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Capacity Additions
To meet the increasing demands from our customers and aligning with our investment plans, we undertook the following
capacity additions in the reporting period.

- Sayakha
Resin manufacturing
capacity
Goindwal Sahib Plant

Emulsion manufacturing
capacity

Certifications

Bawal Hosur Jainpur Lote Sayakha Goindwal Perma, Marpol,

I I I I I I Sahib I Sarigam I Goa
IATF 16949: 2016 Yes Yes Yes Yes Yes Not Not Not
applicable applicable applicable
ISO 9001:2015 Yes Yes Yes Yes Yes Yes Yes Yes
ISO 14001:2015 Yes Yes Yes Yes Yes Yes Yes No
ISO 45001: 2018 Yes Yes Yes Yes Yes Yes Yes No

Operational Excellence
Our manufacturing capability is reflected through our We perform benchmarking exercise against the data available
measures undertaken to deliver operational excellence. We on public forums on key parameters to set exacting targets
continuously implement Kaizens and projects for productivity on our key operational parameters. We have adopted the 3-S
enhancement, Batch Cycle Time (BCT) reduction, rework (System not available, System inadequate and System not
reduction, and throughput improvement. We perform followed) approach to enhance mistake-proofing on shop-
capacity-mapping and debottlenecking exercise at periodic floor activities and focus on safety, quality and timeliness.
intervals to divert underutilised assets and restore capacity
Digitalisation has become imperative for business operations
within. Additionally to reduce dependency, optimise cost and
in recent times. We embarked on our digital journey in
improve delivery, we have adopted the concept of backward
manufacturing process by setting up a state-of-the-art
integration and initiated resin production at Sayakha and IHE
highly automated factory at Goindwal Sahib in FY 2019-20.
at Goindwal Sahib.
Since then, we have been extending our digital initiatives
to our existing plants by using advanced technologies. Our
manufacturing digitalisation action-plan includes piloting
in powder coating section at Hosur and water-base paint
section at Goindwal Sahib. Through this, we intend to improve
overall operational efficiency with system integration and
data-enabled decision-making at shop-floor. Additionally, this
would also aid performance management of key parameters
and aspects with predictive and prescriptive analytics with AI-
ML implementation and thereby gain global competitiveness.

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 Manufacturing Capital 102nd Annual Report 2022

-
Initiatives to drive excellence

Safety and employee Quality, productivity and Technological

engagement efficiency improvement advancement

• Involvement of overseas experts • Focussed strategic initiatives • Modular-Factory (Mo-Fa) at

through safety audits to enhance Goindwal Sahib
safety measures, practices and
• Consolidation of product streams
to improve quality, enhance • Deployment and usage of
emergency preparedness
manpower productivity and cutting-edge technologies and
• Occupational Health and Safety reduced waste generation advanced equipments to improve
Management System based on performance
ISO 45001
• Sustained focus on asset
utilisation through SAP, • Implementation of special
• Robust safety infrastructure and process optimisation, high-end filtration systems
deployment of adequate safety technology and internal capacity
measures creation
• Usage of advanced premixing
and grinding equipment
• Infrastructure upgradation to • Energy Management System • Usage of better VOC control
achieve highest level of fire implementaion
techniques for asset downtime
safety
• Continued OEE (Overall reduction due to vessel entry
• Dedicated focus on chemical Equipment Effectiveness) related work
safety improvement of critical
equipments
• SAP-based dashboards for
• Safety Committee, hazard effective utilisation of assets
identification and risk • Use of advanced diagnostic
minimisation structure in place methods to evaluate current
• Start-up of Tin-free technology in
automotive process
assets in terms of useful life &
• Periodic trainings and awareness improving utilisation • State-of-the-art facility for
sessions to build ‘Safety First’
Inhouse emulsion process
mindset • Revisiting the Maynard
Operations Sequence Technique • New product introduction in
• Safety training KIOSK and Safety (MOST) for Manpower intermedite category with respect
Laboratories across all locations
efficiency (white and blue collar) to better quality, performance
• Conscious programs which improvement and Measure Of
aid employee engagement: Performance (MOP)
horizontal deployment of
CAPA, POKAYOKE, Kaizen
• Various thematic projects for
Cost optimisation - Power & Fuel,
competitions, Six Sigma and
General Works Charges (GWC)
Improvement projects
and Spares & Consumables

 Quality – Kiken-Yochi Training

(Q-KYT), 3S and 4M analysis for
quality improvement

 Adoption of innovative tools and

techniques

75
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Maintenance Strategy
Timely maintenance is a key to ensuring uninterrupted production and reduce unplanned downtimes. Majority of downtimes
are a result of improper maintenance practices, non-availability of spares, inadequate strategies, and lack of skill. In order to
tackle this, we have developed a multi-pronged maintenance excellence strategy. It focusses on varied areas of maintenance
that are critical in ensuring equipment uptime.

• Spares inventory
management &
optimisation
• Standardized
preventive
maintenance
and schedule
adherence

• Develop and
document
SOPs of critical
maintenance
processes
• Predictive
maintenance
for critical
equipments

• Skill
development –
SMEs for areas
of Electrical,
• -- Leveraging
SAP for process
changes /
Instrumentation automation
etc.

Our strategy is based on Plan, Do, Check and Act (PDCA) principles. Specific metrics have been developed around these
areas to help us monitor the health of maintenance sub processes and make corrections as required. Besides, benchmarking
with industry best practices is being done.

To move further towards world-class maintenance excellence, new technologies in the field of maintenance are explored
and leveraged.

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Manufacturing Capital 102nd Annual Report 2022

Project Uday
Our long-term sustained initiative Project UDAY has enabled
us to improve throughput, enhance productivity and optimise
energy cost. During the reporting period, we revisited our India Manufacturing
approach in existing sections across all manufacturing Excellence Award (IMEA)
locations and horizontally deployed the same at new sections
and subsidiary companies through our in-house team.
In FY 2021-22, Hosur Plant received
We achieved shift closure compliance of 86% against prestigious “Gold Award” in “India
planned closure shifts, which resulted in overhead cost Manufacturing Excellence Award”
reduction and productivity improvement.
(IMEA) organised by M/s Frost and
We believe in building a culture of continuous development Sullivan.
and upgradation through external liaisoning, participation in
knowledge-sharing platforms, conferences and competitions.
We ensure that our employees across all levels receive
Over 80 Companies participated
exposure to new practices and platform to showcase their across various sectors for this
ideas and skills. In FY 2021-22, 15 prizes were awarded to prestigious award.
our manufacturing teams in external forums like IMEA,CII
- 3M, Kaizen, Maintenance Excellence; QCFI, Six Sigma We achieved highest score in
competition. ‘Customer Focus & Delight’ and
Strengthening Subsidiary Companies ‘Digitalisation’ parameters as
During the reporting period, we largely focussed on compared to other participant
strengthening our operations in subsidiary companies by companies and industry average.
extending best-practices adopted at KNPL and fostering
employee capability through employee engagement
activities.

Key Themes

Focussed KPIs Actionable aligned based on

Cost, Productivity, Yield, Safety opportunities

Sharing of Best Practices

` Benchmarking (ENCON – Power factor, Solar power,
with KNPL Project Uday learnings, Safety
practices, Water conservation &
waste reduction)

Trainings and awareness Periodic

sessions reviews

77
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Strengthening the Supply Chain

Our vertically integrated supply chain facilitates us to cater myriad requirements of our varied industrial as well as decorative
customers. We have instituted a structured planning and distribution strategy to timely meet the needs of our customers.

• Industrial Customers - Manufacturing as per forecast and despatch as per order

• Decorative Consumers - Make to Stock
How the Supply Chain works
Based on the planning, a production plan is prepared which acts as an input for the Manufacturing team (in terms of finished
goods to be produced) and for the Purchase department (in terms of raw materials to be procured).

B2B B2C

[
[
Demand Planning

V J Js,~'8 [ Demand Planning

V
J
Js,~'8
[
Production Planning

Paint Processing at
J

m[
r Production Planning

Paint Processing at
h
Outside Processing
m
Manufacturing Site
J Manufacturing Site
J[ Centres (OPC)
J
V □□□ J, ~ □□□

[ Finished Goods
Storage at Plant

V
J [ Finished Goods
Storage at Plant/OPC

V
J
( Depots / RDC
J
[ Depot
J
o, ~ /0
[email protected] V
o, ~ /0
[email protected]
V o/ o'-o ( Dealers / Retailers
J o/ o'-o

[
V
Customers
(OEM & Non-OEM)
J ( Consumers
J
~ Supply Chain Planning m
□□□
Manufacturing
o, ';) /0
[email protected] FG Distribution Network
o/ 0 '-o

For B2B, FG service levels are managed at JIT (Just-in-Time) In order to cater our customers in a timely manner during
level. Unique strength of having sufficient back-up facilities these unprecedented times, we identified single source
and flexibility of manufacturing products at multiple locations. suppliers and suitable alternatives were deployed.

Way Forward – Holistic improvements

Going forward, our aim is to reinforce our manufacturing capability with digitalisation, process automation and use of latest
resources. We plan to institutionalise data analytics at every step extending from product development to manufacturing
stage and supply chain. We would continue to raise our bar in delivering superior quality products to meet our customer
demands through PQCDSM improvement in our operations and thereby deliver manufacturing excellence.

78
Manufacturing Capital 102nd Annual Report 2022

Powder Coating Unit, Goindwal Sahib

79
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Social and Relationship

Capital

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-------------------'-
Social and Relationship Capital 102nd Annual Report 2022

We believe that long-term success

of organisation is built on long-term
relationships with all of our stakeholders
and our capacity to deliver value-adding
growth for them.
All of our stakeholders, from customers
to supply chain partners to the broader
community, are a part of our inclusive
growth path.
This allows us to establish a reputation as
an ethical organisation while also fostering
social and relationship capital.

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KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Social and Relationship

Capital

DELIVERING A SUPERIOR CUSTOMER EXPERIENCE

Backdrop Customer Satisfaction

At KNPL, we infuse innovation into every element of our Customer satisfaction is critical for an organisation like ours.
product offerings. We recognise shift in customer We take the following actions to exceed expectations here:
preferences and we work hard to deliver unique customer
value proposition.
• Comprehend and assess the needs of our consumer base
before meeting those needs
Enhancing Customer Relationships • Evaluate the satisfaction levels of various client groups on
We seek to achieve value accretive growth in this dynamic a regular basis
business environment by offering customised solutions, • Keep track of client profile attributes based on their goals
which are sustainable, cost-effective and efficient. and expectations

Response • 
Develop strategies ahead of time to target critical
areas for improvement, retain consumers, and attract
By virtue of our industry, we have a huge customer base that
new ones
caters to a diverse spectrum of demographics.

We have built trusting relations with our customers over the

years, and it’s our mission to provide customer satisfaction Customer Satisfaction Index
by delivering high-quality products and services that meet or
exceed their expectations. 2020-21 87.0

2019-20 87.7

2018-19 85.3
FOCUS OF OUR RESPONSE

 Supply quality products On Time

Customer Complaints
 Reaffirm customer satisfaction Business % of Number of Complaints
Deliver products and solutions that are
  Division I Batches I Justified (%)
environmentally friendly and safe, and that meet Industrial 1.33 0.70
worldwide standards Decorative 0.44 0.03
Powder 1.05 0.12

IMPACT ON SDGs

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Social and Relationship Capital 102nd Annual Report 2022

Customer-Centricity Additionally, KNPL discloses information such as directions

Our customer-centricity is supported by pioneering concepts for use, environmental parameter relevant to product and
and Technology-led paint solutions: instructions on safe disposal also provided on the product
packaging to inform and educate consumers about safe and
responsible usage of products or services.
Decorative
Product information is also available on the Product Data
• Provide lead-free, low VOC and sustainable Sheet, and the MSDS (Material Safety Data Sheet) is
products to our customers. Fulfilling customer
available with customers of the Company and on the website
needs and preference through additional product
of the Company, as applicable. It includes product description
features and functionalities in paints. New
and information on product performance features & benefits,
products and offering broad range of products in
its application and usage and precautions for safe usage
new segments like construction chemicals, wood
along with technical data.
finish, adhesives.
Few of this information such as description, performance
features & benefits, application & safe usage instructions
Industrial are also provided on the product packaging to inform and
educate consumers about safe and responsible usage of
• Environment-friendly, Resource-efficient products or services.
(Energy-saving) and Value-adding technologies
like low bake technology, high solids low VOC, All the required information on our products and
Monocoats, Direct to Metal. services is available & can be accessed at our website:
https://www.nerolac.com/

We promote our products and increase the value of our brand

on our own merits, without infringing on the rights of others
New Brand Expression: through unscrupulous means. We work with only respectable
NEROLAC PAINT+ advertising companies that are members of The Advertising
Standard Council of India (ASCI) and willingly adhere to its
As an organisation, we want to offer products that
marketing communications criteria.
provide additional features that meet their changing
needs and preferences. Products that have more to Way Forward – Walking with Customers
offer! Leveraging our technical expertise with rich
Going forward, we aim to sustain our leadership position in
legacy of 100 years, we want to stand for PAINT+
industrial coatings while increasing our customer-base in
where the “+” denotes the additional benefits and
decorative segment by increasing visibility and enhancing our
features going beyond offering a wide range of
overall customer-service level. We shall continue to invest in
colour choices.
markets and segments where we have a competitive edge
and foray into new markets to achieve inorganic growth,
Product Responsibility & Safe Usage thereby increasing our market share.
We ensure that product information about the physical
dimensions and/or chemical compositions is provided through
the product labels/pack declaration and/or catalogues.
The information on the products is readily available on our
Company website. We also have a dedicated consumer
helpline 1800-209-2092.

83
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

STRENGTHENING RELATIONSHIPS WITH SUPPLY CHAIN PARTNERS

Our long-term performance and brand value are dependent on a sustainable supply chain. To
be able to achieve the same, we work closely with our supply chain partners to build a trusting
and mutually beneficial relationship.

Backdrop Promoting Local Procurement

Close collaborations with suppliers is vital for business
Imported Raw Materials (in %)
growth, and we have adopted this as one of the primary
goals of our operations.
FY 21-22 35
Response
FY 20-21 38
In our business, we rely on a large network of suppliers
and dealers to maintain the efficiency of our supply chain. FY 19-20 38
We connect with them on a regular basis to improve our
understanding and provide value to our partnership for FY 18-19 42
the same.
FY 17-18 45

Investing in Local Growth FY 16-17 42

The availability of quality raw material is crucial for our
FY 15-16 46
business. We currently have more than 500 direct raw
material suppliers, with roughly 350 of them being local. We
encourage local sourcing with the goal of improving the local
economy, streamlining logistics, and reducing transportation Indigenous Raw Materials (in %)
and its accompanying environmental impact.
The majority of our packing materials come from sources FY 21-22 65
within a 10-kilometre radius of our manufacturing facilities.
FY 20-21 62
Supply Chain Ethics FY 19-20 62
We enlighten all of our supply chain partners about the
Supplier Code of Conduct in order to ensure fair and FY 18-19 58
transparent interactions, respect for human rights, adherence
FY 17-18 55
to environmental legislation and standards, and compliance
with health and safety requirements. FY 16-17 58

FY 15-16 54

IMPACT ON SDGs

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-------------------'-
Social and Relationship Capital 102nd Annual Report 2022

During the reporting period, we also conducted a survey on

Environment, Social and Governance (ESG) for some of
FOCUS OF OUR RESPONSE our suppliers. The survey covered details on certifications,
compliances ensured, human rights assessment, initiatives
 Create long-term trustworthy relationships with our undertaken for environmental management and product
supplier network sustainability. Going ahead, we intend to extend the survey
to all our suppliers.
 Build a supply chain that adheres to the highest
ethical, environmental, and working conditions
standards Regular Supplier Audits
As part of our due diligence, we conduct supplier audits at
regular intervals to ensure operations of highest standards.
We have a comprehensive audit system to evaluate suppliers
Building a sustainable supply chain through factory visits.
As part of our sustainable supply chain strategy, we regularly
engage with our supply chain partners to sensitise them on In FY 2021-22, we conducted supplier audits for 13
the KNPL’s Code of Conduct for fair and transparent dealings, existing packaging material suppliers. Apart from this, joint
protection of human rights, appropriate behavioural norms testing was also carried out for improving quality with 9
and best ethical practices. In addition, we also conducted vendors. During the year, 7 new vendors were incorporated
virtual training and awareness sessions on ESG which in our approved manufacturer list, and all of them were
highlighted KNPL’s journey and our expectations from our assessed and regularised. These included local and
value-chain partners towards achieving ESG excellence. international vendors.

Supplier Audit Parameters

Certification Supplier control Sustainability/ Complaints Documentation Inspection of

and statutory and delivery Green management and data incoming
compliance performance initiatives control materials

Inspection of Equipment Shop-floor

Process Training and Inspection of
in-process and standard observations
control development finished goods
materials control

Handling,
Maintenance 5S and Human
storage and
management safety rights
packing

Way Forward – Stronger & Better

In the future, we will focus not only on developing our connections with our suppliers, but also on building their capability and
overall development in order to catalyse long-term success.

85
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

TOUCHING LIVES – ACROSS THE COMMUNITY

As a responsible corporate citizen, we firmly believe in societal well-being. Adopting a

partnership approach, we undertake meaningful initiatives that foster shared progress and
inclusive growth alongside our business proposition of promoting well-being through colours.

Backdrop Response
We are committed to maintaining harmonious relationships Our social outreach programmes and CSR initiatives are
with the local communities and understand our responsibility not only strategically aligned to goals set under United
of uplifting their lives in a responsible manner. Our belief in Nation’s Sustainable Development Goals but also promote
taking collaborative action has consistently encouraged us social stability, empowers local community and reinforces
to design solutions and initiatives that protect, touch and our stakeholder-relationships, thereby creating an increased
inspire lives. social value. We put concerted efforts to collaborate
effectively with the communities in their overall development
plans, through the use of innovative technologies, products
and activities that go beyond normal business.
IMPACT ON SDGs

3 GOOD HEAITH
ANDWEIL-l!EING
4 QUAUTY
EDUCATION
5 EQUALITY
GENDER 6 CLEANWATER
AND SANITATION FOCUS OF OUR RESPONSE

-At/• Mi Cf 'I  Contribute to the community’s overall development

7 AFFORDABLE AND 9 NIJSll!Y.lflOVATION 10 INEQUALITIES
REDUCED 11 SUSTA~ABLI cmES
 Foster relationships
CLEAN ENERGY
\I/
ANDNRASllilJC1lllE
.... AND COMMUNmES

-=-e-:.
. ...
I I\ & ◄=
.... ► ,.ffl~w  Enhance social goodwill

12 RESPONSIBLE
CONSUMPTIIW
13 CLIMATE
ACTION
15 LIFE
ON LAND
17 PARTNERSHIPS
FOR THE GOALS
AND PRODUCTION

00 e 6-:':
I @ More than 95,000
through our CSR interventions
lives touched

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------------------'-
Social and Relationship Capital 102nd Annual Report 2022

Corporate Social Responsibility

At KNPL, our CSR mission is driven by the highest governing body - a dedicated Corporate Social Responsibility (“CSR”)
Committee which is in line with the terms of the provisions of Section 135 of the Companies Act, 2013. The committee
ensures achievement of the company’s CSR objectives and effective resource allocation and channelisation. We also have
a dedicated CSR Policy in place which serves as a guiding principle for our community stewardship activities. The policy is
periodically review and updated whenever necessary.

We undertake CSR initiatives through our own team, NGO partners and government entities. We actively encourage our
employees to volunteer in such activities.

We have instituted a structured approach to frame, design and implement suitable developmental program as part of our
CSR charter:

Stakeholder Resource
Periodic
Stakeholder Need Identity Engagement Mobilisation and
Monitoring and
Consultation Assessment Potential during Plan Preparation
Evaluation
Implementation

Livelihood
& Skill Promoting
Enhancement Education
Programme

. ..
Preventive Our CSR Ensuring

----~~~
Health Care and
Sanitation

.
Focus Areas
~<~--~
.
Environmental
Sustainability

Restoration of
Rural/Community ~~®-........ . ....... -®~ d Buildings & Sites
Development ...... of Historical
Importance
--- ---

87
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Livelihood & Skill Enhancement Promoting Education

• 
Contribute to the socio-economic development of the • Collaborate with various educational institutes to promote
nearby communities education in rural areas

• Impart trainings to unemployed youth to enhance their • Major activities include construction of class rooms, labs,
capacity and skill-set providing computers, solar lights, solar inverters, drinking
water facility, supply of educational material such as
projectors, benches and desks etc.

Livelihood and skill enhancement Painting of School Building

Rural/Community Development Preventive Health Care and Sanitation

• Reach out to the grassroot communities by providing • Seek to provide basic health care & sanitation facilities
to improve general health condition and sanitation of the
basic facilities & amenities in the villages near our plant/
communities we operate in
depot locations

• Work to provide basic infrastructure/facilities to the rural • 

Activity bouquet includes: Setting up health camps,
creating awareness, building toilets in villages, common
community residing in the nearby areas of the plants, in
public places and schools, providing dust bins, provision of
order to improve their basic living standards
pure drinking water facility

Health check-up on wheels

Projects driving women empowerment under “Women
Entrepreneurship”

88
 Social and Relationship Capital 102nd Annual Report 2022

Medical Checkup - Health Camp Theme Park - Goindwal Sahib

Ensuring Environmental Sustainability Restoration of Buildings & Sites of Historical

Importance
• Strongbelief in responsible consumption of resources
guides our commitment to preserve natural resources & • Projects for conservation of National Heritage sites, Art &
ensure clean environment Culture

• Keyareas of intervention span water conservation, air Promotion & development of traditional arts and handicrafts
emissions and use of clean energy

• 
Implementation of watershed development projects -
Pond cleaning, Desilting / deepening of the pond and
overall pond restoration

• 
Focus on sustaining ecological balance through
beautification projects, plantation activities etc.

Beautification of mosque

Way Forward
As we continue to increase our operational footprint, our
objective is to create enduring partnerships and touch
maximum lives through conscientious sustainability efforts.
Clean-up drive

89
KANSAI NEROLAC PAINTS LIMITED CORPORATE OVERVIEW

Human Capital

90
Human Capital 102nd Annual Report 2022

An organisation’s horizons are as broad

as its human capital’s horizons. The
management of other capitals by the
human capital is what adds value to the
process. Therefore, here at Nerolac,
we focus on the development and
strengthening of the employees. We
believe in nurturing performance-driven
culture and are committed to adopting
best-in-class employee welfare practices
to build a future-ready organisation.

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KANSAI NEROLAC PAINTS LIMITED
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Human 00
000
Capital fOl
Backdrop Parameters of our Response
In line with our vision of the future, KNPL is committed to We have identified three core areas to nurture our human
its employees, aimed at nurturing a superior talent pool capital:
that is inspired by the organisation’s ethos. Through our
performance-driven culture, we encourage people to put
in their best and they help us deliver excellence, thereby
adding value to our organisational capabilities. Human Occupational Ethics and
Resource Health and Integrity
Management Safety
Response
We display our commitment towards our employees through
seamless efforts towards a healthy and stimulating work
culture. Through perpetual contributions and engagement
with the human resource, we acknowledge that they are the
core of the organisation as they help us deliver excellence Human Resource Management
inspired by organisation’s vision. At KNPL, we don’t just offer jobs, we offer a learning
experience like none other. We persistently aim to
accomplish an atmosphere of edification and enlightenment.
IMPACT ON SDGs Through catalyst for development, we endeavour to create a

■ ....
LUI ·e 11·
....,., ,
culture of Collaboration, Innovation and Empowerment.

In FY 2021-22: Our total new hires figure (including Perma

& Marpol) stood at 842, while the number of employees who
left was 626.

Gender-wise

Male Female

Permanent employees 3,035 70

FOCUS OF OUR RESPONSE Contractual employees 4,567 76

 Creating growth-oriented work and structure

 Augmenting learning and development initiatives for

further up-skilling employees

 Succession planning

 Creating a differentiated employee experience

 Providing a healthy and safe work environment

 Festive celebrations to bring all the employees closer

like family. “The Nerolac family”.

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______________________J_
Human Capital 102nd Annual Report 2022

Gender-wise Zone-wise Age-wise

Distribution Criterion 30-50
Male Female North South East West <30 years >50 years
years
New employee
806 36 266 93 104 379 374 422 46
hiring details
Employee
610 16 212 90 81 243 236 365 25
turnover details

27% 20%
Rate of new employee hires Employee turnover

Preparing Nerolites of today for the challenges of tomorrow oOo

To ensure the organisation’s future-readiness, we endeavour to effectively sustain various M'Yi)
core programmes established over the years. These are:

• Digitallearning DEGREED (a L&D platform for • Increased employee interaction with the senior
senior personnel of the organisation) management at plant sites and different markets
(visits by senior management across plants and
• I am Nerolac page (a digital media platform to form a depots)
link between the employees and the brand)

• UDAAN - virtual assessment centre (identification • Re-launch of GEMS portal (technical and plants)
(appreciation from your fellow colleagues in
of potential high achievers in all functions)
the form of gems in case of good performance,
• 
Employee engagement survey hosted on HR situation handling or exceptional behaviour)
portal for employee
• Vaccination drive (fighting COVID-19 together
• 
Managerial assessment centre at (L0-L3 level as one nation, by organising vaccination drive
mapping of potential managers) throughout India at plants depot’s and offices.)

• Quarterlytownhall meetings (addressed by the • Celebrating

Diversity (MDs address to women
MD the achievements and concerns of the relevant employees on International Women’s Day)
period)
• Employee Participation in CSR Initiatives
• Webinars addressing health and well-being of
• NPL (Nerolac Premier League) – Gamification of
our employees in association with our medical
employee performance assessment
insurance partner

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KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Our focus on Gender Diversity Performance Management System

KNPL has been working towards increasing the scope of A performance evaluation process that symbolises
hiring female employees. Through consistent identification company’s fairness, transparency and trust is what we foster
of unique positions that can be manned by female here at KNPL. All employees are reviewed based on their
employees and tie-up with consultants exclusively handling performance and the performance appraisal process is
Diversity Hiring, we intend on continuing increasing our conducted annually. In addition to the same, our Contest-
female workforce. Based Framework also partly contributes as a basis for the
annual performance evaluation, in terms of both quantitative
and qualitative appraisal. The Contest has KPIs that are
Currently, women employees is 2.3% of objectively defined in-line with organisation growth strategy
our permanent employees as compared to at the beginning of the financial year and are directed towards
1.73% in previous year. collaborative achievement of our organisational objectives.
This ensures that employees are well-integrated with the
Employee Benefits performance-driven culture.

KNPL offers a range of employee benefits including gratuity

and superannuation, medical and life insurance, group
accident insurance, maternity leave, pension and other PL
retirement benefits and Provident Fund contributions.
These benefits are subject employment terms (vary in case
of permanent and contractual employees). In FY 2021-22,
a total of 70 female employees were entitled to parental
leave. We, as an organisation, foster an equal opportunity
culture within the organisation. All recruitments are based
on competence, potential and experience of candidate with
respect to a job profile. Nerolac Premier League

The Contest-Based Framework offers aid in reviewing an

Talent Development individual’s performance along with system-generated
Talent development is directed towards practices dashboards. These together enable the employees to review
that make employees more productive. Regular in- their own performance in a transparent manner.
house and external trainings are given to workers with These dashboards are user-friendly and generate insights
the intent of self development, skill enhancement, through colour coding on a month-to-month performance
an all-rounder understanding and safety awareness and cumulative yearly performance basis. Based on such
at workplace. insights, improvement areas are identified and the teams are
motivated to perform better. To keep the engagement levels
Also, high potential performers from the above-mentioned
high, we decided to gamify our framework by introducing
talent inventory are put through extensive training, cross- NPL – Nerolac Premier League. Also every month’s
functional assignments, projects and mentoring. top performers are featured in our internal monthly
newsletter – “Impressions”.
Multifold approach towards capability development -

Functional training Behavioural training ESG training

• Advanced Business Skill
Modules
• Online Sales Induction Module
~ • Corporate Grooming
• Stress Management ~ • POSH Training
• Code of Conduct ~
• Communication Skills • Code of Conduct for Affirmative
• Nominations for functional action
specific external training
• Interpersonal Skills • Health Ailment related policy

• Policy on social conduct at
workplace
• Supplier code of conduct policy
for Purchase function

94
 Human Capital

=====-- - 102nd Annual Report 2022

Recognition
KNPL has been certified as a Great Place to Work by the Great Place to Work Institute for the second time.

DIMENSION OF A GREAT PLACE TO WORK@

CREDIBILITY

•
Communication – Communications are open and accessible
Competence – Competence in coordinating human and material resources
Integrity – Integrity in carrying out vision with consistency

RESPECT
Great
Place

TRUST
Support – Supporting professional development and showing appreciation
Collaborating – Collaboration with employees in relevant decisions
Caring – Caring for employees as individuals with personal lives

FAIRNESS
To
Work®
•
Equity – Balanced treatment for all in terms of rewards
- Impartiality – Absence of favouritism in hiring and promotions
Justice – Lack of discrimination and process for appeals

PRIDE Certified
Personal Job – In personal job, individual contributions
JUL 2021- JUL 2022
Team – In work, produced by one’s team or work group
Company – In the organisation’s product and standing in the community INDIA
CAMARADERIE

•
Intimacy – Ability to be oneself
Hospitality – Socially friendly and welcoming atmosphere
Community – Sense of “family” or “team”

 eing Certified as Great Place to Work indicates happiness of employee, the trust they impose on the organisation being fair
B
and transparent, how proud and empowered they feel in working for Kansai Nerolac Paints. It also indicates Brand value of
organisation

Employee Engagement

Credibility Respect Fairness Pride Camaraderie

• Visit by Senior • Up-skilling & Talent • Celebrating • Idea Portal • Annual Learning
Management Development Diversity & Champion Conference
initiatives (MDs address initiative
across States & • Employee
Plants in Q2 • Launch of Digital to women • Re-launch of Participation in
(21-22) University employees on GEMS portal CSR Initiatives
• Town Hall Meets • Connect with IWD) (Technical &
families (Webinars • Celebrating
by MD on wellbeing)
• NPL & Plants) festivities at HO
Appreciation & Plants
• Vaccination Drive Matrix

95
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

Employee Connect Occupational Health, Safety and Environment

We have established effective employee connect and Safety has always been a cornerstone of our business
communication platforms. The key ones are: value system and we constantly endeavour to maintain high
standards and build strong culture around the safety and
Coffee with HR – A Meet and Greet session with the HR as health. Our approach to safety is encapsulated by zero harm
a part of the induction training of new employees. and building safety-first mindset and the same is articulated
HR connects - Understanding the road travelled so far by our robust safety management systems and well-defined
by the high performance employees once a year, on the Occupational Health, Safety and Environmental Policy.
Nerolac journey.
Townhall meet – Quarterly townhall meets are held to Coming out of COVID
discuss the progress of the organisation At KNPL, vaccination drive for both doses of
COVID-19 vaccine was conducted for all its
A 3-day Annual Learning Conference (ALC), was held online
employees. In continuation with the last year’s set
for all Managers. Theme for the Annual Learning Conference
of guidelines on conditional resumption of work
was “Good to Great”. The Learning Conference was a
from office, KNPL successfully opened offices at
notable event as it provided a platform for communication
50% capacity since August. Coming out of the 2nd
to representatives of all functions about the company’s
and 3rd wave of COVID-19 with highest safety
performance as well as the future plans and direction.
measures, extra attention to hygiene at workplace,
Interactive Digital Workshop was held for Decorative Sales & hygiene at canteen and disinfection of premises,
Marketing for improving adoption of ML app (Saathi). medical emergency preparedness and COVID-19
waste disposal was released to prepare the plants
Ethics and Integrity and the depot, ensuring the safety and well-being of
Establishing appropriate behavioural norms with discipline, all employees.
professionalism and best ethical practices as fundamental,
Taking thorough precautionary measures inside
KNPL has created a code of conduct for its Managerial and
the work premises, the organisation also focussed
Executive Staff. The intent of this code of conduct has always
on educating its employees to take maximum
been guiding and regulating administration of its employees.
precautionary measures outside work as well. To
It also strives to engrave company’s core values while
minimise human and surface contact initiatives like:
understanding the best-in-class practices and establishing
centers of excellence at KNPL. • 
Carpooling with the other employees (with
geographical convenience) to avoid public
Code of Conduct transportation
Designed for managerial employees and executives of KNPL and
• Face recognition for attendance purposes (initially
its subsidiaries to establish boundaries and spread awareness thumb recognition was used)
about the Company’s Code of Conduct. It states fundamental
aspects of appropriate behavioural norms like discipline, self-
control, professionalism and best ethical practices.

Whistle Blower
To ensure that employees come forward with their
grievances and actively report genuine concerns, KNPL has
a Whistle Blower Policy. The organisation continues to stay
in compliance with high standards of openness, integrity,
probity and reliability in its work. The company encourages
its employees who have concerns about suspected serious
misconduct to come forward and report these concerns
without fear of punishment, reprisal or unfair treatment.
Proper safeguards ensure that all employee concerns
receive due consideration. Distribution of COVID relief material

96
 Human Capital 102nd Annual Report 2022

-
Health and Safety Management System

Policy Committee Cross-functional Structure

Dedicated Company-wide Definite Safety Committee with Comprising trained personnel from
Occupational Health, Safety and representation from workmen and Production, Engineering, EHS
Environment (OHS&E) Policy periodic reviews
Outcome
Outcome Outcome • Hazard identification and risk
• Delineates Organisational • Compliance with Factories Act, 1948 mitigation to improve safety
Commitment towards health & safety • Ensures participation of all to preparedness
at every facet of business operations monitor and manage health & safety • Joint assessment of risks in the
• Institutionalise safety as a value-led aspects operations and implementation of
concept • Strengthen safety framework & mitigation measures
• Embed culture of safety for greater stakeholder consultation
awareness • Inculcate sense of ownership at all

Certification
All plants are ISO 45001 certified
levels

Emergency Resource
Dedicated Occupational Health
_L_____
Drills
Mock drills and fire drills are conducted
and periodic surveillance audits are Centres (OHCs) & Ambulances periodically, some in collaboration with
conducted NDRF (National Disaster Response
Outcome
Force)
Outcome • Handle emergency medical
• Establish robustness and asserts situations Outcome
effectiveness of the safety systems • Offer preventive and curative health • Improve preparedness &
services to its employees responsiveness amongst employees
for emergency
• OHC compliant analysis enables us
to determine the cause of complaints
and understand the trends

Health Check-ups Safety Audit PHA & HAZOP

Conducted half yearly for all Internal: Monitoring & review of safety Process Hazard Analysis & Hazard
employees including contract workmen indicators by corporate EHS and Operability study
in line with Factories Act, 1948
External: Periodic audits conducted by Outcome
Outcome approved safety experts and OEMs. • Identification of likely safety risks
• Medical counselling by practitioner In FY 2021-22, audit conducted at
and hazards
and identifying specific areas of • Institution of mitigation strategy and
Bawal Plant by Parent Company
concern action plan
Kansai Paint Co., Ltd., Japan in line
• Fosters employee well-being with its exclusively defined Global
Safety and Quality (GSQ) standards

Outcome
• Strengthen documentation and
record-keeping
• Enhance safety measures & control
• De-risking the operations

97
KANSAI NEROLAC PAINTS LIMITED
II CORPORATE OVERVIEW

HIRA Study Fire Safety Chemical Safety

Hazard Identification and Risk Conduct study on Fire load to analyse 100% compliance to storage of raw
Assessment fire load densities at various sections materials as per Chemical Compatibility
of the plant, Deployment of adequate
Outcome Outcome
measures for Detection, Provision,
• Track expected hazards and risk Activation and Suppression
• Effective chemical management and
analysis to put control measures enhanced chemical safety
in place Outcome • Reduce inherent hazards by proper
• Determine the adequacy and segregation, storage and handling of
suitability of the fire-fighting chemicals
equipment in case of fire

Interlock System Internal Safety Procedures

Assessment of existing interlock system robustness and Periodic earthing check at shop floor, Safety walk, safety
identification of new areas communication, Toolbox Talk, CFT 5S & safety inspection

Outcome Outcome
• Establish workability & robustness of the interlock system • Increase robustness and create a sense of awareness
about safety
Safety Trainings and Competitions
Safety is our top-most priority. Our constant focus is to maintain
high standards of safety in our operations and imbibe the Safety Culture Survey
safety-must mindset in every employee. We conduct varied Safety culture survey is conducted across all
thematic safety trainings and competitions like Kiken Yochi manufacturing locations and R&D centre biennially.
Trainings (KYT), Danger Experience Programme (DEP), Life
This year, we extended our boundary and covered
After Accident (LAA) exercise, trainings on static electricity
and human error prevention, online safety tests, safety quiz, the manufacturing facility at Goindwal Sahib as well.
and CAPA completion across different levels. In addition, we The survey covered Management staff as well as
have instituted ‘Self-learning Safety Training Kiosks’ with operators. Through this survey, we aim to promote
customised training modules to increase the competency open feedback culture and and fulfil the requirements
and awareness among employees in relation to safety. in regards to safety.
A special emphasis is laid on behavioural-based safety as
most of the incidents are caused due to behavioural issues The survey is designed to measure the safety culture
like procedural violation, negligence or PPE non-compliance. and identify leading indicators of the safety process.
In order to address this, we have initiated BBS observations The survey included questions on - Training and
across all locations and impart BBS trainings to employees supervision, Safe work procedures, Consultation,
at regular interval. Reporting safety, Management commitment and
Injury management and return to work.

In 2021, the survey covered 843 Management Staff

and 687 Operators and was conducted through HR
Workline Portal for Management Staff and through
physical hard copies in regional languages for
Operators. The Overall Safety Culture Score improved
by 0.6% i.e. from 88.7% in 2019 to 89.3% in 2021.

Road Safety Training

98
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Human Capital 102nd Annual Report 2022

Incident Management
Personal Level Risk Assessment • Commitment to achieve ZERO Incident
Personal level risk assessment (PLRA) is an initiative
• Online IT-enabled SAP EHS module to record, track and
to encourage assessment of risks involved in any ensure timely closure of safety incidents
activity about to be performed on individual level in
daily occupational activity as well as routine/general • Root cause assessments for every safety-related events
life activity. and horizontal deployment of counter-measures to
eliminate their recurrence
It is a process through which an individual would
identify hazard, define risks associated with that In FY 2021-22:
hazard, and determine the best way to eliminate
or control the hazard. It involves taking a thorough Despite of the robust safety measures and regular
inspection of the workplace in order to identify all the sensitisation and trainings on safety-related topics, we
situations, processes and equipment that may cause faced an unfortunate lost time injury at our facility located
harm and making decisions regarding the measures in Goindwal Sahib. The person was instantly given first aid
that can be taken to control the harm. at the site and was immediately rushed to nearby hospital
for further treatment. We conducted a detailed investigation
The goal of PLRA is to either completely remove a
of the incident and have implemented corrective actions to
hazard or reduce its risk in the workplace.
prevent such recurrence.

Lost Time Injury Severity Rate

Frequency Rate (Per Million
(Per Million Man-Hours Man-Hours
worked) worked)

In FY 2021-22, we achieved 36,222 man-hours of safety 0.099 4.99

trainings across all levels ensuring 92% coverage. Our safety
training man-hours per employee has increased from 3 hours
to 9 hours since FY 2017-18. Lost Time Injuries (LTI) Minor Injuries
External Trainings, Competitions and Audits 1 4
In continuation to previous year, we attended various external
trainings and webinars conducted by the Indian Chemical
Council (ICC), Confederation of Indian Industry (CII), and
Million man-hours Occupational Illness
the Federation of Indian Chambers of Commerce & Industry
(FICCI) with regard to safety. worked without LTI

To drive a culture of constant improvement and learning, our

1.67 0
plant teams also actively participate in external competitions.
In FY 2021-22, our Bawal Plant was bestowed with “Platinum Way Forward
Award” for outstanding projects in “Safety Excellence in Going ahead, we aim to strengthen our safety management
Chemical Category” at Golden Bird National Award 21-22 system through implementation of effective safety measures,
while our Lote Plant received 2nd level award: Shreshta reviewing robustness and improving overall safety culture
Suraksha Puraskar at NSCI Safety Awards. based on learnings from other industries. We plan to
During the reporting period, our Bawal Plant was audited conduct audits in line with KPJ GSQ standards to improve
by our Parent Company Kansai Paint Co., Ltd., Japan preparedness across all locations.
(KPJ) in line with the KPJ Global Safety and Quality (GSQ)
Standards. The plant was audited on the attributes like
Management System, Fire prevention, Out-flow prevention,
Occupational accident prevention, Disaster measures and
chemical safety. The plant secured a score of 98%, which
reflected the readiness and measures and controls in place
in regards to safety.
99
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

[ ( KANSAI
PAINT
NEROLAC
KANSAI NEROLAC PAINTS LIMITED
Registered Office: ‘Nerolac House’, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013, Maharashtra.
Tel.: +91-22-24934001 • Website: www.nerolac.com • Investors Relations e-mail ID: [email protected]
Corporate Identity Number (CIN): L24202MH1920PLC000825

Notice
NOTICE is hereby given that the 102nd Annual General 6.  o consider and, if thought fit, to pass the following
T
Meeting of Kansai Nerolac Paints Limited will be held through Resolution as an Ordinary Resolution:
Video Conferencing (“VC”) or Other Audio Visual Means “RESOLVED that pursuant to the provisions of Sections
(“OAVM”), on Thursday, 23rd June, 2022 at 11 a.m. (IST), to 196, 197, 198 and other applicable provisions, if any,
transact the following business: of the Companies Act, 2013, read with Schedule V of
the said Act (including any statutory amendment or
Ordinary Business: modification or re-enactment thereof, for the time being
in force), consent of the Company be and is hereby
1.  o consider and adopt the audited financial statements
T accorded to the appointment of Mr. Anuj Jain (holding
(including the consolidated financial statements) of Director Identification Number 08091524) as the
the Company for the year ended 31st March, 2022 Managing Director of the Company for a period of 5 (five)
and the Reports of the Board of Directors and the years commencing from 1st April, 2022 and ending on
Auditors thereon. 31st March, 2027 (both days inclusive) on the
remuneration and perquisites as set out in the draft
2. To confirm the interim dividend of ₹1.25 (125%) per Agreement to be entered into between the Company and
Equity Share of the nominal value of ₹1 each already Mr. Jain, the material terms of which are as stated in the
paid and to declare a final dividend of ₹ 1.00 (100%) Explanatory Statement annexed to the Notice convening
per Equity Share of the nominal value of ₹1 each for the Annual General Meeting.
the year ended 31st March, 2022.
RESOLVED FURTHER that the Board of Directors
3. To appoint a Director in place of Mr. Shigeki Takahara, and/or Key Managerial Personnel of the Company be
Non-Executive Director (holding Director Identification and are hereby authorised to enter into an Agreement
Number 08736626), who retires by rotation and being on behalf of the Company with Mr. Jain, in terms of
eligible, offers himself for re-appointment. the aforesaid draft Agreement and to do all such acts,
deeds, matters and things as may be deemed necessary,
4. To appoint a Director in place of Mr. Takashi Tomioka, desirable, proper or expedient for the purpose of giving
Non-Executive Director (holding Director Identification effect to the above resolution.”
Number 08736654), who retires by rotation and being 7.  o consider and, if thought fit, to pass the following
T
eligible, offers himself for re-appointment. Resolution as a Special Resolution:

“RESOLVED that pursuant to the provisions of
Special Business: Sections 149, 150, 152, Schedule IV and other
applicable provisions of the Companies Act, 2013,
5.  o consider and if thought fit, to pass the following
T read with applicable rules made thereunder
Resolution as an Ordinary Resolution: and Securities and Exchange Board of India

“RESOLVED that pursuant to the provisions of (Listing Obligations and Disclosure Requirements)
Section 148 and other applicable provisions, if any, of Regulations, 2015 (including any statutory amendment
the Companies Act, 2013, read with the Companies or modification or re-enactment thereof, for the time
(Audit and Auditors) Rules, 2014 and Companies being in force), Ms. Sonia Singh, Independent Director
(holding Director Identification Number 07108778),
(Cost Records and Audit) Rules, 2014 (including any
be and is hereby re-appointed as an Independent
statutory amendment or modification or re-enactment
Director, to hold office for a second term of 5 (five)
thereof, for the time being in force), the remuneration of years commencing from 29th July, 2022 and ending
the Cost Auditor, D. C. Dave & Co., Cost Accountants on 28th July, 2027 (both days inclusive).
(Firm Registration No. 000611), to conduct the audit
of the cost records of the Company for the financial RESOLVED FURTHER that the Board of Directors
year ending 31st March, 2023, as recommended by and/or Key Managerial Personnel of the Company be
the Audit Committee and approved by the Board of and are hereby authorised to do all such acts, deeds,
matters and things as may be deemed necessary,
Directors, be and is hereby ratified.
desirable, proper or expedient for the purpose of giving
RESOLVED FURTHER that the Board of Directors effect to the above resolution.”
and/or Key Managerial Personnel of the Company be For and on behalf of the Board
and are hereby authorised to do all such acts, deeds,
matters and things as may be deemed necessary, P. P. Shah
desirable, proper or expedient for the purpose of giving Chairman
effect to the above resolution.” Mumbai, 10th May, 2022

100
----------------------'-
Notice

NOTES: 4. 
102nd Annual Report 2022

The Members can join the AGM through the

VC/OAVM mode 30 minutes before the scheduled
1. In view of the COVID-19 pandemic and in compliance
time of the commencement of the Meeting by following
with the Circular No. 21/2021 dated 14th December, 2021
the procedure mentioned in the Notice. The facility
read with Circular No. 14/2020 dated 8th April, 2020,
of participation at the AGM through VC/OAVM
Circular No.17/2020 dated 13th April, 2020, Circular
will be made available for 1000 members on
No. 20/2020 dated 5th May, 2020, Circular No.
first come first served basis. This will not include
02/2021 dated 13th January, 2021 issued by the
large Shareholders (Shareholders holding 2%
Ministry of Corporate Affairs (“MCA Circulars”) and
or more shareholding), Promoters, Institutional
Circular No. SEBI/HO/CFD/CMD2/CIR/P/2021/11
Investors, Directors, Key Managerial Personnel, the
dated 15th January, 2021 read with Circular No. SEBI/
Chairpersons of the Audit Committee, Nomination
HO/CFD/CMD1/CIR/P/2020/79 dated 12th May, 2020
and Remuneration Committee and Stakeholders’
(“SEBI Circulars”) issued by the Securities
Relationship Committee, Auditors etc. who are allowed
and Exchange Board of India and relevant provisions
to attend the AGM without restriction on account of first
of the Companies Act, 2013 (“the Act”) and Securities
come first served basis.
and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015 5. The attendance of the Members attending the AGM
(“SEBI Listing Regulations”), the AGM will be through VC/OAVM will be counted for the purpose of
held without the physical presence of Shareholders reckoning the quorum under Section 103 of the Act.
at a common venue. In this Annual Report, the
6. 
The Shareholders, seeking any information with
connotation of “Members” and “Shareholders”
regard to the accounts or any matter to be placed
is the same.
at the AGM, are requested to write to the Company
Accordingly, in compliance with the applicable
 on or before Friday, 17th June, 2022, through e-mail
provisions of the Act read with the said Circulars and on [email protected]. The same will be replied by/on
SEBI Listing Regulations, the Company has decided behalf of the Company suitably.
to convene its ensuing 102nd AGM through VC/OAVM
In view of the COVID-19 pandemic and in line
7. 
and the Members can attend and participate in the
with the relevant Circulars issued by the MCA and
ensuing AGM through VC/OAVM.
SEBI, the Annual Report including Notice of the
2. Explanatory Statement pursuant to Section 102 of the 102nd AGM of the Company inter alia indicating the
Act relating to Item nos. 5, 6 and 7 of the Notice of the process and manner of e-voting is being sent by
102nd AGM, which is considered to be unavoidable e-mail, to all the Shareholders whose e-mail IDs are
by the Board of Directors of the Company, is annexed registered with the Company / Depository Participant(s)
hereto. Also, relevant details in respect of Directors for communication purposes to the Shareholders and
seeking re-appointment at the AGM, in terms of to all other persons so entitled.
Regulation 36(3) SEBI Listing Regulations and
Clause 1.2.5 of Secretarial Standard - 2 on General Further, in terms of the applicable provisions of
Meetings are also annexed to this Notice. the Act, SEBI Listing Regulations read with the
relevant Circulars issued by MCA and SEBI, the
Pursuant to the provisions of the Act, a Member
3. 
entitled to attend and vote at the AGM is entitled to Annual Report including Notice of the 102nd AGM
appoint a proxy to attend and vote on his/her behalf of the Company will also be available on the website
and the proxy need not be a Member of the Company. of the Company at www.nerolac.com. The same
However, since this AGM is being held through can also be accessed from the websites of the
VC/OAVM, whereby physical attendance of Members Stock Exchanges i.e. BSE Limited at www.bseindia.com
has been dispensed with and in line with relevant and National Stock Exchange of India Limited
SEBI Circulars, THE FACILITY TO APPOINT A at www.nseindia.com and on the website of
PROXY TO ATTEND AND CAST VOTE FOR THE National Securities Depository Limited (“NSDL”)
SHAREHOLDER IS NOT MADE AVAILABLE FOR i.e. https://www.evoting.nsdl.co.in.
THIS AGM and hence the Proxy Form and Attendance
8. Voting through electronic means
Slip are not annexed to this Notice.
However, in terms of the provisions of Sections 112 Pursuant to the provisions of Section 108 of the Act
and 113 of the Act read with the relevant Circulars, read with Rule 20 of the Companies (Management
Corporate Members are entitled to appoint their and Administration) Rules, 2014 (as amended)
authorized representatives to attend the AGM through and Regulation 44 of SEBI Listing Regulations
VC/OAVM on their behalf and participate thereat, and the relevant Circulars issued by MCA the
including cast votes by electronic means (details of Company is providing facility of “e-voting” to its
which are provided separately, hereinbelow). Such Members in respect of the business to be transacted
Corporate Members are requested to refer ‘General at the AGM by electronic means. For this purpose,
Guidelines for Shareholders’ provided in hereinbelow, the Company has entered into an agreement with
for more information. NSDL for facilitating voting through electronic means,

101
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

as the authorized agency. The facility of casting votes How do I vote electronically using NSDL e-voting
by a member using remote e-voting system as well system?
as e-voting on the date of the AGM will be provided The way to vote electronically on NSDL e-voting system
by NSDL. consists of “Two Steps” which are mentioned below:
Further, in accordance with Section 108 of the Act
read with Rule 20 of the Companies (Management  Step 1: Access to NSDL e-voting system
and Administration) Rules, 2014 (as amended), the Login method for e-voting and joining virtual
A) 
Company has fixed Thursday, 16th June, 2022 as meeting for individual Shareholders holding
the “cut-off date” to determine the eligibility to vote securities in demat mode
by remote e-voting or e-voting at the AGM. A person
In terms of SEBI Circular dated 9th December, 2020

whose name is recorded in the Register of Members
on e-voting facility provided by Listed Companies,
or in the Register of Beneficial Owners maintained by
individual Shareholders holding securities in
the Depositories as on the cut-off date, i.e. Thursday,
demat mode are allowed to vote through their
16th June, 2022, shall be entitled to avail the facility of
demat account maintained with Depositories
remote e-voting or e-voting at the AGM.
and Depository Participant(s). Shareholders are
Only those Shareholders, who will be present
 advised to update their mobile number and e-mail
at the AGM through VC/OAVM facility and who ID in their demat account(s) in order to access
would not have cast their vote by remote e-voting e-voting facility.
prior to the AGM and are otherwise not barred from
Login method for individual Shareholders

doing so, shall be eligible to vote through e-voting at
holding securities in demat mode is given below:
the AGM.
9. 
The Company has appointed Mr. J. H. Ranade, Type of Login Method
Membership No. F4317 & Certificate of Practice No. 2520 shareholders
or failing him Mr. Sohan J. Ranade, Membership Individual Existing IDeAS user can visit the
1. 
No. A33416 & Certificate of Practice No. 12520 Shareholders e-Services website of NSDL viz.
or failing him Ms. Tejaswi A. Zope, Membership holding securities https://eservices.nsdl.com/ either
No. A29608 & Certificate of Practice No. 14839 in demat mode with on a personal computer or on a
(anyone of them), being Partners of JHR & Associates, NSDL. mobile. On the e-Services home
Company Secretaries in practice, as the Scrutinizer page click on the “Beneficial
to scrutinize the remote e-voting and the e-voting at Owner” icon under “Login” which
the AGM in a fair and transparent manner. is available under ‘IDeAS’ section,
this will prompt you to enter your
THE INSTRUCTIONS FOR MEMBERS FOR REMOTE existing User ID and Password.
E-VOTING AND JOINING GENERAL MEETING ARE
AS UNDER:- After successful authentication,
you will be able to see e-voting
The remote e-voting period begins on Monday,
services under ‘Value added
20th June, 2022 at 9:00 a.m. and ends on Wednesday,
services’. Click on “Access
22nd June, 2022 at 5:00 p.m. The remote e-voting
to e-voting” under e-voting
module shall be disabled by NSDL for voting
services and you will be able
thereafter. The Members, whose names appear
to see e-voting page. Click on
in the Register of Members / Beneficial Owners
as on the record date (cut-off date) i.e. Thursday, company name or e-voting
16th June, 2022, may cast their vote electronically. service provider i.e. NSDL
The voting right of shareholders shall be in and you will be re-directed
proportion to their share in the paid-up equity share to e-voting website of NSDL
capital of the Company as on the cut-off date, being for casting your vote during
16th June, 2022. A person who is not a Member the remote e-voting period or
as on the cut-off date should treat this Notice for joining virtual meeting & voting
information purposes only. during the meeting.

102
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Notice

Type of Login Method Type of

102nd Annual Report 2022

Login Method
shareholders shareholders
2. 
If you are not registered for Individual 1. Existing users who have
IDeAS e-Services, option Shareholders opted for Easi / Easiest, they
to register is available at holding securities can login through their User
in demat mode with ID and Password. Option
https://eservices.nsdl.com.
CDSL will be made available to
Select “Register Online for
reach e-voting page without
IDeAS Portal” or click at
any further authentication.
https://eservices.nsdl.com/
The URL for users to login to
SecureWeb/IdeasDirectReg.jsp Easi/ Easiest are https://web.
3. 
Visit the e-voting website of cdslindia.com/myeasi/home/
NSDL. Open web browser login or www.cdslindia.com and
by typing the following URL: click on New System Myeasi.
https://www.evoting.nsdl.com/ 2. After successful login of Easi/
either on a personal computer Easiest the user will also be
or on a mobile. Once the able to see the e-voting Menu.
The Menu will have links of
home page of e-voting system
e-voting service provider i.e.
is launched, click on the icon
NSDL. Click on “NSDL” to cast
“Login” which is available
your vote.
under ‘Shareholder/Member’
3. If the user is not registered for
section. A new screen will
Easi/Easiest, option to register
open. You will have to enter
is available at
your User ID (i.e. your sixteen
digit demat account number  https://web.cdslindia.com/myeasi/
held with NSDL), Password/ Registration/EasiRegistration
OTP and a Verification Code 4.  Alternatively, the user can
as shown on the screen. After directly access e-voting page
successful authentication, by providing Demat Account
you will be redirected to Number and PAN No. from
a link in www.cdslindia.com
NSDL Depository site wherein
home page. The system
you can see e-voting page.
will authenticate the user by
Click on company name or
sending OTP on registered
e-voting service provider
Mobile & e-mail as recorded
i.e. NSDL and you will be in the demat account. After
redirected to e-voting website successful authentication, user
of NSDL for casting your will be provided links for the
vote during the remote respective ESP i.e. NSDL where
e-voting period or joining the e-voting is in progress.
virtual meeting & voting during Individual You can also login using the login
the meeting. Shareholders credentials of your demat account
4. Shareholders/Members can (holding securities through your Depository Participant
also download NSDL Mobile in demat mode) registered with NSDL/CDSL for
App “NSDL Speede” facility login through e-voting facility. Upon logging in,
by scanning the QR code their depository you will be able to see e-voting
mentioned below for seamless participants option. Click on e-voting option, you
voting experience. will be redirected to NSDL/CDSL
Depository site after successful
NSl:I L Mob! App Is y kl la Gil authentication, wherein you can see
e-voting feature. Click on company
ti App.Stare: Goog11! PJ~
name or e-voting service provider
i.e. NSDL and you will be redirected
to e-voting website of NSDL for
casting your vote during the remote
e-voting period or joining virtual
meeting & voting during the meeting.

103
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

 elpdesk for Individual Shareholders holding securities

H Manner of holding shares Your User ID is:
in demat mode for any technical issues related to login i.e. Demat (NSDL or CDSL)
through Depository i.e. NSDL and CDSL. or Physical
b)  For Members who 16 Digit Beneficiary ID
Login type Helpdesk details hold shares in demat
account with CDSL. For example if your
Individual Members facing any technical
Beneficiary ID is
Shareholders holding issue in login can contact NSDL 12************** then your
securities in demat helpdesk by sending a request User ID is 12**************
mode with NSDL at [email protected] or call at c)  For Members holding EVEN Number followed by
toll free no.: 1800 1020 990 and shares in Physical Folio Number registered
1800 22 44 30 Form. with the Company
Individual Members facing any technical For example if folio number
Shareholders holding issue in login can contact CDSL is 001*** and EVEN is
119880 then User ID is
securities in demat helpdesk by sending a request at
119880001***
mode with CDSL [email protected]
or contact at 022-23058738 or 5. P
 assword details for shareholders other than
022-23058542-43 individual Shareholders are given below:


Important note: Members who are unable to retrieve a) If you are already registered for e-voting,
User ID/ Password are advised to use ‘Forget then you can user your existing password
to login and cast your vote.
User ID’ and ‘Forget Password’ option available at
above mentioned website. b) If you are using NSDL e-voting system
for the first time, you will need to
B) 
Login Method for e-voting and joining virtual retrieve the ‘initial password’ which was
meeting for shareholders other than individual communicated to you. Once you retrieve
Shareholders holding securities in demat your ‘initial password’, you need to enter
mode and shareholders holding securities in the ‘initial password’ and the system will
physical mode. force you to change your password.
How to Log-in to NSDL e-voting website? c) How to retrieve your ‘initial password’?
1. 
Visit the e-voting website of NSDL. Open (i) 
If your e-mail ID is registered in
web browser by typing the following your demat account or with the
URL: https://www.evoting.nsdl.com/ either on Company, your ‘initial password’ is
a Personal Computer or on a mobile. communicated to you on your e-mail
ID. Trace the e-mail sent to you from
 nce the home page of e-voting system is
2. O
NSDL from your mailbox. Open the
launched, click on the icon “Login” which is
e-mail and open the attachment
available under ‘Shareholder/Member’ section.
i.e. a .pdf file. Open the .pdf file.
3. A new screen will open. You will have to enter The password to open the .pdf file
your User ID, your Password/OTP and a is your 8 digit client ID for NSDL
Verification Code as shown on the screen. account, last 8 digits of client ID for
 Alternatively, if you are registered for NSDL CDSL account or folio number for
eservices i.e. IDeAS, you can log-in at shares held in physical form. The
https://eservices.nsdl.com/ with your existing .pdf file contains your ‘User ID’ and
IDeAS login. Once you log-in to NSDL your ‘initial password’.
eservices after using your log-in credentials, (ii) 
If your e-mail ID is not registered,
click on e-voting and you can proceed to please follow steps mentioned
Step 2 i.e. Cast your vote electronically. below in process for those
shareholders whose e-mail IDs
4. Your User ID details are given below :
are not registered.
Manner of holding shares Your User ID is: 6. 
If you are unable to retrieve or have not
i.e. Demat (NSDL or CDSL) received the “Initial password” or have
or Physical forgotten your password:
a)  For Members who 8 Character DP ID followed
hold shares in demat by 8 Digit Client ID Click on “Forgot User Details/
a) 
account with NSDL. For example if your DP ID Password?” (If you are holding
is IN300*** and Client ID is shares in your demat account with
12****** then your user ID is NSDL or CDSL) option available on
IN300***12******. www.evoting.nsdl.com.

104
----------------------'-
Notice

“Physical User Reset Password?”

b) 
102nd Annual Report 2022

Scrutinizer by e-mail to [email protected] with a

(If you are holding shares in copy marked to [email protected]. Institutional
physical mode) option available on shareholders (i.e. other than individuals, HUF,
www.evoting.nsdl.com. NRI etc.) can also upload their Board Resolution /
Power of Attorney / Authority Letter etc. by clicking
c) If you are still unable to get the password
on “Upload Board Resolution / Authority Letter”
by aforesaid two options, you can
displayed under “e-voting” tab in their login.
send a request at [email protected]
mentioning your demat account number/ 2. 
It is strongly recommended not to share your
folio number, your PAN, your name and password with any other person and take utmost
your registered address etc. care to keep your password confidential. Login
d) 
Members can also use the OTP (One to the e-voting website will be disabled upon
Time Password) based login for casting five unsuccessful attempts to key in the correct
the votes on the e-voting system of NSDL. password. In such an event, you will need to go
through the “Forgot User Details/Password?” or
7. 
After entering your password, tick on Agree “Physical User Reset Password?” option available
to “Terms and Conditions” by selecting on the on www.evoting.nsdl.com to reset the password.
check box.
3. In case of any queries, you may refer the Frequently
8. Now, you will have to click on “Login” button. Asked Questions (FAQs) for Shareholders and
9. After you click on the “Login” button, Home e-voting user manual for Shareholders available
page of e-voting will open. at the download section of www.evoting.nsdl.com
or call on toll free no.: 1800 1020 990 and

Step 2: Cast your vote electronically and join 1800 22 44 30 or send a request to Ms. Pallavi
General Meeting on NSDL e-voting system. Mhatre, Manager - NSDL at [email protected].
How to cast your vote electronically and join


Process for those shareholders whose e-mail
General Meeting on NSDL e-voting system?
IDs are not registered with the depositories for
1. After successful login at Step 1, you will be able procuring User ID and Password and registration
to see all the companies “EVEN” in which you of e-mail IDs for e-voting for the resolutions set out
are holding shares and whose voting cycle and in this Notice:
General Meeting is in active status.
1. 
If your e-mail address is not registered with
2. Select “EVEN” of company for which you wish to the Depository Participant(s) (if shares held in
cast your vote during the remote e-voting period and electronic form)/ Company (if shares held in
casting your vote during the General Meeting. physical form), you may register on or before
For joining virtual meeting, you need to click on 13th June, 2022, 5:00 p.m. (IST) to receive the
“VC/OAVM” link placed under “Join General Meeting”. Notice of the AGM along with the Annual Report by
3. 
Now you are ready for e-voting as the Voting completing the process as under:
page opens. a. 
Visit the link https://tcpl.linkintime.co.in/
EmailReg/Email_Register.html.
4. 
Cast your vote by selecting appropriate options
i.e. assent or dissent, verify/modify the number of b. Select the name of the Company ‘Kansai Nerolac
shares for which you wish to cast your vote and click Paints Limited’ from dropdown.
on “Submit” and also “Confirm” when prompted.
c. E
 nter details in respective fields such as DP
5. U
 pon confirmation, the message “Vote cast ID and Client ID (if shares held in electronic
successfully” will be displayed. form)/Folio no. and Certificate no. (if shares
held in physical form), shareholder name, PAN,
6. You can also take the printout of the votes cast
mobile no. and e-mail ID.
by you by clicking on the print option on the
confirmation page. d. System will send One Time Password (‘OTP’)
on mobile no. and e-mail ID.
7. O
 nce you confirm your vote on the resolution, you
will not be allowed to modify your vote. e. Enter OTP received on mobile no. and e-mail ID.
f. Click on submit button.
General Guidelines for shareholders
g. System will then confirm the recording of the
1. 
Institutional shareholders (i.e. other than e-mail address for receiving Notice of the AGM
individuals, HUF, NRI etc.) are required to send along with the Annual Report.
scanned copy (PDF/JPG Format) of the relevant
Board Resolution/ Authority Letter etc. with 2. In case shares are held in physical mode please
attested specimen signature of the duly authorized provide Folio No., Name of shareholder, scanned
signatory(ies) who are authorized to vote, to the copy of the share certificate (front and back),

105
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

PAN (self attested scanned copy of PAN 2. 

Members are encouraged to join the Meeting
card), AADHAR (self attested scanned copy of through laptops for better experience.
Aadhar Card) by e-mail to [email protected] for
procuring the User ID and Password for e-voting. 3. Further Members will be required to allow camera
and use internet with a good speed to avoid any
3. In case shares are held in demat mode, please disturbance during the Meeting.
provide DP ID Client ID (16 digit DP ID +
Client ID or 16 digit beneficiary ID), Name, 4. 
Please note that Participants Connecting from
client master or copy of Consolidated Account Mobile Devices or Tablets or through Laptop
statement, PAN (self attested scanned copy connecting via Mobile Hotspot may experience
of PAN card), AADHAR (self attested scanned Audio/Video loss due to fluctuation in their
copy of Aadhar Card) to [email protected] for respective network. It is therefore recommended
procuring the User ID and Password for e-voting. to use Stable Wi-Fi or LAN Connection to mitigate
If you are an individual Shareholders holding any kind of aforesaid glitches.
securities in demat mode, you are requested to
refer to the login method explained at step 1 (A) 5. S
 hareholders who would like to express their views
i.e. Login method for e-voting and joining or ask questions during the AGM may register
virtual meeting for individual Shareholders themselves as a speaker by sending a request from
holding securities in demat mode. their registered e-mail ID mentioning their name,
DP ID and Client ID/Folio Number, PAN, mobile
T HE INSTRUCTIONS FOR MEMBERS FOR
 number at [email protected] from Thursday,
E-VOTING ON THE DAY OF THE AGM ARE 16th June, 2022 (from 9.00 a.m.) to Tuesday,
AS UNDER: 21st June, 2022 (upto 5.00 p.m.). Those Members
who have registered themselves as a speaker
The procedure for e-voting on the day of the
1. 
will only be allowed to express their views / ask
AGM is same as the instructions mentioned above
questions during the AGM. The Company reserves
for remote e-voting.
the right to restrict the number of speakers
2. Only those Members/ Shareholders, who will be depending on the availability of time for the AGM.
present at the AGM through VC/OAVM facility
and have not casted their vote on the Resolutions Other Information
through remote e-voting and are otherwise not
barred from doing so, shall be eligible to vote 
Any person holding shares in demat or physical form
through e-voting system in the AGM. and non-individual shareholder who acquires shares
of the Company and becomes a Member of the
3. 
Members who have voted through remote
Company after sending of Notice and holding shares
e-voting will be eligible to attend the AGM. However,
in demat mode as on the cut-off date may refer the
they will not be eligible to vote at the AGM.
instructions mentioned in “Step 1: Access to NSDL
4. The details of the person who may be contacted e-voting system”.
for any grievances connected with the facility for
e-voting on the day of the AGM shall be the same Scrutinizer’s Report and Declaration of results:
person mentioned for remote e-voting.
(i) The Scrutinizer shall, after the conclusion of e-voting

INSTRUCTIONS FOR MEMBERS FOR ATTENDING at the AGM, first count the votes cast vide e-voting
THE AGM THROUGH VC/OAVM ARE AS UNDER: at the AGM and thereafter shall unblock the votes
cast through remote e-voting, in the presence of
1. Member will be provided with a facility to attend at least two witnesses not in the employment of
the AGM through VC/OAVM through the NSDL the Company. He shall submit a Consolidated
e-voting system. Members may access by following Scrutinizer’s Report of the total votes cast in
the steps mentioned above for Access to NSDL favour or against, not later than 48 (forty eight)
e-voting system. After successful login, you hours of the conclusion of the AGM, to the
can see link of “VC/OAVM link” placed under Chairman or a person authorized by him in writing,
“Join General Meeting” menu against company who shall countersign the same and declare the
name. You are requested to click on VC/OAVM result of the voting forthwith.
link placed under Join General Meeting menu. The
link for VC/OAVM will be available in Shareholder/ (ii) The results declared along with the Scrutinizer’s
Member login where the EVEN of Company will be Report shall be placed on the Company’s
displayed. Please note that the members who do website www.nerolac.com and on the website of
not have the User ID and Password for e-voting NSDL i.e. www.evoting.nsdl.com. The Company
or have forgotten the User ID and Password may shall simultaneously forward the results to BSE
retrieve the same by following the remote e-voting Limited and National Stock Exchange of India
instructions mentioned in the Notice to avoid last Limited, where the shares of the Company
minute rush. are listed.

106
----------------------'-
Notice

10. 
The Shareholders who are holding shares in
102nd Annual Report 2022

Circular No. 20/2020 dated 5th May, 2020

dematerialized form and have not yet registered issued by the MCA, in case the Company
their e-mail IDs with their Depository Participant(s) is unable to pay the Dividend to any
are requested to register their e-mail ID at the Shareholder by the electronic mode, due to
earliest, to enable the Company to use the same for non-availability of their latest bank account
serving documents to them electronically, hereafter. details (Core Banking Solutions Enabled
Shareholders holding shares in physical form may Account Number, 9 digit MICR and 11 digit
kindly provide their e-mail ID to the Registrar and Share IFSC Code), the Company shall dispatch
Transfer Agents of the Company viz. TSR Consultants the dividend warrant / cheque to such
Private Limited (“TCPL”), by sending an e-mail at Shareholder by post.
[email protected]. The support of the
(c) Shareholders holding shares in dematerialized
Shareholders for the ‘Green initiative’ is solicited.
form are hereby informed that bank particulars
11. Dividend registered against their respective depository
accounts will be used by the Company for
(i) T
 he Board has recommended a final dividend of payment of Dividend. The Company / TCPL
100% (` 1.00 per share) for the year, in addition the cannot act on any request received directly
Company had declared interim dividend of 125% from the Shareholders holding shares in
(` 1.25 per share) paid on 22nd November, 2021. dematerialized form for any change of bank
Accordingly, the total dividend is 225% particulars or bank mandates. Such changes
(` 2.25 per share) for the financial year ended are to be advised only to the Depository
31st March, 2022 as compared to total dividend of Participant of the Shareholders.
525% (` 5.25 per share) including special dividend (iv) Pursuant to Finance Act, 2020, dividend income
of 200% (` 2.00 per share) declared last year. is taxable in the hands of Shareholders with effect
(ii) The Register of Members and Share Transfer books from 1st April, 2020 and the Company is required
of the Company will remain closed from Friday, to deduct tax at source from Dividend paid to the
10th June, 2022 to Thursday, 23rd June, 2022 Shareholders at the prescribed rates.
(both days inclusive), for the purpose of AGM For the prescribed rates for various categories,
and Dividend. The Dividend, if declared, will be the Shareholders are requested to refer to the
payable on or after Tuesday, 28th June, 2022, Finance Act, 2020 and amendments thereof.
to those Shareholders whose names are The Shareholders are requested to update their
registered as such in the Register of Members of PAN with the Company / TCPL (in case of shares
the Company as on Thursday, 9th June, 2022 and held in physical mode) and their respective
to the beneficiary holders as per the beneficiary Depository Participant(s) (in case of shares held in
list as on Thursday, 9th June, 2022 provided by dematerialized form).
the Depositories, NSDL and CDSL, subject to
deduction of tax at source where applicable. A resident individual Shareholder with PAN and
who is not liable to pay income tax can submit a
(iii) Payment of Dividend through electronic means yearly declaration in Form No. 15G/15H, to avail
(a) 
The Company provides the facility to the the benefit of non-deduction of tax at source by
Shareholders for remittance of Dividend e-mail to [email protected]
directly in electronic mode through National by 9th June, 2022. Shareholders are requested to
Automated Clearing House (NACH). In view note that in case their PAN is not registered, the tax
of the COVID-19 pandemic and resultant will be deducted at a higher rate of 20%.
difficulties involved in dispatching of physical Resident Shareholders whose Dividend is liable
dividend warrants, Shareholders holding for deduction of TDS at a concessional or Nil rate
shares in physical form and desirous of as per Section 197 of the Income-tax Act, 1961
availing this facility of electronic remittance are can submit the certificate/letter issued by the
requested to provide their latest bank account Assessing Officer, to avail the benefit of lower rate
details (Core Banking Solutions Enabled of deduction or non-deduction of tax at source by
Account Number, 9 digit MICR and 11 digit e-mail to [email protected]
IFSC Code), along with their Folio Number, to by 9th June, 2022.
the Company or TCPL. Shareholders holding
 on-resident Shareholders can avail beneficial
N
shares in dematerialized form are requested
rates under tax treaty between India and their
to provide the said details to their respective
country of residence, subject to providing
Depository Participant(s).
the necessary documents i.e. No Permanent
(b) 
In line with the Circular No. 21/2021 dated Establishment and Beneficial Ownership
14th December, 2021 read with Circular Declaration, Tax Residency Certificate, Form 10F,
No. 02/2021 dated 13th January, 2021 and any other document which may be required

107
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

to avail the tax treaty benefits by sending an 12. In terms of the provisions of Regulation 40 of SEBI
e-mail to [email protected] Listing Regulations and various notifications issued in
The aforesaid declarations and documents need to that regard, requests for effecting transfer of securities
be submitted by the Shareholders by 9th June, 2022. (except in case of transmission or transposition of
securities) shall not be processed from 1st April, 2019
(v) In terms of the provisions of Sections 124 and 125 of
unless the securities are held in the dematerialized
the Act, Dividend which remains unpaid/ unclaimed
form with the depositories. Further, SEBI vide its
for a period of 7 (seven) years from the date of
Circular No. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/236
declaration is required to be transferred to the
dated 2nd December, 2020 read with Circular
Investor Education and Protection Fund (“IEPF”)
No. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 dated
established by the Central Government.
7th September, 2020 had fixed 31st March, 2021 as
Accordingly, the unpaid/ unclaimed dividend
the cut-off date for re-lodgement of physical shares
for the financial year 2013-14, has been
for transfer and the shares that are re-lodged for
transferred by the Company to the IEPF. Those
transfer shall be issued only in demat mode. In view
Shareholders who have not encashed their
of the same, Shareholders are requested to take
Dividends for the financial year 2014-15 are
action to dematerialize the Equity Shares of the
requested to lodge their claims in that regard with
Company, promptly.
the Company or TCPL.
13. 
SEBI has mandated the submission of Permanent
Further, in terms of the provisions of Section 124 Account Number (PAN) by every participant in
of the Act read with the Investor Education and securities market. Shareholders holding shares in
Protection Fund Authority (Accounting, Audit, dematerialized form are, therefore, requested to
Transfer and Refund) Rules, 2016 (“IEPF Rules”), submit their PAN to the Depository Participant(s)
Equity Shares in respect of which dividend has not with whom they maintain their demat accounts.
been paid or claimed for 7 (seven) consecutive Shareholders holding shares in physical form should
years or more from the date of declaration, are also submit their PAN to the Company/ TCPL.
required be transferred to an account viz. IEPF
Suspense Account, which is operated by the IEPF 14. Shareholders are requested to intimate changes, if
Authority pursuant to the IEPF Rules. Accordingly, any, pertaining to their name, postal address, e-mail ID,
in compliance with the aforesaid Rules, the telephone/mobile numbers, PAN, mandates,
Company has already transferred Equity Shares on nominations, power of attorney, bank details (such
which Dividend remained unclaimed for 7 (seven) as name of the bank and branch details, bank
consecutive years starting from the financial year account number, MICR code, IFSC code etc.), with
2013-14 to the IEPF Suspense Account, after necessary documentary evidence, to their Depository
providing necessary intimations to the relevant Participant(s) in case the shares are held by them in
Shareholders. Further, all equity shares of the dematerialized form and to the Company / TCPL in
Company on which dividend has not been paid or case the shares are held by them in physical form.
claimed for 7 (seven) consecutive years or more, 15. In terms of the provisions of Section 72 of the Act,
shall be transferred by the Company to the IEPF the facility for making nomination is available for the
from time to time. Shareholders in respect of the shares held by them.
Shareholders who have not yet registered their
Details of unpaid/unclaimed dividend and equity
nomination are requested to register the same by
shares transferred to IEPF for the financial
submitting Form No. SH-13. Shareholders holding
year 2013-14 are uploaded on the website of
shares in dematerialized form are requested to submit
the Company as well as on the website of the
the said details to their Depository Participant(s) and
Ministry of Corporate Affairs (“MCA”). No claim
the Shareholders holding shares in physical form, are
shall lie against the Company in respect of
requested to submit the said details to the Company
unclaimed dividend amount and equity shares
or TCPL.
transferred to the IEPF and IEPF Suspense
Account, respectively, pursuant to the IEPF Rules. Shareholders are requested to quote their or
16. 
Shareholders can however claim both unclaimed DP ID - Client ID, as the case may be, in all
dividend amount and equity shares from the IEPF correspondence with the Company or TCPL.
Authority by making an online application in web 17. Since the AGM will be held through Video Conferencing/
Form No. IEPF-5, the details of which are available Other Audio Visual Means, route map of venue of the
at www.iepf.gov.in. AGM is not attached to this Notice.

108
----------------------'-
Notice

EXPLANATORY STATEMENT UNDER SECTION 102 OF THE COMPANIES ACT, 2013

102nd Annual Report 2022

ITEM NO. 5 The appointment of Mr. Jain as the Managing Director of the
Company and the remuneration and perquisites proposed
In accordance with the Companies (Cost Records and Audit)
to be paid or granted to him as set out in the aforesaid
Rules 2014, read with the Companies (Cost Records and
draft Agreement are in conformity with the provisions and
Audit) Amendment Rules, 2016, the Company is required
requirements of Schedule V of the Companies Act, 2013
to conduct cost audit of its cost records pertaining to the
(“the Act”). Accordingly, no approval of the Central
products falling under the product categories – Organic &
Government is required to be obtained for the appointment
Inorganic Chemicals, Ores & Mineral Products, Plastics and
of Mr. Jain as the Managing Director of the Company or the
Polymers, Rubbers and Allied Products & Insecticides or proposed remuneration.
any other products required by the law, for the year ending
31st March, 2023. The products of the Company covered The appointment of Mr. Jain as the Managing Director of the
under the aforesaid categories are different types of Company on the remuneration and perquisites as set out
thinners, floor coating products, powder coating products & in the aforesaid draft Agreement is however subject to the
hardeners, fungicidal solutions and Construction Chemicals. approval of the Shareholders in general meeting pursuant to
Section 196 of the Act. Hence the Resolution at Item no. 6 of
The Board of Directors of the Company, based on the the Notice. In accordance with the Articles of Association of
recommendation of the Audit Committee, has approved the the Company, Mr. Jain as the Managing Director will not be
appointment of D. C. Dave & Co., Cost Accountants, as the liable to retire by rotation.
Cost Auditor for the aforesaid product categories for the
financial year 2022-23 on a remuneration of ₹ 3,00,000 plus Mr. Anuj Jain, aged 53 years, is B.Sc. and Master of
GST and out of pocket expenses. Management Studies, University of Mumbai. Mr. Jain
had joined the Company on 4th June, 1990 and was
D. C. Dave & Co., Cost Accountants has also conveyed its Director – Decorative and Industrial Sales & Marketing,
willingness to act as Cost Auditor of the Company for the prior to his appointment on the Board of Directors as a
year ending 31st March, 2023. The eligibility and consent Whole-time Director designated as Executive Director with
letter will be available for inspection of the Shareholders effect from 1st April, 2018.
through electronic mode. Shareholders may write to the
The material terms of the draft Agreement referred to in the
Company at [email protected] in that regard, by mentioning
Resolution at Item no. 6 are as follows:
“Request for Inspection” in the subject of the e-mail.
1. The appointment of Mr. Jain as the Managing Director
In terms of Section 148(3) of the Companies Act, 2013 read of the Company shall be for a period of 5 (five) years
with the Companies (Audit and Auditors) Rules, 2014, the commencing from 1st April, 2022 and ending on
remuneration recommended by the Audit Committee for 31st March, 2027 (both days inclusive).
the Cost Auditor and approved by the Board of Directors is
2. Mr. Jain’s position and designation shall be Managing
required to be ratified subsequently by the Shareholders. Director.
Hence, the Ordinary Resolution set out in Item no. 5 of the
Notice seeks approval of the Shareholders for the same. 3. Mr. Jain shall manage the day to day affairs of the
Company, subject to the superintendence, control and
None of the Directors and/or Key Managerial Personnel direction of the Board of Directors and he shall exercise
of the Company and/or their relatives, are in any way such powers as may from time to time be entrusted
concerned or interested (financially or otherwise), in the to him by the Directors including powers exercisable
proposed Ordinary Resolution. by the Board under the Articles of Association of the
Company and be subject to such restrictions as the
The Board recommends ratification of the remuneration of
Board of Directors may from time to time specify.
the Cost Auditor, D. C. Dave & Co., Cost Accountants (Firm
Registration No. 000611), as recommended by the Audit 4. 
Mr. Jain shall devote his time, attention, skill and
Committee and approved by the Board of Directors, as set out abilities during business hours to the business of the
in Item no. 5 of the Notice, for approval of the Shareholders. Company and undertake to the best of his skill and
ability to use his utmost endeavours to promote the
interest and welfare of the Company and to conform to
ITEM NO. 6 and comply with the directions as may from time to time
The Board of Directors of the Company, at its meeting held be given by the Board of Directors of the Company.
on 18th February, 2022 (“the said meeting”), pursuant to 5.  r. Jain shall not have the powers to make calls on
M
the recommendation of Nomination and Remuneration shares and to issue debentures.
Committee of the Board approved the appointment of 6. Mr. Jain shall, subject to the prior sanction of the Board of
Mr. Anuj Jain as the Managing Director of the Company for Directors and subject to such restrictions, conditions and
a period of 5 (five) years commencing from 1st April, 2022 limits as may be imposed by the Board or where permitted
and ending on 31st March, 2027 (both days inclusive). by a Committee of the Board, have the power to:
The Board of Directors, at the said meeting, approved
a. Invest the funds of the Company in:
the remuneration and perquisites to be paid or granted to
Mr. Jain as set out in the draft Agreement between i. 
securities of the Government of India or
the Company and Mr. Jain referred to in the Resolution at any of the State Government or foreign
Item no. 6 of the Notice. Governments;

109
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

EXPLANATORY STATEMENT UNDER SECTION 102 OF THE COMPANIES ACT, 2013

ii. any municipal bonds and bonds issued by  ther benefits that will be over and above the aforesaid
O
statutory corporations and public authorities, proposed remuneration and in line with the Company
whether Indian or foreign; policy, would be medical reimbursement as per group
iii.  debentures, preference shares and medical insurance policy, provision of Company car and
equity shares of any private, public and/or its running and maintenance expenses including driver,
Government companies registered in India club membership, telephone/internet reimbursement,
or elsewhere; and Provident fund, Superannuation fund and Gratuity
iv. call deposits or fixed deposits with payment at the end of the term of employment, leave
companies, banks and other institutions. encashment at the end of the term of employment,
benefit, if any, under Group Life Insurance Policy, and
b. Borrow money otherwise than on debentures for asset purchase as per Company policy.
the purpose of the business of the Company;
c. Accept all call deposits and/or fixed deposits; Minimum Remuneration:
d.  Sell any of the assets or investments of the In the event of inadequacy of profits during any
Company; financial year, in the aforesaid period, the Company
will pay remuneration by way of salary, perquisites and
e. Purchase assets of the Company; allowances (including Leave Travel Allowance and
f.  Appoint or engage staff and terminate their House Rent Allowance, where applicable) as specified
employment. above, not exceeding the limits specified in Section II of
7. Mr. Jain shall be entitled to the following emoluments, Part II of Schedule V of the Act, subject to requisite
benefits, perquisites subject to the limit laid down approvals being obtained.
under Sections 197, 198 and Schedule V of the Act, as
8. Mr. Jain shall not be paid any sitting fees for attending
the Managing Director:
the meetings of the Board or of any Committee thereof.
a) Fixed pay consisting of the following:
9. Mr. Jain shall be entitled to reimbursement of actual
1) Salary: ` 9,25,000 per month. Increments, expenses including entertainment and travelling
subject to the limit laid down under incurred during the course of Company’s business.
Sections 197, 198 and Schedule V of the
Act, will be decided upon from time to 10. Mr. Jain will be granted Privilege Leave, Sick Leave
time by the Board each year and will be and Casual Leave in accordance with the rules and
merit based and taking into account the regulations of the Company applicable from time
Company’s performance. to time.
2) House Rent Allowance: 40% of the Salary. In 11. Mr. Jain shall not during the term of this Agreement,
case Company accommodation is provided, whether the employment runs through the full period
no House Rent Allowance will be paid. from the date of appointment or is terminated by the
3) Leave Travel Allowance: 10% of the Salary. Company or Mr. Jain anytime during the term of this
Agreement for whatever reason, directly or indirectly
4) Other Perquisites and Allowances: 75% engage himself in any business or activity substantially
of the Salary. This includes Company’s similar to or competing with the business or activity of
contribution to Provident Fund and
the Company or do any deed, matter or thing so as to
Superannuation Fund to the extent exempt
from time to time under the Income-tax Act solicit the custom of the clients of the Company or offer
and any other perquisites and allowances to provide any services to such clients otherwise than
within the overall limit of 75% of the Salary. through the Company. It shall however be permissible
for Mr. Jain, with the previous written sanction of the
For the purposes of calculating the above Board to hold any directorship/s of any other company
ceiling, perquisites and allowances shall
or companies and the holding of such permitted
be evaluated as per Income-tax Rules,
wherever applicable. In the absence of any directorships shall not be deemed a contravention of
such rules, perquisites and allowances shall this clause.
be evaluated at actual cost. 12. Mr. Jain shall not during the term of this Agreement
The fixed pay for the first year of the term and for all times thereafter, divulge or disclose any
shall not exceed ` 2,50,00,000. information or knowledge obtained by him during
his employment as to the business or affairs of the
b) Variable pay:
Company or any trade secrets or secret processes of
 This shall be in the nature of Commission. the Company.
Subject to the overall ceiling in Section 197
of the Act, the Company shall pay to Mr. Jain 13. Mr. Jain’s employment shall be determined herewith
remuneration by way of commission based on if he commits a material breach of any of the terms,
net profits of the Company for each financial provisions or covenants herein contained, disqualifies
year as the Board may in its absolute discretion himself to act as a Director for any reason besides
determine, depending on performance. The breach of Section 167 of the Act, or becomes insolvent,
Commission for the first year of the term shall makes any composition or arrangement with his
not exceed ` 2,50,00,000. creditors or ceases to be a Director of the Company.

110
----------------------'-
Notice

EXPLANATORY STATEMENT UNDER SECTION 102 OF THE COMPANIES ACT, 2013

102nd Annual Report 2022

14. 
In the event there is no breach of the terms of the of the Company vide a Special Resolution. Also, in the
Agreement by Mr. Jain, but the Company exercises its opinion of the Board, Ms. Singh fulfils the conditions specified
discretion to terminate his services during the term of this in the Companies Act, 2013 (“the Act”) read with the rules
Agreement, without assigning any reason therefor, then made thereunder and the Securities and Exchange Board
and in that event, Mr. Jain shall be paid compensation of India (Listing Obligations and Disclosure Requirements)
in accordance with the provisions of the Act. Regulations, 2015 (“SEBI Listing Regulations”), for being
15. In the event Mr. Jain is not in position to discharge his re‑appointed as an Independent Director of the Company
official duties due to any physical or mental incapacity, and she is independent of the management.
the Board of Directors shall be entitled to terminate this The Company has received a notice in writing as per
Agreement on such terms as the Board of Directors the provisions of Section 160 of the Act, to propose the
may consider appropriate in the circumstances. candidature of Ms. Singh, for the office of Independent
16. All personnel policies of the Company and the related Director, to be re-appointed as such under the provisions
rules which are applicable to other employees of the of Section 149 of the Act and Regulation 17 of SEBI Listing
Company shall also be applicable to Mr. Jain, unless Regulations.
specifically provided otherwise.
Ms. Singh has provided (a) her consent to act as Director in
The Directors consider the aforesaid remuneration to Form DIR-2 pursuant to Rule 8 of Companies (Appointment
be commensurate with the duties and responsibilities & Qualification of Directors) Rules, 2014; (b) intimation
of Mr. Jain as the Managing Director of the Company. in Form DIR-8 in terms of Companies (Appointment &
The draft Agreement between the Company and Qualification of Directors) Rules, 2014 to the effect that
Mr. Jain referred to in the Resolution at Item no. 6 she is not disqualified under Section 164(2) of the Act; and
will be available for inspection of the Shareholders (c) a declaration to the effect that she meets the criteria of
through electronic mode. Shareholders may write to independence as prescribed both under Section 149(6) of
the Company at [email protected] in that regard, by the Act and under SEBI Listing Regulations. Accordingly, it
mentioning “Request for Inspection” in the subject of is proposed to re-appoint her as an Independent Director of
the e-mail. the Company, as per the provisions of Section 149 of the Act
and SEBI Listing Regulations and the Special Resolution
Other than Mr. Jain and his relatives, none of the
set out in Item no. 7 of the Notice seeks approval of the
Directors and/or Key Managerial Personnel of the
Shareholders for the same.
Company and/or their relatives, are in any way
concerned or interested (financially or otherwise), in the A brief resume of Ms. Singh is provided in the annexure to
proposed Ordinary Resolution, as set out in Item no. 6. the Notice.
The Board recommends the appointment of Mr. Jain A copy of the draft letter of appointment setting out the
as the Managing Director of the Company, as set terms and conditions will be available for inspection of the
out in Item no. 6 of the Notice, for approval of the Shareholders through electronic mode. Shareholders may
Shareholders. write to the Company at [email protected] in that regard,
by mentioning “Request for Inspection” in the subject of
ITEM NO. 7 the e-mail.
The Shareholders of the Company, at the 100th Annual Other than Ms. Singh and her relatives, none of the
General Meeting held on 22nd June, 2020, had approved Directors and/or Key Managerial Personnel of the Company
the appointment of Ms. Sonia Singh as an Independent and/or their relatives, are in any way concerned or
Director of the Company, for a period of 3 (three) years from interested (financially or otherwise), in the proposed Special
29th June, 2019 to 28th July, 2022. Resolution, as set out in Item no. 7.
Considering her rich experience and vast knowledge The Board recommends the re-appointment of Ms. Sonia
in the field of brand strategy, sales and marketing, the Singh as an Independent Director of the Company, as set out
skills, capabilities and proficiency required for the role in Item no. 7 of the Notice, for approval of the Shareholders.
and performance evaluation based on her contribution
to the Board during her tenure and pursuant to the
recommendation of the Nomination and Remuneration For and on behalf of the Board
Committee of the Board, the Board approved the
re-appointment of Ms. Sonia Singh as an Independent
Director of the Company, not being liable to retire by P. P. Shah
rotation, for a second term of 5 (five) years commencing Chairman
from 29th July, 2022 and ending on 28th July, 2027
(both days inclusive), subject to the approval of Shareholders Mumbai, 10th May, 2022

111
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Annexure to the Notice

Details of the directors seeking appointment / re-appointment in the 102nd Annual General Meeting, as set out in
Item nos. 3, 4, 6 and 7 of this Notice, in terms of Regulation 36(3) of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 read with clause 1.2.5 of Secretarial Standard-2
on General Meetings
Name of Director Mr. Shigeki Takahara Mr. Takashi Tomioka Mr. Anuj Jain Ms. Sonia Singh
Director Identification 08736626 08736654 08091524 07108778
Number
Age 63 years 49 years 53 years 57 years
Qualifications and Mr. Shigeki Takahara graduated Mr. Takashi Tomioka graduated Mr. Anuj Jain, aged 53 Ms. Sonia Singh is B.A. (Economics)
experience from Kobe University of from Tokyo Gakugei University, years, is B.Sc. and Master from Hindu College, Delhi and
Commerce, Faculty of Faculty of Education. He has of Management Studies, is an alumnus of Faculty of
Commerce and Economics. He worked in various divisions of University of Bombay (Mumbai). Management Studies, Delhi, from
worked with SSP Co., Ltd., Kansai Paint Co., Ltd., Japan Mr. Jain had joined Kansai where she attained her MBA. She
MISUMI Group Inc., Pfizer and is presently the Executive Nerolac Paints Limited on has an experience of over 30 years
Japan Inc. before joining Officer, General Manager, 4th June, 1990 and was with rich experience in creating
Kansai Paint Co., Ltd., Japan in Corporate Planning division. Director – Decorative and new categories, new brands, and
April 2020. He is presently Industrial Sales & Marketing, new functions and capabilities.
the Representative Director prior to his appointment on Passionate about brands -
of the board, Vice President the Board of Directors as a crafting, building, sharpening,
Executive Officer, Chief of Whole-time Director designated growing and developing, she
Corporate Planning, Finance, as Executive Director with effect brings in a track record of strong
HR & Administration. from 1st April, 2018. delivery, of creating things from
scratch, of being a catalyst and
of breaking paradigms. She led
a variety of roles during her stints
in Lakme and Hindustan Unilever
Limited. She also has overseas
experience with companies like
Nokia, Pepsi, Friesland Foods,
Heineken etc. She was also a
Guest lecturer at the University
of Warsaw for the executive
MBA program through the
University of Illinois USA and the
Chartered Institute of Marketing,
Warsaw. Ms. Singh has been an
Independent Brand Strategist and
at present, she is an Independent
Director on the Board of Axis
Asset Management Company
Limited. She was an Independent
Director on the Board of Directors of
Trent Limited.
Date of First 7th May, 2020 7th May, 2020 1st April, 2018 29th July, 2019
Appointment (as the Executive Director)
1st April, 2022
(as the Managing Director)
Directorships held in Nil Nil Nil Axis Asset Management Company
other public companies Limited
(excluding the Company,
foreign companies and
Section 8 companies) as
on 31st March, 2022
Memberships/ Nil Nil Nil 2
Chairmanships of
Committees# of public
companies as on
31st March, 2022
Directorship on listed Nil Nil Nil Nil
entities (excluding the
Company) as on
31st March, 2022
Listed entities in which Nil Nil Nil Nil
the Director has resigned
from directorship in last
three years
Shareholding in the Nil Nil 13,560 Equity Shares Nil
Company as on
31st March, 2022
* Mr. Shigeki Takahara and Mr. Takashi Tomioka are nominees of Kansai Paint Co., Ltd., Japan, Promoter Company and they do not hold any Equity Share of
the Company in their personal capacity.
# In terms of the provisions of Regulation 26 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015,
Memberships/ Chairmanships in only two committees viz. Audit Committee and Stakeholders’ Relationship Committee are considered.
Notes:
None of the directors are related to each other. However, Mr. Shigeki Takahara and Mr. Takashi Tomioka are the nominees
of Kansai Paint Co., Ltd., Japan, Promoter Company.
For other details such as the number of meetings of the Board attended during the year and remuneration drawn in respect
of above Directors, please refer to the Report on Corporate Governance which is a part of the Annual Report.

112
----------------------'-
Board´s Report 102nd Annual Report 2022

Board’s Report
Dear Members,
The Directors of your Company are pleased to present the and High Performance coatings as well. In the Decorative
102nd Annual Report and the Audited Financial Statements segment, KNPL is a leading player and is amongst the top 3
(Standalone and Consolidated) for the year ended players in the country. It has steadily grown its presence in
31st March, 2022 (“year under review / FY 2021-22”). new and niche segments that the Company entered, such
The section on Management Discussion and Analysis as High-End Wood finish, Construction chemicals, Auto
includes a review of the financial performance of the Refinish, and Coil coatings. These forays have helped KNPL
Company – Financial Highlights of the Company’s expand its portfolio of products and offerings in the market.
standalone financial results, key financial ratios and the
dividend recommended by the Directors. It also includes With IT, R&D and Manufacturing Technology as strategic
the particulars of the subsidiaries of the Company including
drivers, KNPL has been making rapid progress on
overseas subsidiaries and their performance during the
driving an organisation-wide agenda to boost customer
year under review.
responsiveness, efficiency, speed and productivity. It has
rolled out several IT applications for internal and external
1. Management Discussion and Analysis stakeholders (channel partners, painters and employees)
Introduction for deeper connect and engagement. The Company
launched a new brand proposition “Paint +” as part of its
Established in 1920, Kansai Nerolac Paints Limited (“KNPL”)
offering to consumers.
is a subsidiary of Kansai Paint Co., Ltd., Japan (“KPJ”).
Apart from operations in India, KNPL has subsidiaries in
KNPL is one of the most trusted brands in the industry and
Nepal, Sri Lanka and Bangladesh through acquisitions and
stands for quality, ingenuity, and excellence. It further plans
joint ventures.
to advance towards the future with the purpose, vision
KNPL (“the Company”) is one of India’s largest Coatings and brand promise of KNPL. With an intention of winning
companies with leadership in industrial coatings. It is an the hearts of the customers through an expanded product
acknowledged leader in Automotive Coating and Powder portfolio and through a focus on sustainability, it displays its
Coatings and has a sizeable presence in General Industrial evolution into a better Company - the Nerolac of tomorrow.

113
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Industry Progress benefits to Executive Directors of ` 24.22 Crores for the

FY 2021-22 came with a wave of incidents including the year. Overheads as a percentage of net revenue were lower
effect of COVID-19 pandemic. The year began in a positive at 13.9% compared to 14.2% of previous year.
manner in April but as we moved ahead through the month,
PBDIT for the year was lower at ` 647.34 Crores compared
the second wave of COVID-19 hit us. The first quarter was
to ` 843.53 Crores reflecting a de-growth by 23.3%.
impacted due to the pandemic. In the 4th quarter, the world
encountered war between Ukraine and Russia. Due to Depreciation for the year was at ` 153.82 Crores, which is
this, businesses encountered high inflationary pressures slightly higher compared to the previous year.
on account of crude oil, as well as, high volatility in Forex.
The global Chip Shortage in the Auto Industry led to reduced Other income was lower at ` 32.86 Crores as compared to
production of cars ultimately impacting the automotive ` 38.85 Crores of the previous year.
paint industry.
Exceptional item represents impairment of investment
Financials in subsidiary viz. Kansai Paints Lanka (Private) Limited
A summary of the Company’s standalone financial results amounting to ` 11.39 Crores (Previous Year: ` 10.82 Crores)
for the year ended 31st March, 2022 (FY 2021-22) vis-à-vis after taking into account its past performance, current
standalone financial results for the previous year change in economic and market conditions consequent to
FY 2020-21, is as under: the severe detoriation of political and economic condition,
` in Crores currency devaluation and very high inflation.
2021-22 2020-21
Revenue from Operations........... 5948.90 4770.90 PBT for the year before exceptional item was ` 516.51
Profit before Depreciation, Interest, Crores as compared to ` 724.89 Crores of the previous
Exceptional item and Tax............. 647.34 843.53 year reflecting a de-growth of 28.7% over previous year.
Less: Depreciation and PAT is lower at ` 374.33 Crores compared to ` 530.60
Amortisation ............................... 153.82 149.01 Crores reflecting de-growth of 29.5%.
Profit Before Interest, Exceptional
Item and Tax................................ 493.52 694.52 There is no amount proposed to be transferred
Less: Interest .............................. 9.87 8.48
to any reserves.
Add: Other Income ..................... 32.86 38.85
Profit before Exceptional The Company has not accepted any deposits covered under
item and Tax ............................... 516.51 724.89
Chapter V of the Companies Act, 2013, during the year.
Less : Exceptional Item .............. 11.39 10.82
Profit Before Tax ......................... 505.12 714.07
There are no significant or material orders passed by any
Less : Tax Expenses 130.79 183.47
Regulators, Courts or Tribunals against the Company which
Profit After Tax ............................ 374.33 530.60
Other Comprehensive Income ... 2.51 0.27
could impact the going concern status and Company’s
Total Comprehensive Income for operations in future. There is no corporate insolvency
the year ...................................... 376.84 530.87 resolution process initiated under the Insolvency and
Bankruptcy Code, 2016. There has been no failure to
Revenue from Operations for the year aggregated to implement any Corporate Action.
` 5948.90 Crores as compared to ` 4770.90 Crores for the
previous year, reflecting a growth of 24.7%. There has been no change in the nature of business
during the year. There have been no material changes and
Unprecedented very high inflation was seen in all major commitments affecting the financial position of the Company
categories of raw materials, resulting in substantial increase which have occurred between the end of the financial year
in material cost. Raw material prices also increased due to of the Company to which the financial statements relate and
global shortages and invoking of force majeure clause by the date of this Report.
global MNCs. Currency also depreciated during the year
which further impacted raw material prices. Dividend
The Board has recommended a final dividend of 100%
Gross margins were severely affected mainly in case of (` 1.00 per share) for the year, in addition the Company
industrial business due to high inflation not compensated by had declared interim dividend of 125% (` 1.25 per share)
corresponding increase in sales price. paid on 22nd November, 2021. Accordingly, the total
dividend is 225% (`  2.25 per share) for the financial year
Operating costs were kept under control by various cost ended 31st March, 2022 as compared to total dividend of
reduction initiatives across all functions. Employee Benefits 525% (` 5.25 per share) including Special Dividend of 200%
Expense includes provision made towards retirement (` 2.00 per share) declared last year.

114
------
Board´s Report

Merger Key Financial Ratios

102nd Annual Report 2022

The National Company Law Tribunal, Mumbai Bench Key Ratios 2021-22 2020-21 Difference %
and Ahmedabad Bench have approved the Scheme of Change

Amalgamation (“the Scheme”) of Marpol Private Limited Debtors

Turnover
and Perma Construction Aids Private Limited (‘Transferor (No. of Days).............. 41 43 -2 -4.7%
Companies’), wholly-owned subsidiaries, with the Company Inventory
(‘Transferee Company’). Pursuant to necessary filings with Turnover
(No. of Days)................ 117 127 -10 -7.9%
the concerned Registrar of Companies, the Scheme has
Interest
become effective from 21st October, 2021. The appointed
Coverage Ratio ......... 66 99 -33 -33.3%*
date of the Scheme is 1st July, 2019. Accordingly, the Current Ratio.............. 2.91 2.96 -0.05 -1.65%
amalgamation has been accounted under the ‘pooling of Debt Equity Ratio....... 0.02 0.02 0.0 8.1%
interests’ method in accordance with Appendix C of Ind Operating
AS 103 ‘Business Combinations under common control’ Profit Margin (%)........ 10.9% 17.7% -6.8% -38.4%*
and comparatives have been restated to give effect of Net Profit Margin (%).. 6.4% 11.2% -4.8% -43.0%*
the amalgamation from the beginning of the previous Return on Equity.......... 9.1% 13.5% -4.4% -32.6%*
year. The impact of amalgamation is not material to the *Change is mainly due to unprecedented inflation resulting in compression
standalone financial results of the Company. in margins during the financial year.

Distribution of Total Income Revenue from Operations (` in Crores)

5949
Corporate Tax Dividend
2.2% (3.8%) 4.7% (4.9%) 5174 5006
Retained 4587 4771
Exceptional
Item Earnings
0.2% (0.2%) 1.5% (6.1%)
Depreciation
2.6% (3.1%)

Finance Cost
0.2% (0.2%)

Operating and
Other Expenses
14.4% (14.6%) FY FY FY FY FY
2017-18 2018-19 2019-20 2020-21 2021-22
Manpower Cost Materials
5.2% (5.6%) 69.0% (61.5%)

Profit (` Crores) Profitability (%)

Profitability ratios are based on Net Sales
17.8*
844*

17.3
17.2
789
786

788

15.8

15.3*
742

725*
713

14.4
682

648*

13.9

13.7

11.1*
11.3

11.2
517*
534

531
516

10.7
467

8.8*
9.1
374

6.4

FY
2017-18
FY
2018-19
■ PBDIT ■ PBT ■ PAT
FY
2019-20
FY
2020-21
FY
2021-22
*Before exceptional item
I FY
2017-18
■ PBDIT ■ PBT ■ PAT
FY
2018-19
FY
2019-20
FY
2020-21
11
FY
2021-22
*Before exceptional item

115
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Shareholders’ Funds (` in Crores) Earnings Per Share (EPS) (`)

4077 4171 9.6 9.9 9.9
3783 8.7
3424
3125
7.0

FY FY FY FY FY FY FY FY FY FY
2017-18 2018-19 2019-20 2020-21 2021-22 2017-18 2018-19 2019-20 2020-21 2021-22

Return on Equity (%) Market Capitalisation as on 31st March (` in Crores)

(Profit after tax divided by Average Shareholder’s Equity)
17.4 32370

14.3 14.8 27172

13.5 24642 25178
20810
9.1

FY
2017-18
FY
2018-19
FY
2019-20
FY
2020-21
I
FY
2021-22
2018 2019 2020 2021 2022

Return on Capital Employed (%) Book Value Per Share as on 31st March (`)
24.5 76 77
70
20.2 64
17.5 58
17.2

12.1

FY
2017-18
FY
2018-19
FY
2019-20
FY
2020-21
FY
I
2021-22
2018 2019 2020 2021 2022

Dividend (%)
525*

315
260 260
225

II
FY
2017-18
FY
2018-19
FY
2019-20
FY
2020-21
I
FY
2021-22 *Includes special dividend of 200%

116
Board´s Report

Subsidiaries and Consolidated Financial

102nd Annual Report 2022

as compared to ` 15.17 Crores during the previous year.

-
Statements The Company’s net loss has been widened to ` 17.64 Crores
In terms of the provisions of Securities and Exchange Board during the year as compared to net loss of ` 7.68 Crores
during the previous year due to unprecedented inflation and
of India (Listing Obligations and Disclosure Requirements)
economy crises in Sri Lanka.
Regulations, 2015 (“SEBI Listing Regulations”), the Board
has approved a Policy for determining material subsidiaries.
Operations in Bangladesh
The same is also available on the website of the Company
at www.nerolac.com. Further, in terms of the said policy, the The turnover of our subsidiary in Bangladesh, Kansai Paints
(Bangladesh) Limited (Formerly known as RAK Paints
Company does not have a material subsidiary.
Limited) for the year was ` 230.54 Crores as compared to
`  163.52 Crores in the previous year. EBDITA for the year
Indian Subsidiaries
de-grew to -1.7% from 2.9% on Y-o-Y basis. The Company
Nerofix Private Limited incurred a net loss of ` 22.41 Crores during the year as
The Company’s turnover was at ` 110.42 Crores compared compared to net loss of ` 6.09 Crores during the previous year.
to ` 69.98 Crores of the previous year. EBDITA for the year
de-grew to 1.7% as compared to 3.1% of the previous Consolidated financial statements of the Company as
year. The Company incurred a net loss of ` 3.69 Crores on 31st March, 2022, are prepared in accordance with
as compared to ` 3.71 Crores during the previous year. applicable Accounting Standards and form a part of this
Company has the plans to expand this business and Annual Report. All the subsidiaries of the Company as on
become a noticeable player in this category. 31st March, 2022, have been considered in the preparation
of consolidated financial statements. Further, a separate
Overseas Subsidiaries: statement in Form AOC-1, containing the salient features
of the respective financial statements of subsidiaries of the
Operations in Nepal
Company, forms part of this Annual Report. Also, Annual
During the year, the turnover of KNP Japan Private Limited, Audited Financial Statements of all subsidiaries of the
the subsidiary of our Company in Nepal, was at ` 84.00 Company are available on the website of the Company i.e.
Crores as compared to ` 68.46 Crores of the previous year. www.nerolac.com.
EBDITA for the year decreased to 13.6% from 16.1% on
Y-o-Y basis. PAT is ` 9.08 Crores as compared to ` 10.24 Segment-wise performance
Crores in the previous year. KNPL has only one segment of activity, namely “paints”, in
accordance with the definition of “Segment” covered under
Operations in Sri Lanka Indian Accounting Standards (Ind AS) 108 on Operating
The turnover of our subsidiary in Sri Lanka, Kansai Paints Segments. The performance of the Company is discussed
Lanka Private Limited for the year was ` 23.71 Crores in this Report.

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KANSAI NEROLAC PAINTS LIMITED
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Marketing The Company witnessed high material price inflation

during the year and had to take series of price increases
Decorative
to offset the inflation and maintain profitability.
The Nerolac Brand focusses on continuing to expand its
product portfolio as per the evolving preferences of the Unique Brand Positioning
consumer. Numerous new, high-end products at premium
This year, the Company has envisioned its new brand
and economy segments have been launched and promoted
expression as PAINT+. This expression stands for its
through a lot of unique marketing initiatives in the FY 2021-22.
sentiment to offer more to its customers i.e. paint with
added benefits. Paint+ is KNPL’s commitment to provide
The Company focussed on increasing its distribution
its consumers with unique products that go beyond offering
network with opening of new dealers and also accelerating
thousands of colourful options. The features built into the
the CCD machine (Colorant Dispenser) installations.
Company’s world-class products offer benefits that resonate
In the rural markets, the Company introduced distributor
with emerging consumer needs and preferences.
model for deeper penetration.
The Company has positioned the brand with unique
In the influencer category, it rolled out initiatives to be
products that live up to the Paint+ promise enabled
a preferred partner through enhanced loyalty programs,
by Japanese technology. It has also brought back the
training workshops and painter meets. It also rolled out an
popular and memorable Nerolac jingle. The Japanese
app for influencers to digitise the painter journey including
woman and couple showcase an active role played by
real-time redemption of loyalty points.
the lady - acknowledging the growing role of women in
decision-making in all aspects around home.
Based on consumer insights, the Company’s new
product strategy centred on evolving consumer needs
and preferences and as a result, a new brand expression
“Paint+” was introduced during the year.

Paint+ is KNPL’s commitment

to provide its consumers with
unique products that go beyond
offering thousands of colourful
options. The features built into the
Company’s world-class products
offer benefits that resonate with
emerging consumer needs and
preferences

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-- ----------- ----

New Products In the Interior space, KNPL launched Beauty Gold

Understanding the needs of customers and their unique Washable, which offers unique anti-bacterial and stain
resistance properties.
requirements, the Company launched multiple products
with characteristics that are combining the brand promise
In enamels, KNPL has launched a revolutionary product
of “Healthy Home Paints” and the new brand expression
“Nerolac PU Enamel 10 in 1”. The product offers excellent
“PAINT+”. KNPL’s efforts in R&D and new product
gloss and finish and offers a host of relevant benefits never
development is focussed not just on paint performance, offered in this category. KNPL is focussing on efforts to
but also the safety and well-being of the consumer and adapt to the changing market and ensuring it develops
the environment. sustainable products. As a result, it has recently launched
Zinc Yellow Metal Primer (Chrome Free). The product
As part of KNPL’s new product strategy, it launched “Excel gives long-lasting rust-free performance.
Mica Marble Stretch & Sheen”, a product that offers
a 6-year waterproofing warranty at a compelling price KNPL has introduced a paint for ceilings i.e. Beauty Ceilings
point and solves a very pertinent problem of cracks on Emulsion, which imparts a smooth finish and has low
exterior walls. spatter thus resulting in reduced wastage during application.

Mica Marble Beauty Gold Nerolac PU Premium Zinc Beauty Ceiling

Stretch & Sheen Washable Enamel 10 in 1 Yellow Primer Emulsion
(Chrome Free)

Nerolac Beauty Nerolac Beauty Nerolac Beauty Nerolac Excel Nerolac Excel
Little Master Smooth Orange Smooth Green Glitter Finish Anti Peel

Nerolac Excel Nerolac Suraksha Nerolac Nerolac Synthetic

Mica Marble Dust Resist Suraksha Plus+ Enamel

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KANSAI NEROLAC PAINTS LIMITED STATUTORY REPORTS

Strengthening New Business

KNPL has been steadily making investments in the new Launch of the carpenter app
businesses of Adhesives, Construction Chemicals and
High-end Wood Finishes. It has adopted a multi-pronged (Nerofix Super Carpenter App)
approach to strengthen them and increase market share. attracted several carpenters to be
The Company focussed on increasing product range,
on board and resulted in faster
introduce new applications, expand distribution network,
enhance influencer programmes and deepen engagement disbursements.
with consumers.

For Wood Coatings, KNPL has a complete range of

products and are present in PU, Polyester, Melamine
has launched 3 new products under general waterproofing
and NC Coatings. The PU range has been expanded
category. With this, it has an entire range of construction
by introducing 2K PU Interior. Tinting machines were
chemicals consisting of General waterproofing, General
installed at dealer counters for tintable range of products.
repairs, Tiling, Admixture, High end waterproofing,
The Company plans to launch more products in PU range
sealants, structural repairs, flooring, industrial grouts
leveraging its collaboration with the Italian company
and Waterproof putty. During the year, drives were
ICRO Coatings. For its NC range, KNPL developed
undertaken for increasing channel participation as well
sustainable and environment-friendly products, which
as increasing reach through expanded dealer network.
were awarded REACH certification. The distribution
Also, initiatives were launched for influencers to increase
network was expanded and influencer participation was
their participation. Going forward, the brand – Nerolac
significantly increased.
Perma, will focus on both retail & projects with an enhanced
product range, channel expansion and adding newer
For Construction Chemicals, KNPL with its acquisition
waterproofing technologies to provide superior solutions to
of Perma, is focussed on providing a holistic product
the customers.
range to the customers through synergy between its paint
and construction chemical portfolio. During the year, KNPL
For Adhesives, KNPL has a complete range of products
covering both white-based and rubber-based adhesives.
Under white-based, it is present in premium, mid-tier
For its NC range, and economy segments with distinctive product features
KNPL developed such as heat resistant, water resistant and waterproof.
The brand includes Nerofix, Gold, Nerofix Super,
sustainable and
Smart & Aqua Smart. Masking tape was also launched
environment-friendly during the year. Aggressive penetration in infrastructure
products, which were awarded projects with focus on new applications for retail and
industrial segments helped drive growth. Initiatives were
REACH certification. undertaken to increase channel expansion and extraction.
Launch of the carpenter app (Nerofix Super Carpenter
App) attracted several carpenters to be on board and

Nerolac Perma Rapidset Nerofix Gold Nerolac Wonderwood Gloria

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Board´s Report

resulted in faster disbursements. The launch of company

102nd Annual Report 2022

A high decibel 360 media campaign for Beauty Gold

-
website (www.nerofixindia.com) enhanced visibility and washable was initiated to build sustained salience for the
established better customer connect. Digital marketing brand to build on the key proposition of “Ab Walls Rahe Saaf
and engagement on social media drove lead generation. aur Safe” and highlight the importance of stain reduction.
Process optimisation initiatives were undertaken in
manufacturing to increase the capacity. Also, packaging Nerolac also launched a new Television commercial for
artworks were revamped for enhanced visibility and Excel Mica Marble Stretch & Sheen. The key proposition
acceptance by customer. of the brand – ‘Chamak pe na aaye Crack, only Nerolac’
highlights the importance of No cracks on walls through the
Marketing Campaigns 2X stretch ability feature backed by Japanese Technology.
KNPL took a focussed market approach for this year’s
marketing plans, ensuring high brand visibility in the key Apart from this, an amplification plan was implemented for
markets which would also act as an enabler for the sales highlighting the protection features of exterior products –
team. Also, the focus this year was to build product offerings Excel Mica Marble & Suraksha by the means of strategic
and product propositions in the minds of consumers and associations of weather branding with top news channels
drive awareness for key products. in Hindi, Telugu & Tamil, thus reinforcing KNPL’s product
proposition and driving clutter-free on-air presence.
Multiple brand-building campaigns were initiated throughout KNPL partnered with big ticket properties on television
the year for “Beauty Gold Washable” and “Excel Mica like IPL, Big Boss etc., during the brand campaigns to
Marble Stretch and Sheen” products. deliver high impact with partners such as Star Sports,

Nerolac Excel Mica Marble Stretch & Sheen Campaign

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Asianet and other leading channels. In its focus markets, KNPL sponsored the International Automotive Design
outdoor advertising, FM radio, Newspaper and other Conclave 2021, an event organised by CII and participated
ambient media were used to drive salience of the products as a Silver Partner. The discussion was focussed on
being advertised. “AUTOMOTIVE DESIGN – Creating Self Reliant India”.

Digital marketing also delivered higher reach and KNPL participated in Powdertech – Organised by Paint India
frequency for the campaigns by targeting unique audiences in March 2022. This was a conference for powder coating
via YouTube, Facebook, Google and other content manufacturers where KNPL presented and discussed on
providers. Social media marketing was topical and focussed
changing trends in powder coating.
on building product feature and benefits in sync with the
Paint+ approach. SEO (Search Engine Optimisation) and
Colour Trends & Promotions
SEM (Search Engine Marketing) played a crucial role in
providing a quantum jump in driving consumer traffic to KNPL participated in Colour Promotions at most of the key
Nerolac assets and building its product propositions. accounts and new colours were launched for new vehicles
introduced in FY 2021-22. While achromatic tints are the
Industrial most popular, customers are increasingly gravitating toward
KNPL is an acknowledged leader in industrial coatings chromatic colours such as red and blue. Metallic colours
and specialises in providing unique and sustainable are becoming more popular in the PV and 2W segments.
solutions to its customers. It has a state-of-the-art In Greens and Blues, the EV category has developed new
R&D set up and has multiple technical collaborations, notions of medium saturation shades.
which are leveraged to provide innovative products and
solutions to customers. Automotive
During the year, as the market revived post COVID, KNPL
KNPL has invested in setting up integrated plants across continued to strengthen its position in major key accounts in
the country to service its customers. Strong intellectual
the Automotive, Ancillary and Alloy Wheels segment.
capital coupled with multi-locational manufacturing set
up has helped KNPL maintain its leadership position in the The organisation continues to work on offering innovative
industrial paint segment. technology and entry into diversified product range in
Auto segment to expand horizon. Introduction of coating
During the year, there was unprecedented inflation in
technologies for new substrates like Plastic, Aluminium
material prices and the Company had to seek a price
Die Castings are leading concepts in Auto Segment and
increase from its customers. However, the price increase
KNPL product innovations continue to lead the market.
realised has been insufficient to offset the inflation for the
industrial segment. KNPL continued to set higher benchmarks in various
parameters of Quality, Cost and Delivery and this
Industrial Marketing
resulted in it being considered as the priority supplier
This year, KNPL participated in the Global Chemical Expo across many Automotive OEMs and Ancillaries. KNPL also
Conference and B2B sessions organised by the Indian received Best Supplier Awards from major OEMs like
Chemical Council (ICC). The exhibition was attended
Honda Motorcycles and Scooters and Isuzu Motors
by business heads, technocrats, policy makers, industry
during the year.
associations and trade delegations from India and abroad.
In the Electric vehicle category, KNPL is present across
all segments i.e. two-wheeler, three-wheeler, passenger
vehicle and commercial vehicle. In tractor segment, the
penetration of electric vehicle has been low.

KNPL sponsored the International In two-wheeler segment, which has witnessed highest
Automotive Design Conclave 2021, growth of EV, KNPL has a formidable presence and has
tapped into both existing and new entrants and partnered
an event organised by CII and for paint supplies. Also, in the PV segment, the Company
participated as a Silver Partner. has partnered with major players for paint supplies.
KNPL is a strong player in the EV (Electric Vehicle) segment
in the country and will continue to focus on this high growth
segment with value-added products and solutions.

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Board´s Report

Performance Coatings Coil Coatings

102nd Annual Report 2022

Under Performance Coatings, the Company offers powder In coil coatings, KNPL has introduced a collection of
coatings for powder segment and liquid coatings for General products that provide clients with unique value. Despite the
Industrial segment & High Performance segments. In fact that the Company entered this market a few years ago,
FY 2021-22, the Company witnessed significant growth in its products have gained widespread acceptance. In line
all three segments and gained market share. with its strategy to enter premium segment in coil coatings,
In Powder coatings, KNPL is present in premium, popular KNPL introduced coil coating products for appliance
and economy segments. In General Industrial, it caters industries. This has gained good momentum in the market
to customers across all segments viz. Drums & Barrels, assisted by increased service availability and targeted
PEB, Electrical appliances, construction equipment client base expansion. Also, KNPL now has a dedicated
and helmets. Under High performance coatings, it has a manufacturing facility for coil coating at Sayaka.
range of products like the C5 Fluoro Polymer Coatings,
IPNet, Polysiloxane and anti-carbonation systems to Research and Development
meet customer needs and requirements. Innovation and Sustainable products have been the
fundamental endeavours of KNPL’s existence. With a
Niche Business devoted facility at Mumbai along with a satellite facility at its
KNPL has also witnessed significant growth in niche plants, R&D is at the core of KNPL’s strategy. This facility
segments that it entered i.e. rebar coatings, super durable is directed towards creating innovative solutions catering to
powder in the powder coatings. It added new customers the ever-changing needs of its customers along with fulfilling
in rebar coatings and have achieved a significant market the organisation’s sustainability agenda.
share. It achieved good growth in powder coating for alloy
wheel segment as well. In pipe coatings, amongst the KNPL is making progress in this area by continuing to
new products developed this year was “Neropoxy Solvent develop sustainable products that have a lower carbon
Free Coating” for Water Pipeline Internal coatings, which footprint during their manufacturing and use phase.
has been certified by Water Regulations Approval Scheme It is building a portfolio time and again, that offers new
Ltd, UK. This development places KNPL on a strong footing unique-to-category products which offer long-term value
to enter this segment. to its esteemed customers. KNPL has offered a variety of
new shades, and health-conscious products offering the
best value proposition to its customers. The Company
has also pioneered many new concepts and innovations
KNPL has also witnessed in decorative paints. Its technology-based products are
significant growth in niche customised for various operating environments which offer
protection to many key industries like metals, chemicals and
segments that it entered i.e. rebar petrochemicals, among others. KNPL has also delivered on
coatings, super durable powder in the promise to develop healthy home paints – 100% heavy
the powder coatings. metal free by design and low VOC products.

Auto Refinish
Auto Refinish business was designated as a major thrust
area for the Company. It has developed a complete range
of products catering to the Premium, Economy and
Retail market. The key elements include new products
launches, OEM approvals and greater reach through the
development of the retail distribution network and body
shops. The Company has created state-of-the-art Training
Centres at its plants of Bawal and Hosur and conducted
several Skill Improvement and Training Activities for OEMs
and Body Shop painters. Also, Digital colour matching
instrument was installed at R&D. Training Centre for Auto Refinish

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

KNPL has introduced many

technological innovations over the
years, which have helped customers
improve finish, film thickness,
productivity and reduce resource use
based on its deep expertise and
R&D strength.

KNPL also collaborates with Kansai Group companies

across the globe to offer Indian customers differentiated
technologies across a spectrum of end-user industries
in the areas of industrial coatings, coil coatings, ARF and
decorative paints.

Colour design studio The Company has a technical collaboration with Oshima
Kogyo Co. Ltd., Japan. This year the product Pyrosin Stack
F150, Pyrosin PX 3103 & Stack Act 250 were developed
KNPL has decades of experience in designing and from M/s Oshima. These products offer protection from high
commissioning various customer lines to successfully run heat and enhance the life of the substrate.
various paint products in the automotive and OEM spaces for
both liquid and powder coatings. Together with deep expertise The Company has a technical collaboration with Cashew
in resin technology and keen working with suppliers over Co. Ltd., Japan, to manufacture coating for interior car
many decades, KNPL has introduced many technological application and with M/s Protech Chemicals Limited,
innovations over the years, which have helped customers Canada, to manufacture powder-coating products.
improve finish, film thickness, productivity and reduce
resource use based on its deep expertise and R&D strength. Development in Automotive Coatings:
In the Automotive paints sector, KNPL’s in-house R&D
Along with its technical prowess, KNPL also has a flair for expertise, paired with support from Kansai Paint Japan,
ever-changing consumer preferences. KNPL’s research gives it a substantial competitive advantage.
and development facility has a dedicated colour design
studio has been designed and built especially for the colour The R&D team focusses on subject expertise and
development process. The studio gives easy access to collaborates closely with clients to create long-term product
more than 7000 new shades. The studio space is used for roadmaps and shade designs. When combined with product
design research and helps in mind mapping for a better and line knowledge, it also leads the effort to work closely with
trend analysis and report. Customer presentation and customers to develop unique and customised value-added
shade selection takes place smoothly in the studio. and value-engineering projects that have added
significant value to customers in areas such as finish,
Collaboration with Kansai Paint, Japan, Kansai consumption reduction, productivity, and energy savings.
Paint Group Companies and other Partner
The Company has focussed its research efforts on sealants
KNPL has maintained its technological leadership in
for passenger automobiles, which is one of the business
industrial coatings by staying ahead of the curve with support
segments it has decided to foray into. To that extent, the
and technical guidance from Kansai Paint Co., Ltd., Japan
Company has developed and received approval for sealants
(KPJ), one of the global leaders in the category with decades
for automotive clients.
of experience in designing and developing technology.

KNPL works closely with KPJ in developing paint Passenger Vehicle Segment
and resin formulations customised to Indian customers. KNPL has developed high solid anti-chip primer and
They also offer insights to customers on emerging shade introduced to one of our Key customer end. This product
trends across the globe, with world-class technical support has given VOC reduction as well as it has excellent
to Indian customers based on experiences across the globe. anti-chip performance.

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Board´s Report

Commercial Vehicle Segment

102nd Annual Report 2022

KNPL has developed high solid High Weatherable Topcoat for three-wheelers was
launched with Superior Gloss & Finish, Enhanced light
anti-chip primer and introduced to
fastness with improved weather ability and Superior Gloss
one of our Key customer end. This retention and Colour retention.
product has given VOC reduction
KNPL has a High performance Solid Monocoat
as well as it has excellent anti-chip technology with high durability and chemical resistance
performance. in the CV Segment. This has resulted in better aesthetic
performance of the vehicles in the field for a longer time.
Further innovation in Solid monocoat technology, has
KNPL is a lead supplier for Metallic colours in PV Segment reduced curing temperature by 20oC. This has reduced
and various new shades have been introduced in this year. carbon footprint by lower energy consumption, productivity
The product range is introduced in 3C-1B Technology improvement and savings to customers without any impact
which offers lean process, energy conservation and on performance properties. This product technology is
high productivity. appreciated by customers and evolved as a trendsetter in
the CV Segment.
Two-wheeler Segment
In this segment where high-end bikes are on the rise,
coatings performance demands are far higher than
traditional coatings in terms of durability and scratch
resistance. KNPL has introduced Matt Lacquer for petrol
tanks of motorcycles with superior mar & scrub resistance
as advancement in the segment. Its characteristics are
petrol stain marks resistance, silky finish, suitability for
dual tone painting, adhesion in multiple recoat system and
Alkali resistance.

KNPL has launched a Coating for Rotamould Nylon Petrol

tank. It is an adhesion promoter primer with High Crosslink
polymeric resin system with better adhesion, Low VOC High Weatherable Topcoat for three-wheelers
system, lower baking temperature, and excellent surface
filling property as it is a porous substrate. Conventional medium solids PU technology is upgraded
to High Solids PU technology. This has offered low
consumption, VOC reduction and productivity
improvement. This has helped customers receive superior
performance without losing productivity.

Key Developments in Decorative Paints:

The market forces are heavily influenced by the surrounding
environment, which is hyper-dynamic in today’s world.
Customer expectations in the decorative paint category
are constantly evolving along with the surroundings.
The demand curve has evolved from better to customised,
and now from customised to customised & sustainable.

Innovating its way to adopt product standards that match

the regulations of the European Union, KNPL has launched
Coating for Rotamould Nylon Petrol tank REACH certified products in the Wood Coatings
Division. This certification is intended to improve the
protection of human health and the environment through the
better and earlier identification of the intrinsic properties of
chemical substances.

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KANSAI NEROLAC PAINTS LIMITED
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KNPL has introduced products using heavy metal free and which a five coat anticorrosive system was developed
low VOC design technology. KNPL is working on a new and commercialised. Its top cost is Fluoro polymer based
array of products to address the rising trend of functional which has exterior durability. Celatect F Series Product
products and has now developed Chrome free Yellow demonstrates a strong interatomic bonding power, resulting
Metal primer for retail market. This year, the Company also in superior weatherability that is a step above other resins.
introduced many products in both construction chemicals, In particular, Celatect F Series of Product features as its
wood finishes and adhesives, which have gained good principal chain to provide strong binding energy to prevent
acceptance in the market. degradation caused by ultraviolet light & coatings that offer
long-term protection.
Key developments in Performance Coatings:
The Company is also working on areas such as new
Performance Coatings are used by a range of OEMs and
coatings solutions for demanding infrastructure categories
end-user industries to protect and enhance surfaces.
like bridges, metro-rail and pipelines.
KNPL has exhibited great skills and proficiency in a wide
range of end-user sectors.
Key developments in Powder Coatings
M/s Water Regulations Approval Scheme Ltd, UK (WRAS) Technological leadership in this segment has helped
has approved KNPL’s product “Neropoxy Solvent Free KNPL be the market leader in powder coatings,
Coating” for Water Pipeline Internal Coating. Its suitability serving a vast array of industries such as white goods,
for use on coming in contact with water on the basis of furniture, auto ancillaries and electricals, besides others.
impact on water quality, such that the water could be
The Company continues to be at the forefront of working
utilised for household purposes fulfilled the standards of
closely with customers in Auto as it continues to convert
“BS6920-1:2000 and/or 2014.” The product also gives
a range of liquid coatings to powder coatings. KNPL has
thickness of 400 microns in one coat & meets Zero
achieved chrome finish on the ceiling fans with powder
VOC regulations.
coatings, successfully removing plating and thereby,
To offer to the society its “bit” and “best”, KNPL has also had reducing the toxicity caused due to the plating process.
the privilege to coat the Mumbai trans harbour bridge for The Company has also developed a product with better
UV transmission confirming with REACH requirements
for one of its customers. R&D efforts are also focussed on
developing various resin backbones for powder coatings
for superior performance.

Key developments in Coil Coatings

New technological products such as Low Bake Coil
Coatings, Uni-coats, and Super Durable Coil Coatings have
been developed to create distinctiveness in this segment.

The R&D efforts of the Company are committed to ensuring

market-share gain in this space even further.

Mumbai trans harbour bridge Key developments in Auto Refinish

The R&D function developed products with superior
performance in terms of finish, drying time, coverage and
environment-friendly. The R&D team has developed a
M/s Water Regulations unique product Anti-Viral Clear Coat, High Gloss PU Clear
Approval Scheme Ltd, UK with Anti-Viral Property, a novel product which is first of its
(WRAS) has approved kind providing Health Safety to our Customers.

KNPL’s product “Neropoxy Collaboration with Vendors

Solvent Free Coating” for KNPL views its vendors as partners with whom it works to
Water Pipeline Internal Coating. reach a win-win outcome. It works closely with its key global
supplier base, numerous research institutes, and universities
to generate new ideas, products, and innovations for the
future through a systematic coordinated programme.

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Board´s Report 102nd Annual Report 2022

A number of futuristic, collaborative projects are

undertaken with the suppliers to create mutual value.
Going forward, KNPL’s focus will be to increase range
of sustainable products using raw material based on
renewable sources.

Instrument analysis and analytical capabilities

KNPL has a robust and high-end instrumentation laboratory
for analysing complicated substances and providing
systematic solutions. It also has a strong R&D team to
analyse such data and add to the intellectual capital of
the Company. Such analytical capabilities enables high
end product development and aids in providing customer
specific solutions.

Supply Chain
The pandemic continues to affect the world. In the midst
of the world returning to normalcy, the Russia-Ukraine war
has also caused significant disruptions.. In these dynamic,
uncertain circumstances, keeping operations running has
been a challenge.

The above-mentioned circumstances have led to extremely

volatile crude oil prices and exchange rates and major Goindwal Emulsion Facility
disruption in the global supply chain. KNPL has initiated a
series of measures to cope up with the situation.
On import and logistics side, KNPL received AEO
In line with its strategy of being an integrated player with
certification and also introduced container tracking for
in-house resin, intermediate & paint manufacturing facility, increased controls.
KNPL has commissioned the resin facility for Industrial
coating segment at Sayakha plant. An emulsion Even with volatile and uncertain circumstances, KNPL
manufacturing facility for Decorative segment was also ensured continuity of operations for all its customers.
commissioned at Goindwal plant. KNPL aims “deliver on time every time” and therefore
strongly focusses on offering customers world-class
This year, the Company focussed on ensuring high OTIF supply-chain capabilities, with a customer-centric approach
(On Time in Full) for its Industrial customers. In Decorative backed by data-driven planning systems.
business, new RDCs (Regional Distribution Centre) and
efficient logistics resulted in better service standards for the Information Technology
customers. This was achieved while maintaining an overall
Investments in technology have been the hallmark of
balanced inventory.
Nerolac’s journey throughout. With the influx of digital
technology, KNPL embarked on its digital journey a couple
of years back during the pre-COVID times. The organisation
was prepared to reap the benefits from use of these
technologies when the pandemic accelerated the process
of adoption of digital technologies in the organisation.

KNPL has been making rapid progress on pushing “an

organisation-wide” digitisation agenda to improve consumer
responsiveness, reliability, speed and productivity.
Digital initiatives have been introduced during the year
across internal and external stakeholders like Dealers,
Influences, Customers, Suppliers and Employees.
More details about these initiatives can be referred under
Sayakha Resin Facility the Intellectual Capital section.

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KANSAI NEROLAC PAINTS LIMITED
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KNPL upgraded its IT infrastructure, moved to a new

data centre and set up disaster recovery capabilities. It was recognised as a
The Company focussed on governance through enhanced
“Great Place to Work” by
cyber security and mobile security. Bulletins on IT & cyber
security were shared with employees on best security the Great Place to Work
practices. Also, External Verification and Vulnerability Institute for the 2nd time.
Analysis was conducted during the year under review.
The first certification was given
People in the year 2019, and the second
KNPL continued to cultivate a culture of trust, confidence was given in 2021.
and transparency in which its people can thrive and
prepare themselves for the future. Employee well-being has
evolved into a key priority. Through the year, the Company
adopted a systematic approach and a range of tools and Competency and Capability Building:
engagement initiatives to ensure the well-being and health KNPL commits to training and development of its employees
of its employees. right from inception as it believes in “building careers”.
It has developed extensive offline and online learning
As a testimony to the initiatives taken towards making KNPL programmes and training modules to help its employees not
a congenial workplace, it was recognised as a “Great Place just upskill and reskill for their roles at KNPL, but also to
to Work” by the Great Place to Work Institute for the 2nd prepare them for the changing workplace.
time. The first certification was given in the year 2019, and
the second was given in 2021. To make its people future-ready and purpose-driven, KNPL
continues to expand organisational skills with a clear
Total number of permanent employees as on 31st March, focus on functional learning priorities. Several new
2022 is 3105. training modules were introduced in terms of competency
enhancement. Interactive Digital Workshop was held for
Decorative Sales & Marketing for improving adoption of
Pandemic and Employee Well-Being:
ML App (Saathi). Learning programmes on Innovation
From the COVID-induced remote model, KNPL has and Design Thinking, as well as Business Acumen, were
seamlessly transitioned to on-site model. It has published undertaken for identified employees.
an advisory guide on travel & work, preparing its employees
for the “New normal”.

The organisation actively held vaccination drives pan-India

(at all depots, offices, plants) and allotted reimbursements
if vaccinated through private hospitals to accelerate the
INEROLAC
national vaccination coverage. Employees were prepared
.A dvance a step c·l oser to yo1t1r
for the “New normal” by publishing an advisory guide on goals
the coronavirus and travel to work. As per government
regulations, offices were only opened to limited individuals,
regular sanitisation of the premises was done and wearing
a mask was made mandatory.

Diwali celebrations

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Board´s Report 102nd Annual Report 2022

KNPL has strengthened the talent management programme

For all managers, a three-day by evaluation of critical positions and creating consideration
set for succession planning.
Annual Learning Conference (ALC)
was held online. “Good to Great” Communication Platforms:
Transparency in communication has always been a priority
was the theme of the Annual
for the Company. The management concentrated on building
Learning Conference. a friendly and inclusive environment in the organisation by
ensuring frequent connect programmes with employees to
discuss various subjects with the aid of digital initiatives and
Trainings related to fire-fighting & life after accident strategies. These were interactive sessions that took place
was imparted to manufacturing personnel. Also, Project both in person and virtual mode.
Management training was imparted to employees for cost
control and timely delivery. Performance Management:
KNPL seeks to attain the highest levels of transparency
A rigorous training system has been developed and in goal-setting and objective-setting, as well as constant
executed for R&D personnel to improve their skills and feedback to our employees. It supports this goal by providing
competencies. Various employee groups are also given employees with KRAs and performance dashboards
leadership training. KNPL has external interventions in that show how their KPIs and performance affect the
several functional areas where needed, either through overall organisation.
external training or through initiatives with best-in-class
organisations, to update its personnel knowledge and Community Development
capability. These initiatives enlighten employees about
new ideas and concepts, allowing them to better cope with KNPL as an organisation holds itself to considerable
environmental problems. standards when it comes to the responsibility it owes to the
community. It believes that taking collaborative action and
Various assessment tools were employed as part of the generating answers to common problems is how it can fulfil
programme to provide a formal opportunity for managers its social obligation.
and staff to grow themselves, as well as courses to pursue
KNPL’s CSR efforts are not limited to the locations in which
to improve competency in specified areas.
it works, but also extends to society at large. The Company
is guided by the philosophy of contributing meaningfully
For all managers, a three-day Annual Learning
to humanity’s progress by acting as a good neighbour,
Conference (ALC) was held online. “Good to Great” was
being thoughtful of others, and operating as a responsible
the theme of the Annual Learning Conference. The learning
corporate citizen with fervour and compassion.
conference was important because it provided a forum for
representatives from all functions to communicate about the KNPL aspires to be a responsible corporate citizen by
Company’s success as well as future plans and direction. proactively contributing to society’s social and economic
advancement through the use of practices that go beyond
traditional industry’s bounds.

The Company participates in Corporate Social Responsibility

(CSR) activities that promote social advancement, with
a focus on events that benefit the underprivileged and
disadvantaged. Encouraging employee participation in
CSR initiatives across the country also fosters a sense of
societal duty on an individual level while also improving the
Company’s image.

KNPL has linked its CSR programmes to the Sustainability

Women’s day celebration Development Goals defined by United Nation (UNSDG’s).

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

The following are broad definitions for all programmes: Promoting Education
Rural Development / Community Development KNPL runs a range of programmes in schools around its
factories and depots to raise educational levels and support
The objective is to reach out to people by providing
education in rural regions. Construction of classrooms and
basic services and amenities. To do so, the organisation
science laboratories, providing computers, solar inverters,
contributes to the local community by construction and
clean water etc. are few initiatives carried out under the
refurbishment of school and other basic infrastructure.
said programme.
During the year, KNPL carried out multiple such activities.
The highlight for the same during the year are Community
Hall Painting Work, Community Room and construction of
Boundary Wall, Pick-up Sheds, Women Empowerment.
KNPL carried out a key project of “Women Empowerment in
farming through livelihood intervention”, which was initiated
three years ago. This project dealt with the development
of farming activity amongst small, marginal land holder &
landless women farmers which helped them to be financially
self-dependent and also to get social recognition.

Promoting Education

Ensuring Environmental Sustainability

The Company is dedicated to helping the community
conserve natural resources and maintain the environment.
It has worked on a number of projects aimed at preserving
the environment’s balance. Tree Plantations, Solar Energy
Use, Cleanliness drive, and Painting activities were created
to contribute to the quality of life on the land. In view of
Pick-up Shed Painting KNPL’s aim to become “Water Positive Organisation” by
2024-25, Pond Rejuvenation projects were carried out near
the Plants. The project included pond cleaning, desilting /
Preventive Health Care and Sanitation
deepening of the pond, disposal of silt, making protection
The purpose of this initiative is to create amenities that wall and tree plantation in the surrounding area.
improve general health and sanitation. Multiple Good Health
& Well-Being camps were held; toilets provided in schools,
initiatives to provide clean drinking water were organised.
KNPL extended support considering the pandemic scenario,
Oxygen Concentrators were distributed. Personal Protective
Equipment (PPE kits) were provided to Frontline Health
workers (Equipment to Hospitals) at multiple community
health centres.

Tree plantation

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Board´s Report 102nd Annual Report 2022

Environment, Health and Safety

Environment, Health and Safety have always been a corner It has also been
stone of KNPL’s business strategy and value system.
recognised by S&P
As a socially and environmentally responsible organisation,
it imbibes practices and encourage programmes that Global and ranked in Top
ensure social well-being and promote environmental
Quartile of Global Chemical
conservation & protection.
Industry S&P ESG Index
KNPL has been placed in the top Quartile in Manufacturing
Space and Rated No.1 in Paint Sector in the CRISIL ESG in CSA 2021.
compendium. It has also been recognised by S&P Global
and ranked in Top Quartile of Global Chemical Industry
S&P ESG Index in CSA 2021. Water Management
KNPL has set an inspiring target of becoming water positive
by FY 2024-25. To do so, it has set exacting standards
KNPL has been placed
and management goals to achieve water stewardship
in the top Quartile in and minimise overall water consumption across the firm.
Manufacturing Space The Company’s aim is to reduce freshwater consumption,
increase rainwater usage within factory premises, and
and Rated No.1 in Paint restore water in operating areas through water replenishment
Sector in the CRISIL ESG initiatives. In FY 2021-22, several measures have been
compendium. launched to reduce freshwater consumption and
improve water efficiency within operational boundaries
which has helped KNPL to reduce specific water
consumption by 7% over the last FY. Special emphasis
Safety was laid on water replenishment in community areas
KNPL believes in building safety-first mindset among where KNPL operates. Efforts towards water conservation
employees and consistent efforts are made to sensitise are detailed out in the Water Management section of
and raise awareness among employees in regards to Natural Capital.
varied aspects of safety. Robust Environmental and Safety
Management System is in place at all KNPL industrial units.
All plants have ISO 45001 certification and are equipped
with adequate requisites for emergency situations. To improve
emergency preparedness and foster safety culture; various
drills, thematic safety trainings, contests and assessments
are undertaken on a regular basis. In order to encourage
open-feedback culture, KNPL conducted a Safety Culture
Survey for management-level and operator-level employees
during the reporting period. Further details are provided in the
Occupational Health and Safety section of Human Capital.

Pond restoration

Waste Management
Judicious waste management has become a major feature
and of paramount importance as the regulatory landscape
is constantly evolving and new requirements are emerging.
All major plants are Zero Liquid Discharge facilities.
KNPL has set up Recovery units at its plants for solvent
recovery and also collect powder dust emitted during charging
Health and Safety pledge through dust collector and powder recovery system.

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KANSAI NEROLAC PAINTS LIMITED STATUTORY REPORTS

KNPL follows the 3R principle for management of all Climate Change

types of wastes: REDUCE, REUSE & RECYCLE. During the reporting period, KNPL has taken concerted
Special precautions are taken to handle, store and steps to tackle climate change. It has instituted a framework
dispose of hazardous wastes. Continuous efforts are to identify risks and opportunities related to climate change.
made to minimise industrial waste through adopting and The Company is working to align and improve its disclosures
implementing varied initiatives focussing on reduction of with growing frameworks such as the TCFD and set a
hazardous as well as non-hazardous waste. During the science-based target. Going forward, KNPL intends to
year, specific hazardous waste generation decreased have a robust strategy and deploy an action plan to mitigate
by 7% from the previous year. climate change risks.

Plastic Waste Management Other Air Emissions

In regards to plastic waste management, KNPL is abreast Ambient air quality, stack emissions, and VOC levels on the
of the changing regulatory requirements. In terms of shop floor and at other plant sites are evaluated on a regular
post-consumer plastic waste, it has initiated efforts under basis to limit other air emissions.
the provision of Extended Producer Responsibility.
The Company also taken significant efforts to limit Additional details on energy and emission reduction are
incoming plastic waste from suppliers by replacing stated in Natural Capital under the section of Energy and
alternative materials for plastic or utilising a supplier-set Emission Management.
take-back system. KNPL has also initiated use of recycled
Greenbelt Development
plastic content in certain packing materials.
As a responsible organisation, KNPL conducts
tree-plantation drives within and outside factory premises
on various occasions round the year. The Company has
a total of 53,811 trees planted within factory premises,
of which 6,564 trees were planted during the reporting
period. In addition, 6,760 trees were planted outside
factory premises through CSR initiatives in FY 2021-22.

Opportunities and Threats

Product packing with recycled plastic content Information for this section can be found in the “Opportunities
and Threats” section of the Corporate Overview.
Further details on efforts to reduce waste generation and
disposal are outlined in the Waste Management Section Risks and Concerns
under Natural Capital. Information for this section can be found in the “Risk and
Concerns” section of the Corporate Overview.
Energy and Emission Management
During the reporting period, KNPL continued its Outlook
energy-saving goal to reduce its carbon footprint by KNPL expects demand to remain positive for the year.
implementing a variety of energy-saving initiatives and Many favourable factors like demographics, urbanisation,
moving to environment-friendly and cost-effective options. infrastructure thrust and lower per capita paint consumption
KNPL’s aim is to, gradually adopt new concepts and by global standards make the outlook positive over
technologies which further lead to diversification of energy the long term.
mix, to reduce carbon emissions and improve air quality.
In conclusion, KNPL aims to become more and more The industry is seeing renewed action with the entry of
energy efficient. newer players. This augurs well for the industry as it will
lead to more innovation. KNPL has taken many strategic
In FY 2021-22, 52% of total energy (power + fuel + heat initiatives in the areas of Branding, Technology, Products,
and steam) consumed is from renewable sources. Manufacturing, Distribution, Service, People, Digital and
KNPL was also able to sustain its Scope 1 and Scope Governance and is confident of meeting the challenges of
2 GHG emission intensity as a result of energy saving the emerging tomorrow.
initiatives and increasing the share of green energy.
The Company has also on-boarded experts to conduct There are challenges expected in the immediate term due to
a detailed Scope 3 inventorisation in order to achieve the Russia-Ukraine war scenario. However, the Company’s
completeness in GHG reporting and, as a result, construct a view is that the supply chain challenges and inflation
carbon reduction action plan. pressures will ease off once the war subsides.

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Internal Control Systems and their Adequacy

102nd Annual Report 2022

internal audit success. KNPL’s control measures are

-
KNPL’s Internal Control Systems are designed to track benchmarked against the industry standards for effective
control mechanisms. The internal audit programme of the
and report on its day-to-day operations in order to monitor
Company focusses on determining whether gaps exist as
and control them. These systems also effectively monitor
a result of control design, policy design, control or process
compliance to numerous concepts, regulations, and norms,
deviation, IT or regulatory compliances. It also considers
as well as adherence to methodology requirements.
which controls are capable of automation. The results of
the audit are then used by the Company to improve its
The Company has implemented an Internal Financial Control
internal controls.
system in compliance with the provisions of Section 134(5)
(e) of The Companies Act, 2013, to improve internal control
Compliances:
systems and give the Board of Directors with additional
capacity to review internal controls. Implementation of these KNPL has developed a dashboard of key legislation
systems has been guided by the framework suggested in changes that are notified by various government authorities
the Guidance Note on Audit of Internal Financial Controls and is tracked by the management with respect to
in Financial Reporting issued by The Institute of Chartered requirements and implementation. The Company tracks all
Accountants of India, to address the Company’s operational regulatory compliances online, through the Legatrix system.
and financial risks. In addition, the statutory auditors test the The system is updated regularly with all the changes in
Company’s systems using automated techniques. compliances as they occur. Online tracking and tracing of
completion helps ensure strict adherence to regulations.
Control Efficiency Index and Robust Control Index: In addition, the Company also tracks any legal cases
through the Roznama system.
The Control Efficiency Index (CEI) and the Robust Control
Index (RCI) are still used by the Company to track its

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Awards & Recognition (FY 2021-22)

Company/
Name of Award Award Description Category Awarded By
Location
Honoured with Best Supplier award
Best Supplier from HMSI consecutively for the
Supply chain HMSI KNPL
Award 4th time in the annual Supplier
Conference
Prestigious Continual efforts on “100% delivery M/s Daimler India
Quality Hosur
Award and Zero PPM” for year 2019 & 2020 (Bharat Benz)
India Manufacturing Excellence Manufacturing
Gold Award Frost & Sullivan Hosur
Award 2021 Excellence
Platinum & National Poka-Yoke and Kaizen
Quality Hosur, Lote
Gold Award Competition
Platinum and Innovative & Renovate Category in Goindwal
Innovation
Silver Award National Kaizen Competition Sahib
Improvement Projects in
Platinum Award Operation Category of 15th Six Sigma Operations Bawal
National Competition
Star Challenger
Awarded in the Innovative Category Innovation Hosur
Award
Confederation of
Gold Award Case Study Preparation Competition Quality Indian Industry (CII) Sayakha
Allied Circle and Quality Circle
Silver Award Quality Bawal
Concept
National Poka Yoke Competition -
The project presented was Environment
Silver Award Bawal
“Prevention of Hazardous Material Health & Safety
Overflow from Seal Tank”
Energy Efficient Unit Award in 22nd
Energy Efficient Energy
CII National Award for Excellence in Bawal
Unit Award Conservation
Energy Management 2021
Exemplary work and best practices
Greenpreneur Goindwal
in water management to build a Environment FICCI Amritsar
Award Sahib
sustainable future
Excellence award in large scale
Rotary Award EHS Excellence Rotary Award Sayakha
chemicals sector category
Outstanding projects in “Safety Environment Golden Bird
Platinum Award Bawal
Excellence” in chemical category Health & Safety National Award
Best use of Regional KNPL-
Bronze Award Marketing Prime Time Awards
entertainment channel Marketing

Cautionary Statement
Statements in this Management Discussion and Analysis section of this report describing the Company’s objectives,
estimates and expectations may be “forward-looking statements”, actual results might differ materially from those either
expressed or implied.

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Boardʼs Report

2. Directors’ Responsibility Statement

102nd Annual Report 2022

then as the Managing Director and subsequently as the

Vice Chairman and Managing Director of the Company.
As stipulated under the provisions contained in
Section 134(3)(c) read with Section 134(5) of the The Board of Directors of the Company, at its meeting held
Companies Act, 2013, (“the Act”), the Board of Directors, on 18th February, 2022 pursuant to the recommendation
to the best of its knowledge and belief and according to the of Nomination and Remuneration Committee of the
information and explanations obtained by it, hereby states that: Board, approved the appointment of Mr. Anuj Jain
i. in the preparation of the annual accounts, the (holding Director Identification Number 08091524), as
applicable accounting standards have been followed the Managing Director of the Company for a period of
and there are no material departures; 5 (five) years commencing from 1st April, 2022 and ending
on 31st March, 2027 (both days inclusive) on the remuneration
ii. the directors have selected such accounting policies and perquisites as set out in the draft Agreement between the
and applied them consistently and made judgments Company and Mr. Jain, referred to in the Resolution at Item
and estimates that are reasonable and prudent so as
no. 6 of the Notice of AGM. In accordance with the Articles
to give a true and fair view of the state of affairs of the
of Association of the Company, Mr. Jain as the Managing
Company at the end of the financial year and of the
Director will not be liable to retire by rotation.
profit of the Company for that period;
iii. the directors have taken proper and sufficient care The Board of Directors of the Company, at its meeting held
for the maintenance of adequate accounting records on 10th May, 2022 pursuant to the recommendation of the
in accordance with the provisions of the Act, for Nomination and Remuneration Committee of the Board,
safeguarding the assets of the Company and for approved the re-appointment of Ms. Sonia Singh (holding
preventing and detecting fraud and other irregularities; Director Identification Number 07108778), as an Independent
Director of the Company, not being liable to retire by rotation,
iv. the directors have prepared the annual accounts of
for a second term of 5 (five) years commencing from
the Company on a going concern basis;
29th July, 2022 and ending on 28th July, 2027 (both days
v. the directors have laid down internal financial controls inclusive), subject to the approval of Shareholders of the
to be followed by the Company and that such internal Company vide a Special Resolution. The Board considered
financial controls are adequate and are operating her rich experience and vast knowledge in the field of brand
effectively; and strategy, sales and marketing, the skills, capabilities and
vi. the directors have devised proper systems to ensure proficiency required for the role, performance evaluation
compliance with the provisions of all applicable laws and her contribution to the Board during her first term for
and that such systems are adequate and operating her re-appointment.
effectively.
None of the Director is disqualified as on 31st March, 2022
from being appointed as a Director under Section 164
3. New Projects
of the Act.
During financial year 2021-22, the Company has
commissioned emulsion resin manufacturing facility at All the Independent Directors on the Board have given a
Goindwal Sahib, Punjab. declaration of their independence to the Company as required
under Section 149(6) of the Act and Regulation 16(1)(b)
of the Securities and Exchange Board of India (Listing
4. Directors
Obligations and Disclosure Requirements) Regulations,
In terms of the provisions of the Act and the Articles of 2015 (“SEBI Listing Regulations”). In the opinion of
Association of the Company, Mr. Shigeki Takahara (holding the Board, all the Independent Directors possess
Director Identification Number 08736626), Non-Executive integrity, expertise and experience including proficiency
Director and Mr. Takashi Tomioka (holding Director required to be Independent Directors of the Company.
Identification Number 08736654), Non-Executive Director They fulfill the conditions of independence as specified
are liable to retire by rotation at the ensuing Annual General in the Act and SEBI Listing Regulations, comply
Meeting (“AGM”) of the Company and being eligible offer with the Code for Independent Directors as prescribed
themselves for re-appointment. in Schedule IV of the Act and are independent of
the Management.
Mr.  H.   M.  Bharuka (holding Director Identification
Number 00306084) retired as the Vice Chairman and The Company has a Code of Conduct for Directors
Managing Director of the Company on completion of and Senior Management. All the Directors and Senior
his term from the close of business on 31st March, 2022 Management have confirmed compliance with the Code.
and also resigned as a member of the Board of Directors
of the Company from the same date. The Board placed Details with respect to the composition of the Board,
on record its sincere appreciation and gratitude for the the meetings of the Board held during the year and the
very valuable and outstanding contribution made by attendance of the Directors thereat have been provided
Mr. Bharuka during his long and fruitful association with the separately in the Annual Report, as a part of the Report on
Company including his tenure as Deputy Managing Director, Corporate Governance.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

5. Key Managerial Personnel thereat of the members of the Committee, are separately
provided in the Annual Report, as a part of the Report on
Mr. H. M. Bharuka retired as the Vice Chairman and Corporate Governance.
Managing Director of the Company on completion of his
term from the close of business on 31st March, 2022.
9. Statutory Auditors
The Board of Directors of the Company, pursuant to
At the 99th Annual General Meeting of the Company, the
the recommendation of Nomination and Remuneration
Shareholders had approved the appointment of S R B C
Committee of the Board, appointed Mr. Anuj Jain as the
& CO LLP, Chartered Accountants (Firm Registration
Managing Director of the Company for a period of 5 (five)
No. 324982E / E300003) as the Statutory Auditors of
years commencing from 1st April, 2022 and ending on
the Company, to hold office for a period of 5 (five) years
31st March, 2027 (both days inclusive).
from the 99th Annual General Meeting of the Company till
In terms of Section 203 of the Act, the Company has the conclusion of the 104th Annual General Meeting of
the following Key Managerial Personnel: Mr. Anuj Jain, the Company, in terms of the applicable provisions
Managing Director, Mr. P. D. Pai, Chief Financial Officer of Section 139(1) of the Act read with the Companies
and Mr. G. T. Govindarajan, Company Secretary. (Audit and Auditors) Rules, 2014. Details of the remuneration
paid to S R B C & CO LLP, Chartered Accountants, Statutory
6. Meetings of the Board Auditors, during financial year 2021-22 are disclosed in the
Financial Statements of Company, which are part of the
The Board met 5 (five) times during the financial year
Annual Report.
ended 31st March, 2022. The meeting details are provided
separately in the Annual Report, as a part of the Report on The Auditors’ Report on the Financial Statements
Corporate Governance. The maximum interval between any (Standalone and Consolidated) of the Company for the year
two meetings did not exceed 120 days, as prescribed in the under review, is clean and there are no qualifications in
Act and the SEBI Listing Regulations. their Report. Also, no frauds in terms of the provisions of
Section 143(12) of the Act have been reported by the
7. Board Evaluation Auditors in their Report for the year under review.
In terms of the applicable provisions of the Act and the
SEBI Listing Regulations, Nomination and Remuneration The Notes to the Financial Statements (Standalone and
Committee and the Board of Directors have approved Consolidated) are self-explanatory and do not call for any
a framework, which lays down a structured approach, further comments.
guidelines and processes to be adopted for carrying out an
evaluation of the performance of the Directors, the Board 10.  
Particulars of Loans, Guarantees or
as a whole and its Committees. The evaluation process has Investments under Section 186 of the
been separately explained in the Annual Report, as a part of Companies Act, 2013
the Report on Corporate Governance. Details of Loans, Guarantees and Investments covered
under the provisions of Section 186 of the Act, are separately
For the year under review, the Board carried out the disclosed in the Annual Report, as a part of the Notes to the
evaluation of its own performance, its Committees and Financial Statements.
individual Directors. Evaluation results as collated and
presented, were noted by the Nomination and Remuneration 11. Related Party Transactions
Committee and Board.
The Company has in place a Policy on dealing with Related
8. Audit Committee Party Transactions and on Materiality of Related Party
Transactions which is available on the website of the
In terms of the provisions of Regulation 18 of SEBI Listing Company at https://www.nerolac.com/financial/policies.html.
Regulations read with Section 177 of the Act, the Audit In terms of the same, a statement in summary form of
Committee is constituted as follows: transactions with related parties in the ordinary course of
Names of the Members Designation business and arm’s length basis is periodically placed before
the Audit Committee for its review. Omnibus approval was
Mr. P. P. Shah (Chairman of Chairman and obtained for transactions which were repetitive in nature.
the Audit Committee) Independent Director Transactions entered into pursuant to omnibus approval
were placed before the Audit Committee for its review during
Mr. N. N. Tata Independent Director
the year. Related party transactions have been disclosed in
Ms. Sonia Singh Independent Director Note no. 37 to the Standalone Financial Statements.

The recommendations made by the Audit Committee to the In terms of the provisions of Section 188(1) of the
Board, from time to time during the year under review, have Act read with the Companies (Meetings of Board and
been accepted by the Board. Other details with respect its Powers) Rules, 2014 and Regulation 23 of the
to the Audit Committee such as its terms of reference, SEBI Listing Regulations, all contracts/ arrangements/
the meetings of the Audit Committee and attendance transactions entered into by the Company with its related

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Boardʼs Report

parties, during the year under review, were in the ordinary

102nd Annual Report 2022

independence from the Independent Director

course of business of the Company and on an arm’s length in accordance with the Act and SEBI Listing
basis. There were no material related party transactions Regulations.
during the year. Accordingly, Form No. AOC-2, prescribed
under the provisions of Section 134(3)(h) of the Act ● The remuneration paid to Whole-time Directors
and Rule 8 of the Companies (Accounts) Rules, 2014, is subject to the limits laid down under
for disclosure of details of Related Party Transactions, Section 197 and Schedule V to the Act and
which are “not at arm’s length basis” and also which are in accordance with the terms of appointment
“material and at arm’s length basis”, is not provided as an approved by the Shareholders of the Company.
annexure to this Report as it is not applicable. The remuneration of the Whole-time Directors is
determined by the Nomination and Remuneration
12. Corporate Governance Committee based on factors such as the Company’s
performance and performance/ track record of the
The Company is in full compliance with the requirements Whole-time Directors. The remuneration consists
and disclosures that have to be made in terms of the of Salary, Commission, Company’s contribution to
requirements of Corporate Governance specified in SEBI Provident Fund and Superannuation Fund, House
Listing Regulations. Rent Allowance (HRA), Leave Travel Allowance (LTA)
In terms of the provisions of Schedule V(C) of the SEBI and other perquisites and allowances in accordance
Listing Regulations, a detailed Report on Corporate with the rules of the Company, applicable from time
Governance forms part of the Annual Report. Further, a to time.
Certificate from the Statutory Auditors of the Company
● The Non-Executive Independent Directors
confirming compliance with the requirements of Corporate
are paid commission within the ceiling of 1%
Governance as specified in SEBI Listing Regulations is
of net profits of the Company as specified in
provided together with the Report on Corporate Governance,
Section 197 of the Act. The commission payable
the same shall be considered to be an annexure to
to Non-Executive Independent Directors is decided
this Report.
by the Board, on recommendation of the Nomination
and Remuneration Committee, based on a
13. Remuneration Policy number of factors including number of Board and
The Board of Directors has adopted a (“Remuneration Policy”) Committee meetings attended, individual contribution
which deals with (i) criteria for determining qualifications, thereat, etc.
positive attributes and independence of Director and
(ii) remuneration for Directors, Key Managerial Personnel ● The objective of the policy is to have a compensation
and other employees. framework that will reward and retain talent.

The features of the Remuneration Policy are as follows: ● The remuneration will be such as to ensure that the
correlation of remuneration to performance is clear
● The Company, while constituting the Board shall and meets appropriate performance benchmarks.
draw members from diverse fields such as finance,
law, management, sales, marketing, architecture, ● Remuneration to Key Managerial Personnel,
administration, research, corporate governance, Senior Management and other employees will involve
operations or other disciplines related to the a balance between fixed and variable pay reflecting
Company’s business. There shall be no discrimination short and long term performance objectives of
on the basis of gender, race, ethnicity and nationality the employees in line with the working of the
while determining the Board composition. Company and its goals. The short and long term
performance objectives cover amongst various
● A Director shall be a person of integrity, who aspects industry performance, customer performance,
possesses relevant expertise and experience. He overall economic environment, financial performance
shall uphold ethical standards of integrity and probity and performance on Environment, Social and
and act objectively and constructively. He shall Governance objectives.
exercise his responsibilities in a bona-fide manner
in the interest of the Company; devote sufficient ● For Directors, the Performance Pay will be linked to
time and attention to his professional obligations for achievement of Business Plan (achievement of short
informed and balanced decision making; and assist term and long-term business objective).
the Company in implementing the best corporate
governance practices. ● For Heads of Department, the Performance Pay
will be linked to achievement of functional plan
● An Independent Director should meet the which is derived from the business plan. The
requirements of the Act and the SEBI Listing functional plan includes both, short-term and
Regulations, concerning independence of directors. long-term objectives.
The Company shall also obtain certification of

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

● The above will take into consideration industry 15. Vigil Mechanism – Whistle Blower Policy
performance, customer performance and overall
economic environment. The Company has a Whistle Blower Policy to report
genuine concerns and grievances. The Policy provides
● For other management personnel, the Performance adequate safeguards against victimisation of persons
Pay will be linked to achievement of individual set who use the Whistle Blower mechanism. Details with
objectives and part of this will also be linked to overall
respect to implementation of the Whistle Blower Policy
Company performance.
are separately disclosed in the Annual Report, as a
● The Remuneration Policy is also available on the part of the Report on Corporate Governance. The
website of the Company at https://www.nerolac.com/ same is also available on the website of the Company at
financial/policies.html. https://www.nerolac.com/financial/policies.html.

14. Risk Management Policy 16. Corporate Social Responsibility

The Company has identified the risk areas in its operations In terms of Section 135 of the Act, the constitution of the
along with its probability and severity, department wise. An Corporate Social Responsibility (“CSR”) Committee as on
effective Risk Management Framework is put in place in the 31st March, 2022 is as follows :
Company in order to analyze, control and mitigate risk. Risk
Names of the Members Designation
profiling is also put in place for all the areas of operations
in the Company and well integrated in the business cycle. Mr. H. M. Bharuka* Vice Chairman and
The various risks to which the Company is exposed are (Chairman of the CSR Committee) Managing Director
disclosed as a part of Management Discussion and Analysis, Mr. N. N. Tata Independent Director
hereinabove.
Mr. Anuj Jain Executive Director
The Risk Management Framework of the Company
* Mr. H. M. Bharuka retired as the Vice Chairman and Managing
comprises of Risk Management Committee and the
Director of the Company on completion of his term from close of
Risk Officers.
business on 31st March, 2022 and resigned as a member of the
In terms of the provisions of Regulation 21 of SEBI Board of Directors of the Company from the same date.
Listing Regulations, the constitution of Risk Management
Committee as on 31st March, 2022 as follows: Ms. Sonia Singh, Independent Director, has been appointed
as the Chairperson of the CSR Committee with effect from
Names of the Members Designation 1st April, 2022.
Mr. H. M. Bharuka* Vice Chairman and The functions of the CSR Committee are to:
(Chairman of the Risk Managing Director
(a) formulate and recommend to the Board, a Corporate
Management Committee)
Social Responsibility Policy which shall indicate the
Ms. Sonia Singh Independent Director activities to be undertaken by the Company in areas
Mr. Anuj Jain Executive Director or subject, specified in Schedule VII of the Act;
(b) recommend the amount of expenditure to be incurred
Mr. Jason Gonsalves Non-board member on
on the activities referred to in clause (a); and
the Committee
(c) monitor the CSR policy of the Company from time
Mr. P. D. Pai Chief Risk Officer and
to time.
Non-board member on
the Committee There was 1 (one) meeting of the CSR Committee during
the financial year on 17th March, 2022 which was attended
* Mr. H. M. Bharuka retired as the Vice Chairman and Managing
Director of the Company on completion of his term from close of by all members of the Committee.
business on 31st March, 2022 and resigned as a member of the
Board of Directors of the Company from the same date. The Board on recommendation of CSR Committee has
framed a CSR Policy and the same is available on the
Ms. Sonia Singh, Independent Director, has been appointed website of the Company at https://www.nerolac.com/
as a member of the Risk Management Committee financial/policies.html.
in accordance with SEBI Listing Regulations along with
Mr. P. D. Pai appointed as the Chief Risk Officer and The Annual Report on CSR activities as required under
member, with effect from 5th May, 2021. Companies (Corporate Social Responsibility Policy)
Rules, 2014, as amended, including a brief outline of
Mr. P. P. Shah, Independent Director, has been appointed
the Company’s CSR Policy, is annexed to this Report as
as the Chairman of the Risk Management Committee with
effect from 1st April, 2022. Annexure 1.

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Boardʼs Report

17. Particulars on the Committees of the Board

102nd Annual Report 2022

of Section 134(3)(m) of the Act read with Rule 8(3) of the

Companies (Accounts) Rules, 2014, is annexed to this
The details with regard to the Composition of the Committees
of the Board and the number of meetings held during the Report as Annexure 3.
year of such committees, as required under SEBI Listing
Regulations, is separately provided in the Annual Report, 23. Share Capital
as part of the Report on Corporate Governance. The paid up Equity Share Capital as at 31st March, 2022
stood at ₹ 53.89 Crores. In terms of the Scheme of Merger
18. Dividend Distribution Policy
by absorption of Marpol Private Limited and Perma
The Dividend Distribution Policy of the Company Construction Aids Private Limited, both wholly-owned
has been formulated to ensure compliance with the subsidiaries of the Company, with the Company and as
provisions of Regulation 43A of SEBI Listing Regulations. directed by the National Company Law Tribunal, Mumbai
The Dividend Distribution Policy of the Company Bench, the Authorised Share Capital of the Company
is also available on the website of the Company at increased from ₹ 60,00,00,000 (Rupees Sixty Crores) to
https://www.nerolac.com/financial/policies.html.
₹ 66,50,00,000 (Rupees Sixty Six Crores Fifty Lakhs).
The declaration of dividend by the Company is in compliance
During the year under review, the Company did not issue
with the Dividend Distribution Policy.
any Equity Shares. Further, the Company has not issued
19.  
Prevention of Sexual Harassment at any convertible securities or shares with differential voting
workplace rights nor has granted any stock options or sweat equity
or warrants.
In line with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)
24. Annual Return
Act, 2013 (“POSH Act”), the Company has adopted a “Policy
on Appropriate Social Conduct at Workplace”. The Policy Pursuant to Section 92(3) read with Section 134(3)(a)
is applicable for all employees of the organization, which of the Act, the Annual Return as on 31st March, 2022 is
includes corporate office, manufacturing locations, branches, available on the website of the Company in the following link
depots, etc. The Policy is applicable to non-employees as https://www.nerolac.com/our-financial-results.html
well i.e. business associates, vendors, trainees etc.
25. Details of Unclaimed Suspense Account
The Company has complied with provisions relating to
the constitution of Internal Complaints Committee under Details pertaining to Unclaimed Suspense Account of the
the POSH Act to redress complaints received on sexual Company are separately provided in the Annual Report, as
harassment as well as other forms of verbal, physical, part of the Report on Corporate Governance.
written or visual harassment.
26. Investor Education and Protection Fund
During the year under review, the Company did not receive (“IEPF”)
any complaints of sexual harassment and no cases were
filed under the POSH Act. Transfer of Unclaimed Dividend to IEPF
During the year under review, dividend amounting to
20. General Shareholder Information ₹9.64 Lakhs that had not been claimed by the shareholders
General Shareholder Information is given as Item no. 11 of for the year ended 31st March, 2014, was transferred to the
the Report on Corporate Governance forming part of the credit of IEPF as required under Sections 124 and 125 of
Annual Report. the Act.

21.  Particular regarding Employees Unclaimed dividend as on 31st March, 2022

Remuneration As on 31st March, 2022, dividend amounting to
Disclosure comprising particulars with respect to the ₹ 2.46 Crores has not been claimed by shareholders of
the Company. Shareholders are required to lodge their
remuneration of directors and employees, as required to
claims with the Registrar and Share Transfer Agents
be disclosed in terms of the provisions of Section 197(12)
of the Company i.e. TSR Consultants Private Limited
of the Act and Rule 5 of the Companies (Appointment and
(formerly known as TSR Darashaw Consultants Private
Remuneration of Managerial Personnel) Rules, 2014, is
Limited), for unclaimed dividend.
annexed to this Report as Annexure 2.
Pursuant to the provisions of Investor Education and
22.  
Conservation of Energy, Technology Protection Fund Authority (Accounting, Audit, Transfer and
Absorption and Foreign Exchange earnings Refund) Rules, 2016 (as amended), the Company has
and outgo uploaded the details of unpaid and unclaimed amounts
The statement giving the particulars relating to lying with the Company as on 31st March, 2021, on the
conservation of energy, technology absorption and website of the Company i.e. www.nerolac.com. The same
foreign exchange earnings and outgo, as required in terms are also available with the Ministry of Corporate Affairs.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Transfer of Equity Shares for the previous year, was clean and there was no
As required under Section 124 of the Act, 61,790 Equity qualification in their Report. The same was duly filed with
Shares, in respect of which dividend has not been Ministry of Corporate Affairs on 19th October, 2021.
claimed by the members for 7 (seven) consecutive years
or more, have been transferred by the Company to the The Company had re-appointed D.C. Dave & Co., Cost
IEPF Authority during the financial year 2021-22. Details Accountants, as the Cost Auditor for the year ended
of such shares transferred have been uploaded on the 31st March, 2022, and the Cost Audit Report when submitted
website of the Company, i.e. www.nerolac.com. The same by them, will be duly filed with Ministry of Corporate Affairs.
are also available with the Ministry of Corporate Affairs.
Further, the Company has re-appointed D.C. Dave & Co.,
Nodal Officer Cost Accountants, as the Cost Auditor for the Financial
The Company has appointed Mr. G. T. Govindarajan, Year 2022-23, to conduct an audit of its cost accounting
Company Secretary as the Nodal Officer for the purpose records pertaining to said products, at a remuneration of
of verification of claims filed with the Company in terms of ₹ 3,00,000 plus Goods and Service tax and out of pocket
IEPF Rules and for co-ordination with the IEPF Authority. expenses. The Company is seeking the approval of the
The said details are also available on the website of the Shareholders by means of ratification, for the remuneration
Company i.e. www.nerolac.com. to be paid to D. C. Dave & Co., Cost Accountants, vide
Item no. 5 of the Notice of the AGM.
27. Secretarial Audit
Pursuant to the provisions of Section 204 of the Act, the Certificate from D. C. Dave & Co., Cost Accountants, has
Company had appointed JHR & Associates, Company been received to the effect that their appointment as Cost
Secretaries, as the Secretarial Auditor for the year under Auditor, if made, would be in accordance with the limits
review, to conduct the Secretarial Audit of the Company. specified under Section 141 of the Act and Rules framed
thereunder.
The Secretarial Audit Report for the year under review
issued by Secretarial Auditor is annexed to this Report as 29. Business Responsibility Report
Annexure 4. There is no qualification or adverse remark in
A Business Responsibility Report describing the initiatives
their Report.
taken by the Company from an environmental, social
Further, in terms of the provisions of the Circular No. CIR/ and governance perspective, as required in terms of the
CFD/CMD1/27/2019 dated 8th February, 2019 issued by provisions of Regulation 34(2)(f) of SEBI Listing Regulations,
Securities and Exchange Board of India, the Company separately forms part of the Annual Report.
has obtained the Annual Secretarial Compliance Report
for the financial year ended 31st March, 2022, confirming 30. Acknowledgements
compliance of the applicable SEBI Regulations and Your Directors wish to express their grateful appreciation
circulars/ guidelines issued thereunder, by the Company. for the co-operation and continued support received from
customers, parent company, collaborators, vendors,
The Company has complied with the applicable Secretarial
investors, shareholders, financial institutions, banks,
Standards issued by the Institute of Company Secretaries
regulatory authorities and the society at large during the year.
of India.
We also place on record our appreciation for the
28. Cost Audit contribution made by our employees at all levels and for
their commitment, hard work and support in a challenging
The Company has maintained cost records as specified
environment.
by the Central Government under Section 148(1) of the
Act. Further the Company had appointed D. C. Dave &
Co., Cost Accountants (Registration No.000611), as the For and on behalf of the Board
Cost Auditor to conduct an audit of its Cost Accounting
P. P. Shah
Records for the financial year 2020-21, pertaining Chairman
to products of the Company as required by the law.
The Cost Audit Report submitted by the Cost Auditor Mumbai, 10th May, 2022

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Boardʼs Report

Annexure 1 to the Board’s Report

102nd Annual Report 2022

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

FOR THE FINANCIAL YEAR 2021-22

1. A brief outline of the Company’s CSR Policy, including : Given separately as part of this Report.
overview of projects or programmes proposed to be taken

2. Composition of CSR Committee as on 31st March, 2022:

Sl. Name of Director Designation / Number of meetings of Number of meetings
No. Nature of Directorship CSR Committee held of CSR Committee
during the year attended during the year
1. Mr. H. M. Bharuka* Vice Chairman and 1 1
Managing Director
2. Mr. N. N. Tata Independent Director 1 1
3. Mr. Anuj Jain Executive Director 1 1
* Mr. H. M. Bharuka retired as the Vice Chairman and Managing Director of the Company on completion of his term from close of
business on 31st March, 2022 and resigned as a member of the Board of Directors of the Company from the same date.

Ms. Sonia Singh, an Independent Director, has been appointed as the Chairperson of the Corporate Social
Responsibility Committee with effect from 1st April, 2022.

3. Provide the web-link where Composition of CSR Committee, CSR Policy and CSR Projects approved by the
board are disclosed on the website of the Company
Composition of the CSR Committee shared above and is available on the Company’s website on
https://www.nerolac.com/our-people.html
CSR Policy - https://www.nerolac.com/financial/policies.html
CSR Projects - https://www.nerolac.com/financial/csr-projects-approved.html

4. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of Rule 8
of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the report).
 he Company has carried out impact assessment in terms of Rule 8(3) of the Companies (Corporate Social
T
Responsibility Policy) Rules, 2014, as amended, through an independent agency for three projects, each having
outlay of Rs.1 Crore or more and that have completed not less than one year before undertaking the impact study. The
CSR Impact Assessment Study Report is attached.

5. Details of the amount available for set off in pursuance of sub-rule (3) of Rule 7 of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any:
Sl. Financial Year Amount available for set-off Amount required to be set-off
No. from preceding financial years for the financial year, if any
(in `) (in `)
1. 2020-21 0.02 Crores Nil
2. — — —
3. — — —
Total 0.02 Crores Nil

6. Average net profit of the Company as per Section 135(5) - ` 700.32 Crores

7. (a) Two percent of average net profit of the Company as per Section 135(5) - ` 14.01 Crores
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: Nil
(c) Amount required to be set off for the financial year, if any : Nil
(d) Total CSR obligation for the financial year (7a+7b-7c) : ` 14.01 Crores

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

8. (a) CSR amount spent or unspent for the financial year:

Amount Unspent (in `)
Total Amount transferred to Amount transferred to any fund
Unspent CSR Account as per specified under Schedule VII as per
Section 135(6). second proviso to Section 135(5).
Total Amount Spent for the Amount Date of Name of Amount Date of
Financial Year (in `) transfer the Fund transfer
14.06 Crores NIL – – NA –

(b) Details of CSR amount spent against ongoing projects for the financial year : There are no pending
ongoing projects under CSR as at 31st March, 2022.
(c)  etails of CSR amount spent against other than ongoing projects for the financial year : ` 14.06 Crores
D
(Separately attached to this Report).
(d) Amount spent in Administrative Overheads - NIL
(e) Amount spent on Impact Assessment, if applicable - NIL
(f) Total amount spent for the Financial Year (8b+8c+8d+8e) : ` 14.06 Crores
(g) Excess amount for set off, if any

Sl. Particular Amount

No. (in `)
(i) Two percent of average net profit of the company as per Section 135(5) 14.01 Crores
(ii) Total amount spent for the financial year 14.06 Crores
(iii) Excess amount spent for the financial year [(ii)-(i)] 0.05 Crores
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous NIL
financial years, if any
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] 0.05 Crores

9. (a) Details of Unspent CSR amount for the preceding three financial years:
Sl. Preceding Amount Amount spent Amount transferred to any fund Amount
No. Financial transferred to in the reporting specified under Schedule VII as remaining to
Year Unspent CSR Financial Year per Section 135(6), if any be spent in
Account under (in `) succeeding
Section 135(6) Name of Amount Date of financial years
(in `) the Fund (in `) transfer (in `)
1. – NIL – – NIL – –
2. – NIL – – NIL – –
3. – NIL – – NIL – –

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Sl. Project Name Financial Project Total Amount Cumulative Status
No. ID of the Year in duration amount spent on the amount of the
Project which the allocated project in spent at project -
project was for the the reporting the end of Completed/
commenced project Financial reporting Ongoing
(in `) Year Financial
(in `) Year
(in `)
1. – – – – – – – –

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Boardʼs Report 102nd Annual Report 2022

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or
acquired through CSR spent in the financial year (asset-wise details).
(a) Date of creation or acquisition of the capital asset(s). – None
(b) Amount of CSR spent for creation or acquisition of capital asset. – NIL
(c)  etails of the entity or public authority or beneficiary under whose name such capital asset is
D
registered, their address etc. – Not Applicable
(d) Provide details of the capital asset(s) created or acquired (including complete address and location of
the capital asset) – Not Applicable

11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per
Section 135(5) – Not Applicable

Anuj Jain Sonia Singh

Managing Director Independent Director
Chairperson of the CSR Committee

Mumbai, 10th May, 2022

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

BRIEF OUTLINE OF CSR POLICY

The Mission and philosophy of CSR function of the Company is “To contribute positively to the development of the society, by
acting as a good neighbour, considerate of others, playing the role of a good corporate citizen with passion and compassion.”
Hence the CSR activities undertaken by the organisation essentially focus on four core areas of Environment, Health,
Education and Community Development. The focus of the Company is to contribute to various institutions and initiatives
around the manufacturing locations to provide social services to the needy.
The CSR vision of the Company is to strive to be a responsible corporate by proactively partnering in the Environmental,
Social and Economic development of the communities through the use of innovative technologies, products as well as
through activities beyond normal business.
The Company endeavours to make a positive and significant contribution to the society by targeting social and cultural
issues, maintaining a humanitarian approach and focusing on areas in and around its plants and where its establishments
are located.
The Company would continue to carry out CSR activities as it has been carrying out over the years in the areas of Environment,
Health, Education and Community Development. In particular, the Company will undertake CSR activities as specified in
Schedule VII to the Companies Act, 2013 (including any amendments to Schedule VII and any other activities specified by
the Government through its notifications and circulars) as follows:
1. Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation,
including contribution to the Swach Bharat Kosh set up by the Central Government for the promotion of sanitation and
making available safe drinking water;
2. Promoting education, including special education and employment enhancing vocational skills especially among
children, women, elderly and the differently abled and livelihood enhancement projects;
3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old
age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced
by socially and economically backward groups;
4. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry,
conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean
Ganga Fund set up by the Central Government for rejuvenation of river Ganga;
5. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and
works of art; setting up public libraries; promotion and development of traditional art and handicrafts;
6. Measures for the benefit of armed forces veterans, war widows and their dependents, Central Armed Police Forces
(CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows;
7. Training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports;
8. Contribution to the Prime Minister’s National Relief Fund or Prime Minister’s Citizen Assistance and Relief in Emergency
Situations Fund (PM CARES Fund) any other fund set up by the Central Government for socio-economic development
and relief and welfare of the scheduled castes, the scheduled tribes, other backward classes, minorities and women;
9. (a) Contribution to incubators or research and development projects in the field of science, technology, engineering
and medicine, funded by Central Government or State Government or Public Sector Undertaking or any agency
of the Central Government or State Government; and
(b) Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and
autonomous bodies established under Department of Atomic Energy (DAE); Department of Biotechnology
(DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda,
Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information
Technology and other bodies, namely Defense Research and Development Organisation (DRDO); Indian
Council of Agricultural Research (ICAR); Indian Council of Medical Research (ICMR) and Council of Scientific
and Industrial Research (CSIR), engaged in conducting research in science, technology, engineering and
medicine aimed at promoting Sustainable Development Goals (SDGs);
10. Rural development projects;
11. Slum area development; Explanation. - For the purposes of this item, the term `slum area' shall mean any area
declared as such by the Central Government or any State Government or any other competent authority under any
law for the time being in force;
12. Disaster management, including relief, rehabilitation and reconstruction activities.
CSR activities will be undertaken either by the Company itself or through a Trust/Section 8 Company to be established by
the Company or through any other Trust engaged in similar projects and activities. The Company may also collaborate with
other companies to carry out its CSR activities.

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Boardʼs Report

PROGRAM WISE CSR DETAILS 2021-22

102nd Annual Report 2022

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

A. 1 Advanced Open Livelihood & Skill YES Punjab, M.P., Kerala, ALL 508.09 NO Kasturi Mrig CSR00011046
Training in Painting Enhancement Karnataka, Gujrat, Vidhya Vihar
Program Rajasthan, Andhra Samiti, Indore
Pradesh, Delhi, Goa,
Puducherry, Tamilnadu,
Maharashtra, Telangana,
U.P., Bihar, Odisha,
Uttarakhand, Haryana,
Assam, Himanchal
Pradesh, Chhatisgarh,
J&K, Jharkhand, M.P.,
West Bengal
2 Mobile Training Livelihood & Skill YES Maharashtra, Bihar, ALL 157.05 NO 1. Kasturi CSR00011046
Academy Enhancement West Bengal, Rajasthan, Mrig Vidhya
Program Gujarat Vihar Samiti,
Indore
2. Karmdeep CSR00018568
Foundation,
Ahmedabad
Sub Total 665.14
B. 1 Health Camp for Preventive Health YES HARYANA REWARI 3.23 YES
villagers near Bawal Care & Sanitation
Plant
2 Awareness sessions Preventive Health YES HARYANA REWARI 1.13 YES
for Teenage Girl Care & Sanitation
Students from various
Govt. schools at
Bawal and Rewari
3 Construction of Toilets, Preventive Health YES HARYANA REWARI 7.47 YES
Urinals and providing Care & Sanitation
Benches in Govt.
School at Harsauli
4 Providing Dustbins Preventive Health YES HARYANA REWARI 1.06 YES
under Swachh Bharat Care & Sanitation
Abhiyaan in Bawal
5 Construction of Toilet Preventive Health YES TAMIL NADU KRISHNAGIRI 10.03 YES
blocks and painting Care & Sanitation
at Govt. High school,
Hosur
6 Support in Covid-19 Preventive Health YES TAMIL NADU KRISHNAGIRI 6.40 YES
Vaccination drive Care & Sanitation
for poor citizens at
Moranapalli
7 Providing Oxygen Preventive Health YES TAMIL NADU KRISHNAGIRI 5.10 YES
Concentrators to Care & Sanitation
7 Govt Primary
Health Centers at
Kelamangalam &
Soolagiri Blocks,
Hosur
8 Health camps for Preventive Health YES TAMIL NADU KRISHNAGIRI 0.78 YES
villagers near Hosur Care & Sanitation
Plant
9 Health Camps for Preventive Health YES MAHARASHTRA RATNAGIRI 3.68 YES
villagers near Lote Care & Sanitation
Plant
10 Installation of Fire Preventive Health YES GUJARAT BHARUCH 9.00 NO Sevashram CSR00007888
Safety System in Care & Sanitation Hospital Trust,
Sevashram Hospital, Bharuch
Bharuch
11 Providing Garbage Preventive Health YES GUJARAT BHARUCH 0.70 YES
collection facility (Dust Care & Sanitation
Bins, Tricycles, Safety
shoes, Masks, Gloves
etc) for door to door
collection of garbage in
Argama village
12 Medical Camps for Preventive Health YES GUJARAT BHARUCH 1.63 YES
villagers at Ankot and Care & Sanitation
Sayakha
13 Financial Support to Preventive Health YES GUJARAT BHARUCH 3.00 NO Masi Mai CSR00017924
Masi Mai foundation Care & Sanitation Foundation,
for Prosthetic limb Bharuch
transplant at Bharuch

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

PROGRAM WISE CSR DETAILS 2021-22 (contd.)

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

14 Donation to Rotary Preventive Health YES GUJARAT BHARUCH 0.90 NO Rotary Welfare CSR00004051
Welfare Trust, Care & Sanitation Trust, Bharuch
Bharuch for COVID-19
dispensary at Bharuch
15 Distribution of Preventive Health YES GUJARAT BHARUCH 0.37 YES
Masks, Sanitisers, Care & Sanitation
Temperature Gun,
Oxymeters etc. to
Public Health Centres
at Vagra, Derol,
Argama, Saladara,
Vorasamni and Ankot   
16 Support to Medical Preventive Health YES GUJARAT BHARUCH 0.50 NO Rotary Welfare CSR00004051
Project by Rotary Care & Sanitation Trust, Bharuch
Welfare Trust at Nikora
17 Providing Medical Preventive Health YES GUJARAT BHARUCH 0.27 YES
Beds during Care & Sanitation
COVID-19 at
Saladara, Ankot and
Aragama villages
18 Distribution of Preventive Health YES UTTAR PRADESH KANPUR 6.20 YES
10 Nos Oxygen Care & Sanitation DEHAT
Concentrators, Jainpur
19 Construction of 2 Nos Preventive Health YES UTTAR PRADESH KANPUR 9.45 YES
Toilets for visiting Care & Sanitation DEHAT
public at DM Office,
Kanpur Dehat
20 Construction of 2 Nos Preventive Health YES UTTAR PRADESH KANPUR 9.45 YES
Toilets for visiting Care & Sanitation DEHAT
public at ADM Office,
Kanpur Dehat
21 Construction of 4 Nos Preventive Health YES UTTAR PRADESH KANPUR 18.90 YES
Toilets for visiting public Care & Sanitation DEHAT
near Vikas Bhawan,
Kanpur Dehat.
22 Health camps for Preventive Health YES UTTAR PRADESH KANPUR 9.70 YES
villagers near Jainpur Care & Sanitation DEHAT
Plant
23 Construction of 2 Nos Preventive Health YES PUNJAB TARN TARAN 1.35 YES
toilets and Washing Care & Sanitation
area in Govt. Primary
School, Khakh village
24 Renovation of Preventive Health YES PUNJAB TARN TARAN 1.40 YES
Students' Dinning Hall Care & Sanitation
in Navodaya Boarding
School, Goindwal
Sahib
25 Eye Check-up Camp Preventive Health YES PUNJAB TARN TARAN 17.50 YES
with 250 Cataract Care & Sanitation
Surgeries for poor
local villagers,
Goindwal Sahib
26 Medical camp Preventive Health YES PUNJAB TARN TARAN 3.02 YES
for villagers near Care & Sanitation
Goindwal Sahib Plant
27 DG Set to COVID -19 Preventive Health YES PUNJAB TARN TARAN 21.37 YES
Hospital at Goindwal Care & Sanitation
28 Construction of Toilets Preventive Health YES PUNJAB TARN TARAN 5.79 YES
at Civil Hospital, Care & Sanitation
Goindwal Sahib
29 Providing hospital Preventive Health YES PUNJAB TARN TARAN 4.40 YES
equipment (Wheel Care & Sanitation
chairs, visitor chairs,
Stretchers etc) at
Civil Hospital, Khadur
Sahib
30 Human Dummy for Preventive Health YES PUNJAB TARN TARAN 0.31 YES
Red Cross Society, Care & Sanitation
Tarn Taran

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Boardʼs Report

PROGRAM WISE CSR DETAILS 2021-22 (contd.)

102nd Annual Report 2022

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

31 Support to Andhra Preventive Health YES MAHARASHTRA MUMBAI 10.00 NO Connect CSR00008366
Pradesh Govt. under Care & Sanitation to Andhra,
COVID-19 related Vijaywada
"Connect to Andhra"
Project
32 Providing PPEs to Preventive Health YES MAHARASHTRA MUMBAI 1.75 YES
Mathadi Hospital, Care & Sanitation
Kopar Khairane near
R&D
Sub Total 175.84

C. 1 Providing drinking Rural Development / YES HARYANA REWARI 3.95 YES

Water Cooler facility Community
with RO in Govt. Development
school at Chirhara,
Rewari

2 Installation of Street Rural Development / YES HARYANA REWARI 1.91 YES

Lights in Civil Hospital, Community
Bawal Development

3 Construction of Bore Rural Development / YES HARYANA REWARI 3.70 YES

well in Melawas Community
Development

4 Providing Shed and Rural Development / YES HARYANA REWARI 7.44 YES
seating arrangement Community
for Patients at Health Development
Centre, Sangwari

5 Providing PCR Vehicle Rural Development / YES HARYANA REWARI 11.00 YES
to S. P. Office, Rewari Community
Development

6 Providing water Rural Development / YES MAHARASHTRA CHIPLUN 0.21 YES

pipeline & Pump at Community
Tisangi Development

7 Construction of RCC Rural Development / YES MAHARASHTRA CHIPLUN 5.75 YES

Protection wall at Community
Asagani Development

8 Providing water Pipe Rural Development / YES MAHARASHTRA CHIPLUN 1.09 YES
Line at Boraj Community
Development

9 Providing water Pipe Rural Development / YES MAHARASHTRA CHIPLUN 1.85 YES
Line at Ambdas Community
Development

10 Providing Water Rural Development / YES MAHARASHTRA CHIPLUN 2.06 YES

storage Tank & Pipe Community
Line at Dhulapwadi, Development
Hedali

11 Help to flood affected Rural Development / YES MAHARASHTRA CHIPLUN 11.82 YES
people from Chiplun Community
area Development

12 Water cooler, Rural Development / YES MAHARASHTRA CHIPLUN 3.51 YES

Computers and printer Community
to S. T. Stand, Chiplun Development

13 Women Rural Development / YES MAHARASHTRA CHIPLUN 5.00 NO Dishantar CSR00003091

Empowerment project Community Sanstha,
with NGO Dishantar at Development Chiplun
Mandavkhari, Chiplun

14 Bus Pickup shed at Rural Development / YES MAHARASHTRA CHIPLUN 1.60 YES
Shinde wadi, Mani Community
Development

15 Bus Pickup shed at Rural Development / YES MAHARASHTRA CHIPLUN 1.60 YES
Deulwadi, Gunade Community
Development

16 Photo Copy Machine Rural Development / YES MAHARASHTRA CHIPLUN 1.99 YES
and printer to Community
Lokmanya Tilak Development
Library, Chiplun

17 Gym equipment to Rural Development / YES MAHARASHTRA CHIPLUN 2.10 YES

Khed Nagar Parishad, Community
Khed Development

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PROGRAM WISE CSR DETAILS 2021-22 (contd.)

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

18 Construction of Bore Rural Development / YES MAHARASHTRA CHIPLUN 1.22 YES

well, Ghanekhunt, Community
Khed Development
19 Construction of Bore Rural Development / YES MAHARASHTRA CHIPLUN 0.19 YES
well, Dhamnavane, Community
Khed Development
20 Construction of Bore Rural Development / YES MAHARASHTRA CHIPLUN 1.58 YES
well, Shresh Nagar, Community
Ghanekhunt, Khed Development
21 Construction of Bore Rural Development / YES MAHARASHTRA CHIPLUN 0.99 YES
well, Udhale, Khed Community
Development
22 Bus Pickup shed at Rural Development / YES MAHARASHTRA CHIPLUN 1.60 YES
Kelane, Khed Community
Development
23 Construction of Rural Development / YES MAHARASHTRA CHIPLUN 0.59 YES
Bore well at village Community
Nandivali, Khed Development
24 Construction of Bore Rural Development / YES MAHARASHTRA CHIPLUN 1.07 YES
well at village Vihali, Community
Khed Development
25 Painting of Compound Rural Development / YES UTTAR PRADESH KANPUR 4.04 YES
Wall of DM Office, Community DEHAT
Kanpur Dehat Development
26 Providing Water Rural Development / YES UTTAR PRADESH KANPUR 2.66 YES
Cooler for public use Community DEHAT
at various Government Development
offices, Jainpur
27 Renovation of Rural Development / YES TAMIL NADU KRISHNAGIRI 8.15 YES
Rural Women Community
Employment Training Development
center, Sericulture
Department, Hosur
28 Renovation of Rural Development / YES TAMIL NADU KRISHNAGIRI 9.42 YES
"Rehabilitation Home Community
for women", Hosur Development
29 Providing Drinking Rural Development / YES GUJARAT BHARUCH 2.09 YES
water facility with RO Community
facility at Rahad Development
30 Paver block work in Rural Development / YES GUJARAT BHARUCH 4.61 YES
Navi Vasahat, Argama Community
village Development
31 Financial Assistance Rural Development / YES GUJARAT BHARUCH 2.50 YES
to DM for the welfare Community
of armed forces Development
veterans, war widows
and their dependants
32 Paver block work for Rural Development / YES GUJARAT BHARUCH 5.55 YES
public walkways in Community
Vorasamni Development
33 Conducting “Assistant Rural Development / YES GUJARAT BHARUCH 1.87 YES
Beauty Therapy” Community
Course under NSDC Development
for Ankot village
women under "Women
Empowerment" project
34 OSR programme for Rural Development / YES GUJARAT BHARUCH 2.00 NO Brahmakumaris CSR00000880
soft skill improvement Community Educational
& Promotion of Yoga Development Society,
in 11 villages near Mumbai
Plant
35 Providing COVID-19 Rural Development / YES GUJARAT BHARUCH 0.80 YES
related medicines at Community
Vagra      Development
36 Sprinkler system for Rural Development / YES GUJARAT BHARUCH 0.32 YES
solar panel at Kalrav Community
Development
37 Installation of Solar Rural Development / YES PUNJAB TARN TARAN 6.44 YES
Lights in Goindwal Community
Sahib village and Development
Solar Panel at Home
for Mentally affected
Persons, Pinglewara

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Boardʼs Report

PROGRAM WISE CSR DETAILS 2021-22 (contd.)

102nd Annual Report 2022

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

38 Visiting room and Rural Development / YES PUNJAB TARN TARAN 7.98 YES
boundary wall to Local Community
Police Administration Development
office, Goindwal Sahib
39 Traffic Barricades Rural Development / YES PUNJAB TARN TARAN 3.42 YES
to Local Police Community
Administration office, Development
Goindwal Sahib
40 Providing Water Tank Rural Development / YES MAHARASHTRA MUMBAI 0.60 YES
at Dadar Station, Community
Mumbai Development
41 Thermoplastic Road Rural Development / YES MAHARASHTRA MUMBAI 16.24 YES
Marking Work for Community
Road Safety in Worli Development
near HO
Sub Total 152.51
D. 1 Pace setting Activity Promoting YES HARYANA REWARI 5.20 YES
(Educational Training Education
and Guidance) to poor
Students, Raliyawas
2 Providing Computers, Promoting YES HARYANA REWARI 3.70 YES
Books, Tables etc. to Education
Library at School in
Jaitrawas, Rewari
3 Providing uniforms Promoting YES UTTAR PRADESH KANPUR 5.17 YES
and educational Education DEHAT
material to the Primary
students at Sarvan
Khera, Kanpur Dehat
4 Renovation of Class Promoting YES MAHARASHTRA RATNAGIRI 2.13 YES
rooms at Z.P. School, Education
Kulwandi
5 Construction of Promoting YES GUJARAT BHARUCH 4.97 YES
Boundary wall in MM Education
Patel school, Vagara
6 Construction of terrace Promoting YES GUJARAT BHARUCH 4.84 YES
shed in School in Education
Derol
7 Installation of PA Promoting YES GUJARAT BHARUCH 0.57 YES
system in Jujera High Education
school, Vagra
8 Providing Dining Promoting YES GUJARAT BHARUCH 1.00 YES
facility to school for Education
children with special
needs, Kalrav
9 Pavor blocks and Promoting YES GUJARAT BHARUCH 2.58 YES
barricades for school Education
children at Kolavana
10 Providing Fans, Promoting YES GUJARAT BHARUCH 1.77 YES
Lights, furniture Education
at Govt Higher
Secondary School,
Vagra
11 Installation of paver Promoting YES GUJARAT BHARUCH 4.79 YES
block in school at Education
Saladara village
12 Construction of shed Promoting YES GUJARAT BHARUCH 7.01 YES
in LG Vidhyalaya in Education
Haldar
13 Construction of Promoting YES GUJARAT BHARUCH 5.25 YES
Compound wall in Education
Primary School at
Ankot
14 Construction of 2 Promoting YES PUNJAB TARN TARAN 15.12 YES
Class rooms in Govt. Education
Primary School at
Khakh village
15 Construction of Promoting YES PUNJAB TARN TARAN 12.48 YES
Bondary Wall and Education
School Gate in Govt.
Primary School,
Khakh village

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KANSAI NEROLAC PAINTS LIMITED
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PROGRAM WISE CSR DETAILS 2021-22 (contd.)

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

16 Providing benches in Promoting YES PUNJAB TARN TARAN 1.25 YES

Govt. Primary School, Education
Khakh village
17 Construction of Promoting YES PUNJAB TARN TARAN 8.25 YES
New Class Room in Education
Navodaya Boarding
School, Goindwal
Sahib
18 Construction of Promoting YES PUNJAB TARN TARAN 6.85 YES
Bondary Wall in Education
Navodaya Boarding
School, Goindwal
Sahib
Sub Total 92.93
E. 1 Maintenance of Park & Ensuring YES HARYANA REWARI 2.50 YES
Plantation at Chirhara, Environmental
Bawal Sustainability
2 Painting of Govt. Ensuring YES HARYANA REWARI 6.37 YES
Hospital at Bawal Environmental
Sustainability
3 Painting of Govt. Ensuring YES HARYANA REWARI 6.05 YES
School Building at Environmental
Nandrampurbas Sustainability
4 Painting of School Ensuring YES HARYANA REWARI 2.60 YES
Building at Govt. Environmental
school, Sihali Khurd, Sustainability
Mundawar
5 Tree Plantation in area Ensuring YES HARYANA REWARI 4.80 YES
near Bawal Plant Environmental
Sustainability
6 Lake Rejuvanation Ensuring YES TAMIL NADU KRISHNAGIRI 29.05 YES
Projects (2nos) at Environmental
Moranapalli and at Sustainability
Rangopanditam, Hosur
7 Painting and Civil Ensuring YES TAMIL NADU KRISHNAGIRI 5.85 YES
repair work at Govt Environmental
Urdu Hr secondary Sustainability
School, Seetharam
Nagar, Hosur
8 Painting and Civil Ensuring YES TAMIL NADU KRISHNAGIRI 6.99 YES
repair work at Govt Environmental
Boys Hr secondary Sustainability
School, Hosur
9 Painting and Civil Ensuring YES TAMIL NADU KRISHNAGIRI 5.98 YES
repair work at Govt Environmental
allied John Bosco Sustainability
School, Hosur
10 Maintenance of Plants Ensuring YES TAMIL NADU KRISHNAGIRI 1.78 YES
in Industrial park near Environmental
Plant, Hosur Sustainability
11 Tree plantation in and Ensuring YES TAMIL NADU KRISHNAGIRI 3.00 YES
around Hosur Environmental
Sustainability
12 Painting of Eye Ensuring YES TAMIL NADU KRISHNAGIRI 14.16 YES
Hospital, Hosur Environmental
Sustainability
13 Painting for John Britto Ensuring YES TAMIL NADU KRISHNAGIRI 10.03 YES
Govt aided Higher Environmental
secondary school, Sustainability
Hosur
14 Painting of Special Ensuring YES TAMIL NADU KRISHNAGIRI 1.04 YES
children-Day care Environmental
centre at Moranapalli Sustainability
15 Distribution of Cloth Ensuring YES TAMIL NADU KRISHNAGIRI 0.87 YES
bags, Caps for Environmental
Environment and Sustainability
cleaniliness drive
(in coordination with
TNPCB) in Hosur
16 Solar panel Invertors Ensuring YES MAHARASHTRA CHIPLUN 2.54 YES
at Chinktewadi, Hedali Environmental
Sustainability
17 Tree Plantation in area Ensuring YES MAHARASHTRA CHIPLUN 2.37 YES
near Lote Plant Environmental
Sustainability

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Boardʼs Report

PROGRAM WISE CSR DETAILS 2021-22 (contd.)

102nd Annual Report 2022

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

18 Plants maintenance Ensuring YES MAHARASHTRA CHIPLUN 2.34 YES

and plantation in Sane Environmental
Guruji Udyan, Chiplun Sustainability
19 Providing Paint at Ensuring YES MAHARASHTRA CHIPLUN 1.02 YES
Ganwal Wadi, Gunde Environmental
Sustainability
20 Providing Paint at Z. P. Ensuring YES MAHARASHTRA CHIPLUN 0.52 YES
School, Kulvandi Environmental
Sustainability
21 Providing Paint at Z.P. Ensuring YES MAHARASHTRA CHIPLUN 1.69 YES
School, Awashi Environmental
Sustainability
22 Garden Development Ensuring YES MAHARASHTRA CHIPLUN 3.00 YES
& Maintenance near Environmental
and around the Plant Sustainability
23 Supply of Paint to Ensuring YES MAHARASHTRA CHIPLUN 12.09 YES
various Educational Environmental
Institutes, Hospitals Sustainability
etc.
24 Providing Paint at Ensuring YES MAHARASHTRA CHIPLUN 0.40 YES
Z.P.School, Wadachi Environmental
Wadi, Kulwandi Sustainability
25 Providing Paint to Ensuring YES MAHARASHTRA CHIPLUN 0.06 YES
Grampanchayat Environmental
Office, Adre Sustainability
26 Providing Paint to Z.P. Ensuring YES MAHARASHTRA CHIPLUN 0.21 YES
Primary school, Adre Environmental
Sustainability
27 Providing Paint to Lote Ensuring YES MAHARASHTRA CHIPLUN 0.85 YES
Industries Office Environmental
Sustainability
28 Plantation Drive near Ensuring YES UTTAR PRADESH KANPUR 1.35 YES
Plant in Jainpur Environmental DEHAT
Sustainability
29 Providing Solar Panel Ensuring YES GUJARAT BHARUCH 7.72 YES
in Old Age Home at Environmental
Bharuch Sustainability
30 Tree Plantation Ensuring YES GUJARAT BHARUCH 3.58 YES
and Green belt Environmental
development near Sustainability
Mamlatdar Office,
Vagara
31 Painting of Govt Ensuring YES GUJARAT BHARUCH 3.99 YES
School at Vorasamni Environmental
Sustainability
32 Painting of Taluka Ensuring YES GUJARAT BHARUCH 4.93 YES
Police Station, Environmental
Bharuch Sustainability
33 Painting of Sardar Ensuring YES GUJARAT BHARUCH 7.35 YES
Patel Trust Hospital at Environmental
Ankaleshwar Sustainability
34 Painting of Village Ensuring YES GUJARAT BHARUCH 1.30 YES
Community Center at Environmental
Bhersam Sustainability
35 Pond Rejuvenation Ensuring YES GUJARAT BHARUCH 9.75 YES
Project at Vorasamni Environmental
Sustainability
36 Pond Rejuvenation Ensuring YES GUJARAT BHARUCH 23.12 YES
Project at Argama Environmental
Sustainability
37 Tree Plantation at Ensuring YES GUJARAT BHARUCH 2.40 YES
various locations near Environmental
Plant Sustainability
38 Beautification and Ensuring YES GUJARAT BHARUCH 5.00 YES
Plantation in Ankot, Environmental
Bharuch Sustainability
39 Painting of schools Ensuring YES GUJARAT BHARUCH 13.86 YES
in Narmada Nagri, Environmental
Bharuch Sustainability
40 Painting of Slum Ensuring YES GUJARAT BHARUCH 5.00 NO Masi Mai CSR00017924
Area - Furja Bharuch Environmental Foundation,
in collaboration with Sustainability Bharuch
Masi Mai Foundation,
Bharuch

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

PROGRAM WISE CSR DETAILS 2021-22 (contd.)

Sr. No. Name of the Project / Item from the list of Local Location of the Project / Program Amount Mode of Mode of implementation -
Program activities in area spent implemen- through implementing agency
schedule VII to (Yes/ No) for the tation -
the Act State District Project/ Direct Name CSR
Programs (Yes/No) Registration
(in ` Lakhs) Number

41 Painting of Police Ensuring YES GUJARAT BHARUCH 8.10 YES

station society Environmental
building, Vagara Sustainability
42 Painting of Primary Ensuring YES GUJARAT BHARUCH 4.49 YES
school building, Vasti Environmental
Khandali Sustainability
43 Greenbelt Ensuring YES GUJARAT BHARUCH 6.56 YES
development in Rahad Environmental
& Argama villages Sustainability
44 Garden and Green Ensuring YES GUJARAT BHARUCH 1.35 YES
belt development at Environmental
Vagra Sustainability
45 Painting of School Ensuring YES GUJARAT BHARUCH 5.10 YES
at Bholav Misrshala, Environmental
Bharuch Sustainability
46 Painting of School at Ensuring YES GUJARAT BHARUCH 4.96 YES
Makhtampur, Bharuch Environmental
Sustainability
47 Providing Paint to Ensuring YES MAHARASHTRA MUMBAI 0.38 YES
Sarvodaya Kanya Environmental
Vidyalaya, Delhi Sustainability
48 Painting of UNESCO Ensuring YES MAHARASHTRA MUMBAI 0.12 YES
School, Jaipur Environmental
Sustainability
49 Providing Paint to Ensuring YES MAHARASHTRA MUMBAI 0.65 YES
Maharashtra School, Environmental
Chiplun Sustainability
50 Providing Paint to Ensuring YES MAHARASHTRA MUMBAI 0.07 YES
Somaiyya College, Environmental
Mumbai Sustainability
51 Providing Paint to Ensuring YES MAHARASHTRA MUMBAI 1.17 YES
BMC for Beautification Environmental
at Worli, Mumbai Sustainability
52 Painting in Govt. Ensuring YES PUNJAB TARN TARAN 3.31 YES
Primary School, Environmental
Khakh village Sustainability
53 Painting & Kids Ensuring YES PUNJAB TARN TARAN 1.08 YES
drawing on wall in Environmental
Navodaya Boarding Sustainability
School, Goindwal
Sahib
54 2 Nos. Rain Water Ensuring YES PUNJAB TARN TARAN 25.00 YES
Harvesting projects Environmental
at DC Office, Tarn Sustainability
Taran & Camp office,
Goindwal Sahib
55 Maintenance of Parks Ensuring YES PUNJAB TARN TARAN 4.00 YES
at Goindwal Sahib and Environmental
Dhunda villages Sustainability
56 Theme Park Painting, Ensuring YES PUNJAB TARN TARAN 4.56 YES
Civil work and Environmental
plantation at Goindwal Sustainability
Sahib
57 Tree Plantation activity Ensuring YES PUNJAB TARN TARAN 4.05 YES
at Goindwal Sahib Environmental
near Plant Sustainability
58 Development of theme Ensuring YES PUNJAB TARN TARAN 26.69 YES
park in Residential Environmental
area near Goindwal Sustainability
Sahib Plant
Sub Total 319.15
GRAND TOTAL 1405.57

Implementing Agencies for CSR Activities -

1 Kasturi Mrig Vidya Vuhar Samiti, Indore
2 Karmdeep Foundation, Ahmedabad
3 Rotary Welfare Trust, Bharuch
4 Masi Mai Foundation, Bharuch
5 Sevashram Hospital Trust, Bharuch
6 Dishantar Sanstha, Chiplun
7 Bramhakumaris Educational Society, Mumbai
8 Connect to Andhra, Vijaywada

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Board’s Report 102nd Annual Report 2022

Date: 5th May 2022

To

Kansai Nerolac Paints Ltd.

Nerolac House,
G. K. Marg,
Lower Parel,
Mumbai- 400013

Subject – CSR Impact Assessment Study Report

Dear Sirs,

We have reviewed the CSR projects carried out by Kansai Nerolac Paints Ltd. The three projects, Advanced Open Training
in Painting; Mobile Training Academy & Fumigation Training fall under the purview of impact assessment study. The projects
have been selected as per CSR regulations as all three projects has the spent of more than INR 1 Crore.
● Advanced Open Training in Painting – INR 238.51 Lakhs
● Mobile Training Academy – INR 108.27 Lakhs
● Fumigation Training – INR 119.17 Lakhs

The regulation clearly stated that impact assessment is mandatory for companies with all projects with outlays of INR 1 Crore
or more. These impact assessments must be undertaken by an independent agency.

The impact assessment report is attached.

For SoulAce Consulting (P) Ltd

Rajib Nath
Manager - Admin

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

CSR Impact Assessment

Study Report of

Premium Painter Pragati

Project

Prepared For

KA
.... .· ·.·N SAI
[ ( PAINT 1

NE.ROLAC
NSAI NEROLAC P INTS U · ITED

Submitted By

SoulAceity
Path to Sustuinabi
SOULACE CONSULTING PVT LTD
ISO 27001:2013 Certified
DELHI NCR | MUMBAI | KOLKATA
Website: www.soulace.in; Email: [email protected]

154
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Board’s Report 102nd Annual Report 2022

Table of Contents
Page No.

Acknowledgement 01

Chapter 1: Introduction 02 - 06

Chapter 2: Research Methodology 07 - 10

Chapter 3: Major Findings of the Study 11 - 38

Advanced Open Training in Painting 11 - 19
Mobile Training Academy 20 - 28
Fumigation Training 29 - 38
Chapter 4 : OECD Framework 39 - 40

Chapter 5: Conclusion & Recommendations 41 - 42

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Acknowledgement
This report is the result of the Impact Assessment Study conducted by SoulAce Social Venture for
the “ Nerolac Premium Painter Pragati Project” by Kansai Nerolac.

The project was implemented Pan India, The training program had three different approaches
Advanced Open Training for Painters, Mobile Training Vans for Skill Enhancement and Fumigation
Training for Alternate Employment

The research team would like to express its sincere gratitude to Kansai Nerolac for reposing their
faith in SoulAce to conduct this study. The team would like to thank the management of
implementing partner Preksha Foundation for sharing the required data, information and support
for conducting this study.

Finally, SoulAce is grateful to the Board of Advisors for their insightful suggestions, encouragement,
and guidance.

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Board’s Report 102nd Annual Report 2022

Chapter 1: Introduction
1.1 About Kansai Nerolac Paints Limited

Kansai Ne rol ac Paints Li mite d is the Kansai Nerolac Paint o ffers

larg est i n d us tr i al paint and third d i ffer e n ti a te d prod ucts with a focus
larg est d e c or a ti v e paint c o m pa ny of on being eco - frie ndly and healthy.

India based in M u mb ai. It is a Kansai Nerolac Paint ’ s key products

and brands include the fo llo win g:
s u b si di a r y of Kansa i Paint Co., Ltd,
Japan. It is e ng a ge d in the i n d u st ri a l,
• Decorative Paints: Interior wall
a ut o m o t i v e and powder c o atin g pai nts, e xte rior wall p aint s, Wood
b u si n e s s. It d e vel o ps and s u ppli es surf ac e p aint s, and Metals s urfa c e
paint syst e ms used on the fi nis hin g paints.
lines of el e c tri c a l c o m p o n e n t s, cycle,
• Automotive Coatings: Pre - Treatment
m ateri al ha n dlin g e q u i p m e n t, bus
Chemicals, Ele ctro d ep ositi on .
bo die s, c o n t ai n er s and f ur ni t ur e
In t er m e d i a t e Coats / Primer S u r f ac e r s,
industries.
To pc oat s, Clear Coats, Touch Up
Pai nts, Auto R e fi n is h i n g P r o d u ct s ,
Kansai N erol ac Paints has 8 paint Heat R e s i s t a nt Pa ints, U n der bo d y
m a n u f a ct u ri n g plants and about 6 – 7 Paints & PVC Se a lant s & R a pg ar d
co ntra ct m a n uf a c t ur e rs . The N er ola c Tra nsit P r ot e c ti o n Fil ms.

owned plants are at 1. Jai n pur,

• Performance Coatings: Performance
Kanpur Dehat (Uttar Pra d es h ) 2. Bawal
Co ati ng is av a il a bl e for a wide range
(Har ya n a ) 3. Lote, C hipl u n
of pr o d u c ts . For ho us e hol d
(M a h a r a s ht r a ) 4. Hosur (Tamil Nadu )
a p pl i a n c es and metal fit tin gs in
5. S ay ak ha ( Guj ar at ) 6 . Goin d wal fa c t or i es , there is a c o m p r e h e n si v e
Sa hi b (P unj ab ) 7. Kakoda (Goa ) range of g en er al in d u st ri a l co atin g
8. S a ri g a m ( Gu j a r at ). syst e ms like P. T. c h e m i c al s, and, Coil
Coat, Heat R e s i s t a nt Paints & Metal
D e c o r ati o n C o a ti n g s . Pow der Co atin g
Kansai N erol ac Paints Ltd. has
is now i n c r e a si n g in p o p ul a ri t y
ent er ed into many te ch nic al
be ca us e of its high q ualit y,
c ol l a b or a ti o n s with other i nd ustr y
r es i st a n c e to c o rr o s io n , the a pp ar ent
lea der s such as E. I . Du - pr o d u c ts . ease of a p pli c a ti o n and the
The Mu mbai - based company is the e n vi r o n m e n t al fri e n dl i n e ss of the
leader in the i ndus tri al paints technology.
segment. Tec hn olo gical ly innovative
pro d ucts are the c o m pa ny ' s hallmark.

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1.2 Skill Gap in India and Rising Unemployment

Employability and Employment This is also followed by lack of

Challenges financial resources which becomes

crucial when technical and
According to India Skills Report 2022
professional courses and education is
by Wheebox, only 48.7% of total youth
concerned.
in India are employable. This means
almost 1 out 2 Indian youths are not
b.Lack of technical skills among the
employable. The study also says that
youths and working groups: One of
about 75% of all the companies
the major reasons for unemployment
surveyed reported a skill gap in the
or casual employment is lack of
industry.
technical and market based skills
among the potential working group of
Mahesh Vyas, the Managing Director
people and youths. These courses are
and CEO of Centre for Monitoring
quite cost intensive and families from
Indian Economy tells “ Companies will
rural areas do not have capacity to
pay very high wages to get skilled
afford the courses. Most of the
labour , demand for lesser skilled
industries require skilled workers in
people is very low in the economy.”
the required trades. Thus, it becomes
very difficult for the youths to find a
Source:
good job in industries with existing
https://www.timesnownews.com/busi
skill set and knowledge. Also there is
ness-
growing market demand of technical
economy/industry/article/decoding-
services but this too requires
india-s-skill-gap-experts-think-the-
technical skills for self-
country-is-facing-skill-deficit/839660
entrepreneurship.
a. Poor education: The education
status in rural areas of India is quite c. Lack of interest among the youths:
low and especially this is a major Another crucial reason for youths with
concern area among males and low employable skills is lack of
females both. Poor educational status interest level in them. The main root
results in loosing opportunities for cause for this is poor sensitization
employment. Also lack of awareness towards building the awareness and
on importance of education is interest level. Very minimal efforts
concern among the parents and have been made by Civil Societies
community as a whole is one of the towards motivating the youths to take
key reasons for low education rate. up vocational and job oriented skills.

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d. Lack of opportunity: Also it is e.Gaps in subjects taught in

visible that there are not many technical institutes and practical
opportunities for jobs for the unskilled application : The courses taught in
and semi skilled workers in the technical institutes like Diplomas, etc
industrial sector. Thus, opportunity are more of theoretical and
availability for such type of work force unaffordable for rural or semi urban
is very less as compared to the skilled youth with limited educational
ones. However, there are ample qualifications. Thus most youth remain
opportunities available for jobless before they get frustrated and
entrepreneurship as the customer start exploring menial jobs.
base for such services like painter,
electrician, plumber, carpentry, mobile
repairing, inverter and battery
repairing, etc are growing day by day.

1.3 Kansai Nerolac Premium Painter Pragati Project

Staying updated with the latest tools Some of the key features of the
and new product development helps training program are: Technical
a painter instill confidence in the Training, Automated Painting Tools
minds of its customer. Prashikshan Training, Wood Coating, Adhesive,
under NPP Pragati, educates budding Texture Training, Certified Skill
painters with the new developments, Training.
paint techniques, usage of latest
tools, government certification, etc. Objectives
Thereby enabling him to be in sync To improve upon Painting skills
•
with the ever changing market knowledge of Painters and Youth
scenario.
• To make them self employed by
empowering them with modernised
skills and equipment knowledge

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

1. Advanced Open Training Program for Painters

'lra1n1r1 mas
A Designer Tr,aining
IB Product U,pg1radation
C Wood Finish Training
D C:0111struction Chernicals

2. Mobile Training Van for Skill Enhancement

3. Fumigation Training for Alternate Employment

NPP programme by Kansai Nerolac Paints Limited is an exclusive platform that

offers a holistic development for its registered painters under 'Nerolac Premium
Painter Pragati'. Through NPP Pragati, it strives to improve all aspects of their life
like skill training, career guidelines for their children, business generation,
personal accidental insurance etc.

The NPP aims progress in all aspects of budding Painters life with Prashikshan,
Rozgaar, Parivaar and Uphaar.

Prashikshan Rozgaar
e •
Parivaar Uphaar

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Under the Rozgaar programme, NPP • Accidental insurance up to Rs.5 lac

helps to connect with prospective • Children scholarship up to
customers who are looking out for Rs.10000
quality painting services within • Career guidance support for
certain operational area, through children, Tollfree-1800-102-2424
various mediums and resources. • Health Insurance upto Rs.1 lac
only*
One such medium for lead generation
is www.nerolacmasterpainter.in the Appreciating painter efforts, NPP
online platform which connects Pragati through Uphaar ensures to
prospective customer and painter from bring enough opportunities in regular
the same area. intervals for all registered painters to
win exciting rewards and surprises.
The special bond of mutual respect,
Thus buying Nerolac products helps
trust and loyalty along with a
them win exciting prizes.
beneficial association through NPP is
also to establish a bond with the
Loyalty scheme: Annual point based
family of registered painters in -
loyalty programme for painter
Nerolac Premium Painter Pragati
Parivaar. Here, apart from the
Monthly Scheme: Provided to painter
professional benefits, other benefits
on regular intervals.
are like accidental insurance,
scholarships for children etc.

1.4 About Preksha Foundation

Preksha Foundation is an NGO based in Mumbai, Mr. Santosh Dehspnade is the

Director of the NGO. It is operational since 2016 and has been providing skill
development training major thematic areas of Preksha Foundation work are
Vocational Training, Literacy & Skill Development.

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Chapter 2: Research Methodology

Research can be defined as a logical Thus, we need to delimit the research

and systematic search for new and problem into a measurable problem
useful information on a particular and formulate objectives, make
subject matter. Social Science decisions on the research design,
Research refers to the systematic sample design, type of research
activity of gaining new knowledge by Instruments for collecting the data,
following scientific principles and and how these data can be edited,
methods in order to minimize bias and coded, classified, tabulated, and
subjectivity. It is opposed to writing interpreted so that findings and
something based on assumptions or conclusions can be reached.
speculation. Though information
about certain facts can also be gained Every research needs to have a proper
through common sense and based on methodology so as to foresee
general observation and hearsay, problems that could arise in the
those facts won’t be considered valid course of research and also to steer
until they have been obtained in a through the research process in the
methodical manner, that can stand the proper direction without losing focus.
test of time. The defining
characteristics of scientific research Use of Mixed Methodology for
are objectivity, ethical neutrality, Maximum Insights
reliability, testability, and
The research problem consisted of
transparency.
understanding the extent of impact
created by Kansai Nerolac Paints
Identification of the research problem
Limited supported initiatives of
provides the starting point of
improving economic condition of the
research, which is then defined and
Painter in various states of India by
redefined through a proper review of
providing skill development trainings
literature on the problem or
Implemented through Preksha
deliberations with research guides
foundation, to gain maximal insight,
and knowledgeable others in the area
both Quantitative and Qualitative
of interest. Each research problem has
techniques are used.
a multitude of perspectives and
dimensions. Research cannot go on
covering all those in one study.

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Application of Quantitative anticipated when the research was

Techniques initiated. For better accuracy,
ensuring anonymity and at the same
A quantitative study will be needed if time, to cover a larger sample
the focus is on presenting the study population, quantitative techniques
problem in terms of numbers, were used.
frequencies, percentages, etc., A
quantitative study always uses Qualitative techniques of interviews
structured tools like questionnaires with key stakeholders and interviews
and interview schedules, in which with community people were adopted
questions are planned well in advance for a better understanding of the
by the researcher before entering the problem alongside Quantitative
field. Research.

Though the information that is Ensuring Triangulation

obtained is easily amenable to various Triangulation is needed to increase
statistical measures and tests, the credibility and validity of the
quantitative information has its own research findings. It is also a measure
limitations. It can uncover only the taken to ensure the trustworthiness of
surface phenomena. It is unable to the research process. The findings of
penetrate beneath the surface and the quantitative research have been
identify what is hidden deep beneath. verified with the insights from
In this study, to assess the impact of qualitative research and the report has
structured tools like the interview also been structured to reflect this
schedule administered was used. This point.
helped in getting quantifiable
information. Objectives of the Study
1.To assess the direct / indirect impact
Application of Qualitative
of Kansai Nerolac Paints CSR projects
Techniques on the lives of targeted beneficiaries.
2.To assess the consistency in the
Qualitative Research can only unravel
process of project implemented
enriched and hidden information that
together with fulfilment of stated
may not be evident on the face of it.
objectives.
The qualitative approach is
distinguished by deeper probing and
flexibility, and it can yield massive
amounts of data that were not

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Ensuring Commitment to Research Ethics

1. Anonymity 3. Non Maleficence

Anonymity refers to not revealing the Research should not lead to harm to
identity of the respondents. This the research subjects. This study
research study strictly sticks to not ensures that the respondents are not
revealing the identity of respondents harmed in any way.
unless the same is warranted for
illustration of success stories or case 4. Beneficence
studies. After the research is
Any research study should lead to
completed, the research should not
some benefits for the respondent. This
reveal which individual respondents
research study ensures that
answered which question in what
individuals, groups, and communities
manner. The results will be revealed
benefit and their well- being is
only as an aggregate, so no one will
enhanced.
not be able to single out the identity
of a particular respondent. This is
5. Justice
required for not breaking the trust of
the respondent of not revealing the Justice refers to being fair to all. This
individual identity. research study ensures equal
treatment of all its research subjects
and no biases or prejudices towards
2. Confidentiality
any group based on social stereotypes
Research subjects participate in the or stigma associated with being a
process only on the basis of the trust member of a certain group or class.
that confidentiality will be maintained.
Hence, the research will not reveal
any data regarding the respondents
for purposes other than the research
study.

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Board’s Report 102nd Annual Report 2022

Research Design

• Name of the project : Kansai Nerolac Premium Painter Pragati Project

• Project Partner : Preksha Foundation

• Research Design used : Descriptive Research Design

• Sampling Technique : Purposive Sampling

• Geographies Covered : Assam, Bihar, Chattisgarh, Gujarat, Jharkhand,

Madhya Pradesh, Punjab, Orissa, Uttar Pradesh,
West Bengal.

• Sample Size of Advanced Open Training : 250 Trainees

• Sample Size of Mobile Training Vans : 250 Trainees

• Sample Size of Fumigation Training : 150 Trainees

Stakeholders Covered: Preksha

Foundation
Staff

Fumigation Advance Open

Training Program STAKEHOLDERS Training Program
Trainers Trainers

Pragati
Mobile Van
Staff

10

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Chapter 3: Major Findings of the Study

3.1 Advanced Open Training in Painting

The objective of the Study :

To conduct an impact assessment of the Nerolac Premium Painter Pragati Program
(Advanced Open Training Project)

Key findings of the study :

SoulAce Survey Team interviewed a total of 250 trainees of the Advance Open
Training Programme were interviewed.

The survey approach is comprised of collecting qualitative and quantitative

information. The qualitative information was collected from different stakeholders
(NGO Staff, trainers, trainees) through one -to -one meetings and interviews. The
team also conducted focus group discussions with trainees to understand the
collective opinion on the programs conducted under the Nerolac Premium Painter
Pragati Program.

The Survey was conducted across 10 States i.e., Bihar, Chattisgarh, Delhi, Goa,
Gujarat, Haryana, Jharkhand, Madhya Pradesh, Maharashtra, and Uttar Pradesh.

The key findings and observations from the study are presented below:

Percentage distribution of trainees by age-group

The Chart shows that more than half 20-30 years

of the respondent Trainees belong to
the age group of 31-40 years, 31-40 years
followed by trainees in the age group
of 20 to 30 years. Most of the trainees
41-50 years
are married youth who have migrated
from their native places in search of
51-60 years
daily wage and have taken up
painting as an occupation. 0 20 40 60

11

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Board’s Report 102nd Annual Report 2022

Percentage distribution of trainees by Educational Status

40

30

20

10

0
te

th

th

e
ar

ar
at

at
ra

10

12
er

du
im

nd
ite

lit

Pr

ra
co
Ill

G
Se

The chart shows that the majority i.e., 36 percent of trainees are
literate. Around 23 percent are illiterate and 24 percent have studied
till the primary section. The educational status shows that receiving
training in Painting is a welcoming opportunity for the trainees as
their qualification does not promise skilled job opportunities.
Advanced training in Painting can tat least assure the candidates that
they will receive better wages and they may enhance their earning
potential.

Mr. Nitin Gope is a resident of Dhanbad in Jharkhand. He has

completed his secondary education and started working on a daily
wage. He likes painting and has taken part in the advanced open
training conducted by Nerolac. He learnt about Designer Training.
Earlier before the training he used to earn Rs 16,000 per month but now
thanks to the training and guidance provided under Nerolac Premium
Painter Pragati Project, he is now able to earn Rs 20,000 a month.

Nitin Gope , Painter, 41 Years

Advanced Open Training, Jharkhand
17

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KANSAI NEROLAC PAINTS LIMITED
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Percentage distribution of trainees by Social Category

SC
General 21%
30%

ST
20%

OBC
29%

The chart shows that around 30 percent are from General Caste,
29 percent are from Other Backward Caste, 21 Percent from
Scheduled Caste, and 20 Percent from Scheduled Tribes. People
irrespective of caste or credentials are desperately looking for
opportunities. Thus, the Nerolac Premium Painter Pragati
program has given hope for a better future and provided the
candidates with add -on painting skills.

Mr. Sukhsagar Sharma is a resident of Chattisgarh. He had no formal

education and started working on a daily wage. He comes from Other
Backward Caste (OBC) section of society. He likes painting and has
taken part in the advanced open training conducted by Nerolac. He
learnt about product upgradation during the training.He says that the
timings of the training were convenient. Earlier, before the training he
used to earn Rs 10,000 per month but now thanks to the training and
guidance provided under Nerolac Premium Painter Pragati Project, he
is now able to earn Rs 16,000 a month.

Sukhsagar Sharma, Painter, 29 Years

Advanced Open Training, Chattisgarh
17

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Board’s Report 102nd Annual Report 2022

Percentage distribution of trainees by Monthly Income before and after

completing the training program

■ Before
■ After

Rs..rnooo Rs_llOOIJ.15ClOO mu&000-2000Cl R9 .21000,'.25000Cl Abo~ Rti.'25Cl00

The Chart shows that around 52 percent of trainees now earn

between Rs 16,000 to Rs 20,000. The majority of them (53%) were
earning around Rs. 10,000 before receiving training from Nerolac.
Thus, the value has been added for the candidates through the
Advance Open Training Program is quite evident.

Percentage distribution of trainees by types of training they are trained under

lltO\

D~tgn,iirT11'!!ftnlng corumucllol'!
□ IRfilll:lib

The Chart shows that 38 percent of candidates received training in Product

Upgradation, 24 Percent received training in Wood Finish Training, 22 Percent in
Designer Training, and around 22 percent in Construction Chemicals.

14

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KANSAI NEROLAC PAINTS LIMITED
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S u r y a Prakash, Trainer
A d v a nce Open Training

Mr. Surya Prakash is trainer at Nerolac Painter Pragati Program

and takes Advance open training classes for participating
Painters. During an interview with him, we asked him about
the process of implementation of the program. He mentioned
that at initial level the Area Sales Manager shares the monthly
meeting plan at Depo level. Around 4-5 days prior to the
training the recce team visits and finalizes the training venue
based on certain pre decided guidelines. Then we call and
invite painters for the Advance Open Training Program. The
Painters undergo a registration process. At the beginning of
the training Nerolac Company Information, vision and product
details are communicated. Skill upgradation training (Product
demo, Tools & New Designs) is provided. The participants are
explained about the NPP Program and its benefits for Painters.
They also receive Gifts to keep them motivated.

Surya Prakash also told us about the Course Syllabus, which consists of the following:

a. Nerolac Company Intro / vision for painters / Benefit scheme for painters and their family
b. Product Demo / training on new designs (Skill Upgradation), sharing entire product knowledge
and the utility
c. Training on impactful Consumer interaction
d. NPP Program
e. Problem Solving Sessions / Feedback Sessions
f. Painter’s training was done basis below details
• Nerolac Loyal Painters ( npp)
• Nerolac Dealers
• Competition Dealers
We also asked Surya Prakash about the strength of the program and the learnings from it. He said
that the project enhances confidence and improves the presentation skills. The painters
understand about the calculation after the training. The painters have in depth knowledge on
company details and the benefits to his family. The painter understands about product
effectiveness through live demo application. The participants told that the per site income had
increased by learning new skills in training. They also got to know the benefits compared to other
products in the market.

Surya Prakash also told that the challenge of the program was in identifying accessible venue. The
other challenge was to transport gifts and marketing collaterals. The program needs improvement
in bringing more focus in providing opportunities to painters undergoing the training program.

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Board’s Report 102nd Annual Report 2022

Percentage distribution of trainees by duration of their training classes

3 hrs to 4 hrs
12%
The chart shows that around 60
percent of candidates reported that
they are receiving training for 1 to
2 hrs to 3 hrs 2 hours. 28 Percent of candidates
28% reported that they are receiving
1 hr to 2 hr
60% training for around 2 hours to 3
hours and 12 percent mentioned
that they received training for 3 to
4 hours.

Percentage of Trainees reported about convenience in training time

The chart shows that around 88 percent of

candidates were satisfied with the training
timings and they could learn it properly. They 88%
further added that the trainers were also
supportive and encouraging.

Mr. Sanjay Gupta is a resident of Haryana. He had no formal education

and started working on a daily wage. He likes painting and has taken
part in the advanced open training conducted by Nerolac. He learnt
about wood finishing during the training. He says that the timings of
the training were convenient. Earlier, before the training he used to
earn Rs 10,000 per month but now thanks to the training and
guidance provided under Nerolac Premium Painter Pragati Project, he
is now able to earn Rs 15,000 a month.

Sanjay Gupta , Painter, 33 Years

Advanced Open Training, Haryana
17

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KANSAI NEROLAC PAINTS LIMITED
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Percentage of Trainees reported about syllabus of training being in line with

the demands of the Market

The chart shows that candidates had mixed

reviews on the question of the syllabus of
training being in line with the demands of
Yes the market. Around 46 percent are in
46%
No agreement and around 54 percent are in
54% disagreement. It is suggested that for future
initatives Preksha Foundation can conduct
pre training consultation with relevant
stakeholders (Nerolac's R&D
team,Dealers/Vendors & potential trainess)
for understanding the market needs &
streamline the syllabus.

Percentage of Trainees reported about getting assistance from the training

organization in getting jobs/contracts

No
16%

The chart shows that 84 percent of trainees

mentioned that they are not receiving any
kind of support for getting jobs or contractual
work. Around 16 percent of candidates
mentioned that they are receiving assistance
in looking for job opportunities.

Yes
84%

17

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Board’s Report 102nd Annual Report 2022

Percentage distribution of Trainees by their rating on the training program

Excellent
Average 16%
The chart shows that around 46 percent of
28% candidates mentioned, the training
Very Good
program to be good. Around 28 percent
10%
mention it to be average and around 16
percent say it to be excellent. Overall, the
rating of the program by more than half of
the candidates was good and they were
Good satisfied.
46%

Percentage distribution of Trainees having Awareness about organization who

supported the training program

No
16%

The chart shows that around 84 percent of

candidates are aware of the training
organization. Around 16 percent of
respondents mentioned having that they have
no idea of the training organization’s name.

Yes
84%

18

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Bran d V i s i b i l i t y
Most of the trainees and stakeholders are aware of Nerolac company and are
grateful for the training opportunity provided to them.

Banners with Nerolac logo at the registration desk

19

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Board’s Report 102nd Annual Report 2022

3.2 Mobile Training Academy

The objective of the Study :

To conduct impact assessment of the Nerolac Premium Painter Pragati Program
(Mobile Training Van for Skill Development Project)

Key findings of the study :

SoulAce Survey Team interviewed total 250 trainees of the Mobile Training Van for
Skill Development Programme.

The survey approach comprised of collecting qualitative and quantitative

information. The Qualitative information was collected from different stakeholders
(NGO staff,staff of van, trainees) through one -to -one meetings and interviews.
The team also conducted focus group discussions with trainees to understand the
collective opinion on the programs conducted under the Nerolac Premium Painter
Pragati Program.

The Survey was conducted across 10 States i.e Assam, Bihar, Chattisgarh, Gujarat,
Jharkhand, Madhya Pradesh, Punjab, Orissa, Uttar Pradesh, West Bengal.

Percentage distribution of respondent by age group

The chart shows that majority of the

respondents belong to age group of 31 to 41-50 years
40 Years. Around 30 percent belong to e 25% 21-30 years
30%
age group of 21 to 30 Years. And 25
percent belong to age group of 41 to 50
years. This shows that men from age group
of 21 to 50 are involved in Painting or
similar daily wage activity. This age group
is also the breadwinner of the family and
have responsibilities. Therefore, the
initiative by Nerolac is of great support to 31-40 years
ensure better employability and 45%
employment opportunity for the youth.

20

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Demo of tool kit by Van Trainers

Participants Scan QR for Nerolac Product Information

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Board’s Report 102nd Annual Report 2022

Percentage distribution of respondent by educational qualification

Illiterate

literate

Primary

Secondary

10th standard

12th standard

Graduate

0 5 10 15 20 25

The chart shows that majority of the respondents have completed

matriculation. 24 percent have completed secondary education and 13
percent have completed primary education. It can be seen that with basic
education it is difficult to find job opportunities in the formal employment
sector. with basic education. So, to make both ends meet it is important to
enter into some forms of engagement which can help to run the family.
Nerolac Mobile Training Van for Painters is a welcome an open opportunity
for youth filled with aspirations but lacking viable opportunities.

Mr. Surender is a resident of Bhagalpur in Bihar. He has completed his

secondary education and started working as a painter. He likes painting and
has taken part in the Mobile training van program conducted by Nerolac. He
learnt about new painting technology and the demo tools. He also learnt
about Nerolac Products during the sessions. He is quite satisfied with the
training program and understands it to be helpful in enhancing his earnings.
He now earns Rs 15,000 per month due to the additional knowledge and
skills he picked up during the training sessions run by Nerolac.

Mr. Surender Jha, Painter, 35 Years

Mobile Training Van, Bihar
17

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Percentage distribution of respondents by Frequency of visit of Pragati Mobile

Van

The Chart shows that respondents

Once
had mixed views on the frequency
of visit of Pragati Mobile Van.
Twice Around 42 percent mentioned
seeing it once, around 37 percent
said it to be coming twice and
Thrice around 19 percent said it to be
thrice.
0 10 20 30 40 50

Percentage of respondents reported about various topics covered in the sessions

79.6%
74..0!i,

2110':1,

lmormllloo ebout lnfom:;lllo.n ab0\11 Probaem s:olvlng

new p;ain'tin~ Nso lac: product!! g.esi;;:ion on i !l'Bues
tecliloolag..)' Jeoed wNle
wo,i.;1no

The Chart shows that during the training sessions around 79 percent respondents
mentioned receiving information about new painting technology. It is important to
keep abreast with newer development in the painting field, this helps them be
relevant and negotiate a better wage. Very limited people get this opportunity at
no cost. The respondents were grateful to receive the opportunity and to be the
part of the Mobile Training Van skill development program. The trainer also
provided information on Nerolac products, demo of tools and answered on
challenges faced by workers.

23

178
Board’s Report 102nd Annual Report 2022

Session conducted by Van trainer

Training session for Van Trainer

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KANSAI NEROLAC PAINTS LIMITED
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Percentage of respondents reported about Gifts received during the session

The Chart shows that around 76 percent

people reported receiving gifts during
the training program. Around 24 percent
people mentioned not receiving any
76% gifts. The implementing organization
should cross check on the beneficiaries
of the program to sort out the
discrepancy.

Listed below are the benefits received by the trainees post the implementation of
Pragati Mobile Training Van Program.

• Knowledge about new Nerolac products

• Knowledge about new painting techniques
• Improvement in business
• Economical support
• Getting new work
• Improvement in work quality
• Knowledge about usage of painting machinery
• Gained knowledge about new design and textures
• Overall skill development
• Helped in convincing customers

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Mr.D eepak Sharma, Traine r ( A h m e d a b a d )

Mobile Training Van

Mr. Deepak is trainer at Nerolac Painter Pragati Program and

takes Mobile training Van classes for participating Painters.
During an interview with him, we asked him about the process
of implementation of the program. He mentioned that at initial
level they chart out a dealer wise route plan and hand over to
the team for activity execution. Two days prior to the training
the sales team and Dealer are informed about the Van
schedule and timing for their respective outlet. The painters
are called for the training. In one day three trainings are done.
The van reaches the dealer point at a given time. The training
is done on enhancing the skills of painters through providing
sessions on Nerolac company, the Overall Vision and Benefits
to painters, Product Communication,

Product Demo (how it will help the painters to save cost by using less paint and getting more
coverage), Live Demo – Helping them to make special designs through which they can upgrade
their skills and look professional and earn more per site, Painters Problem Solving / Feedback
Session. Then Lucky Draw / Order Booking is done. Finally training closure and reporting.

Mr. Deepak also told us about the Course Syllabus, which consists of the following:

a. Nerolac Company Intro / vision for painters / Benefit scheme for painters and their family
b. Nerolac Product Details and its benefits to Painters
c. Precaution to be taken during the work
d. Product Demo / designs (Skill Upgradation)
e. Problem Solving Sessions / Feedback Sessions
f. Order Booking / Lucky Draw
g. Painter’s training was done basis below details
• Nerolac Loyal Painters ( npp)
• Nerolac Dealers
• Competition Dealers
We also asked Mr. Deepak about the strength of the program and the learnings from it. He said that
the project helped the participants to know more about Nerolac and the extended benefits to their
family. They got to know more about product effectiveness through live demo application. Per Site
remuneration amplified by learning new skills in training. Now they have better idea about benefits
compared to competition products.

The challenges faced during implementation of the programme was of taking van permissions
during COVID was difficult. There was limited space at Dealer Counter for Van. The Improvements
which can be bought about in the program is that the duration of Van could be increased which
could help to save fixed cost.

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Percentage distribution of respondents by their ratings of the session

Average
7%

Execellent
30%
Good
24%

Very Good
39%

The Chart shows that around 30 percent respondents rated the Pragati
Mobile Training Van program as Excellent. Around 39 percent
mentioned it to be very good. Around 24 percent reported it to be
good. Overall, it can be seen that the participants were satisfied with
the program and would like to recommend it to other youths as well to
be a part of thethis training program.

Mr. Monu is a resident of Gujarat. He has completed his secondary

education and started working on daily wage. He has taken part in the
Mobile training van program conducted by Nerolac. During the
sessions he received knowledge on Demo Tools, different products of
Nerolac. He has learnt about new technology being used in the paint
industry. He now earns Rs 12,000 per month due to the additional
knowledge and skills he picked up during the training sessions run by
Nerolac. He thanks Preksha Foundation and Nerolac both for bringing
the program to them through the innovative method of Mobile Van.

Mr. Monu Yadav, Painter, 23 Years

Mobile Training Van, Gujarat
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Percentage distribution of respondents by their Knowledge of the organization

who has supported the program

100

75

50

25

0
ac

ow
en
tio
ol

Kn
nm
da
er

't
N

un

er

on
ov
Fo

D
G
a
sh
ek
Pr

The Chart shows that 82 percent respondent were aware of the training
program being organized by Nerolac Paints. There is scope of keeping
the communication and branding clear that the participants understand
about the sponsoring organization. The implementing organization can
take responsibility of proper branding and communication messages,
so that there is recall factor with the participants.

Mr. Pramjit is a resident of Mansa in Punjab. He has completed his

secondary education and started working as a painter. He has taken part in
the Mobile training van program conducted by Nerolac. He learnt about
new painting technology and the demo tools. He also learnt about Nerolac
Products during the sessions. He is grateful to the company for providing a
door step opportunity to enhance ones skills and be capable of charging a
fair wage for his work. With the help of the training program he is now able
to earn Rs 12,000 per month due to the additional knowledge and skills he
picked up during the training sessions run by Nerolac.

Mr. Paramjit Singh, Painter, 42 Years

Mobile Training Van, Punjab

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3.3 Fumigation Training

The objective of the Study :

To conduct impact assessment of the Nerolac Premium Painter Pragati Program (
Fumigation Training for Alternate Employment)

Key findings of the study :

SoulAce Survey Team interviewed total 150 trainees of the Fumigation Training for
Alternate Employment.

The survey approach comprised of collecting qualitative and quantitative

information. The Qualitative information was collected from different stakeholders
(NGO Staff, Trainers, Trainees) through one -to -one meeting and interviews. The
team also conducted focus group discussion with trainees to understand the
collective opinion on the programs conducted under the Nerolac Premium Painter
Pragati Program.

The Survey was conducted across 6 States i.e Delhi, Gujarat, Jharkhand,
Maharashtra, Madhya Pradesh and Punjab.

Percentage distribution of respondent by age group

Above 50 years
The Chart shows that majority of the 7% 20-30 years
16%
respondents (55%) were in the age
group of 31 to 40 years. 22 percent
41-50 years
were in the age group of 41 to 50 22%
years. Thus, it can be seen that
respondents receiving training were
majorly, married youths who were out
in search of working opportunity in
form of daily wages. Thus, getting an
opportunity to be a part of
Fumigation training as part of
alternate employment. 31-40 years
55%

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b.1MA IRB!tM P
CONTilAdO

Demo of Fumigation Machine

Fumigation Machiner Handover to Trainees

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Percentage distribution of trainees by Educational Level

Illiterate

literate

Primary

Secondary

10th standard

12th standard

Graduate

0 5 10 15 20 25

The Chart shows that the participants were of mixed educational

background. 24 percent completed matriculation, around 18 percent
completed secondary and 18 percent received primary education. With
such basic education entry into formal jobs is difficult, thus getting an
opportunity to receive training in Fumigation does help learn an
employable skill which may open a window of opportunity.

Mr. Varun Kumar is a resident of Mandoli in Delhi. He has completed

his secondary education and started working as a painter. He has
taken part in the Fumigation training program conducted by
Nerolac. He learnt about new painting technology and the demo
tools. He also learnt about Nerolac Products during the sessions. He
is grateful to the company for providing additional skills and be
capable of charging a fair wage for his work. With the help of the
training program he is now able to earn Rs 25,000 per month.

Varun Kumar, Painter, 30 Years

Fumigation Training Programme, Delhi
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Percentage distribution of trainees by Social Category

SC
13%

ST
7%

General
55%
OBC
25%

The above chart shows that majority of the respondents were from General
Caste, followed by 25 percent as Other Backward Caste.

Mr. Mukesh Ramesh Boriya is a resident of Baroda in Gujarat. He has

completed his Primary education and started working as a painter.
He is from Other Backward Caste section of the society. He has
taken part in the Fumigation training program conducted by
Nerolac. He learnt about new painting technology and the demo
tools. He also learnt about Nerolac Products during the sessions. He
got to know about the program through Newspaper Advertisement.
He is grateful to the company for providing additional skills and be
capable of charging a fair wage for his work. With the help of the
training program he is now able to earn Rs 25,000 per month.

Mukesh Ramesh Boriya, Painter, 36 Years

Fumigation Training Programme, Gujarat
17

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Percentage of trainees reported about their monthly Income before and after
completion of the training program

■ Before
■ After

Rs_10000 Rs-. 11000 ·i.,o Rs.. 16000 IO R~. 21000 &Cl• Rg _Alli:1\ll!!!
151:JOO 2.001m 2SCIOO 25IlCIO

The above Chart shows that there is a major shift of respondent trainees
rise in income from the bracket of (Rs 10,000- Rs 15,000) to (Rs 20,000 to
25,000) because of knowledge of using Fumigation Machine.There is severe
crunch in job openings in formal sector. Candidates are able to make at an
average Rs 20,000 because of painter, fumigation training. The program
goes a long way in providing alternate employment opportunities and
creating happy families.

Practicals of Fumigation

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Mr.Suraj Chaudary, Head T r a i n e r ( D e l h i )

Fumigation training & mac h i n e r y

Mr. Suraj is trainer at Nerolac Painter Pragati Program and

takes Fumigation training classes for participating Painters.
During an interview with him, we asked him about the process
of implementation of the program. He mentioned that at initial
level they collect the Training Plan from Nerolac with regards
to the area / location to be targeted for Fumigation training.
Then the Venue recee is done. Venue is confirmed according
to the guidelines provided by Nerolac. Then they call and
inform the participants about the training place and time.
Machines and other demo material are arranged before the
training day. Practical and theory Training is given on training
day and Fumigation Machine distributed.

Mr. Suraj also told us about the Course Syllabus, which consists of the following:

a. Giving complete Sanitization Training and telling how its beneficial

b. Showing how to assemble fumigation machine and how to use it properly by showing practical
demonstration at the venue
c. Showing calculation on how to calculate the charged vs How much will be expenses vs Profit per
home participant can earn
d. Showing to participants how Fumigation is a new way of doing business / Earning Livelihood
during Covid times
e. Painter’s training has done on following points
• Nerolac Loyal Painters ( npp)
• Painters looking out for new way of Income generation during Covid time when paint business
was totally closed
• Painters from Nerolac Loyal Dealer points

We also asked Mr. Suraj about the strength of the program and the learnings from it. He said that the
project helped the participants to learn new skills in their Life and earn additional source of income.
The Project helped participants / painters to start their own business and improve their Livelihood. It
improved participants respect and dignity in their Society and made him Independent.

On the challenges faced during the implementation of the programme, Mr. Suraj mentioned that
during the Covid time Venue selection / permission was a big problem. The program was conducted
under the government guideline. The Transportation of Machines was difficult. Mr. Suraj also
mentioned that for the effectiveness of the program, on site training can be planned post practical
training.

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Percentage of trainees reported about the Source of information of the training

program

From Advertisement (Newspaper/Banner/Flyers)

From NGO (Preksha Foundation) 18%
27%

From Friend
55%

The Chart shows that around 55 percent respondents got to know about the
program through their friends. 27 percent got to know from Preksha
Foundation and 18 percent got to know about it from Advertisements.
Preksha Foundation could focus more on reaching out to potential
candidates for training program.

Percentage of trainees reported about Awareness of Fumigation Technology

prior training program

The Chart shows that 90 percent respondents

were aware of the Fumigation technology even
before being a part of the training program.
This is a good sign which shows the awareness
and exposure of todays’ youth. They want to
learn new technology and tools but cannot 90%
afford the training charges. Therefore, Nerolac
has taken a thoughtful initiative and provided
training under CSR for underprivileged and
disadvantaged youthdeprived youths.

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Board’s Report 102nd Annual Report 2022

Perc en tage of t rain ees r eported a bout Convinienc e o f the timin g o f the
train ing

The Chart shows that 92 percent respondents

were satisfied with the timings of the training
program. It is also important for the fact that
92% most of the youths are out working on a daily
wage basis and can notcannot spoil their days
earning to participate in the training.

P erc entage of t rainees r ep orted wh eth er an y help received from th e tr aining

organ ization to ge t jobs/c ontra cts

The chart shows that 90 percent respondents

mentioned receiving support from Preksha
Foundation to get jobs or contracts. This is an
important step in achieving the ultimate goal of
90%
training program.

Participants with Fumigation Machines

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Percentage of trainees reported about Benefits received due to Fumigation

training

(l

I I

The Chart shows that around 82 percent respondents were happy with the
hands -on experience they received in using the machine. 66 percent were
happy with the fact that they got to learn a new technology. Around 54
percent respondents were happy to get better painting contract because of
the Fumigation Training Program they attended. Overall, the training
program was successful as the candidates see the value addition to their
lives and to future career prospects.

Mr. Gajanan Ramchandra Salunkhe is a resident of Pune in Maharashtra . He

has completed his Higher Secondary education and started working as a
painter. He has taken part in the Fumigation training program conducted by
Nerolac. He learnt about new painting technology and the demo tools. He also
learnt about Nerolac Products during the sessions. He is grateful to the
company for providing additional skills and be capable of charging a fair wage
for his work. He got to know about the program through a friend. He had some
idea about Fumigation Machines earlier as well, therefore he was excited to be
a part of the program. With the help of the training program he is now able to
earn Rs 15,000 per month.

Gajanan Ramchandra Salunkhe, Painter, 46 Years

Fumigation Training Programme, Maharashtra 17

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Percentage of trainees reported about the Quality of Fumigation machine

received
Poor
2%
Average
18%

The Chart shows that the quality of the

fumigation machine was good. Only 18
percent reported it to be of average
quality. Preksha Foundation could
enquire as to why respondents felt it to
be of average quality.
Good
80%

Percentage of trainees reported Whether any operational training of

machine provided by NGO

The Chart shows that 91 percent

respondents agreed on receiving 91%
training on how to use the fumigation
machine.

Percentage of trainees rated the overall support received by the NGO

Average Excellent
10% 8%

The Chart shows that the respondents

were happy with the support received
from the NGO Preksha Foundation.
Very Good
34%

Good
48%

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Chapter 4 : OECD Framework

Justification/ Arguments
Criteria Ratings
supporting or against the Criteria

The majority of the beneficiaries have a secondary level of

Relevance education which is insufficient to get the opportunities for ••••
Has the program met formal employment. Therefore the Advanced Open
its objectives? Training, Mobile Training Van, and Fumigation Training for
Is the CSR Project alternate employment have given them new scope and
meeting the needs of push to get work in the Painting Industry. The knowledge of
the beneficiaries? Nerolac Products, demo, designs, usage of machines, as
well as support in getting a contract and hence the project
is relevant.

Coherence The project is in line with the below mentioned Government

program - National Skill Development Program.
Is the project aligned
with any Government The project is in line with the below Sustainable
program / SDG? Development Goals (SDGs) •••••
Goal 1: No Poverty
Goal 4 : Quality Education
Goal 8: Decent Work & Economic Growth

1111
liTiM •' .· .·'·.
Effectiveness During COVID 19 epidemic many people migrated to their
native places. They had to leave jobs and return home with
Has the Program met
nothing, there were no opportunities available locally. In this
its objectives? background painting training through Nerolac Painter
To What extent the
expected results have
Pragati Program was a welcome opportunity for painters to
learn the new tools and upgrade themselves. This helped
• •••
been achieved? them charge a fair wage as per their knowledge. There
Has it reached the earnings have gone up by 25 to 30 percent after
Right Target Groups? participating in the training program. Therefore we can fairly
say that the program has met its objective, the expected
results have been met and the program has reached the
right target groups.

Index : 5 Points - Very High ; 4 Points - High ; 3 Points - Moderate ; 2 Points - Low ; 1 Point - Very Low

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Board’s Report 102nd Annual Report 2022

OECD Framework

Justification/ Arguments
Criteria Ratings
supporting or against the Criteria

Efficiency
There were challenges in implementation during COVID 19
The extent to which the times the program was much needed as it was directly
CSR Project delivers, or connected to the earnings of the participants. Gathering of
is likely to deliver, participants for Mobile Training etc was a bit of a challenge,
results in an economic in some places space was a problem at dealer's place but
and timely way. the program overall was effectively delivered.

Impact
Nerolac Painter Pragati Program has created a large-scale
The extent to which impact in the lives of disadvantaged sections of society.
the intervention has Daily wage workers who look for some sort of security in
generated or is terms of daily earnings to make both ends meet were the
expected to generate targets of this program. Most of the painters knew basic ••••
significant positive or level and were making Rs 10,000 to Rs 15,000 per month,
negative, intended or but post the training now they make between Rs 20,000 to
unintended, higher- Rs 25,000. Being a part of the program has also given the
level effects. knowledge of Life insurance and health insurance.

Sustainability The painters have upgraded their learnings through the

The extent to which the Nerolac Painter Pragati Program. They are able to charge
an increased fee for their service. So the impact is
net benefits of the
intervention continue sustainable. ••••
or are likely to
continue.

Index : 5 Points - Very High ; 4 Points - High ; 3 Points - Moderate ; 2 Points - Low ; 1 Point - Very Low

40

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Chapter 5: Conclusion & Recommendations

The unemployment rate has increased Most of the trainees have basic or no
in recent times. The last 2 years, education to help them avail
starting from 2020 were completely employment in the formal sector.
marred by lockdowns and shutdowns Upskilling them in their existing
in the country and prolonged occupation at no cost is the best
inactivity across sectors pushed remedy to this problem.
millions of Indians out of jobs and Against this backdrop, the Premium
migrated to rural areas or native Painter Pragati Program has turned out
places in the absence of work and to be a blessing for the painter
regular income. community.

Recommendations
There were certain suggestions and requests provided by trainees and teaching
staff during the impact assessment study. The requirements are stated below:

1. Advance Open Training Program

• It is recommended to conduct pre- • Currently, the training program is

training consultations with relevant enhancing the skills of the painters
stakeholders by the implementing by which they have become self-
partner and align the course syllabus reliant and helping them to get a
with the current market trends. job.

• Refreshment courses can be explored

and introduced during periodic
intervals of the program. It would be
beneficial to get the desired jobs by
the beneficiaries.

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2. Mobile Training Van Program

• A module of Follow-up can be • A prior timetable can be provided to

aligned with the program to check the beneficiaries so they can plan to
and monitor the absorption of the attend the sessions accordingly.
provided information at the
beneficiaries' level.

• More topics can be introduced in

consultation with the implementing
partner at the initial stage of the
program.

3. Fumigation Training Program

• While interacting with the beneficiaries it was noted that very few of them were
aware of the fumigation technology. Different engagement sessions can be
explored to create more awareness about the technology.

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Annexure 2 to the Board's Report

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12)

OF THE COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
(a) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the
financial year 2021-22.
(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company
Secretary or Manager, if any, in the financial year.

Sr. Name of Director/ Key Managerial Remuneration of Percentage increase Ratio of

No. Personnel ('KMP') and Designation Director/ KMP for in remuneration for Remuneration
Financial Year the Financial Year of each
2021-22^ 2021-22 Director/ KMP
(` in Lakhs) to the median
remuneration of
employees

1 Mr. P. P. Shah 43.50 1.16 5.76

Chairman
Non-Executive and Independent Director

2 Mr. H. M. Bharuka 861.46# 18.48 114.03

Vice Chairman and Managing Director -
upto 31st March, 2022

3 Mr. N. N. Tata 39.00 1.96 5.17

Non-Executive and Independent Director

4 Mr. Anuj Jain 228.61 26.93 30.26

Executive Director - upto 31st March, 2022
Managing Director - w.e.f. 1st April, 2022

5 Mr. H. Nishibayashi* – – –
Non-Executive Director

6 Ms. Sonia Singh 34.50 48.39 4.57

Non-Executive and Independent Director

7 Mr. S. Takahara* – – –
Non-Executive Director

8 Mr. T. Tomioka* – – –
Non-Executive Director

9 Mr. P. D. Pai 130.82 33.36 17.32

Chief Financial Officer

10 Mr. G. T. Govindarajan 65.33 14.36 8.65

Company Secretary

^ Remuneration mentioned above in the case of Vice Chairman and Managing Director, Executive Director and other KMP
is the income earned during the financial year 2021-22 as reflected in the Income-tax Computation Sheet as "Gross Income"
(inclusive of perquisites). It excludes the Company's contribution to Provident Fund and Superannuation Fund. As the future
liabilities for gratuity, leave encashment and Director pension along with medical benefits are provided on an actuarial valuation
basis for the Company as a whole, the amount pertaining to each individual is not ascertainable and therefore not included above.
# Remuneration to Mr. H. M. Bharuka excludes retirement benefits of ` 824.40 Lakhs towards Gratuity, Leave Encashment and
Ex-gratia.
* Mr. H. Nishibayashi, Mr. S. Takahara and Mr. T. Tomioka did not receive any sitting fees for attending Board Meetings nor were
they paid any commission.

(c) The median remuneration of employees of the Company for the year increased by 6.1% compared to the previous
financial year.

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Boardʼs Report 102nd Annual Report 2022

(d) The number of permanent employees on the rolls of the Company is 3105 as on 31st March, 2022.
(e) Average percentage increase made in the salaries of employees other than KMP in the last financial year was 7.1%. The
percentage increase in remuneration of KMP was 21.1%.
(f) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.
(g) The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees
as required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment
and Remuneration of Key Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming a part of
the Report. Further, the Annual Report is being sent to the Members excluding the aforesaid Annexure. In terms of
Section 136 of the Act, the said Annexure will be available for inspection of the Shareholders through electronic mode.
Shareholders may write to the Company at [email protected] in that regard.
(h) None of the employee listed in the said Annexure is a relative of any Director in the Company.
(i) There was no employee either throughout the financial year or part thereof who was in receipt of remuneration which,
in the aggregate, was in excess of that drawn by the Managing Director or Whole-time Director and who held by
himself or along with his spouse and dependent children, not less than two percent of the Equity Shares of the Company.

For and on behalf of the Board

P. P. Shah
Chairman
Mumbai, 10th May, 2022

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Annexure 3 to the Board’s Report

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO,
AS PRESCRIBED UNDER RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014
A. Conservation of Energy
We continue to accord utmost importance on saving and efficient usage of energy. Efficient and judicious use of
energy sources has been our prime objective. In line with the energy saving goal, considerable investments have been
made across organisation to improve the overall energy consumption.
We aim to gradually adopt new concepts and technologies which further lead to diversification of energy mix to reduce
dependence on fossil fuels and to cut emissions. We have made considerable investments across organisation
to enhance the Green footprint thereby reduce dependency on Grid Power and fossil fuels. Plans are in place for
enhancing solar and wind power footprint in line with corporate RE 70 theme.
The Company measures progress in energy management through various key indicators of specific power consumption,
specific fuel consumption, percentage outage, power cost, power losses etc.
We also track quantum of renewable power generated through self-owned power plants as well as through open access
mechanism where in power is sourced through developers/Independent power producers via suitable power purchase
agreements as well as shareholding agreements. Renewable power as a percentage of total power is tracked month on
month and initiatives are consistently explored for increasing this quantum in line with Corporate RE 70 vision.
(i) Steps taken or impact on conservation of energy:
At Kansai Nerolac Paints Limited, we have adopted measures to overcome the sustainability challenge.
Measures are being taken to reduce energy consumption through efficiency improvement projects viz;
a) Conversion to energy efficient lighting.
b) Replacement of old motors and compressors with new and energy efficient ones.
c) Implementation of energy management system for real time tracking and insights.
d) Installation of timing controller for auto on/off of lighting system.
e) Optimizing compressed air network based on loading and utilization, regular leak tests, pump up tests to
ensure efficient operations of compressed air network.
f) Efficiency checks of cooling and chilling pumping systems to ensure pumps operate at their nearest
duty points.
(ii) Steps taken by the Company for utilizing alternate sources of energy:
Following carbon neutrality projects have been implemented in financial year 2021-22:
1. Increase in quantum of green power through third party at Hosur plant
2. Fuel switch to PNG from diesel in Bawal plant
3. Increase in power quantum through Group Captive wind power at Hosur plant
With above projects, our renewable power green footprint for all 6 plants stands at 32%
(iii) Capital investment on energy conservation equipment: ₹ 192 Lakhs

B. Technology Absorption
(i) Efforts made towards technology absorption
Following activities carried out in Research and Development:
— Development of new products for Automotive, Performance Coating and Decorative segments
— Innovative shade development & color forecasting for OEM industry
— Upgradation of processes for cycle time reduction and energy saving
— Localization of New technology Products and intermediates for automotive coating
— Green initiatives - Development of Low bake & High solid products for OE Industries to reduce VOC &
Carbon footprint, Sustainable product development
— Formulation optimization by value engineering

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Boardʼs Report

— Import substitution of raw materials

102nd Annual Report 2022

— Joint projects with vendor & customers for mutual benefit & quality enhancement
— Technical support to overseas subsidiaries for new product development, value engineering, Alternate/
New Raw material development etc
— Competitor sample evaluation and benchmarking
— Support to customers for smooth introduction of new shades & products on running production line
— Training to customers on paint Technology & Application to upgrade knowledge & skill

(ii) Benefits derived like product improvement, cost reduction, product development or import substitution:
Below range of products has helped us to generate additional business by way of New Product and product
upgradation, also it covers the list of products where we have done cost reduction and import substitution which
has helped to improve our margins.
— Nerolac Excel Mica Marble Stretch & Sheen Exterior Emulsion
— Nerolac Impression Kashmir
— Nerolac 10 in 1 PU Enamel
— Nerolac Synthetic Enamel Gold & Silver
— Nerolac Perma damp protect Interior
— Nerolac Zinc Yellow Primer
— Nerolac Beauty Ceiling Emulsion
— Nerolac Perma Rapid set
— High Solids, High Aesthetic Bumper Clear System for 4 Wheeler OEM plastic parts
— White Pearl in 3 Coat 1 Bake lean compact processes
— Non Chrome Primer for 2 Wheeler industries
— Silky Matt Clear for 2 wheeler Industries
— High Solids Superior Anti Chip Primer for 4 wheeler Industries
— New Product for Rotamould Petrol Tank
— Mar Resistance clear meeting Flexi Fuel requirement
— Hard coat Clear coat for 2 wheeler head Lamp
— Coating for Alloy wheel
— Travel Colors shades for 2 Wheelers
— Perfect Match Popular Clear
— Low Bake ACED LB66
— Eco Black CED High Gloss / Circulation free Holiday
— Nerolac Anticarbonation Paint
— Nerolac Acrylic Alkali Primer
— Neropoxy Solvent Free Coating WRAS Approved
— Nerolac Anti-dust Lacquer
— Bonded Metallic Powder
— Fusion Bonded Epoxy Powder for Valves & Fittings
— High Dielectric Jet Black Powder for EV

(iii) Details of imported technology (imported during last three years reckoned from the beginning of the
financial year):
a. Details of technology imported
Particulars Year of Import
Intermediate Paste of Bismuth & DOTO on high efficient mill 2019-20
High Weather resistance Taxi Yellow shade for construction equipment 2019-20
Painting for steel bridges of Railway & Road for High corrosion protection life 2019-20

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Particulars Year of Import

Fluoro polymer resin based system (Celatect F Top coat, Celatect F Undercoat, 2019-20
Epomarine SHB, Esco NB & SD Zinc 500)
Coatings for Alloy wheels 2019-20
Soflex-420 Base coat & 7175 common clear coat for Solvent & Water Borne Base 2019-20
coats for 4 Wheeler Industry for plastic painting
SFX 415 & SFX 7500 High solid Clear coat for Product Rationalization - 4 wheeler 2019-20
Industry
Adhesion Promotor for Diamond cut alloy wheel painting system 2019-20
Retan Karplast primer - is adhesion promoter for PP Substrate 2020-21
Retan KP 200 is PU tapping clear for two wheeler’s high end motorcycle petrol tank 2020-21
Grip Eco Primer for chrome plated petrol tank of motor cycle 2020-21
Soflex 7650 PU Clear for Two wheeler application 2020-21
Low formaldehyde coatings for OEM 2020-21
Nerolac Excel Virus Guard 2020-21
Localization for PU metallic Monocoat 2021-22
High Solids Bumper Clear Coat 2021-22
Cardea Crystal clear for Refinish 2021-22
Low Bake ACED LB66 2021-22
Eco Black CED High Gloss / Circulation free Holiday 2021-22
EU 577 Paint 2021-22

b. Whether the technology has been fully absorbed : Yes

c. If not fully absorbed, areas where absorption has not taken place, and the reasons thereof : The Technology
has been fully absorbed.

(iv) Expenditure incurred on Research and Development

(₹ in Crores)
Particulars FY 2021-2022 FY 2020-2021
a. Capital 0.59 1.92
b. Recurring 32.41 28.68
Total 33.00 30.60

C. Foreign Exchange earnings and outgo

Foreign Exchange earnings during the year: ₹ 11.60 Crores (2020-2021: ₹ 9.39 Crores)

Foreign Exchange outgo during the year: ₹ 1106.38 Crores (2020-2021: ₹ 763.12 Crores)

For and on behalf of the Board

P. P. Shah
Chairman
Mumbai, 10th May, 2022

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Board’s Report

Annexure 4 to the Board’s Report

102nd Annual Report 2022

FORM NO. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2022
[PURSUANT TO SECTION 204(1) OF THE COMPANIES ACT, 2013 AND RULE NO. 9 OF THE COMPANIES
(APPOINTMENT AND REMUNERATION PERSONNEL) RULES, 2014]

The Members,
Kansai Nerolac Paints Limited
Nerolac House, Ganpatrao Kadam Marg,
Lower Parel, Mumbai-400 013

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good
corporate practices by Kansai Nerolac Paints Limited (hereinafter called ‘the Company’). Secretarial Audit was conducted in
a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing
our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained
by the Company and also the information / representations provided by the Company, its officers, agents and authorised
representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the
audit period covering the financial year ended on 31st March 2022, complied with the statutory provisions listed hereunder
and also that the Company has proper Board­-processes and compliance-mechanism in place to the extent, in the manner
and subject to the reporting made hereinafter:-
We have examined the books, papers, registers, minute books, forms and returns filed, and other records maintained by the
Company, for the financial year ended on 31st March, 2022 according to the provisions of:-
i. The Companies Act, 2013 (the Act) and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder;
iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign
Direct Investment, and Overseas Direct Investment.
v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992
(‘SEBI Act’):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018
(Not applicable to the Company during audit period);
d. Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 / Securities
and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021
(Not applicable to the Company during audit period);
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008
(Not applicable to the Company during audit period);
f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with client;
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 / Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (Not applicable to the Company
during audit period);
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (Not applicable to the
Company during audit period);
i. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
j. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible and Redeemable Preference
Shares) Regulations, 2013 (Not applicable to the Company during audit period);
k. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

There are no laws which specifically apply to the type of activities undertaken by the Company.
We have also examined compliance with the applicable clauses of the following:-
i. Secretarial Standards issued by The Institute of Company Secretaries of India as in force from time to time.
ii. The Listing Agreements entered into by the Company with National Stock Exchange of India Limited (NSE) and
BSE Limited.
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines,
etc. mentioned above.
We further report that:-
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive
Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the
period under review were carried out in compliance with the provisions of the Act.
Adequate notice of atleast seven days was given to all Directors to schedule the Board Meetings, agenda and detailed notes
on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and
clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
As per minutes of the meetings duly recorded and signed by the Chairman, the decisions of the Board were unanimous with
views of the Board members recorded in the same.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations
of the Company to monitor and ensure compliance with applicable laws, rules, regulations, and guidelines.
We further report that during the audit period, the Scheme of Amalgamation of Marpol Private Limited and Perma Construction
Aids Private Limited (both being wholly owned subsidiaries) with the Company has come into effect.

Place: Thane For JHR & Associates

Date: 09th May 2022 Company Secretaries

 J. H. Ranade
(Partner)
 FCS: 4317, CP: 2520
UDIN: F004317D000291681

The Members,
Kansai Nerolac Paints Limited
Nerolac House, Ganpatrao Kadam Marg,
Lower Parel, Mumbai-400 013

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the company. Our responsibility is to
express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that
correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a
reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and
regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the
responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the company.

Place: Thane For JHR & Associates

Date: 09th May 2022 Company Secretaries

 J. H. Ranade
(Partner)
 FCS: 4317, CP: 2520

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Report on Corporate Governance 102nd Annual Report 2022

Report on Corporate Governance

Pursuant to Schedule V(C) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“SEBI Listing Regulations”), a Report on Corporate Governance for the year ended 31st March, 2022
is given below:

1. Company’s philosophy on Code of Governance

The Company believes in abiding by the Code of Governance so as to be a responsible corporate citizen and to serve
the best interests of all the stakeholders viz., the employees, shareholders, customers, vendors and the society at large.
The Company seeks to achieve this goal by being transparent in its business dealings, by disclosure of all relevant
information in an easily understood manner and by being fair to all stakeholders, by ensuring that the Company’s
activities are managed by a professionally competent and independent Board of Directors.

2. Board of Directors (“Board”)

(a) As on 31st March, 2022, the strength of Board was eight Directors. The Board of Kansai Nerolac Paints Limited
comprises of Executive and Non-Executive Directors. The Managing Director and the Whole-time Director were the
two Executive Directors. There are six Non-Executive Directors, of which three Directors, including the Chairman,
are Independent Directors. The Board also consists of one Woman Independent Director. The composition
of the Board is in conformity with the requirements of Regulation 17(1) of SEBI Listing Regulations and the
Companies Act, 2013 ("the Act"). The three Non-Executive Non-Independent Directors on the Board as on
31st March, 2022, namely, Mr. H. Nishibayashi, Mr. S. Takahara and Mr. T. Tomioka are nominees of
Kansai Paint Co., Ltd., Japan, Promoter Company.
Mr. H. M. Bharuka retired as the Vice Chairman and Managing Director of the Company on completion of his term
from close of business on 31st March, 2022 and resigned as a member of the Board of Directors of the Company
from the same date.

 r. Anuj Jain was appointed as the Managing Director of the Company for a period of 5 (five) years commencing
M
from 1st April, 2022 and ending on 31st March, 2027 (both days inclusive).

(b) In view of the COVID-19 pandemic, all meetings during the year ended 31st March, 2022 were held through
Video Conferencing / Other Audio Visual Means without the physical presence of the Directors / Members. During
the year ended 31st March, 2022, 5 (five) Board Meetings were held i.e. on 7th May, 2021, 30th July, 2021,
25th October, 2021, 1st February, 2022 and 18th February, 2022. The last Annual General Meeting of the Company
was held on 25th June, 2021 by Video Conferencing / Other Audio Visual Means.

 etails of the Directors of the Company and their attendance at the Board Meetings held during the financial year
D
2021-22 and the last Annual General Meeting of the Company, are as follows:

Name of the Director Category of Directorship No. of Attendance at

Board Meetings the last Annual
Attended General Meeting
Mr. P. P. Shah Chairman (Non-Executive and Independent Director) 5 Yes
Mr. H. M. Bharuka* Vice-Chairman and Managing Director 5 Yes
Mr. N. N. Tata Non-Executive and Independent Director 5 Yes
Mr. Anuj Jain@ Whole-time Director 5 Yes
Mr. H. Nishibayashi Non-Executive Director 5 Yes
Ms. Sonia Singh Non-Executive and Independent Director 5 Yes
Mr. S. Takahara Non-Executive Director 5 Yes
Mr. T. Tomioka Non-Executive Director 5 Yes
* Mr. H. M. Bharuka retired as the Vice Chairman and Managing Director of the Company on completion of his term
from close of business on 31st March, 2022 and resigned as a member of the Board of Directors of the Company from the
same date.
@  r. Anuj Jain was appointed as the Managing Director of the Company with effect from 1st April, 2022 for a period
M
of 5 (five) years.

All Independent Directors of the Company have certified and confirmed their independence in accordance with

Section 149 of the Act read with Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

(c) Number of Directorships (other than the Company) and Committees in which the Director is a Chairperson / Member
as on 31st March, 2022, is as follows:

Name of the Director No. of Directorships No. of Committees

in other public in which Chairperson / Member
limited companies (including the Company)*

Chairperson Member

Mr. P. P. Shah 7 3 6
Mr. H. M. Bharuka (retired on 31st March, 2022) Nil Nil Nil
Mr. N. N. Tata 6 1 3
Mr. Anuj Jain Nil Nil Nil
Mr. H. Nishibayashi Nil Nil Nil
Ms. Sonia Singh 1 1 2
Mr. S. Takahara Nil Nil Nil
Mr. T. Tomioka Nil Nil Nil
* In terms of the provisions of Regulation 26(1) of the SEBI Listing Regulations,
• Committee memberships / chairpersonship in Committees of the Board(s) of all public companies, whether listed or
not, have been taken into consideration excluding private limited companies, foreign companies, high value debt listed
entities and companies registered under Section 8 of the Act.
• Chairpersonship and memberships of Audit and Stakeholders' Relationship Committees have been considered. Also,
the number of membership of Committees includes chairmanship.

Details of their directorships in listed entities other than the Company and their category of directorship as on
31st March, 2022, are as follows:

Name of the Director Names of Listed Entities Category of Directorship

Mr. P. P. Shah BASF India Ltd. Non-Executive - Independent Director - Chairperson
KSB Ltd. Non-Executive - Independent Director
Pfizer Ltd. Non-Executive - Independent Director - Chairperson
Sonata Software Ltd. Non-Executive - Independent Director - Chairperson
Bajaj Auto Ltd. Non-Executive - Independent Director
Bajaj Holdings & Investment Ltd. Non-Executive - Independent Director
Mr. N. N. Tata Trent Ltd. Non-Executive - Non Independent Director - Chairperson
Voltas Ltd. Non-Executive - Non Independent Director - Chairperson
Tata Investment Corporation Ltd. Non-Executive - Non Independent Director - Chairperson
Titan Company Ltd. Non-Executive - Nominee Director
Tata Steel Ltd. Non-Executive - Non Independent Director

As on 31st March, 2022, Mr. H. M. Bharuka, Mr. Anuj Jain, Mr. H. Nishibayashi, Ms. Sonia Singh, Mr. S. Takahara
and Mr. T. Tomioka are not directors in any listed entity other than the Company.

The number of directorships and the positions held by Directors on Board Committees are in conformity with the
limits laid down in the Act and SEBI Listing Regulations, as on 31st March, 2022.

(d) Number of meetings of the Board held and dates on which held during the year are given in Clause 2(b) above.

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Report on Corporate Governance

102nd Annual Report 2022

(e) In terms of Regulation 36(3)(c) and Schedule V(C)(2)(e) of the SEBI Listing Regulations, none of the Directors
are related to each other. However, Mr. H. Nishibayashi, Mr. S. Takahara and Mr. T. Tomioka are the nominees of
Kansai Paint Co., Ltd., Japan, Promoter Company.

(f) Disclosure of Shareholding of Non-Executive Directors:

Name of the Director Number of Equity Shares held as on 31st March, 2022
(Own or held by / for other persons on a beneficial basis)

Mr. P. P. Shah Nil

Mr. N. N. Tata Nil
Mr. H. Nishibayashi Nil*
Ms. Sonia Singh Nil
Mr. S. Takahara Nil*
Mr. T. Tomioka Nil*

* As on 31st March, 2022, Mr. H. Nishibayashi, Mr. S. Takahara and Mr. T. Tomioka were the nominees of Kansai Paint Co., Ltd.,
Japan, Promoter Company and they did not hold any Equity Share of the Company in their personal capacity.

(g) Orientation of newly elected directors and updation strategy:

Newly elected directors are given a presentation on the functioning of the Company. Every quarter, reports of
the various departments of the Company are circulated among all the Directors. These reports give specific
particulars of the respective departments. Apart from this, the Directors are intimated of the changes as and when
they happen. All the functional heads are present at the Audit Committee Meeting of the Company held every
quarter. Presentations are also made to the Board of Directors by the functional heads. This ensures that the
functional heads can apprise all the Directors about the developments in their specific areas.

Access to information
Directors, including Independent Directors, can visit the various manufacturing locations of the Company. They
need not necessarily be accompanied by the Managing Director. The purpose is to ensure that the Independent
Directors have free and independent access to the Company's officials and records, so that they can form an
independent opinion about the situation of the Company.

Apart from this, reports of the audit carried out by the internal auditors and the statutory auditors are circulated to
all the Directors.
Monthly Performance Report is also forwarded to the Chairman and other Independent Directors updating them
with the performance on various parameters.
It is ensured that the Board receives qualitative and quantitative information in line with the best management
practices adopted.

The details of familiarization programme for the Independent Directors of the Company is available on the website
of the Company at https://www.nerolac.com/financial/policies.html.

Code of Conduct for Board of Directors and Senior Management

The Company has adopted a Code of Conduct for Board and Senior Management (“Code”). The Code has
been communicated to the Directors and the members of Senior Management. The Code is available on the
Company’s website at https://www.nerolac.com/financial/policies.html. All Directors and Senior Management
have confirmed compliance with the Code for the year ended 31st March, 2022. A declaration to this effect signed
by the Managing Director who is the Chief Executive Officer, is separately provided at the end of this Report.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

(h) A Chart / Matrix setting out the skills / expertise / competence of the Board of Directors:

Competency is defined as the experience, knowledge, skills, attitudes, values and beliefs of the person (member).
A list of core skills / expertise / competencies identified by the Board, as required in the context of its business(es)
and sector(s) for it to function effectively and available with the Board, is as follows:

Competencies:
Competency Definition
Strategic expertise Ability to understand, review and guide strategy by analyzing the Company’s competitive position
and benchmarking taking into account market and industry trends
Business and financial Demonstrate techno-commercial and business perspective, ability to comprehend, interpret and
acumen guide on financial statements, Audit Committee presentations and matters of business
Risk management Experience in providing guidance on major risks, compliances and various legislations
Building high Build and nurture talent to create strong and competent future business leaders
performance teams
Industry knowledge Experience in similar industries
IT – digital acumen Ability to understand, support and guide the digital strategy in the organization with respect to
AI, IOT, MI, Robotics, Big Data Analytics

Personal Qualities:
Personal quality Definition
Integrity Fulfilling a director’s duties and responsibilities, putting the organization’s interests above personal
interests, acting ethically
Curiosity and courage Must have the curiosity to ask questions and the courage to persist in asking or to challenge
management and fellow board members where necessary
Interpersonal skills Must work well in a group, listen well, be tactful but able to communicate his / her point of view
frankly
Instinct Good business instincts and acumen, ability to get the crux of the issue quickly
An active contributor The member must be one who participates and contributes actively and must allocate quality time
to the organization’s affairs

Details of the skills / expertise / competencies possessed by the Directors who were part of the Board as on
31st March, 2022, are as follows:
Name Age Qualifications Industry Expertise
Experience
Mr. P. P. Shah 69 B.Com., Chartered Accountant and Finance, Investments, Business Strategy,
Cost Accountant, MBA (Harvard Projects and Financial Analyst
Business School) Consultancy
Mr. H. M. Bharuka 61 B.Com., Cost Accountant Engineering, Paint Business Strategy
(retired on 31st March, 2022)
Mr. N. N. Tata 65 Graduate of University of Sussex, Marketing, Business Strategy
International Executive Programme Administration and
at INSEAD Business School Investments
Mr. Anuj Jain 53 BSc, MMS Paint Sales, Marketing
Mr. H. Nishibayashi 58 Graduated from Osaka University Paint Sales, Marketing,
of Foreign Studies, faculty of International
English studies business
Ms. Sonia Singh 57 BA (Economics), MBA Consumer goods and Brand Strategy,
services Sales and Marketing
Mr. S. Takahara 63 BS of Accounting (Kobe University High Technology, Finance, Business
of Commerce), US-CPA Pharmaceutical, Paint Strategy
Mr. T. Tomioka 49 Graduated from Tokyo Gakugei Paint Sales, Marketing,
University, faculty of Education Business Strategy,
International

(i) The Board hereby confirms that in its opinion, the Independent Directors of the Company fulfill the conditions as
specified in the SEBI Listing Regulations and are independent of the management.
(j) Detailed reasons for the resignation of an Independent Director who resigns before the expiry of his tenure
along with a confirmation by such director that there are no other material reasons other than those provided:
During the year, no Independent Director resigned from the Company, before the expiry of his / her tenure.

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Report on Corporate Governance

3. Audit Committee
102nd Annual Report 2022

The terms of reference of the Audit Committee, in accordance with the SEBI Listing Regulations, are:
(i)  versight of the listed entity’s financial reporting process and the disclosure of its financial information to ensure
o
that the financial statement is correct, sufficient and credible;
(ii) recommendation for appointment, remuneration and terms of appointment of auditors of the listed entity;
(iii) approval of payment to statutory auditors for any other services rendered by the statutory auditors;
(iv) r eviewing, with the management, the annual financial statements and auditor's report thereon before submission
to the board for approval, with particular reference to:
(a) matters required to be included in the director’s responsibility statement to be included in the board’s report
in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
(b) changes, if any, in accounting policies and practices and reasons for the same;
(c) major accounting entries involving estimates based on the exercise of judgment by management;
(d) significant adjustments made in the financial statements arising out of audit findings;
(e) compliance with listing and other legal requirements relating to financial statements;
(f) disclosure of any related party transactions;
(g) modified opinion(s) in the draft audit report;
(v) reviewing, with the management, the quarterly financial statements before submission to the board for approval;
(vi) 
reviewing, with the management, the statement of uses  / 
application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those
stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring
the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the board to
take up steps in this matter;
(vii) reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
(viii) approval or any subsequent modification of transactions of the listed entity with related parties;
(ix) scrutiny of inter-corporate loans and investments;
(x) valuation of undertakings or assets of the listed entity, wherever it is necessary;
(xi) evaluation of internal financial controls and risk management systems;
(xii) 
reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal
control systems;
(xiii) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department,
staffing and seniority of the official heading the department, reporting structure coverage and frequency of
internal audit;
(xiv) discussion with internal auditors of any significant findings and follow up there on;
(xv) r eviewing the findings of any internal investigations by the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter
to the board;
(xvi) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern;
(xvii) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders
(in case of non-payment of declared dividends) and creditors;
(xviii) to review the functioning of the whistle blower mechanism;
(xix) a
 pproval of appointment of chief financial officer after assessing the qualifications, experience and background,
etc. of the candidate;
(xx) carrying out any other function as is mentioned in the terms of reference of the audit committee;
(xxi) reviewing the utilization of loans and / or advances from / investment by the holding company in the subsidiary
exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans/
advances / investments existing as on the date of coming into force of this provision;
(xxii) consider and comment on rationale, cost-benefits and impact of schemes involving merger, demerger,
amalgamation etc., on the listed entity and its shareholders.
In addition to the above, the Audit Committee reviews information mandatorily required to be reviewed as per the
SEBI Listing Regulations.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

As at 31st March, 2022, Mr. P. P. Shah, Mr. N. N. Tata and Ms. Sonia Singh, all Non-Executive and Independent
Directors, were the members of the Audit Committee. All of them possess sound knowledge of accounts, audit, financial
management expertise etc.
Mr. P. P. Shah is the Chairman of the Audit Committee and Mr. G. T. Govindarajan, Company Secretary acts as the
Secretary to the Audit Committee.
The Internal Auditors, who report directly to the Audit Committee and the representatives of the Statutory Auditors also
attend the meetings of the Audit Committee, besides the executives invited by the Audit Committee to be present thereat.
Mr. P. P. Shah, Chairman of the Audit Committee, was present at the last Annual General Meeting of the Company held
on 25th June, 2021 by Video Conferencing / Other Audio Visual Means.
During the year ended 31st March, 2022, 4 (four) meetings of the Audit Committee were held i.e. on 7th May, 2021,
30th July, 2021, 25th October, 2021 and 1st February, 2022.

Name of the Member Number of Audit Committee Meetings attended

during the year ended 31st March, 2022
Mr. P. P. Shah 3
Mr. N. N. Tata 4
Ms. Sonia Singh 4
After 31st March, 2022, an Audit Committee meeting was held on 10th May, 2022, whereat the Audited Financial Results
and Audited Financial Statements of the Company for the financial year ended 31st March, 2022, were reviewed,
considered and recommended by the Audit Committee to the Board.

4. Nomination and Remuneration Committee

The terms of reference of the Nomination and Remuneration Committee, in accordance with the SEBI Listing
Regulations, are:
(i) formulation of the criteria for determining qualifications, positive attributes and independence of a director and
recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and
other employees;
(ii) formulation of criteria for evaluation of performance of Independent Directors and the Board;
(iii) devising a policy on Board diversity;
(iv) identifying persons who are qualified to become directors and who may be appointed in senior management in
accordance with the criteria laid down and recommend to the Board their appointment and removal and shall carry
out evaluation of every Director’s performance;
(v) whether to extend or continue the term of appointment of the Independent Director, on the basis of the report of
performance evaluation of Independent Directors; and
(vi) recommend to the Board, all remuneration, in whatever form, payable to senior management.
As at 31st March, 2022, Mr. N. N. Tata, Mr. P. P. Shah and Ms. Sonia Singh, all Non-Executive and Independent
Directors, were the members of the Nomination and Remuneration Committee. Mr. H. Nishibayashi has been appointed
as a member of the Committee with effect from 1st April, 2022.
Mr. N. N. Tata, an Independent Director, is the Chairman of the Nomination and Remuneration Committee and he
was present at the last Annual General Meeting of the Company held on 25th June, 2021 by Video Conferencing/ 
Other Audio Visual Means.
During the year ended 31st March, 2022, 4 (four) meetings of the Nomination and Remuneration Committee were held
i.e. on 7th May, 2021, 25th October, 2021, 26th January, 2022 and 18th February, 2022.

Name of the Director Number of Nomination and Remuneration Committee Meetings attended
during the year ended 31st March, 2022
Mr. N. N. Tata 4
Mr. P. P. Shah 4
Ms. Sonia Singh 4

After 31st March, 2022, a Nomination and Remuneration Committee meeting was held on 10th May, 2022, whereat
the remuneration to be paid to Executive Directors and senior management, commission to be paid to Non-Executive
Directors was determined and evaluation of the performance of the Board, its Committees and the Directors was
carried out and discussed.

210
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Report on Corporate Governance

5. Stakeholders’ Relationship Committee

102nd Annual Report 2022

The terms of reference of the Stakeholders' Relationship Committee, in accordance with the SEBI Listing Regulations, are:

(i) Resolving the grievances of the security holders of the listed entity including complaints related to transfer/
transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate
certificates, general meetings etc.

(ii) Review of measures taken for effective exercise of voting rights by shareholders.

(iii) Review of adherence to the service standards adopted by the listed entity in respect of various services being
rendered by the Registrar & Share Transfer Agent.

(iv) Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed
dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of
the Company.

As at 31st March, 2022, Ms. Sonia Singh, Mr. H. M. Bharuka and Mr. Anuj Jain were the members of the Stakeholders’
Relationship Committee. Mr. H. M. Bharuka retired as the Vice Chairman and Managing Director of the Company on
completion of his term from close of business on 31st March, 2022 and resigned as a member of the Board of Directors
of the Company from the same date. Mr. P. P. Shah has been appointed as the member of the Committee with effect
from 1st April, 2022.

Ms. Sonia Singh, Non-Executive and Independent Director, is the Chairperson of the Stakeholders’ Relationship
Committee and she was present at the last Annual General Meeting of the Company held on 25th June, 2021 by
Video Conferencing / Other Audio Visual Means.
Mr. G. T. Govindarajan, Company Secretary, is the Compliance Officer.

During the year ended 31st March, 2022, 1 (one) meeting of the Stakeholders’ Relationship Committee was held on
22nd March, 2022, which was attended by all its members.

A summary of various complaints received and resolved to the satisfaction of the Shareholders by the Company during
the year is given below:

Nature of Complaint Received Resolved Pending

Non-receipt of Dividend Warrant 0 0 0

Non-receipt of Share Certificates 0 0 0

SEBI / Stock Exchange Letter/ROC/NSDL/CDSL 2 2 0

Miscellaneous 0 0 0

Total 2 2 0

  ormally all complaints/queries are disposed off expeditiously. The Company had no complaint pending at the close of
N
the financial year.

6. Risk Management Committee

The terms of reference of the Risk Management Committee, in accordance with SEBI Listing Regulations, are:

(1) To formulate a detailed risk management policy which shall include:

I. A framework for identification of internal and external risks specifically faced by the listed entity, in particular
including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber
security risks or any other risk as may be determined by the Committee.

II. Measures for risk mitigation including systems and processes for internal control of identified risks.

III. Business continuity plan.

211
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

(2) To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks
associated with the business of the Company;

(3) To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk
management systems;

(4) To periodically review the risk management policy, at least once in two years, including by considering the changing
industry dynamics and evolving complexity;

(5) To keep the board of directors informed about the nature and content of its discussions, recommendations and
actions to be taken;

(6) T
 he appointment, removal and terms of remuneration of the Chief Risk Officer (if any) shall be subject to review
by the Risk Management Committee.

As at 31st March, 2022, Mr. H. M. Bharuka, Mr. Anuj Jain, Ms. Sonia Singh, Mr. P. D. Pai and Mr. Jason Gonsalves,
were the members of the Risk Management Committee. Mr. P. D. Pai, Chief Risk Officer and Mr. Jason Gonsalves are
non-board members of the Risk Management Committee.

Ms. Sonia Singh, Independent Director, has been appointed as a member of the Risk Management Committee
with effect from 5th May, 2021 in accordance with the SEBI Listing Regulations. Mr. P. D. Pai was appointed as a
Chief Risk Officer and member with effect from 5th May, 2021.

Mr. H. M. Bharuka retired as the Vice Chairman and Managing Director of the Company on completion of his
term from close of business on 31st March, 2022 and resigned as a member of the Board of Directors of the
Company from the same date. Mr. P. P. Shah, an Independent Director, has been appointed as the Chairman of
the Risk Management Committee with effect from 1st April, 2022.

Mr. H. M. Bharuka, was the Chairman of the Risk Management Committee till 31st March, 2022 and he was present
at the last Annual General Meeting of the Company held on 25th June, 2021 by Video Conferencing / Other Audio
Visual Means.

During the year ended 31st March, 2022, 2 (two) meetings of the Risk Management Committee were held i.e. on
27th September, 2021 and 22nd March, 2022.

Name of the Director Number of Risk Management Committee Meetings attended

during the year ended 31st March, 2022
Ms. Sonia Singh 2
Mr. H. M. Bharuka 2
Mr. Anuj Jain 2
Mr. P. D. Pai 2
Mr. Jason Gonsalves 2

7. Remuneration of Directors
The Company has adopted a Remuneration Policy for its Directors, Key Managerial Personnel and other employees.
The Remuneration Policy has laid down the criteria for determining qualifications, positive attributes, Independence of
Director and Board diversity. The Policy lays down the factors for determining remuneration of Whole-time Directors,
Non-Executive Directors, Key Managerial Personnel and other employees. The policy also lays down the evaluation
criteria of the Independent Directors and the Board. The Remuneration Policy is also available on the website of the
Company at https://www.nerolac.com/financial/policies.html.
The Nomination and Remuneration Committee decides the remuneration of the Whole-time Directors.

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Report on Corporate Governance

Remuneration Policy:
102nd Annual Report 2022

A. Remuneration to Whole-time Directors:

• The remuneration paid to Whole-time Directors is subject to the limits laid down under Section 197 and
Schedule V of the Act and in accordance with the terms of appointment approved by the Shareholders
of the Company. The remuneration of the Whole-time Directors is determined by the Nomination and
Remuneration Committee based on factors such as the Company’s performance and performance/
track record of the Whole-time Directors. The remuneration consists of Salary, Commission,
Company’s contribution to Provident Fund and Superannuation Fund, House Rent Allowance (HRA),
Leave Travel Allowance (LTA) and other perquisites and allowances in accordance with the rules of the
Company, applicable from time to time.

• The Whole-time Directors are not paid any sitting fees for attending the meetings of the Board of Directors
or Committees thereof.

•  he Agreement with the Whole-time Director is for a period not exceeding 5 (five) years at a time. In the
T
event that there is no breach of the terms of the Agreement by the Whole-time Director, but the Company
exercises the discretion to terminate his services during the term of his Agreement, without assigning any
reason thereof, then and in that event, the Whole-time Director shall be paid a compensation in accordance
with the provisions of the Act.
• Presently, the Company does not have a scheme for grant of stock options either to the Whole-time Directors
or employees.

 The details of remuneration paid to Mr. H. M. Bharuka – Vice Chairman and Managing Director and
Mr. Anuj Jain – Executive Director, for the financial year 2021-22, are as follows:
(` in Lakhs)

Sr. Particulars of Remuneration# Mr. H. M. Bharuka Mr. Anuj Jain

No.
1 Fixed component    
a. Salary as per provisions contained in Section 17(1) of the 509.86* 118.21
Income-Tax Act, 1961
b. Value of Perquisites u/s 17(2) of Income-Tax Act, 1961 0.40 0.40
  510.26 118.61
2 Variable component (performance linked)
Commission 351.20 110.00
 Total 861.46 228.61

# Excludes Company's Contribution to Provident Fund and Superannuation Fund. As the future liabilities for gratuity,
leave encashment and Director pension along with medical benefits are provided on an actuarial valuation basis for the
Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
*  emuneration to Mr. H. M. Bharuka excludes retirement benefits of ` 824.40 Lakhs towards Gratuity, Leave Encashment
R
and Ex-gratia.

B. Remuneration to Non-Executive Directors

The Non-Executive Independent Directors are paid commission within the ceiling of 1% of net profits of the
Company as specified in Section 197 of the Act. The commission payable to Non-Executive Independent Directors
is decided by the Board, on recommendation of the Nomination and Remuneration Committee, based on a number
of factors including number of Board and Committee meetings attended, individual contribution thereat etc.
The Non-Executive Independent Directors are also paid sitting fees for attending the meetings of the Board or
Committee thereof within the limits prescribed under the Act.

Apart from the commission and sitting fees paid by the Company, the Non-Executive Independent Directors,
in their individual capacity, did not have any pecuniary relationship or transactions with the Company during the
financial year 2021-22.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

The details of payments made to Non-Executive Independent Directors during the year ended 31st March, 2022
are as under:
(` in Lakhs)

Name of the Sitting Fees Commission$ Total

Director
Board AC% NRC* CSRC# ID^ SRC@ RMC&
Meeting Meeting Meeting Meeting Meeting Meeting Meeting

Mr. P. P. Shah 1.25 0.75 1.00 – 0.50 – – 40.00 43.50

Mr. N. N. Tata 1.25 1.00 1.00 0.25 0.50 – – 35.00 39.00

Ms. Sonia Singh 1.25 1.00 1.00 – 0.50 0.25 0.50 30.00 34.50

% AC: Audit Committee.

* NRC: Nomination and Remuneration Committee.
# CSRC: Corporate Social Responsibility Committee.
^ ID: Independent Director.
@
SRC: Stakeholders� Relationship Committee.
& RMC: Risk Management Committee.
$ Commission paid during the year 2021-22 was for the year ended 31st March, 2021.

C. Remuneration to Key Managerial Personnel and other employees

The objective of the policy is to have a compensation framework that will reward and retain talent.
As per the policy, the remuneration is such as to ensure that the correlation of remuneration to performance is
clear and meets appropriate performance benchmarks.
Remuneration to Key Managerial Personnel, Senior Management and other employees involves a balance
between fixed and variable pay reflecting short and long term performance objectives of the employees in line
with the working of the Company and its goals.
For Directors, the Performance Pay is linked to achievement of Business Plan (achievement of short-term and
long-term business objective).
For Heads of Department, the Performance Pay is linked to achievement of functional plan which is derived from
the business plan. The functional plan includes both, short-term and long-term objectives.
The above takes into consideration industry performance, customer performance and overall economic environment.
For other management personnel, the Performance Pay is linked to achievement of individual set objectives and
part of this will also be linked to overall company performance.

8. Independent Directors:
The Independent Directors of the Company have been appointed in accordance with the provisions of Section 149 of
the Act and applicable provisions of the SEBI Listing Regulations.
Pursuant to Schedule IV of the Act, every Independent Director has been issued a letter of appointment containing
the terms and conditions of his/her appointment. The terms and conditions of appointment have been posted on the
website of the Company at https://www.nerolac.com/financial/policies.html.

Independent Director’s databank registration

 ursuant to a notification dated 22nd October, 2019 issued by the Ministry of Corporate Affairs, all Independent Directors
P
are registered with the Independent Director’s Databank.

214
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Report on Corporate Governance

Separate meeting of Independent Directors

102nd Annual Report 2022

In accordance with the provisions of Schedule IV of the Act and Regulation 25 of SEBI Listing Regulations, 2 (two)
separate meetings of the Independent Directors were held during the year i.e. on 7th May, 2021 and 25th October, 2021,
wherein the Internal Auditors and the Statutory Auditors of the Company were also invited. Both these meetings of the
Independent Directors were without the attendance of Non-Independent Directors and members of management.

Name of the Director Number of meetings of the Independent Directors attended

during the year ended 31st March, 2022
Mr. P. P. Shah 2
Mr. N. N. Tata 2
Ms. Sonia Singh 2

After 31st March, 2022, a meeting of the Independent Directors was held on 10th May, 2022 and the Internal Auditors
and the Statutory Auditors of the Company were also invited for discussion at this meeting.

Mr. P. P. Shah, Chairman of the Company, who is an Independent Director was the Chairman of all the meetings
of Independent Directors. The Independent Directors discussed matters pertaining to the Company’s affairs and
functioning of the Board and presented their views to the Managing Director for appropriate action.

The Independent Directors at their meetings also considered:

a. Review of the performance of the Non-Independent Directors and the Board as a whole;

b. Review of the performance of the Chairman of the Company, taking into account the views of the Executive
Directors and Non-Executive Directors;
c.  ssessing the quality, quantity and timeliness of flow of information between the Company management and the
A
Board that is necessary for the Board to effectively and reasonably perform their duties.

9. General Body Meetings:

(a) Location and time of the last three Annual General Meetings (“AGM”) of the Company:

Particulars of Date and Time Venue

the AGM

101st AGM 25th June, 2021 at 11.00 a.m. By Video Conferencing / Other Audio Visual Means

100th AGM 22nd June, 2020 at 12:00 noon By Video Conferencing / Other Audio Visual Means

99th AGM 21st June, 2019 at 11.00 a.m. Walchand Hirachand Hall, I.M.C. Chambers, Churchgate,
Mumbai – 400020

(b) No Special Resolution was passed at the 99th and 101st AGM of the Company. 2 (two) Special Resolutions
were passed at the 100th AGM of the Company, for re-appointment of Mr. P. P. Shah and Mr. N. N. Tata,
Independent Directors.
(c) No Special Resolution was passed last year through Postal Ballot.
(d) During the year, no postal ballot was conducted by the Company.
(e) As at 31st March, 2022, no Special Resolution is proposed to be conducted through Postal Ballot.
(f) Postal Ballot whenever conducted will be carried out as per the procedure mentioned in Rule 22 of Companies
(Management and Administration) Rules, 2014, including any amendment thereof.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

10. Means of Communication

(a) Quarterly Results: The quarterly results are published in accordance with the applicable provisions of the SEBI
Listing Regulations.
(b) Newspaper in which results are normally published: Generally the results are published in Business Standard
and Sakal. However, the results could also get published in any other reputed newspaper such as the Financial
Express / Loksatta or the Economic Times / Maharashtra Times.
(c) Any website, where displayed: https://www.nerolac.com.
(d) W
 hether it also displays official news releases; and presentation made to institutional investors or to the analysts: Relevant
information is displayed on the website of the Company at https://www.nerolac.com/investor-presentations.html.

11. General Shareholder Information

(a) Date, Time and Venue of the AGM : The ensuing AGM of the Company will be held on Thursday, 23rd June, 2022
at 11 a.m. through Video Conferencing/Other Audio Visual Means.

(b) Financial Year :  April - March

Financial reporting for the quarter ending 30th June, 2022 :  July - August, 2022
Financial reporting for the quarter ending 30th September, 2022 :  October - November, 2022
Financial reporting for the quarter ending 31st December, 2022 :  January - February, 2023
Financial reporting for the year ending 31st March, 2023 :  April - May, 2023
Annual General Meeting for the year ending 31st March, 2023 :  End June, 2023

(c) Dates of Book Closure: Friday, 10th June, 2022 to Thursday, 23rd June, 2022 (both days inclusive) for the purpose
of Annual General Meeting and Dividend.
Dividend Payment Date: Dividend, when declared, will be payable on or after Tuesday, 28th June, 2022 to those
members whose names are registered as such in the Register of Members of the Company as on Thursday,
9th June, 2022 and to the Beneficiary holders as per the beneficiary list as on Thursday, 9th June, 2022 provided
by National Securities Depository Limited (“NSDL”) and Central Depository Services (India) Limited (“CDSL”).

(d) Name and address of Stock Exchanges on which Equity Shares of the Company are listed:
The Company’s Equity Shares are listed on the BSE Limited and the National Stock Exchange of India Limited.

BSE Limited (“BSE”) National Stock Exchange of India Limited (“NSE”)

Phiroze Jeejeeebhoy Towers, Exchange Plaza, Bandra-Kurla Complex
Dalal Street, Mumbai - 400 001 Bandra (E), Mumbai - 400 051

The annual listing fees of the BSE and the NSE for the financial year 2022-23 have been paid.

(e) Stock Code:

Stock Exchange Code

BSE 500165
NSE KANSAINER

ISIN : INE531A01024

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Report on Corporate Governance 102nd Annual Report 2022

(f) Market Price Data - High, Low during each month (g) Performance of the Company’s Stock in comparison
in last financial year: to broad-based indices such as BSE Sensex,
High / Low of market price of the Company’s shares CRISIL Index etc.:
traded on the Stock Exchanges during the year Details of the performance of the Company’s
ended 31st March, 2022 is furnished below: stock vis-à-vis S&P BSE Sensex, was as below:

Month BSE NSE Month Company’s BSE Sensex

Closing Price
High Low High Low on BSE (`)
(`) (`) (`) (`) April 2021 556.35 48,782.36
April 2021 604.70 532.00 603.00 531.50 May 2021 572.20 51,937.44
May 2021 599.75 548.70 600.00 547.95 June 2021 563.25 52,482.71
June 2021 604.30 550.10 604.00 546.60 July 2021 626.10 52,586.84
July 2021 649.00 562.75 649.95 561.95 August 2021 620.05 57,552.39
August 2021 649.45 611.25 649.40 611.25 September 2021 633.45 59,126.36
September 2021 639.75 600.95 640.50 600.75 October 2021 545.30 59,306.93
October 2021 674.15 521.75 675.00 523.00 November 2021 591.35 57,064.87
November 2021 629.65 544.95 629.90 545.05 December 2021 590.55 58,253.82
December 2021 604.70 561.85 604.80 561.70 January 2022 567.85 58,014.17
January 2022 628.25 559.00 628.45 558.70 February 2022 454.75 56,247.28
February 2022 573.65 440.60 577.00 440.00 March 2022 467.20 58,568.51
March 2022 483.00 422.05 483.50 421.70

KANSAI NEROLAC PAINTS LTD. (KNPL) -- • - - KNPL's Closing Price (<)

SHARE PRICE MOVEMENT/ BSE SENSEX --+-- Sensex
650 70000
■ •• - - - - - - ■ - - - - - - ....
600 .. . . •------ ........ 65000
_______ ............. .
,
_
. . . •,.
KNPL Share Price (`)

550 60000

BSE Sensex
500 55000

,.__ .... --•

450 50000

400 45000

350 40000
Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 Mar 22

(h) The securities of the Company have never been suspended from trading.

(i) Registrar and Share Transfer Agents:

TSR Consultants Private Limited
(Formerly known as TSR Darashaw Consultants Private Limited)
C-101, 1st Floor, 247 Park, Lal Bahadur Shastri Marg,
Vikhroli (West), Mumbai – 400 083.
Tel. No.: +91 22 66568484, Fax No.: +91 22 66568494
E-mail: [email protected]

(j) Share Transfer System:

In terms of the provisions of Regulation 40 of SEBI Listing Regulations and various notifications issued in that regard,
requests for effecting transfer of securities (except in case of transmission or transposition of securities) are not to
be processed from 1st April, 2019 unless the securities are held in the dematerialized form with the depositories.

217
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Further, SEBI vide its Circular No. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/236 dated 2nd December, 2020
read with Circular No. SEBI/HO/MIRSD/RTAMB/CIR/P/2020/166 dated 7th September, 2020 had fixed
31st March, 2021 as the cut-off date for re-lodgement of physical shares for transfer and the share that are
re-lodged for transfer shall be issued only in demat mode. In view of the same, Shareholders are requested to take
action to dematerialize the Equity Shares of the Company, promptly.
The requests for transmission or transposition of securities held in physical form are registered and returned within
a period of 15 days from the date of receipt in case the documents are complete in all respects. The same are
placed for consideration of the Stakeholders’ Relationship Committee. Further, particulars of movement of shares
in the dematerialized form are also placed before the Stakeholders’ Relationship Committee.

(k) Distribution of Shareholding as on 31st March, 2022:

No. of Equity Shares held No. of Folios % to number No. of Shares % to number
of Folios of Shares
Upto 500 72,839 92.79 42,00,591 0.78
501 to 1000 1,835 2.34 14,60,021 0.27
1001 to 2000 1,176 1.50 18,22,951 0.34
2001 to 3000 454 0.58 11,63,689 0.22
3001 to 4000 379 0.48 13,34,282 0.25
4001 to 5000 248 0.32 11,68,424 0.22
5001 to 10000 623 0.79 47,37,380 0.88
10001 to 20000 433 0.55 62,10,534 1.15
20001 and above 510 0.65 51,68,21,848 95.90
Grand Total 78,497 100.00 53,89,19,720 100.00

Geographical Distribution of Shareholders as on 31st March, 2022

Location No. of Folios % to number No. of Shares % to number

of Folios of Shares
OUTSIDE INDIA
Promoter - Kansai Paint Co., Ltd., 1 0.00 40,41,35,898 74.99
Japan
FII, NRI, OCB, FPI - Corp. 2,504 3.19 2,07,43,344 3.85
IN INDIA
Mumbai 15,400 19.62 91,812,113 17.04
New Delhi 4,270 5.44 44,04,993 0.82
Ahmedabad 2,214 2.82 15,29,124 0.28
Bangalore 3,578 4.56 18,07,361 0.34
Pune 3,840 4.89 19,21,812 0.36
Kolkata 1,953 2.49 29,18,959 0.54
Chennai 2,287 2.91 6,64,032 0.12
Hyderabad 1,906 2.43 7,66,402 0.14
Surat 800 1.02 3,77,158 0.07
Vadodara 856 1.09 3,57,324 0.07
Jaipur 750 0.96 4,36,018 0.08
Others 38,138 48.59 70,45,182 1.31
TOTAL 78,497 100.00 53,89,19,720 100.00

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---------
Report on Corporate Governance

Categories of Shareholders as on 31st March, 2022

102nd Annual Report 2022

Sr. Category No. of Percentage of

No. Shares held Shareholding
A. Promoters’ Holding
1. Promoters
Indian Promoters Nil Nil
Foreign Promoters (Kansai Paint Co., Ltd., Japan) 40,41,35,898 74.99
2. Persons acting in concert Nil Nil
Sub-Total (A) 40,41,35,898 74.99
B. Non-Promoters’ Holding
3. Institutional Investors
a. Mutual Funds and UTI 3,55,98,641 6.61
b. Banks, Financial Institutions, Insurance Companies, 3,55,31,842 6.59
Alternate Investment Funds (Central/ State Govt. Institutions/
Non-Government Institutions)
c. Foreign Portfolio Investors 1,91,29,119 3.55
Sub-Total (i) 9,02,59,602 16.75
4. Others
Private Corporate Bodies 28,83,047 0.53
Indian Public 3,92,68,930 7.29
NBFCs 5,400 0.00
NRIs / OCBs 16,14,225 0.30
Any Other (Trusts) 1,83,300 0.03
Unclaimed Suspense Account 98,110 0.02
IEPF 4,71,208 0.09
Sub-Total (ii) 4,45,24,220 8.26
Sub-Total (B) = (i) + (ii) 13,47,83,822 25.01
Grand Total = (A) + (B) 53,89,19,720 100.00

(l) Dematerialisation of Shareholding and Liquidity: As at 31st March, 2022, 99.58% of the paid-up share capital
of the Company had been dematerialised. Particulars of trading on the Company’s shares for the financial year
2021-22:

Stock Exchange No. of Trades No. of Shares

BSE 2,90,673 58,09,645
NSE 24,08,988 7,35,09,436

(m) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments:

The Company has not issued any GDRs / ADRs / Warrants or any Convertible Instruments.

(n) Commodity price risk or foreign exchange risk and hedging activities:
With reference to Circular No. SEBI/HO/CFD/CMD1/CIR/P/2018/0000000141 dated 15th November, 2018 issued
by Securities and Exchange Board of India, on disclosures regarding commodity risks by listed entities, the
Company is actively working on mitigating commodity risks and foreign exchange risks.

Commodity Risk
Commodity risk is an integral spectrum of the risk framework of the Company and impacts its financial performance
upon fluctuations in the prices of the commodities that are out of control of the Company and are primarily
driven by external market forces, government policies and international market changes. The Company does not
undertake any commodity hedging activities on any exchange but procures raw materials which are derivatives of
various commodities. The Company has a robust framework and governance mechanism in place that ensures
Company’s interests are protected despite volatility in prices and availability.

219
KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Foreign Exchange Risk

The Company manages its foreign exchange risks by hedging its net exposure with the use of appropriate
hedging instruments based on its foreign exchange risk management policy. The Company does not enter into
any derivative instruments for trading or speculative purposes. The details of foreign exchange exposures are
disclosed in Notes to the Financial Statements.
(o) Plant Locations:
The Company’s plants, which are operative, are located at:
1. Lote Parshuram, Ratnagiri, Maharashtra
2. Jainpur, Kanpur Dehat, Uttar Pradesh
3. Bawal, Haryana
4. Hosur, Tamil Nadu
5. Sayakha, Gujarat
6. Goindwal Sahib, Punjab
7. Kakoda, Goa (Manufacturing unit of merged subsidiary, Marpol Private Limited)
8. Sarigam, Gujarat (Manufacturing unit of merged subsidiary, Perma Construction Aids Private Limited)
(p) Address for correspondence:
TSR Consultants Private Limited
(Formerly known as TSR Darashaw Consultants Private Limited)
C-101, 1st Floor, 247 Park, Lal Bahadur Shastri Marg,
Vikhroli (West), Mumbai - 400 083.
Tel. No.: +91 22 66568484, Fax No.: +91 22 66568494
E-mail ID: [email protected]

Shareholders can also contact the Secretarial Department at the Registered Office of the Company at:
Nerolac House, Ganpatrao Kadam Marg,
Lower Parel, Mumbai - 400 013, Maharashtra.
Tel. No.: +91 22 24934001
E‑mail ID for Investor Grievances: The Company has created an e-mail ID for redressal of Investor Complaints
i.e. [email protected].

(q) List of all credit ratings obtained by the Company:

Sr. Particulars Amount Rating Rating

No. (` in Crores) Agency
1 Cash Credit* 158 CRISIL Long Term Rating – CRISIL AAA / Stable
2 Commercial Paper 30 CRISIL CRISIL A1+
3 Non-Convertible Debentures 10 CRISIL CRISIL AAA / Stable
* Interchangeable with buyer's credit, working capital loan, letter of credit and bank guarantee.

12. Disclosures
(a) Related Party Transactions:
 ll transactions entered into with the Related Parties as defined under the Act and Regulation 23 of SEBI
A
Listing Regulations, during the financial year were in the ordinary course of business and on arm’s length basis and
do not attract provisions of Section 188 of the Act. There were no materially significant transactions with the related
parties during the financial year that may have potential conflict with the interests of the Company at large.
Related party transactions have been disclosed in Note no. 37 to the Standalone Financial Statements.
The Company has in place a Policy on dealing with Related Party Transactions and on Materiality of Related Party
Transactions which is available on the website of the Company at https://www.nerolac.com/financial/policies.html.
In terms of the same, a statement in summary form of transactions with related parties in the ordinary course of
business and arm’s length basis is periodically placed before the Audit Committee for its review. Omnibus approval
was obtained for transactions which were repetitive in nature. Transactions entered into pursuant to omnibus
approval were placed before the Audit Committee for its review during the year.

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102nd Annual Report 2022

(b) Non-compliance by the Company, penalties, and strictures imposed on the Company by Stock Exchanges
or SEBI or any statutory authority on any matter related to capital markets, during the last three years: Nil.

(c) Vigil mechanism and Whistle Blower Policy:

The Company has a Whistle blower Policy in place, which is available on the website of the Company at
https://www.nerolac.com/financial/policies.html. The Company’s portal provides a very effective means for the
employees to communicate freely with the Managing Director. The Company’s employees can also directly meet
the Managing Director and express their grievances / concerns. There are safeguards to ensure that all employee
concerns receive due consideration. Further, the Internal Auditors of the Company, have been provided with a
separate office at the Head Office and e-mail address. Any employee of the organization can contact the Auditor
on the mail or personally.
The Code of Conduct for the Board of Directors and Senior Management states that Directors and Senior Managers
of the Company shall endeavour to promote ethical behaviour and to provide an opportunity to employees to
report violation of laws, rules, regulations or codes of conduct and policy directives adopted by the Company to
the appropriate personnel without fear of retaliation of any kind for reports made by the employees in good faith.
No personnel have been denied access to the Audit Committee.

Details of compliance with mandatory requirements and adoption of the non-mandatory requirements
(d) 
alongwith the details of any non-compliance of any requirement of the corporate governance report, pertaining to
Point Nos. (2) to (10) of Schedule V(C) of the SEBI Listing Regulations:
The Company has complied with all the mandatory requirements of the SEBI Listing Regulations relating to
Corporate Governance.
There is no non-compliance of any requirement of the Report on Corporate Governance and necessary details
as required vide Schedule V(C) of the SEBI Listing Regulations have been provided herein. Further, necessary
disclosures with respect to the compliance with Corporate Governance requirements specified in Regulation 17
to 27 of the SEBI Listing Regulations, have been made in this Report on Corporate Governance. Necessary
details as required in terms of clauses (b) to (i) and (t) of Regulation 46(2) of the SEBI Listing Regulations are
available on the website of the Company i.e. www.nerolac.com.
The discretionary requirements as stipulated in Part E of Schedule II of the SEBI Listing Regulations, have
been adopted to the extent and in the manner as stated under the appropriate headings in this Report on Corporate
Governance.
(e) Material Subsidiaries:
 he Company does not have a material subsidiary as defined under Regulation 16(1)(c) of the SEBI Listing
T
Regulations. The Policy for determining material subsidiaries is available on the website of the Company at
https://www.nerolac.com/financial/policies.html.
(f) Disclosure of commodity price risks and commodity hedging activities:
This has been discussed under Point no. 11(n) of this Report on Corporate Governance.
(g) D
 etails of utilization of funds raised through Preferential Allotment or Qualified Institutions Placement as specified
under Regulation 32(7A) of SEBI Listing Regulations:
 here was no Preferential Allotment or Qualified Institutions Placement as specified under Regulation 32(7A) of
T
SEBI Listing Regulations.
(h) A
 Certificate has been received from JHR & Associates, Practicing Company Secretaries that none of the Directors
on the Board of Directors of the Company have been debarred or disqualified from being appointed or continuing
as Directors of Companies by the Securities and Exchange Board of India/ Ministry of Corporate Affairs or any
such Statutory Authority.
Further, in terms of the provisions of the Circular No. CIR/CFD/CMD1/27/2019 dated 8th February, 2019 issued
by Securities and Exchange Board of India, the Company has obtained the Annual Secretarial Compliance Report
for the financial year ended 31st March, 2022, confirming compliance of the applicable SEBI Regulations and
circulars / guidelines issued thereunder, by the Company.
(i) Disclosure of instances along with the reasons, where the Board of Directors had not accepted any recommendation
of any Committee of the Board which is mandatorily required, in the financial year 2021-22:
There was no instance during the financial year 2021-22, where the Board of Directors did not accept the
recommendation of any Committee of the Board which it was mandatorily required to accept.

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II STATUTORY REPORTS

(j) Total fees for all services paid by the Company and its subsidiaries, on a consolidated basis, to the statutory
auditor and all entities in the network firm/network entity of which the Statutory Auditor is a part:

Total fees for all services paid by the Company and its subsidiaries, on a consolidated basis, to S R B C & CO LLP,
Chartered Accountants (Statutory Auditors of the Company) and other firms in the network entity of which the
Statutory Auditor is a part, as included in the Consolidated Financial Statements of the Company for the year
ended 31st March, 2022, is as follows:
(` in Crores)

Fees for audit and related services paid to S. R. Batliboi & Affiliates firms and to entities of the 0.85
network of which the statutory auditor is a part (excluding out of pocket expenses)

Other fees paid to S. R. Batliboi & Affiliates firms and to entities of the network of which the –
statutory auditor is a part

Total fees 0.85

(k) Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013:

a. Number of complaints filed during the financial year 2021-22: Nil

b. Number of complaints disposed of during the financial year 2021-22: Nil

c. Number of complaints pending as on end of the financial year 2021-22: Nil

(l) Disclosure by listed entity and its subsidiaries of loans and advances in the nature of loans to firms/companies in
which directors are interested by name and amount:
 here are no loans and advances in the nature of loans to firms/companies in which directors are interested as on
T
31st March, 2022.

13. CEO/CFO Certification

A certificate from the CEO and CFO as specified in Part B of Schedule II in terms of Regulation 17(8) of the SEBI Listing
Regulations, was placed before the meeting of the Board of Directors held on 10th May, 2022, to approve the Audited
Financial Results and Audited Financial Statements of the Company for the financial year ended 31st March, 2022.

14. Compliance certificate obtained from S R B C & CO LLP, Chartered Accountants, Statutory Auditors of the Company,
regarding compliance of conditions of corporate governance, is annexed to this Report.

15. Unclaimed Dividend

Pursuant to Section 205A of the Companies Act, 1956, all unclaimed Dividend upto 56th Dividend for the year ended
31st March, 1994 have been transferred to the General Revenue Account of the Central Government. Also, pursuant to
Section 205A read with 205C of the Companies Act, 1956 as replaced by Section 124 and 125 of the Companies Act, 2013
read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
(“IEPF Rules”), as amended, all unclaimed Dividends for the year ended 31st March, 1995 to 31st March, 2014 have
been transferred to the Investor Education and Protection Fund (“IEPF”).
Shareholders who have not encashed their Dividend warrants for the aforesaid period are requested to claim the
amount from the IEPF Authority, by submitting an online application in Form IEPF-5 available on www.iepf.gov.in.
Shareholders are requested to encash their Dividend warrants immediately on receipt as Dividends remaining
unclaimed for seven years are to be transferred to the IEPF. Further, pursuant to Section 124 of the Act read with
IEPF Rules, as amended, the shares, in respect of which Dividend is not claimed for seven consecutive years, are
required to be transferred by the Company in the name of IEPF. Any claimant of such transferred shares would
be entitled to claim the transfer of shares from IEPF in accordance with the procedure as laid down in the aforesaid
IEPF Rules.
Shareholders are requested to visit the website of the Company at https://www.nerolac.com/financial/shareholders.html
for details of amounts lying in the unclaimed Dividend accounts of the Company, unclaimed dividend for 2013-14
transferred to the IEPF, the shares transferred to IEPF and the shares due to be transferred to IEPF.

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Report on Corporate Governance

16. Disclosure with respect to demat suspense account / unclaimed suspense account

102nd Annual Report 2022

Particulars No. of No. of Equity

Shareholders Shares
a) Aggregate number of shareholders and the outstanding shares lying in the 34 1,22,810
Unclaimed Suspense Account as on 1st April, 2021 Equity Shares
of ` 1 each
b) Number of shareholders who approached the Company for transfer of Nil Nil
shares from the Unclaimed Suspense Account during the year
c) Number of shareholders to whom the shares were transferred from the Nil Nil
Unclaimed Suspense Account during the year
d) Number of shareholders whose unclaimed dividends were transferred 7 24,700
to the IEPF account in terms of Ministry of Corporate Affairs General Equity Shares
Circular No. 12/2017 dated 16th October, 2017 of ` 1 each
e) Aggregate number of shareholders and the outstanding Shares lying in 27 98,110
the Unclaimed Suspense Account as on 31st March, 2022 Equity Shares
of ` 1 each
f) It is hereby confirmed that the voting rights on these shares shall remain frozen till the rightful owner of such
shares claims the shares.

For and on behalf of the Board

P. P. SHAH
Chairman
Mumbai, 10th May, 2022

DECLARATION
As required under Schedule V(D) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, it is hereby declared that the members of the Board of Directors and the Senior
Management Personnel have confirmed compliance with the Code of Conduct for the Board of Directors and the Senior
Management for the year ended 31st March, 2022.
For Kansai Nerolac Paints Limited

Anuj Jain
Managing Director
Mumbai, 10th May, 2022

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Independent Auditor’s Report on compliance with the conditions of Corporate Governance as

per provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015, as amended
The Members of Kansai Nerolac Paints Limited

1. 
The Corporate Governance Report prepared by Kansai Nerolac Paints Limited (hereinafter the “Company”),
contains details as specified in regulations 17 to 27, clauses (b) to (i) and (t) of sub – regulation (2) of regulation 46 and
para C, D, and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, as amended (“the Listing Regulations”) (‘Applicable criteria’) for the year ended
March 31, 2022 as required by the Company for annual submission to the Stock exchange.

Management’s Responsibility

2. The preparation of the Corporate Governance Report is the responsibility of the Management of the Company including
the preparation and maintenance of all relevant supporting records and documents. This responsibility also includes
the design, implementation and maintenance of internal control relevant to the preparation and presentation of the
Corporate Governance Report.

3. The Management along with the Board of Directors are also responsible for ensuring that the Company complies with
the conditions of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities and Exchange
Board of India.

Auditor’s Responsibility

4. Pursuant to the requirements of the Listing Regulations, our responsibility is to provide a reasonable assurance in the
form of an opinion whether, the Company has complied with the conditions of Corporate Governance as specified in
the Listing Regulations.

5. We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on Reports
or Certificates for Special Purposes and the Guidance Note on Certification of Corporate Governance, both issued by the
Institute of Chartered Accountants of India (“ICAI”). The Guidance Note on Reports or Certificates for Special Purposes
requires that we comply with the ethical requirements of the Code of Ethics issued by ICAI.

6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control
for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related
Services Engagements.

7. The procedures selected depend on the auditor’s judgement, including the assessment of the risks associated in
compliance of the Corporate Governance Report with the applicable criteria. Summary of procedures performed include:

i. Read and understood the information prepared by the Company and included in its Corporate Governance Report;
ii.  btained and verified that the composition of the Board of Directors with respect to executive and non-executive
O
directors has been met throughout the reporting period;
iii. Obtained and read the Register of Directors as on March 31, 2022 and verified that atleast one independent woman
director was on the Board of Directors throughout the year;
iv. Obtained and read the minutes of the following committee meetings / other meetings held from April 01, 2021
to March 31, 2022:
(a) Board of Directors;
(b) Audit Committee;
(c) Annual General Meeting (AGM);
(d) Nomination and Remuneration Committee;
(e) Stakeholders Relationship Committee;
(f) Risk Management Committee
v. Obtained necessary declarations from the directors of the Company.

vi. Obtained and read the policy adopted by the Company for related party transactions.

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Report on Corporate Governance

102nd Annual Report 2022

vii. Obtained the schedule of related party transactions during the year and balances at the year-end. Obtained and
read the minutes of the audit committee meeting where in such related party transactions have been pre-approved
prior by the audit committee.

viii. P
 erformed necessary inquiries with the management and also obtained necessary specific representations from
management including that the Company is in process of submitting the secretarial compliance report to stock
exchange and the due date for submission of the same is May 30, 2022.

8. The above-mentioned procedures include examining evidence supporting the particulars in the Corporate Governance
Report on a test basis. Further, our scope of work under this report did not involve us performing audit tests for the
purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the financial
statements of the Company taken as a whole.

Opinion

9. Based on the procedures performed by us, as referred in paragraph 7 above, and according to the information and
explanations given to us, we are of the opinion that the Company has complied with the conditions of Corporate
Governance as specified in the Listing Regulations, as applicable for the year ended March 31, 2022, referred to in
paragraph 4 above.

Other matters and Restriction on Use

10. T
 his report is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with
which the management has conducted the affairs of the Company.

11. This report is addressed to and provided to the members of the Company solely for the purpose of enabling it to
comply with its obligations under the Listing Regulations with reference to compliance with the relevant regulations of
Corporate Governance and should not be used by any other person or for any other purpose. Accordingly, we do not
accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown or
into whose hands it may come without our prior consent in writing. We have no responsibility to update this report for
events and circumstances occurring after the date of this report.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003

per Anil Jobanputra

Partner
Membership Number: 110759
UDIN: 22110759AISCTJ5978

Place of Signature: Mumbai

Date: May 10, 2022

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Business Responsibility Report

In terms of Regulation 34(2)(f) of the Securities and – R&D Centre: 1 main R&D centre and 5 local R&D
Exchange Board of India (Listing Obligations and Disclosure centres (at plant locations)
Requirements) Regulations, 2015 as amended, Business
Responsibility Report (BRR) in the Annual Report is – Depot/Sales Locations: 99 (At start of year was
mandatory for the top 1000 listed companies, based on 99, Closed & Added during the year: NIL)
market capitalisation as on 31st March of every year. The
BRR is based on the format suggested by SEBI. – Distribution Centres: 7 (At start of year was 3,
Closed & Added during the year: 1 & 5)
SECTION A: GENERAL INFORMATION
ABOUT THE COMPANY – Divisional Offices: 6 (Pune, Ahmedabad, Mayapuri
- Delhi, Gurugram, Kolkata, Patna)
Corporate Identity Number (CIN) of the Company:
1. 
L24202MH1920PLC000825
Markets served by the Company: National and
10. 
Name of the Company: Kansai Nerolac Paints Limited
2.  International

Registered address: Nerolac House, Ganpatrao Kadam

3.  SECTION B: FINANCIAL DETAILS OF THE
Marg, Lower Parel, Mumbai - 400 013, Maharashtra COMPANY
4. Website: www.nerolac.com 1. Paid-up Capital: ` 53.89 Crores

5. Email ID: [email protected] 2. Net Turnover: ` 5,948.90 Crores

6. Financial year reported: 1st April, 2021 to 31st March, 2022 3. Total Profit after Taxes: ` 374.33 Crores

7. Sector(s) that the Company is engaged in (industrial 4. 

Total Spending on Corporate Social Responsibility
activity code wise): (CSR) as a percentage of profit after tax (%): 3.75%
NIC Code of the Description
product 5. List of Activities in which expenditure in 4 as above has
20221 Manufacture of paints and been incurred:
varnishes, enamels or lacquers
(a) Livelihood & Skill Enhancement Programmes
Key product that the Company manufactures/
8. 
(b) Preventive Health Care & Sanitation
provides (as in balance sheet): Paints

Total number of locations where business activity

9.  (c) Rural/Community Development
is undertaken by the Company:
(d) Promoting Education
(a) Number of International Locations: The Company
has three subsidiaries abroad, namely KNP Japan (e) Ensuring Environmental Sustainability
Private Limited in Nepal, Kansai Paints Lanka
(f) Restoration of Buildings and Sites of Historical
(Private) Limited in Sri Lanka and Kansai Nerolac
Paints (Bangladesh) Limited in Bangladesh. The Importance
Company has one domestic subsidiary, Nerofix
Pvt. Ltd. SECTION C: OTHER DETAILS
The Company, Kansai Nerolac Paints Limited (KNPL),
(b) Number of National Locations: has 4 subsidiaries (1 Domestic and 3 International).
– Manufacturing Facilities: 8 including facilities Perma Construction Aids Private Limited and Marpol
of the merged entities, Marpol Private Private Limited, wholly owned subsidiaries were merged
Limited and Perma Construction Aids with KNPL during the year. KNPL encourages its subsidiary
Private Limited. companies to adopt its policies and practices.

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Business Responsibility Report

SECTION D: BUSINESS RESPONSIBILITY (BR) INFORMATION

102nd Annual Report 2022

1. Details of Director responsible for BR

(a) Details of the Director responsible for implementation of the BR policy:

1. DIN Number: 00306084

2. Name: Mr. H. M. Bharuka
3. Designation: Vice-Chairman and Managing Director up to 31st March, 2022

Mr. Anuj Jain, Managing Director from 1st April, 2022 has taken over the responsibility of implementation of
BR Policy.

(b) Details of the BR head:

No. Particulars Details
1 DIN Number (if applicable) -
2 Name Mr. Jason S. Gonsalves
3 Designation Director - Corporate Planning, IT, and Materials
4 Telephone Number 022 - 2499 2520
5 Email ID [email protected]

2. Principle-wise [as per National Voluntary Guidelines (NVGs)] BR policy/policies

Business Responsibility Report
This BR Report follows the National Voluntary Guidelines on social, environmental and economic responsibilities of
business, as notified by the Ministry of Corporate Affairs, Government of India, which laid down the following principles:

(a) Details of compliance (Reply in Y/N):

Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 Do you have a policy / policies for... Y Y Y Y Y Y Y Y Y
--------------------------- --- --- --- --- --- --- --- --- ----

Has the policy been formulated in consultation

2 Y Y Y Y Y Y Y Y Y
with the relevant stakeholders?
--------------------------- --- --- --- --- --- --- --- --- ----

Does the policy conform to any national / Y Y Y Y Y Y Y Y Y

international standards? If yes, specify? (50 Policies have been formulated taking into consideration
3 words) the laws of the land, environmental and safety norms.
The policies are based on and are in compliance with
the applicable regulatory requirements.
Has the policy been approved by the Board? Y Y Y Y Y Y Y Y Y
4 If yes, has it been signed by MD/Owner/CEO/ Policies are prepared and discussed with management
appropriate Board Director? committee and approved.
Does the Company have a specific committee
5 of the Board/Director/Official to oversee the Y Y Y Y Y Y Y Y Y
implementation of the policy?
6 Indicate the link for the policy to be viewed online Links for the policies are mentioned in the table below
Has the policy been formally communicated to all
7 Y Y Y Y Y Y Y Y Y
relevant internal and external stakeholders?
--------------------------- --- --- --- --- --- --- --- --- ----

Does the Company have in-house structure to

8 Y Y Y Y Y Y Y Y Y
implement the policy / policies?
--------------------------- --- --- --- --- --- --- --- --- ----

Does the Company have a grievance redressal

9 mechanism related to the policy/policies to Y Y Y Y Y Y Y Y Y
address stakeholders’ grievances?
--------------------------- --- --- --- --- --- --- --- --- ----
Has the Company carried out independent audit/
10 evaluation of the working of this policy by an Y Y Y Y Y Y Y Y Y
internal or external agency?

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Principle Applicable Policies Policy link

Principle 1 Businesses should a) Code of Conduct https://www.nerolac.com/corporate-
conduct and govern sustainability/downloads.php
themselves with Ethics, b) Code of Conduct for https://www.nerolac.com/financial/
Transparency and Directors and Senior policies.html
Accountability Management
c) Code of Practices and https://www.nerolac.com/financial/
Procedures for Fair policies.html
Disclosure of Unpublished
Price Sensitive Information
d) Whistle Blower Policy https://www.nerolac.com/financial/
policies.html
e) Statutory Compliance Policy https://www.nerolac.com/financial/
policies.html
Principle 2 Businesses should a) Occupational Health, Safety https://www.nerolac.com/financial/
provide goods and & Environment Policy policies.html
services that are safe
and contribute to
sustainability throughout
their life cycle
Principle 3 Businesses should a) Code of Conduct https://www.nerolac.com/corporate-
promote the well-being sustainability/downloads.php
of all employees b) Code of Conduct on https://www.nerolac.com/financial/
Affirmative Action policies.html
c) Occupational Health, Safety https://www.nerolac.com/financial/
& Environment Policy policies.html
d) Appropriate Social Conduct Available in Employee Workline
at Workplace Policy Portal
(Including POSH)
e) Medi-claim Policy Available in Employee Workline
Portal
f) Maternity Policy Available in Employee Workline
Portal
Principle 4 Businesses a) Corporate Social https://www.nerolac.com/financial/
should respect the Responsibility Policy policies.html
interests of, and be
responsive towards,
all stakeholders,
especially those who
are disadvantaged,
vulnerable and
marginalised
Principle 5 Businesses should a) Code of Conduct on https://www.nerolac.com/financial/
respect and promote Affirmative Action policies.html
human rights b) Occupational Health, Safety https://www.nerolac.com/financial/
& Environment Policy policies.html
c) Policy on Health Related https://www.nerolac.com/corporate-
Ailments sustainability/downloads.php
d) Appropriate Social Conduct Available in Employee Workline
at Workplace Policy Portal
(Including POSH)

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Principle Applicable Policies Policy link

102nd Annual Report 2022

Principle 6 Businesses should a) Occupational Health, Safety https://www.nerolac.com/financial/

respect, protect and & Environment Policy policies.html
make efforts to restore
the environment
Principle 7 Businesses, when a) Policy on Advocacy of Public https://www.nerolac.com/financial/
engaged in influencing & Regulatory Policy policies.html
public and regulatory
policy, should do so in a
responsible manner
Principle 8 Businesses should a) Corporate Social https://www.nerolac.com/financial/
support inclusive Responsibility Policy policies.html
growth and equitable b) Code of Conduct on https://www.nerolac.com/financial/
development Affirmative Action policies.html
Principle 9 Businesses should a) Quality Policy Available in Employee Workline
engage with, and Portal
provide value to,
their customers
and consumers in a
responsible manner

(b) If answer to the question at serial number 1, against any principle, is ‘No’, please explain why. (Tick up to 2 options)

Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
1 The Company has not understood the principles - - - - - - - - -
--------------------------- --- --- --- --- --- --- --- --- ----
The Company is not at a stage where it finds
2 itself in a position to formulate and implement the - - - - - - - - -
policies on specified principles
--------------------------- --- --- --- --- --- --- --- --- ----

The Company does not have financial or manpower

3 - - - - - - - - -
resources available for the task
--------------------------- --- --- --- --- --- --- --- --- ----

4 It is planned to be done within the next 6 months - - - - - - - - -

--------------------------- --- --- --- --- --- --- --- --- ----

5 It is planned to be done within the next 1 year - - - - - - - - -

--------------------------- --- --- --- --- --- --- --- --- ----
6 Any other reason (please specify) - - - - - - - - -

3. Governance Related to BR 
The Company has been publishing the
a) 
The Board of Directors assesses the BRR Sustainability Report since 2012, in FY 2018-19,
performance of the Company annually and the Sustainability Report formed a part of the
the Management Committee reviews the BRR Annual Report of the Company. From FY 2019-20,
Performance Quarterly. the Company started publishing Annual Report in
the Integrated Report format. The Annual Report
b) The Company publishes the information on BRR, is available on the website of the Company at
which forms part of the Annual Report of the www.nerolac.com.
Company.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

SECTION E: PRINCIPLE-WISE
PERFORMANCE
Compliance training
Principle 1: ETHICS, TRANSPARENCY AND
ACCOUNTABILITY
workshop covering policies
Businesses should conduct and govern themselves
on Code of Conduct, Code
with ethics, transparency and accountability of Conduct for Affirmative
Does the policy relating to ethics, bribery and corruption Action, Whistle Blower,
cover only the Company? Yes/No Appropriate Social Conduct
Does it extend to the Group/Joint Ventures/Suppliers/ at Workplace, Health
Contractors/NGOs/Others? related Ailment Policy was
The KNPL Corporate Governance philosophy, which undertaken for all employees
encompasses Directors, Senior Management, and all
in the organisation.
employees, is guided by a Board-approved policy. Conflicts
of interest, corporate opportunities, confidentiality, related-
party transactions, insider trading, compliance with
laws, rules, and regulations, asset protection and proper
usage, fair dealing, and ethical business practises are all
addressed. It encourages people to report anything that are of Conduct is the part of the new-joinee kit and Corporate
illegal or unethical, among other things. The provisions are Orientation programme. An Induction Confirmation
available on the Company’s website. Undertaking (ICU) is received from all new joiners. Also,
100% of the employees were covered for awareness
KNPL has a Code of Conduct (CoC), extended to group
programmes on 9 Principles during the reporting period.
companies and covers acts such as deception, bribery,
Compliance training workshop covering policies on Code
forgery, extortion, corruption. It also mentions that
of Conduct, Code of Conduct for Affirmative Action,
no employee is allowed to accept any form of illegal
Whistle Blower, Appropriate Social Conduct at Workplace,
gratification.
Health-related Ailment Policy was undertaken for all
KNPL also has a Whistle Blower Policy which allows employees in the organisation. The employees were briefed
employees to bring to the attention of the Management, about key aspects of these policies and query related to
promptly and directly, any unethical behaviour, suspected the policies were addressed. Also, grievance and complaint
fraud or irregularity in the Company practices which is redressal mechanism was emphasised upon.
not in line with the Company’s CoC. If it is proved that
During FY 2021-22, KNPL received 2 shareholder
any employee has accepted any illegal gratification, that
complaints and 4 whistle-blower complaints. All shareholder
employee is liable for termination from employment.
and whistle-blower complaints have been resolved and
Fraud detection is a part of the Audit Committee and the none is under investigation.
Risk Management Committee. Whistle-Blower complaints
For the year in consideration, no cases of corruption
are reviewed by the Audit Committee of the Board.
and conflicts of interest were reported in FY 2021-22,
Web-link - https://www.nerolac.com/corporate-sustainability/ thus no corrective action is taken or underway on issues
downloads.php related to fines/penalties/action taken by regulators/law
enforcement agencies/judicial institutions. No staff or
All new joiners are inducted on the KNPL Code of Conduct employee has been dismissed / disciplined for corruption-
as well as the Whistle-Blower Policy. The Company’s Code related activity.

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Business Responsibility Report

Principle 2: PRODUCTS LIFECYCLE SUSTAINABILITY

102nd Annual Report 2022

performance of the vehicles for longer periods. Further it

Businesses should provide goods and services that are has reduced carbon footprint by lower energy consumption.
safe and contribute to sustainability throughout their
life cycle Neropoxy Solvent Free Coating” for Water Pipeline Internal
Coating.
List up to 3 of your products or services whose designs
have incorporated social or environmental concerns, Product developed to meet the social needs of transporting
risks and/or opportunities. clean water in pipelines. The product suitability for use
on coming in contact with water on the basis of impact
Consumers increasingly prefer responsible brands
on water quality, such that the water could be utilised for
and businesses. KNPL incorporated responsibility and
household purposes.
sustainability into their goal as well as their products and
commits to incorporate sustainability principles into Coating for Rotamould Nylon Petrol Tank.
various stages of its product life cycle, including:
Product is developed as an Adhesion promoter primer with
a) 
Product design: To adhere to relevant sustainability High Crosslink polymeric resin system in 2K quality with
requirements, necessary care is taken as part of the better adhesion, Low VOC system, low energy usage and
new-product design process at the design stage itself. excellent surface filling property.
Our decorative products are designed to be heavy-metal
free and low VOC. Our Automotive paints are designed For each such product, provide the following details
as heavy metal free and less resource use at customer in respect of resource use (energy, water, raw material
end application. The Company will continue to conduct etc.) per unit of product (optional):
research and introduce environmentally friendly products (a) 
Reduction during sourcing/production/ distribution
and resource efficient solutions for its customers. achieved since the previous year throughout the
b) 
Sourcing of raw materials: KNPL has green value chain?
procurement guidelines which factors social, ethical KNPL as part of its Sustainability Agenda continues to
and environmental aspects before on-boarding of reduce its carbon-footprint through reduction in energy
new suppliers and review of existing suppliers. The usage and through use of energy from renewable
Company is focussed on identifying and implementing source. KNPL has also reduced its water usage per
material processed through the bio-route. unit of paint production. Details are provided under the
Natural Capital Section of the Annual Report.
c) Manufacturing of product: KNPL has focussed on
introducing or expanding technology products that 
Products are designed without Persistent Organic
enable waste reduction, VOC reduction, efficient Pollutants (POPs), which are synthetic organic chemicals
resource use, energy savings, and process time which are persistent in the environment, accumulate in
reduction in manufacturing of products. the food chain and are known for their acute toxicity.
d) 
Disposal by consumers: On the product packaging,
Paint production is done by KNPL on flexible production
KNPL provides information such as environmental and
lines with multiple brands produced on same line.
social parameters relevant to the product, as well as
Besides, common infrastructure is used to produce
guidelines for its safe and responsible use. It also mentions
and distribute different paints. So, there is the practical
the product’s safe disposal after it has been used.
difficulty of isolating data on resource utilisation for the
KNPL believes in using safer chemicals in its products above-mentioned products. Through a combination of
and is committed to reduce and phase out hazardous 99 depots and Information Technology systems, KNPL
substances in the products. KNPL uses raw materials has ensured that kilometres covered by the finished
which are heavy-metal-free by design (Decorative – 100%, goods are minimised. KNPL has also taken various
Automotive – 100%, Powder Coating 93.8%, Performance measures to ensure that spillages and damages
Coating 94.6%). incurred during transportation are minimised.


At the plants, various initiatives are undertaken
Some of the Offerings in FY 2021-22
systemically to reduce wastage, like residual raw
High performance Solid Monocoat for CV segment. materials in bags and barrels, and solvents used for
KNPL developed product with High Durability and cleaning, amongst others. Details are provided under
Chemical Resistance. This has resulted in better aesthetic the Natural Capital Section of the Annual Report.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS


Resource use across the value chain for the
products mentioned:
High performance Solid Monocoat for CV segment.
The solid monocoat technology eliminated basecoat
manufacturing and reduced material consumption.
Further, Innovation in Solid monocoat technology, is
reduced curing temperature by 20o C. This has reduced


carbon footprint.

Neropoxy Solvent Free Coating” for Water Pipeline

>65%
Internal Coating. sourcing is done from manufacturers
This is a low VOC product and gives thickness of who have a formal sustainability
400 microns in one coat, thereby reducing material
consumption.
programme.

Coating for Rotamould Nylon Petrol tank. More than 65% sourcing is done from manufacturers who
It is low VOC system with lower baking temperature have a formal sustainability programme. The Company is
(80o/30 mins), thereby reducing energy consumption. also focussed on identifying and implementing material
processed through the renewable source.
(b) 
Reduction during usage by consumers (energy,
water) has been achieved since the previous year? 
Has the Company taken any steps to procure
It has been our endeavour to develop products with goods and services from local and small producers,
lesser environmental footprint and efficient resource including communities surrounding their place of
used at the time of application at customer end. Various work? If yes, what steps have been taken to improve
technologies that we have introduced like 3 coat 1 the capacity and capability of local and small
Bake, Medium High solids, Monocoats have helped vendors?
reduce the resource use at consumer’s end through KNPL actively encourages and works with local and
use of less energy and less material usage. small producers to improve their capability and capacity
through quality programmes, suggestions, feedback
Does the Company have procedures in place for on price competitiveness, vendor ratings, and audits
sustainable sourcing (including transportation)? If at supplier factories by purchase, as well as interaction
yes, what percentage of your inputs was sourced with senior management.
sustainably? Also, provide details thereof, in about
50 words or so. KNPL has collaborated with suppliers to establish units
The Company has a well laid out policy on Supplier near its production sites and has worked with a group
Code of Conduct. The policy focusses on environment of suppliers to increase capacity.
protection, human rights, anti-corruption and fair trade
KNPL has also engaged with suppliers to develop local
practices. It is our endeavour that our suppliers adhere
substitutes for imported raw materials and participated
to the procurement guidelines laid out in the policy.
with them to improve quality aspects as part of their
capability-enhancement initiative.

Most packing material used is sourced from local

The Company has a well laid and/or small suppliers within a 10-kilometre radius of
out policy on Supplier Code of production sites.

Conduct. The policy focusses Does the Company have a mechanism to recycle
on environment protection, products and waste? If yes, what is the percentage
human rights, anti-corruption of recycling of products and waste (separately as
10%)? Also, provide details thereof, in about 50
and fair trade practices.
words or so.
KNPL has a robust mechanism in place to ensure that
products and waste are recycled efficiently. KNPL’s

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Business Responsibility Report 102nd Annual Report 2022

plants have zero liquid discharge and the same is included in the plant design for all new project expansions. Solvent
Recovery Unit (SRU) is installed at plants to distil solvents. SRU removes sludge in the used solvent, thus making it
reusable. TiO2 Dust and Powder flakes are also recovered during the process to reduce the wastage.

Across all plants, a standard recycling process is followed, and the technical team advises recycling of products based on
their chemical composition. A tracking mechanism is in place to track the recycling of products on a batch-by-batch basis.

Percentage of recycling of products: >10%

Percentage of waste recycled: >10%

Principle 3: EMPLOYEES’ WELLBEING

Businesses should promote the wellbeing of all employees
S. No. Particulars Details
1. Please indicate the total number of employees 3,105
2. Please indicate the total number of employees hired on 4,643
temporary/contractual/casual basis
3. Please indicate the number of permanent women employees 70 (2.3%)
4. Please indicate the number of permanent employees with KNPL have set a target of representation of
disabilities disabled workforce up to 0.25% of White Collar
manpower by March’24.
5. Do you have an employee association that is recognised by KNPL has Operators’ Trade Unions at each of its
management plant locations. The management discusses and
settles issues pertaining to wages and service
conditions with these Unions
6. What percentages of your permanent employees are 22.2% of the strength of permanent employees are
members of this recognised employee association? unionised
7. Please indicate the number of complaints relating to child No complaints relating to child labour, forced
labour, forced labour, involuntary labour, sexual harassment labour, involuntary labour and sexual harassment
in the last financial year and pending, as on the end of the are filed and pending as of end of the reporting
financial year. period FY 2021-22
8. What percentage of your under-mentioned employees were Safety Trainings Skill-Upgrade Trainings
given following training in the last year?
(a) Permanent Employees 100% 94%
(b) Permanent Women Employees 47% 79%
(c) Casual/Temporary/Contractual Employees 100% 90%
(d) Employees with Disabilities NA NA

KNPL views employees as a key stakeholder. Their

wellbeing is a core component of KNPL’s philosophy and
No complaints relating to
this is reflected in the approach toward health and safety of
employees at the workplace.
child labour, forced labour,
involuntary labour and sexual
This diverse workforce comprises different age groups, harassment are filed and
gender, religion, nationality, intellectual abilities and pending as of end of the
professional backgrounds. KNPL focusses on creating a
reporting period FY 2021-22
stimulating work environment, supported by a caring and
compassionate work ethos to enable employees to thrive
and deliver winning performance.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

KNPL provides the following employee benefits: The Company’s business operations have evolved as a
result of regular and extensive stakeholder engagement
1. 
Welfare facilities like subsidised food, bus service,
over many years, balancing business priorities and
medical check-up, amongst others, for its workmen.
KNPL also provides medi-claim facility to employees. responsibility towards economic, environmental, and
social sustainability.
2. 
Employees’ Group Insurance Policy (EGI): In the
unfortunate event of the demise of a permanent Out of the above, has the Company identified
employee, the family of the deceased employee will the disadvantaged, vulnerable & marginalised
be supported financially by the policy. The EGI policy stakeholders?
proposes an assured financial assistance as ‘sum
Yes, KNPL has put in place systems and procedures to
assured’ which becomes applicable in the event of an
identify, prioritise and address the needs and concerns of its
unfortunate death of the employee whilst in service
stakeholders, across businesses and units, in a continuous,
and is payable to the grantees of the benefit of the
Beneficiary of the employee. consistent and systematic manner.

3. 
At manufacturing locations, programmes like Are there any special initiatives taken by the Company
investment opportunities, career options, health & to engage with the disadvantaged, vulnerable and
hygiene practices, etc., are held for employees and marginalised stakeholders? If so, provide details
their family members. thereof, in about 50 words or so.
4. 
Industry experts are also invited to share their The Company has various initiatives in place to cover
knowledge and experience for the benefit of the local communities in and around the plants. Construction
employees. of toilets, providing dustbins, conducting health camps and
medical facilities, building classrooms, beautification of the
Further details on initiatives have been given in Human
surroundings, plantation of trees, construction of borewells
Capital and Management Discussion and Analysis (People
and providing pipelines for water are some of the activities
section)
that the Company engages in.
Principle 4: STAKEHOLDER ENGAGEMENT
The Company conducts training programmes for people
Businesses should respect the interests of, and be
engaged in the painting profession to enhance their skills
responsive towards all stakeholders, especially those
and capabilities. More than 61,000 painters were imparted
who are disadvantaged, vulnerable and marginalised.
advanced training in paint application through classroom
Has the Company mapped its internal and external sessions or by using a Mobile Training Academy (mini-van)
stakeholders? Yes/No
The Company fosters working partnerships, builds trust
through productive relationships, and views internal and
external stakeholders as integral to its business as effective
stakeholder engagement process is necessary to achieve
its sustainable goal of inclusive growth.

Internal Stakeholders:

Business
Partner
Shareholders
(Kansai Paint Employees
Co., Ltd., and Investors

61,000
Japan)

External Stakeholders: More than

painters were imparted advanced
training in paint application through
Customers Suppliers Community
classroom sessions or by using a
Mobile Training Academy

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Business Responsibility Report

The five main CSR areas related to vulnerable sections of

society are:
102nd Annual Report 2022

How many stakeholder complaints have been received

in the past financial year and what percent was
satisfactorily resolved by the management?
1. Rural / Community Development (in villages around
the Company’s facilities) During FY 2021-22, the Company did not receive any
complaints with regard to human rights.
2. Livelihood & Skill Enhancement (national level)
3. Promoting Education Principle 6: ENVIRONMENT
4. Healthcare & Sanitation Businesses should respect, protect and make efforts to
restore the environment
5. Environment Sustainability
Does the policy related to Principle 6 cover only the
Company or extends to the Group/Joint Ventures/
Details of the initiatives are listed in CSR section of Annual
Suppliers/Contractors/ NGOs/others?
Report as well as Social and Relationship Capital under
Capital section. KNPL has a well-defined Occupational, Health & Safety
and Environmental Policy (OHS&E) in line with ISO 45001
Principle 5: HUMAN RIGHTS standards and attaches high priority to this policy. The
management ensures that declared policy is extended and
Businesses should respect and promote human rights
made available to all employees and & its subsidiaries /
Does the policy of the Company on human rights associate companies.
cover only the Company or extend to the Group/Joint
Ventures/Suppliers/Contractors/NGOs/Others? Does the Company have strategies / initiatives to
KNPL’s commitment to human rights, such as no forced address global environmental issues such as climate
labour, no child labour, compliance with minimum wages, no change, global warming, etc.? Y/N. If yes, please give
discrimination, gender equality, prevention of sexual or any hyperlink for webpage etc.
other form of harassment, occupational safety, employee KNPL is a responsible organisation and has taken a number
health and well-being, is covered under Company’s of steps over the years to reduce its carbon footprint. It has
Code of Conduct Policy, Policy on Code of Conduct on increased its renewable energy contribution year-on-year.
Affirmative Action, Policy on Health Related Ailments, It has developed products which are sustainable and use
Appropriate Social Conduct at Workplace Policy (including less energy. The company has established a framework for
POSH) and OHS&E Policy. These policies are applicable climate change management. It is working with experts to
for the organisation as well as its subsidiaries and group address risks due to climate change and also adopt science-
based target to address global warming.
companies. Elements of the human rights have also been
included in our policy on Supplier Code of Conduct.
In FY 2021-22, we planted 13,324 trees, of which 6,564
were planted within factory premises while 6,760 were
We have an Internal Complaints Committee (IC) consisting
planted outside factory premises.
of 6 members from different functions including external
member. The prime objective of the IC is to ensure effective
intervention and timely handling of the matters falling under
the Company’s Appropriate Social Conduct at Workplace
Policy (including POSH). We have aligned our Company
Policies in line with UNGC Principle which had been published
in last year’s Annual Report FY 2020-21.

During the FY 2021-22, the In FY 2021-22, we planted

Company did not receive any
complaints with regard to
human rights.
13,324 trees
of which 6,564 were planted within
factory premises while 6,760 were
planted outside factory premises.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

Information on detailed initiatives are covered in the consumption per unit of paint produced. Details of this is
Natural Capital section of this Annual Report and can be available in Natural Capital section under capitals.
accessed at https://nerolac.com/corporate-sustainability/
The Company’s R&D team has developed several
environmentalperformance.html
technologies which are environment-friendly and
energy-efficient, for example, Low VOC, High solids,
Does the Company identify and assess potential
Heavy metal free, 3C1B (3 coat 1 bake). More details are
environmental risks?
available in Intellectual Capital under capitals and under
Yes, KNPL has a formal mechanism to identify and assess R&D Section of the Management and Discussion Analysis
potential environmental risks. KNPL has taken multiple in the Board’s Report.
initiatives to mitigate those risks. Risk management
frameworks and mitigation plans were created by assessing Are the Emissions/Waste generated by the Company
potential risks related to water security, climate change, and within the permissible limits given by CPCB/SPCB for
other environmental risks that could impact the business the financial year being reported?
scenario. KNPL’s emissions/waste are within the CPCB/permissible
SPCB’s limits for fiscal years 2021-22.
Does the Company have any project related to Clean
Development Mechanism? If so, provide details thereof, These are continuously monitored by online monitoring
in about 50 words or so. Also, if yes, whether any systems installed at all of KNPL’s manufacturing sites. We
environmental compliance report is filed? are also complying with the National Ambient Air Quality
Currently no project is registered under Clean Development Standards (NAAQS), 2009, to ensure ambient air-quality
parameters.
Mechanism, However, every year the Company is
undertaking various initiatives to reduce Green House Gas
Number of show cause/ legal notices received from
(GHG) emissions.
CPCB/SPCB which are pending (i.e. not resolved to
satisfaction) as on end of Financial Year.
Yes, the Company files environment compliance reports as
per Pollution Control Board requirements. During the reporting period, the Company did not receive
any show cause/ legal notices from CPCB/SPCB, which are
Has the Company undertaken any other initiatives on – pending as on end of FY 2021-22.
clean technology, energy efficiency, renewable energy,
Principle 7: POLICY ADVOCACY
etc. Y/N. If yes, please give hyperlink for web page etc.
Businesses, when engaged in influencing public and
The Company continued to undertake initiatives on energy
regulatory policy, should do so in a responsible manner
conservation and optimal energy utilisation in all areas of
operations. The Company has increased its contribution Is your Company a member of any trade and chamber
or association? If Yes, name only those major ones that
for power from renewable source such as solar and wind
your business deals with:
power. Also, several initiatives are taken to reduce energy
KNPL engages with the public and regulatory bodies in a
responsible manner. It participates in the same on a need
basis. KNPL is a member of the following trade associations:

The Company has S. Name of the trade and Reach of trade and
No. industry chambers/ industry chambers/
established a framework for
associations associations
climate change management. (State/National)
It is working with experts to 1 Indian Paint Association National
address risks due to climate 2 NHRD - Human Resources National
change and also adopt Development
science-based target to 3 Bombay Management National
Association
address global warming.
4 Indian Chemical Council National
5 Bombay Chamber of Commerce National
& Industry

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Business Responsibility Report

S. Name of the trade and Reach of trade and

102nd Annual Report 2022

No. industry chambers/ industry chambers/

associations associations
(State/National)
6 Maharashtra Economic State
Development Council
7 National Safety Council National
8
9
Confederation of Indian Industry
The Colour Society
National
National More than 8%
10 Advertising Standards Council National of employees were involved in
of India charitable work in this year
11 The Institute of Cost Accountants National
of India

Have you advocated/lobbied through above

associations for the advancement or improvement of Are the programmes/projects undertaken through in-
public good? Yes/No; if yes, specify the broad areas house team/own foundation/external NGO/government
(drop box: Governance and Administration, Economic structures/any other organisation?
Reforms, Inclusive Development Policies, Energy
Projects are carried out by in-house expert teams and in
Security, Water, Food Security, Sustainable Business
collaboration with like-minded expert partner organisations
Principles, Others):
that share our Company’s goal of achieving inclusive
Yes. The Company collaborates with regulatory authorities growth. CSR activities will be carried out either by the
and relevant public bodies to develop public policies that are Company itself or through a Trust/Section 8 company
consistent with the Company’s business and societal work, (under the Companies Act, 2013) that the Company
as well as its sustainability and compliance commitments. will establish.
KNPL also has a defined policy on public advocacy.
CSR activities will be carried out by the Company’s
Principle 8: INCLUSIVE GROWTH AND EQUITABLE management. KNPL takes a variety of steps to engage
DEVELOPMENT employees in CSR and charitable work. More than 8% of
Businesses should support inclusive growth and employees were involved in charitable work in this year.
equitable development
Does the Company have specified programmes/ Have you done any impact assessment of your
initiatives/projects in pursuit of the policy related to initiative?
Principle 8? If yes, details thereof. More than 95,000 beneficiaries have received benefits
KNPL has programmes in place to promote inclusive from different activities under CSR programmes such as
growth and equitable development. KNPL, guided by its construction of classrooms, labs, toilets, setting up health
Corporate Social Responsibility Policy, participates in camps, tree plantation, digging bore-wells, rejuvenating water
a variety of activities that promote inclusive growth and bodies, etc.
development for all. The broad areas of work include
livelihood and skill development, preventive health The Company has also carried out impact assessment in
care and sanitation, education promotion, and rural and terms of Rule 8(3) of the Companies (Corporate Social
community development. Responsibility Policy) Rules, 2014, as amended, through
an independent agency for three projects, each having
Details are covered in the Social Capital section under outlay of ` 1 Crore or more and that have completed not
Capitals & Annexure 1 to the Board’s Report pertaining to CSR. less than one year before undertaking the impact study.

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KANSAI NEROLAC PAINTS LIMITED
II STATUTORY REPORTS

KNPL has established a dedicated consumer helpline,

1800-209-2092, where customers can record their
concerns. Consumer-related issues are also tracked until
they are resolved successfully. Furthermore, dealers can
contact KNPL and file any complaints they may have
about the company. These are then tracked until they are
successfully resolved.

`14.06 Crores There are 10 consumer-related cases and 11 (1.6%)

customer complaints pending at the end of the Financial
Year.
was spent towards various
CSR projects during FY 2021-22 Does the Company display product information on
the product label, over and above what is mandated
What is your Company’s direct contribution to as per local laws? Yes/No/N.A./Remarks (additional
community development projects - Amount in INR and information)
the details of the projects undertaken? Yes, the products of KNPL display all information as
An amount of ` 14.06 Crores was spent towards various mandated by law. Additionally, KNPL discloses information
CSR projects during FY 2021-22. such as directions for use, environmental parameter relevant
to product and instructions on safe disposal also provided
Have you taken steps to ensure that this community
on the product packaging to inform and educate consumers
development initiative is successfully adopted by the
about safe and responsible usage of products or services.
community? Please explain in 50 words, or so.
KNPL ensures all community development initiatives Product information is also available on the Product
make an impactful and effective contribution to society at Data sheet, and the MSDS (Material Safety Data Sheet)
large, with involvement and engagement of its employees, is available with customers of the company and on the
along with partnerships with local and government bodies. website of the Company, as applicable. It includes product
The number of beneficiaries of the CSR activities is also description and information on product performance
monitored. Details of the CSR initiatives undertaken by features & benefits, its application and usage and
KNPL are set out in Annexure 1 to the Board’s Report.
precautions for safe usage along with technical data.

Principle 9: CUSTOMER VALUE

Few of this information such as description, performance
Businesses should engage with and provide value features & benefits, application & safe usage instructions
to their customers and consumers in a responsible are also provided on the product packaging to inform and
manner educate consumers about safe and responsible usage of
What percentage of customer complaints/consumer products or services.
cases are pending as on the end of financial year?
All product complaints from customers are recognised and All the required information on our products and
recorded in the IT system. Each complaint is assigned services is available & can be accessed at our website
a distinct reference number. They are then tracked to https://www.nerolac.com/
completion at the customer end by the Quality Assurance
function in accordance with internally established timeline The information is updated timely on the platform.
norms. Most products are batch-managed and KNPL Apart from this, various digital product posts are also
conducts root-cause analysis to ascertain the issue with offered on our social media handles such as Facebook,
a product when needed. KNPL extends this rigour of YouTube, Instagram, Twitter and LinkedIn for customer
monitoring and control of quality to its suppliers as well. engagement.

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Business Responsibility Report

Is there any case filed by any stakeholder against the

102nd Annual Report 2022

Company regarding unfair trade practices, irresponsible

advertising and/or anti-competitive behaviour during KNPL regularly engages
the last five years and pending as on end of financial with customers to get their
year? If so, provide details thereof, in about 50 words feedback on products and
or so.
gauge their satisfaction level.
There are no cases filed by any stakeholder against the
Company regarding unfair trade practices, irresponsible
advertising and/or anti-competitive behaviour during the last
five years and pending at the end of FY 2021-22.

Did your Company carry out any consumer survey/ meets, customer satisfaction feedback and surveys.
consumer satisfaction trends? Detailed customer surveys are carried out and based on the
KNPL regularly engages with customers to get their feedback received; KNPL undertakes and tracks various
feedback on products and gauge their satisfaction level. initiatives to ensure that the overall satisfaction level of a
Engagement mechanisms include brand track, customer customer is improved.

For and on behalf of the Board

Anuj Jain
Mumbai, 10th May, 2022 Managing Director

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KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Independent Auditor’s Report

To the Members of Kansai Nerolac Paints Limited

Report on the Audit of the Standalone Financial Statements

Opinion
We have audited the accompanying standalone financial statements of Kansai Nerolac Paints Limited (“the Company”),
which comprise the Balance sheet as at March 31 2022, the Statement of Profit and Loss, including the statement of Other
Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes
to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2022, its profit including other comprehensive income, its cash flows and the changes
in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs),
as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the
‘Auditor’s Responsibilities for the Audit of the Standalone Financial Statements’ section of our report. We are independent
of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together
with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and
the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the
Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone
financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of
the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have
fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The
results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying standalone financial statements.

Key audit matters How our audit addressed the key audit matter

Revenue recognition on sale of goods (as described in note 27 of the standalone financial statements)

Revenue is measured based on the transaction Our audit procedures included, amongst others:
price, which is the consideration, adjusted for • We read and evaluated the Company’s policies for revenue
volume discounts, rebates, scheme allowances, recognition and assessed its compliance with Ind AS 115 ‘Revenue
price concessions, incentives and returns, if from contracts with customers’;
any, (‘variable consideration’) as specified in the
contracts with the customers. • We obtained an understanding, evaluated the design and tested
the operating effectiveness of internal controls related to sales
including variable consideration;
An estimate of variable consideration payable • We performed the following tests for a sample of transactions
to the customers is recorded as at the year-end. relating to variable consideration:
Such estimation is done based on the terms of
contracts, rebates and discounts schemes and • Read the terms of contract including rebates and discounts
historical experience. schemes as approved by authorized personnel.
We identified estimation of variable consideration • Assessed computation of variable consideration by
as a key audit matter because the Company’s comparing it with the budget, schemes, past trends and
management exercises judgment in calculating evaluated the reasons for deviation, if any.
the said variable consideration.
• We read and assessed the relevant disclosures made within the
standalone financial statements.

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Key audit matters How our audit addressed the key audit matter
102nd Annual Report 2022

Assessment of impairment of investments in subsidiaries (as described in note 5 of the standalone financial statements)
The carrying values of the Company’s Our audit procedures included, among others the following:
investments in subsidiaries, including corporate • We evaluated the key judgements / assumptions underlying
guarantees provided by the Company to management’s assessment of potential indicators of impairment;
the lenders of its subsidiaries, are assessed
annually by management for potential indicators • Where potential indicators of impairment were identified,
of impairment. As a result, an impairment we evaluated management’s impairment assessment and
assessment was required to be performed by assumptions around the key drivers of the cash flow forecasts,
the Company by comparing the carrying value discount rates, expected growth rates and terminal growth rates
of these investments and guarantees to their by comparison with available financial information including
recoverable amount to determine whether an considerations of the economic conditions and audited financial
impairment was required. statements of the subsidiaries;
For the above impairment testing, management • We compared the forecast of future cash flows to business plan
has determined the value in use and the fair value considering economic conditions and previous forecasts to the
less cost to sell as applicable. Value in use has actual results;
been determined by forecasting and discounting • We performed sensitivity analysis to determine the impact of
future cash flows. changes in current and estimated future uncertain economic
The determination of value in use requires conditions and key assumptions, both individually and in
management to make estimates and judgments aggregate;
in respect of projected sales volume, margins, • We involved our valuation specialists to assist in evaluating the
terminal growth rates and discount rates. key assumptions and methodology used by the Company in
We identified the assessment of potential computing the recoverable amount;
impairment of investments including corporate • We read and assessed the relevant disclosures made within the
guarantees as a key audit matter because standalone financial statements.
impairment assessment involves significant degree
of management judgement in determining the key
assumptions and forecasting future cash flows.

Other Information
The Company’s Board of Directors is responsible for the other information. The other information comprises the information
included in the Annual report, but does not include the standalone financial statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in
doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the
preparation of these standalone financial statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with
the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under
section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility
also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding
of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone
financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company’s financial reporting process.

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Independent Auditor’s Report (Continued)

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether
the Company has adequate internal financial controls with reference to financial statements in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures,
and whether the standalone financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified
in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears
from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income,
the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the
books of account;

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(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record
by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a
director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements
and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid / provided by the
Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to
the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial
statements – Refer Note 35 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Company
iv. a) The management has represented that, to the best of its knowledge and belief and as disclosed in
the note 48 to the standalone financial statements, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of funds) by the
company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief and as disclosed in
the note 48 to the standalone financial statements, no funds have been received by the company
from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding,
whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding
Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries; and
c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations under sub-clause
(a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year
is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid by the Company during the year and until the date of this audit report
is in accordance with section 123 of the Act.
As stated in note 16 to the standalone financial statements, the Board of Directors of the Company have
proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual
General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies
to declaration of dividend.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Anil Jobanputra
Partner
Membership Number: 110759
UDIN: 22110759AISCNF7123
Place of Signature: Mumbai
Date: May 10, 2022

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II FINANCIAL STATEMENTS

Annexure 1 Independent Auditor’s Report

Annexure ‘1’ referred to in paragraph under the heading “Report on other legal and regulatory requirements”
of our report of even date
Re: Kansai Nerolac Paints Limited (“the Company”)
In terms of the information and explanations sought by us and given by the company and the books of account and
records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that:
(i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and
situation of Property, Plant and Equipment.
(B) The Company has maintained proper records showing full particulars of intangibles assets.
(b) All Property, Plant and Equipment have not been physically verified during the year by the management, but
there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties (other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee) disclosed in note 2 to the financial statements included in
property, plant and equipment are held in the name of the Company. Certain title deeds of the immovable Properties,
in the nature of leasehold land disclosed in note 2B to the financial statements included in Right of use assets
(ROU), as indicated in the below mentioned cases which were acquired pursuant to a Scheme of Amalgamation
approved by National Company Law Tribunal (NCLT), are not individually held in the name of the Company.

Description of Gross carrying Held in name of Whether Period held – Reason for not being held
Property value promoter, indicate in the name of Company
(` in Crores) director or range, where
their relative appropriate
or employee
Leasehold land at Goa 0.30 Marpol Private No Less than 1 year These properties were acquired
Limited pursuant to a scheme of
Leasehold land at Vapi 0.12 Perma No Less than 1 year amalgamation and continue to
Construction Aids be registered in the name of
Private Limited amalgamating Companies.

(d) The Company has not revalued its Property, Plant and Equipment (including Right of use assets) or intangible
assets during the year ended March 31, 2022.
(e) There are no proceedings initiated or are pending against the Company for holding any benami property under
the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
(ii) (a) The inventory has been physically verified by the management during the year except for inventories lying with
third parties and discrepancies of 10% or more in aggregate for each class of inventory were not noticed in respect
of such physical verification. In our opinion, the frequency of verification by the management is reasonable and
the coverage and procedure for such verification is appropriate. Inventories lying with third parties have been
confirmed by them as at March 31, 2022 and discrepancies of 10% or more in aggregate for each class of
inventory were not noticed in respect of such confirmations.
(b) The Company has not been sanctioned working capital limits in excess of ` five crores in aggregate from banks
or financial institutions during any point of time of the year on the basis of security of current assets. Accordingly,
the requirement to report on clause 3(ii)(b) of the Order is not applicable to the Company.
(iii) (a) During the year the Company has not provided loans, advances in the nature of loans, stood guarantee or provided
security to companies, firms, Limited Liability Partnerships or any other parties. Accordingly, the requirement to
report on clause 3(iii)(a) of the Order is not applicable to the Company.
(b) During the year the Company has not made investment, provided guarantees, provided security and granted
loans and advances in the nature of loans to companies, firms, Limited Liability Partnerships or any other parties.
Accordingly, the requirement to report on clause 3(iii)(b) of the Order is not applicable to the Company.
(c) The Company has not granted loans and advances in the nature of loans to companies, firms, Limited Liability
Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(c) of the Order is not
applicable to the Company.
(d) The Company has not granted loans or advances in the nature of loans to companies, firms, Limited Liability
Partnerships or any other parties. Accordingly, the requirement to report on clause 3(iii)(d) of the Order is not
applicable to the Company.

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(e) There were no loans or advance in the nature of loan granted to companies, firms, Limited Liability Partnerships
or any other parties. Accordingly, the requirement to report on clause 3(iii)(e) of the Order is not applicable to
the Company.
(f) The Company has not granted any loans or advances in the nature of loans, either repayable on demand or
without specifying any terms or period of repayment to companies, firms, Limited Liability Partnerships or any other
parties. Accordingly, the requirement to report on clause 3(iii)(f) of the Order is not applicable to the Company.
(iv) There are no loans, investments, and securities given in respect of which provisions of section 185 and 186
of the Companies Act 2013 are applicable. Guarantees in respect of which provisions of sections 185 and 186 of the
Companies Act, 2013 are applicable have been complied with by the Company.
(v) The Company has neither accepted any deposits from the public nor accepted any amounts which are deemed
to be deposits within the meaning of sections 73 to 76 of the Companies Act and the rules made thereunder,
to the extent applicable. Accordingly, the requirement to report on clause 3(v) of the Order is not applicable to
the Company.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the
manufacture of paints, and are of the opinion that prima facie, the specified accounts and records have been made
and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including goods and services tax, provident fund, employees’ state insurance, income-
tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues have
generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few
cases. According to the information and explanations given to us and based on audit procedures performed by us,
no undisputed amounts payable in respect of these statutory dues were outstanding, at the year end, for a period
of more than six months from the date they became payable.
(b) The dues of goods and services tax, provident fund, employees’ state insurance, income-tax, sales-tax, service
tax, duty of custom, duty of excise, value added tax, cess, and other statutory dues which have not been deposited
on account of any dispute, are as follows:
Name of the statute Nature of the Amount Period to which the amount Forum where dispute
dues unpaid* relates is pending
(` Crores)
The Central Excise Tax, Penalty 0.19 2000-01 Commissioner (Appeals)
Act, 1944 and Interest
Sales Tax and Value Tax, Penalty 5.56 1980-81, 1991-92, 2007-08 Assistant Commissioner
Added Tax Act and Interest to 2011-12, 2014-15 and 2017-18
45.62 1991-92, 1995-96, 2001-02, Deputy Commissioner
2004-05 to 2006-07, 2009-10
to 2017-18
1.50 1996-97, 2004-05, 2008-09, Additional Commissioner
2009-10, 2011-12
21.16 2001-02, 2003-04, 2005-06, Joint Commissioner
2012-13, 2015-16, 2017-18
2.45 2005-06, 2008-09, 2009-10, Senior Additional Commissioner
2015-16, 2016-17 (Revision Board)
0.05 2002-03 Joint Commissioner (Appeals)
0.03 2006-07 Commissioner
0.58 2014-15 Senior Additional Commissioner
The Finance Act, 1994 Tax, Penalty 9.54 2009-10, 2012-13 to 2016-17 CESTAT
and Interest
0.38 2016-17 and 2017-18 Commissioner (Appeals)
Goods and Services Tax, Penalty and 0.02 2017-18 Superintendent
Tax Act Interest

* Net off amount paid under protest

(viii) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the
tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on
clause 3(viii) of the Order is not applicable to the Company.

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Annexure 1 Independent Auditor’s Report (Continued)

(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon
to any lender.
(b) The Company has not been declared willful defaulter by any bank or financial institution or government or any
government authority.
(c) The Company did not have any term loans outstanding during the year hence, the requirement to report on
clause (ix)(c) of the Order is not applicable to the Company.
(d) The Company did not raise any funds during the year hence, the requirement to report on clause (ix)(d) of the
Order is not applicable to the Company.

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from
any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint
ventures or associate companies. Hence, the requirement to report on clause (ix)(f) of the Order is not applicable
to the Company.

(x) (a) The Company has not raised any money during the year by way of initial public offer / further public offer
(including debt instruments) hence, the requirement to report on clause 3(x)(a) of the Order is not applicable to
the Company.
(b) The Company has not made any preferential allotment or private placement of shares / fully or partially or optionally
convertible debentures during the year under audit and hence, the requirement to report on clause 3(x)(b) of the
Order is not applicable to the Company.

(xi) (a) No fraud by the Company or no material fraud on the Company has been noticed or reported during the year.
(b) During the year, no report under sub-section (12) of section 143 of the Companies Act, 2013 has been filed
by cost auditor/ secretarial auditor or by us in Form ADT – 4 as prescribed under Rule 13 of Companies
(Audit and Auditors) Rules, 2014 with the Central Government.
(c) We have taken into consideration the whistle blower complaints received by the Company during the year while
determining the nature, timing and extent of audit procedures.

(xii) The Company is not a nidhi Company as per the provisions of the Companies Act, 2013. Therefore, the requirement
to report on clause 3(xii)(a), (b) and (c) of the Order is not applicable to the Company.

(xiii) Transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where
applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable
accounting standards.

(xiv) (a) The Company has an internal audit system commensurate with the size and nature of its business.
(b) The internal audit reports of the Company issued till the date of the audit report, for the period under audit have
been considered by us.

(xv) The Company has not entered into any non-cash transactions with its directors or persons connected with its directors
and hence requirement to report on clause 3(xv) of the Order is not applicable to the Company.

(xvi) (a) The provisions of section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) are not applicable to the
Company. Accordingly, the requirement to report on clause (xvi)(a) of the Order is not applicable to the Company.
(b) The Company is not engaged in any Non-Banking Financial or Housing Finance activities. Accordingly, the
requirement to report on clause (xvi)(b) of the Order is not applicable to the Company.
(c) The Company is not a Core Investment Company as defined in the regulations made by Reserve Bank of India.
Accordingly, the requirement to report on clause 3(xvi)(c) of the Order is not applicable to the Company.
(d) There is no Core Investment Company as a part of the Group, hence, the requirement to report on clause 3(xvi)(d)
of the Order is not applicable to the Company.

(xvii) The Company has not incurred cash losses in the current financial year and in the immediately preceding
financial year.

(xviii) There has been no resignation of the statutory auditors during the year and accordingly requirement to report on
Clause 3(xviii) of the Order is not applicable to the Company.

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(xix) On the basis of the financial ratios disclosed in note 49 to the financial statements, ageing and expected dates
of realization of financial assets and payment of financial liabilities, other information accompanying the financial
statements, our knowledge of the Board of Directors and management plans and based on our examination of the
evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material
uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however,
state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based
on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities
falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when
they fall due.

(xx) (a) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a
fund specified in Schedule VII of the Companies Act (the Act), in compliance with second proviso to sub section
5 of section 135 of the Act. This matter has been disclosed in note 40(c) to the financial statements.
(b) There are no unspent amounts in respect of ongoing projects, that are required to be transferred to a special
account in compliance of provision of sub section (6) of section 135 of Companies Act. This matter has been
disclosed in note 40(d) to the financial statements.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Anil Jobanputra
Partner
Membership Number: 110759
UDIN: 22110759AISCNF7123
Place of Signature: Mumbai
Date: May 10, 2022

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KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Annexure 2 Independent Auditor’s Report

Annexure 2 to the Independent Auditor’s Report of even date on the standalone financial statements of Kansai
Nerolac Paints Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
We have audited the internal financial controls with reference to standalone financial statements of Kansai Nerolac
Paints Limited (“the Company”) as of March 31, 2022 in conjunction with our audit of the standalone financial statements of
the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively for ensuring the 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 the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.

Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls with reference to these standalone
financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, as specified under
section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by ICAI. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether adequate internal financial controls with reference to these standalone financial
statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial
controls with reference to standalone financial statements included obtaining an understanding of internal financial controls
with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the internal financial controls with reference to these standalone financial statements.

Meaning of Internal Financial Controls with Reference to these Standalone Financial Statements
A company's internal financial controls with reference to standalone financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference
to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets
that could have a material effect on the financial statements.

248
----------------------'-
Standalone

Annexure 2 Independent Auditor’s Report (Continued)

102nd Annual Report 2022

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements
Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including
the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone
financial statements to future periods are subject to the risk that the internal financial control with reference to standalone
financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone
financial statements and such internal financial controls with reference to standalone financial statements were operating
effectively as at March 31, 2022, based on the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Anil Jobanputra
Partner
Membership Number: 110759
UDIN: 22110759AISCNF7123
Place of Signature: Mumbai
Date: May 10, 2022

249
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Standalone Balance Sheet as at 31 st

March 2022
` in Crores
Note As at 31st March, 2022 As at 31st March, 2021
ASSETS
Non-current Assets
Property, Plant and Equipment.......................................................... 2 1701.27 1611.00
Capital Work-in-progress................................................................... 2A 223.88 205.83
Right of Use Assets (ROU)................................................................ 2B 165.15 150.55
Investment Property ......................................................................... 3 0.18 0.18
Goodwill ............................................................................................ 0.20 0.20
Other Intangible Assets..................................................................... 4 9.35 14.81
2100.03 1982.57
Financial Assets:
Investments.................................................................................. 5 90.87 102.12
Other Financial Assets................................................................. 6 13.70 14.72
104.57 116.84
Non-current Tax Assets (Net)............................................................. 132.19 113.92
Other Non-current Assets.................................................................. 7 87.62 90.17
.Total Non-current Assets................................................ 2424.41 2303.50
Current Assets
Inventories......................................................................................... 8 1531.54 1111.81
Financial Assets:
Investments.................................................................................. 9 209.46 668.06
Trade Receivables....................................................................... 10 965.43 846.50
Cash and Cash Equivalents......................................................... 11 66.44 80.30
Bank Balances other than Cash and Cash Equivalents............... 12 14.21 3.01
Other Financial Assets................................................................. 13 29.17 61.81
1284.71 1659.68
Other Current Assets......................................................................... 14 155.06 163.19
.Total Current Assets........................................................ 2971.31 2934.68
.Total Assets..................................................................... 5395.72 5238.18
EQUITY AND LIABILITIES
Equity
Equity Share Capital.......................................................................... 15 53.89 53.89
Other Equity....................................................................................... 16 4117.04 4023.13
Total Equity...................................................................... 4170.93 4077.02
Liabilities
Non-current Liabilities
Financial Liabilities:
Lease Liabilities...................................................................... 17 85.93 72.69
Provisions..................................................................................... 18 22.27 0.41
Deferred Tax Liabilities (Net)........................................................ 19 95.55 96.27
.Total Non-current Liabilities........................................... 203.75 169.37
Current Liabilities
Financial Liabilities:
Borrowings.............................................................................. 20 — 8.34
Lease Liabilities...................................................................... 21 22.95 17.41
Trade Payables....................................................................... 22
Total Outstanding dues of Micro Enterprises and Small
Enterprises........................................................................ 101.29 90.95
Total Outstanding dues of creditors other than Micro
Enterprises and Small Enterprises................................... 789.11 731.94
890.40 822.89
Other Financial Liabilities............................................................. 23 51.51 94.92
964.86 943.56
Other Current Liabilities............................................................... 24 32.61 22.49
Provisions..................................................................................... 25 18.58 20.75
Current Tax Liabilities (Net).......................................................... 26 4.99 4.99
.Total Current Liabilities................................................... 1021.04 991.79
.Total Liabilities................................................................. 1224.79 1161.16
.Total Equity and Liabilities............................................. 5395.72 5238.18
Significant Accounting Policies................................................................ 1
The notes referred to above form an integral part of Standalone Financial Statements.

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E /E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

250
----------------------'-
Standalone

Standalone Statement of Profit and Loss for the year ended 31

102nd Annual Report 2022

st
March 2022
` in Crores
Year ended Year ended
Note 31st March, 2022 31st March, 2021
Income
Revenue from Operations....................................................................... 27 5948.90 4770.90
Other Income.......................................................................................... 28 32.86 38.85
Total Income.......................................................................................... 5981.76 4809.75

Expenses
Cost of Materials Consumed................................................................... 29 4013.98 2741.58
Purchases of Stock-in-trade.................................................................... 396.22 315.33
Changes in Inventories of Finished Goods, Work-in-progress and
Stock-in-trade.................................................................................................... 30 (280.94) (99.47)
Employee Benefits Expense................................................................... 31 312.37 268.62
Finance Cost........................................................................................... 32 9.87 8.48
Depreciation and Amortisation Expenses............................................... 33 153.82 149.01
Other Expenses...................................................................................... 34 859.93 701.31
Total Expenses...................................................................................... 5465.25 4084.86
Profit Before Exceptional Items and Tax.................................................. 516.51 724.89
Exceptional Item........................................................................................... 44 11.39 10.82
Profit Before Tax......................................................................................... 505.12 714.07

Tax Expense
Current Tax.............................................................................................. 19 132.35 181.93
Deferred Tax............................................................................................ 19 (1.56) 1.54
Total Tax Expense................................................................................. 130.79 183.47
Profit for the Year....................................................................................... 374.33 530.60

Other Comprehensive Income

(i) Items that will not be reclassified to Standalone Statement of
Proflt and Loss
(a) Remeasurement of Defined Benefit Liability..................................... 3.35 0.34
(b) Income tax relating to items that will not be reclassified to
Standalone Statement of Profit and Loss.......................................... (0.84) (0.07)
Total Other Comprehensive Income (net of taxes)............................ 2.51 0.27
Total Comprehensive Income for the Year......................................... 376.84 530.87

Earnings per Share (Face Value of ` 1 each):

Basic and Diluted (in `)........................................................................... 6.95 9.85

Significant Accounting Policies................................................................ 1

The notes referred to above form an integral part of Standalone Financial Statements

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E /E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

251
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Standalone Statement of Changes in Equity

for the year ended 31st March, 2022
` in Crores
A. Equity Share Capital
Balance as at 1st April, 2020......................................................................................................................................... 53.89
Changes in Equity Share Capital during 2020-2021................................................................................................. —
Balance as at the 31st March, 2021.............................................................................................................................. 53.89
Changes in Equity Share Capital during 2021-2022................................................................................................. —
Balance as at the 31st March, 2022.............................................................................................................................. 53.89

B. Other Equity
` in Crores
Capital Securities General Retained
Total

Balance as at 1 April, 2021.....................................................

st
Reserve
0.30
I Premium
12.56
I Reserve
487.67
I Earnings
3522.60
I 4023.13
Profit for the Year..................................................................... — — — 374.33 374.33
Other Comprehensive Income:
Remeasurement of Employee Defined Benefit Liability ....... — — — 3.35 3.35
Deferred Tax on Remeasurement of Employee Defined
Benefit Liability...................................................................... — — — (0.84) (0.84)
Total Other Comprehensive Income for the Year, net of tax.. — — — 2.51 2.51
Total Comprehensive Income for the Year............................. — — — 376.84 376.84
Transaction with Owners in their Capacity as Owners,
recorded directly in equity:
Dividends.............................................................................. — — — (282.93) (282.93)
— — — (282.93) (282.93)
Balance as at 31st March, 2022................................................ 0.30 12.56 487.67 3616.51 4117.04

` in Crores
Capital Securities General Retained
Total
Reserve Premium Reserve Earnings
Balance as at 1 April, 2020.......................................................
st
0.30 12.56 487.67 3232.45 3732.98
Net Assets/(Reserves) acquired on account of merger of
Marpol Private Limited [Refer note 45(a)]................................. — — — (3.25) (3.25)
Net Assets/(Reserves) acquired on account of merger of Perma
Construction Aids Private Limited [Refer note 45(b)]................. — — — (0.35) (0.35)
Restated balance as at 1st April, 2020......................................... 0.30 12.56 487.67 3228.85 3729.38
Profit for the year........................................................................ — — — 530.60 530.60
Other Comprehensive Income:
Remeasurement of Employee Defined Benefit Liability........ — — — 0.34 0.34
Deferred Tax on Remeasurement of Employee Defined
Benefit Liability...................................................................... — — — (0.07) (0.07)
Total Other Comprehensive Income for the Year, net of tax....... — — — 0.27 0.27
Total Comprehensive Income for the Year................................. — — — 530.87 530.87
Transaction with Owners in their Capacity as Owners, recorded
directly in equity:
Dividends.............................................................................. — — — (237.12) (237.12)
— — — (237.12) (237.12)
Balance as at 31st March, 2021.................................................. 0.30 12.56 487.67 3522.60 4023.13

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E /E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

252
----------------------'-
Standalone

Standalone Statement of Cash Flows

for the year ended 31st March, 2022
102nd Annual Report 2022

` in Crores

Particulars Year ended Year ended

31st March, 2022 31st March, 2021

Cash Flow from Operating Activities

Profit Before Tax............................................................................................ 505.12 714.07
Adjustments for:
Depreciation and Amortisation Expenses................................................ 153.82 149.01
Fair Value Loss/(Gain) on Financial Instruments recognised through FVTPL 0.61 (4.24)
Unrealised Foreign Exchange Gain (Net)................................................ (0.95) (0.28)
Profit on Sale of Current Investments (Net)............................................. (14.29) (10.12)
Interest Income........................................................................................ (1.45) (5.15)
Dividend Income...................................................................................... (2.52) (2.24)
Profit on Sale of Property, Plant and Equipment (Net) ........................... (0.19) (2.36)
Finance Cost........................................................................................... 9.87 8.48
Impairment loss allowance on trade receivables..................................... 2.36 9.48
Provisions/Liabilities no longer required written back.............................. (47.44) (8.23)
Impairment of non-current investment (Refer note 44)............................ 11.39 10.82
111.21 145.17
Operating Profit Before Working Capital Changes........................................ 616.33 859.24
(Increase) in Trade and Other Receivables.................................................. (85.72) (205.05)
(Increase) in Inventories............................................................................... (419.73) (164.33)
Increase in Trade Payables, Other Financial Liabilities and Provisions....... 98.83 313.50
(406.62) (55.88)
Cash Generated from Operations................................................................. 209.71 803.36
Direct Taxes Paid (Net of Refunds)............................................................... (150.62) (148.66)
Net Cash Flows generated from Operating Activities............................. 59.09 654.70
Cash Flow from Investing Activities
Purchase of Property, Plant and Equipment and Other Intangible Assets
(including Adjustments on Account of Capital Work-in-progress, Capital
Creditors and Capital Advances)................................................................. (213.78) (100.55)
Proceeds from Sale of Property, Plant and Equipment................................. 0.24 2.81
Purchase of Investments in Subsidiaries..................................................... — (26.34)
Purchase of non-current Investments.......................................................... (0.14) 0.11
Purchase of Current Investments................................................................. (3014.36) (3277.00)
Proceeds from Sale/Redemption of Current Investments............................. 3486.64 2928.30
Interest Received.......................................................................................... 1.45 5.15
Dividend Received........................................................................................ 2.52 2.24
(Investments) in fixed deposits..................................................................... (11.11) (0.05)
Net Cash Flows generated/(used in) Investing Activities....................... 251.46 (465.33)

253
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Standalone Statement of Cash Flows

for the year ended 31st March, 2022
` in Crores

Particulars Year ended Year ended

31st March, 2022 31st March, 2021

Cash Flows from Financing Activities

(Repayment) of Current Borrowings............................................................. (8.34) (9.26)
Payment of Lease Liabilities......................................................................... (32.76) (28.19)
Interest Paid.................................................................................................. (0.38) (0.99)
Dividend Paid................................................................................................ (282.93) (237.12)
Net Cash Flows (used in) Financing Activities........................................ (324.41) (275.56)
Net (Decrease) in Cash and Cash Equivalents.............................................. (13.86) (86.19)

 ash and Cash Equivalents at beginning of the year, the components

C
being (Refer note 11):
Cash on hand................................................................................................ 0.08 0.13
Cheques on hand......................................................................................... 16.78 3.55
Balances with Banks..................................................................................... 62.46 36.84
Deposit with Banks with less than 3 months maturity.................................... — 125.13
Effect of exchange rate fluctuation................................................................. 0.98 0.84
80.30 166.49
Cash and Cash Equivalents at end of the year, the components being:
Cash on hand................................................................................................ 0.08 0.08
Cheques on hand.......................................................................................... 23.34 16.78
Balances with Banks ........................................................................................ 42.04 62.46
Effect of exchange rate fluctuation................................................................ 0.98 0.98
66.44 80.30
Net (Decrease) as disclosed above................................................................ (13.86) (86.19)

Debt Reconciliation Statement in accordance with Ind AS 7 ` in Crores

31 March, 2022
st
31 March, 2021
st

Opening Balances
Current Borrowings.............................................................................................................. 8.34 17.60
Movements
Current Borrowings.............................................................................................................. (8.34) (9.26)
Closing Balances
Current Borrowings.............................................................................................................. — 8.34

Notes:
(i) Figures in brackets are outflows/deductions.
(ii) The above Cash Flow Statement is prepared under the “Indirect Method” as set out in the Indian Accounting Standards (Ind AS-7) –
Statement of Cash Flows.

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E /E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

254
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

A. Corporate Information
Kansai Nerolac Paints Limited (the ‘Company’) is a public limited company domiciled in India and incorporated under the provisions of the
Companies Act. The Company’s shares are listed on National Stock Exchange and Bombay Stock Exchange. The registered office of the
Company is located at Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400013. The Company is principally engaged in the
manufacturing of Paints.
Kansai Paint Co., Ltd., Japan is immediate and ultimate holding company of Kansai Nerolac Paints Limited and is based and listed in Japan.
Financial Statements of Kansai Paint Co., Ltd., Japan are available in public domain.
The Standalone Financial Statements for the year ended 31st March, 2022 have been reviewed by the Audit Committee and approved by the
Board of Directors at their meetings held on 10th May, 2022.

B.  Basis of Preparation

1. Statement of compliance
The Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the
Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other
relevant provisions of the Act as amended from time to time.
Details of the Company’s Accounting Policies are included in Note 1.
2. Functional and Presentation currency
The Standalone Financial Statements are presented in Indian Rupees (INR), which is also the Company’s functional currency.
All amounts have been rounded-off to the nearest crores, unless otherwise indicated.
3. Basis of measurement
The Standalone Financial Statements have been prepared on the historical cost basis except for investments in mutual funds, non-
trade equity shares, bonds and provision for employee defined benefit plans, which are measured at fair values at the end of each
reporting period.
4. Use of estimates and judgements
Critical accounting judgments and key sources of estimation uncertainty:
The preparation of the financial statements in conformity with the Ind AS requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at
date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may
differ from these estimates under different assumptions and conditions.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
(i) Critical Judgments
In the process of applying the Company’s accounting policies, management has made the following judgments, which have the
most significant effect on the amount recognised in the financial statements.
Discount rate used to determine the carrying amount of the Company’s defined benefit obligation.
In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government
bonds in currencies consistent with the currencies of the post-employment benefit obligation.
Contingences and Commitments
In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where
the potential liabilities have a low probability of crystallising or are very difficult to quantify reliably, we treat them as contingent
liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no
assurance regarding the final outcome of the legal proceedings, we do not expect them to have a materially adverse impact on
our financial position or profitability.
(ii) Key Sources of Estimation Uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below:
Useful Lives of Property, Plant and Equipment
As described in Note 1(3)(c), the Company reviews the estimated useful lives and residual values of property, plant and equipment
at the end of each reporting period. During the current financial year, the management determined that there were no changes to
the useful lives and residual values of the property, plant and equipment.
Impairment loss allowance on trade receivables
The Company makes loss allowances for credit impaired debts based on an assessment of the recoverability of trade and
other receivables. The identification of credit impaired debts enquires use of judgments and estimates. Where the expectation
is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and credit
impaired debts expenses in the period in which such estimate has been changed.

255
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
B.  Basis of Preparation (contd.)
4. Use of estimates and judgements (contd.)
Allowances for Inventories
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the
aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be
made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for
obsolete and slow-moving inventories has been made in the financial statements.
Impairment of Investments in Subsidiaries
The carrying amount of the Company’s investments in subsidiaries including corporate guarantees provided by the Company
to the lenders of its subsidiaries are assessed at the end of each reporting date to determine whether there are any potential
indicators of impairment. If any such indication exists, then the Company estimates the recoverable amount of such investments.
The determination of recoverable amounts of the Company’s investments in subsidiaries involves significant judgements. Market
related information and estimates are used to determine the recoverable amount. Key assumptions on which management has
based its determination of recoverable amount includes projected sales volume, estimated long-term growth rates, weighted
average cost of capital, estimated operating margins, etc.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model,
which involve various judgements and assumptions.
Defined Benefit Plans
The costs and present value of the defined benefit gratuity plan and other long-term employee benefits are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in
future. These include the determination of appropriate discount rate, salary escalation rate, expected rate of return on assets and
mortality rates. Due to the complexities involved in the valuation and its long-term nature, defined benefit plans are highly sensitive
to changes in these assumptions. All assumptions are reviewed at each reporting date and the same are disclosed in Note 38,
‘Employee benefits’.

C. Recent Accounting Pronouncement

Standards issued but not yet effective
M
 inistry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 has notified certain
amendments to existing Ind AS via notification dated 23 March 2022. The same shall come into force from annual reporting period
beginning on or after *1st April 2022* which the Company has not applied as they are not effective for annual period beginning on or
after 1 April 2021.
Key synopsis are as under:
– Ind AS 16 Property, Plant and Equipment - For items produced during testing/trail phase, clarification added that revenue generated
out of the same shall not be recognised in statement of profit and loss and considered as part of cost of PPE.
– Ind AS 37 Provisions, Contingent Liabilities & Contingent Assets - Guidance on what constitutes cost of fulfilling contracts (to
determine whether the contract is onerous or not) is included.
– Ind AS 101 - First time Adoption of Ind AS - Measurement of Foreign Currency Translation Difference in case of subsidiary/
associate/ JV’s date of transition to Ind AS is subsequent to that of Parent - FCTR in the books of subsidiary/associate/JV can be
measured based Consolidated Financial Statements.
– Ind AS 103 - Business Combination - Reference to revised Conceptual Framework. For contingent liabilities/ levies, clarification is
added on how to apply the principles for recognition of contingent liabilities from Ind AS 37.
Recognition of contingent assets is not allowed.
– Ind AS 109 Financial Instruments - The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’ test in
assessing whether to derecognise a financial liability.
While preparing the financial statement for the year ended 31 March 2022, the above amendments are not considered for disclosure
as standards notified by Ministry of Corporate Affairs, but not yet effective, in accordance with IND AS.

Note 1: Significant Accounting Policies

1. Classification of Assets and Liabilities
Schedule III to the Act, requires assets and liabilities to be classified as either Current or Non-current.
(a) An asset shall be classified as current when it satisfies any of the following criteria:
(i) it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is expected to be realised within twelve months after the reporting date; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting date.
(b) All assets other than current assets shall be classified as non-current.

256
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

1. Classification of Assets and Liabilities (contd.)
(c) A liability shall be classified as current when it satisfies any of the following criteria:
(i) it is expected to be settled in the Company’s normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is due to be settled within twelve months after the reporting date; or
(iv) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the
reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
(d) All liabilities other than current liabilities shall be classified as non-current.
2. Operating Cycle
An operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The
Company has ascertained the operating cycle as twelve months for the purpose of current or non-current classification of assets and
liabilities.
3. Property, Plant and Equipment
(a) Recognition and Measurement
An item of Property, Plant and Equipment that qualifies for recognition as an asset is initially measured at its cost and then carried
at the cost less accumulated depreciation and accumulated impairment, if any.
The cost of an item of Property, Plant and Equipment comprises its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates and any costs directly attributable to bringing the asset to the location
and condition necessary for it to be capable of operating in the manner intended by management. The initial estimate of the costs
of dismantling and removing the item and restoring the site on which it is located is included in the cost of an item of property, plant
and equipment.
The cost of a self-constructed item of Property, Plant and Equipment comprises the cost of materials and direct labor, any other
costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and
removing the item and restoring the site on which it is located.
Tangible Property, Plant and Equipment under construction are disclosed as Capital Work-in-progress. Item of Capital Work-
in-progress is carried at cost using the principles of valuation of item of property, plant and equipment till it is ready for use, the
manner in which intended by management.
(b) Subsequent Expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will
flow to the Company.
(c) Depreciation
The depreciable amount of an item of Property, Plant and Equipment is allocated on a systematic basis over its useful life. The
Company provides depreciation on the straight line method. The Company believes that straight line method reflects the pattern in
which the asset’s future economic benefits are expected to be consumed by the Company. Based on internal technical evaluation,
the management believes useful lives of the assets are appropriate. The depreciation method is reviewed at least at each financial
year-end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied
in the asset, the method is changed to reflect the changed pattern. Such a change is accounted for as a change in an accounting
estimate in accordance with Ind AS 8 – Accounting Policies, Changes in Accounting Estimates and Errors.
Each part of an item of Property, Plant and Equipment with a cost that is significant in relation to the total cost of the item is
depreciated separately.
The depreciation charge for each period is recognised in the Standalone Statement of Profit and Loss unless it is included in the
carrying amount of another asset.
The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 –
Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives for the current and comparative
periods are as follows:
Useful Lives Useful Lives
Asset Class (in years) (in years)
– as per Companies Act, 2013 – as estimated by the Company
Buildings 30-60 30-60
Plant and Equipments 10-20 10-25
Furniture and Fixtures 10 10
Vehicles 10 10
Office Equipments 5 5
Computers 3-6 3-6
Assets for Scientific Research 10-20 20
Assets on Operating Lease NA 5
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use
(disposed off).
Depreciation charge for the year is displayed as depreciation on the face of Standalone Statement of Profit and Loss.

257
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
Note 1: Significant Accounting Policies (contd.)
3. Property, Plant and Equipment (contd.)

(d) Disposal
The carrying amount of an item of Property, Plant and Equipment is derecognised on disposal or when no future economic
benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of Property, Plant and
Equipment is included in Standalone Statement of Profit and Loss when the item is derecognised.
4. Investment Property
(a) Recognition and Measurement
Land or building held to earn rentals or for capital appreciation or both rather than for use in the production or supply of goods or
services or for administrative purposes; or sale in the ordinary course of business is recognised as Investment Property. Land held
for a currently undetermined future use is also recognised as Investment Property.
An investment property is measured initially at its cost. The cost of an investment property comprises its purchase price and any
directly attributable expenditure. After initial recognition, the Company carries the investment property at the cost less accumulated
depreciation and accumulated impairment, if any.

(b) Depreciation
After initial recognition, the Company measures all of its Investment Property in accordance with Ind AS 16 – Property, Plant and
Equipment requirements for cost model. The depreciable amount of an item of Investment Property is allocated on a systematic
basis over its useful life. The Company provides depreciation on the straight line method. The Company believes that straight line
method reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Company. Based
on internal technical evaluation, the management believes useful lives of the assets are appropriate. The depreciation method is
reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of consumption
of the future economic benefits embodied in the asset, the method is changed to reflect the changed pattern. Such a change is
accounted for as a change in an accounting estimate in accordance with Ind AS 8 – Accounting Policies, Changes in Accounting
Estimates and Errors.
The depreciation charge for each period is generally recognised in the Standalone Statement of Profit and Loss.
The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 –
Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives for the current and comparative
periods are as follows:

Useful Lives Useful Lives

Asset Class (in years) (in years)
– as per Companies Act, 2013 – as estimated by the Company

Buildings 30-60 30-60

(c) Fair Value

Fair value of investment property is based on a valuation by an independent valuer who holds a recognised and relevant
professional qualification and has recent experience in the location and category of the investment property being valued. The fair
value of investment property is disclosed in the Note 3.
(d) Gain or loss on Disposal
Any gain or loss on disposal of an Investment Property is recognised in the Standalone Statement of Profit and Loss.

5. Other Intangible Assets

(a) Recognition and Measurement
An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are initially measured at
its cost and then carried at the cost less accumulated amortisation and accumulated impairment, if any.
Research and Development
Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and
understanding. Expenditure incurred on research of an internal project is recognised as an expense in Standalone Statement of
Profit and Loss, when it is incurred.
Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially
improved materials, devices, products, processes, systems or services before the start of commercial production or use. An
intangible asset arising from development is recognised if, and only if, the following criteria are met:
(a) it is technically feasibile to complete the intangible asset so that it will be available for use or sale.
(b) the Company intends to complete the intangible asset and use or sell it.

258
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Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

5. Other Intangible Assets (contd.)

(c) the Company has ability to use or sell the intangible asset.
(d) the Company can demonstrate how the intangible asset will generate probable future economic benefits.
(e) the Company has adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset.
(f) the Company has ability to measure reliably the expenditure attributable to the intangible asset during its development.
Expenditure on research activities is recognised in Standalone Statement of Profit and Loss as incurred.

(b) Subsequent Expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates.All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in Standalone
Statement of Profit and Loss as incurred.

(c) Amortisation

The Company amortises Other Intangible Assets on the straight line method. The Company believes that straight line method
reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Company. The amortisation
method is reviewed at least at each financial year-end and, if there has been a significant change in the expected pattern of
consumption of the future economic benefits embodied in the asset, the method is changed to reflect the changed pattern. Such
a change is accounted for as a change in an accounting estimate in accordance with Ind AS 8 – Accounting Policies, Changes in
Accounting Estimates and Errors.

The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 –
Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives as estimated by management are
as follows:
Useful Lives (in years)
Asset Class
– as estimated by the Company
Software 3
Customer Relationship 5
Brand and Technical Knowhow 5
Non-compete 5

6. Non-current assets or disposal group held for sale

Non-current assets, or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that they
will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any
resultant loss on a disposal group is allocated first to goodwill, and then to remaining assets and liabilities on pro rata basis, except
that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, and biological assets, which
continue to be measured in accordance with the Company’s other accounting policies. Losses on initial classification as held for sale
and subsequent gains and losses on remeasurement are recognised in Standalone Statement of Profit and Loss.
Once assets classified as held-for-sale, then Property, Plant and Equipment, Investment Property and Other Intangible Assets are no
longer required to be depreciated or amortised.

7. Employee Benefits
(a) Short-term Employee Benefits:
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount
of obligation can be estimated reliably.
(b) Post-Employment Benefits:
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity
and will have no legal or constructive obligation to pay further amounts.

(i) Provident and Family Pension Fund

The eligible employees of the Company are entitled to receive post employment benefits in respect of provident and family
pension fund, in which both the employees and the Company make monthly contributions at a specified percentage of
the employees’ eligible salary (currently 12% of employees’ eligible salary). The contributions are made to the Regional
Provident Fund Commissioner (RPFC) which are charged to the Standalone Statement of Profit and Loss as incurred.

259
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
Note 1: Significant Accounting Policies (contd.)
7. Employee Benefits (contd.)
(b)
Post-Employment Benefits (contd.):
In respect of contribution to RPFC, the Company has no further obligations beyond making the contribution, and hence, such
employee benefit plan is classified as Defined Contribution Plan. The Company’s contribution is recognised as an expense
in the Standalone Statement of Profit and Loss.
(ii)
Superannuation
The eligible employees of the Company are entitled to receive post employment benefits in respect of superannuation fund
in which the Company makes annual contribution at a specified percentage of the employees’ eligible salary (currently 15%
of employees’ eligible salary). The contributions are made to the Life Insurance Corporation of India (LIC). Superannuation
is classified as Defined Contribution Plan as the Company has no further obligations beyond making the contribution. The
Company’s contribution is recognised as an expense in the Standalone Statement of Profit and Loss.
Defined Benefit Plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in
respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current
and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset
ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in Other Comprehensive Income.
The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying
the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined
benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of
contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in
Standalone Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service
(‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss. The
Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides
a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an
amount equivalent to 15 days to one month salary payable for each completed year of service or part there of equal to or in excess
of six months depending upon category of employee. Vesting occurs upon completion of five years of service. The Company
has obtained insurance policies with the Life Insurance Corporation of India (LIC) and makes an annual contribution to LIC for
amounts notified by LIC. The Company accounts for gratuity benefits payable in future based on an independent external actuarial
valuation carried out at the end of the year using the projected unit credit method. Actuarial gains and losses are recognised as
Other Comprehensive Income.

Provident Fund Trust

In respect of contribution to the trust set up by the Company, since the Company is obligated to meet interest shortfall, if any,
with respect to covered employees, such employee benefit plan for eligible employees is classified as Defined Benefit Plan. Any
obligation in this respect is measured on the basis of independent actuarial valuation.

(c) Retirement Benefits to Executive Directors

The liability for special retirement benefit to the Executive Directors who became entitled prior to the discontinuation of the
policy, is recognised in the balance sheet at its present value of the defined benefit obligation at the end of the reporting period.
The defined benefit obligation is calculated annually by actuaries using the projected united credit method.
The present value of the said obligation is determined by discounting the estimated future cash outflows, using market yields of
government bonds that have tenure approximating the tenures of the related liability.
The interest expense is calculated by applying the discount rate to the defined benefit liability. The interest expense on the defined
benefit liability is recognised in the Standalone Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in
the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Standalone
Statement of Changes in Equity and in the Standalone Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised
immediately in profit or loss as past service cost.

260
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Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

7. Employee Benefits (contd.)
(d) Other Long-term Employee Benefits - Compensated Absences
The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to
accumulate leave subject to certain limits for future encashment/availment. The Company makes provision for compensated
absences based on an independent actuarial valuation carried out at the end of the year. Actuarial gains and losses are recognised
in the Standalone Statement of Profit and Loss.

8. Inventories
(a) Measurement of Inventory
The Company measures its inventories at the lower of cost and net realisable value.
(b) Cost of Inventories
The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories
to their present location and condition.
The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently
recoverable by the entity from the Tax authorities), and transport, handling and other costs directly attributable to the acquisition
of finished goods, materials and services. Trade discounts, rebates and other similar items are deducted in determining the costs
of purchase.
The costs of conversion of inventories include costs directly related to the units of production and a systematic allocation of fixed
and variable production overheads that are incurred in converting materials into finished goods.
Other costs are included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their
present location and condition.
The cost of inventories is assigned by weighted average cost formula. The Company uses the same cost formula for all inventories
having a similar nature and use to the Company.
(c) Net realisable value
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale. Net realisable value is ascertained for each item of inventories with reference to
the selling prices of related finished products.
The practice of writing inventories down below cost to net realisable value is consistent with the view that assets should not be
carried in excess of amounts expected to be realised from their sale or use. Inventories are usually written down to net realisable
value item by item. Estimates of net realisable value of finished goods and stock-in-trade are based on the most reliable evidence
available at the time the estimates are made, of the amount the inventories are expected to realise. These estimates take
into consideration fluctuations of price or cost directly relating to events occurring after the end of the period to the extent that
such events confirm conditions existing at the end of the period. Materials and other supplies held for use in the production of
inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold
at or above cost. However, when a decline in the price of materials indicates that the cost of the finished products exceeds net
realisable value, the materials are written down to net realisable value.
Amount of any reversal of write-down of inventories shall be recognised as an expense as when the event occurs.
A new assessment is made of net realisable value in each subsequent period. When the circumstances that previously caused
inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the amount of the write-down is reversed. Amounts such reversed shall be
recognised as a reduction in the amount of inventories recognised as an expense in the period in which reversal occurs.
(d) Valuation of Spare parts, stand-by equipments and servicing equipments
Spare parts, stand-by equipment and servicing equipment are recognised as Property, Plant and Equipment if and only if it is
probable that future economic benefits associated with them will flow to the Company and their cost can be measured reliably.
Otherwise such items are classified and recognised as Inventory.
9. Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of
meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify as a cash equivalent it
must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. Therefore, an investment
normally qualifies as a cash equivalent only when it has a short maturity of, say, three months or less from the date of acquisition. For the
purpose of Cash Flow Statement cash and cash equivalent includes bank overdrafts which are repayable on demand.

261
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
Note 1: Significant Accounting Policies (contd.)
10. Government Grants
Government grants are assistance by government in the form of transfers of resources to the Company in return for past or future
compliance with certain conditions relating to the operating activities of the Company. Government grants are not be recognised until
there is reasonable assurance that the Company will comply with the conditions attaching to them and the grants will be received.
Government grants are recognised in Statement of Profit and Loss on a systematic basis over the periods in which the Company
recognises as expenses the related costs for which the grants are intended to compensate.
11. Provisions and Contingent Liabilities
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on technical
evaluation, historical warranty data and a weighting of all possible outcomes by their associated probabilities.
Restructuring
A provision for restructuring is recognised when the Company has approved a detailed formal restructuring plan, and the restructuring
either has commenced or has been announced publicly.
Onerous contracts
A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the contract are
lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the
present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
Before such a provision is made, the Company recognises any impairment loss on the assets associated with that contract.
12. Revenue Recognition
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the
Company expects to receive in exchange for those goods.
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which is usually on
dispatch / delivery.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, rebates, scheme
allowances, price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes
taxes collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated (using the
most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short
nature of credit period given to customers, there is no financing component in the contract.
The Company has adopted Ind AS – 115 Revenue from contracts with customers, with effect from 1st April, 2018. Ind AS – 115
establishes principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash flows arising
from the contracts with its customers and replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts.
The Company has adopted Ind AS – 115 using the cumulative effect method whereby the effect of applying this standard is recognised
at the date of initial application (i.e. 1st April, 2018). Accordingly, the comparative information in the Standalone Statement of Profit and
Loss is not restated. Impact on adoption of Ind AS – 115 is not material.
Interest Income
Interest income is recognised using the effective interest method as set out in Ind AS 109 – Financial Instruments: Recognition and
Measurement, when it is probable that the economic benefits associated with the transaction will flow to the Company and the amount
of the revenue can be measured reliably. The effective interest method is a method of calculating the amortised cost of a financial asset
or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over
the relevant period.
Royalty Income
Royalty income is recognised on an accrual basis in accordance with the substance of the relevant agreement when it is probable that the
economic benefits associated with the transaction will flow to the Company and the amount of the revenue can be measured reliably.
Dividend Income
Dividend income is recognised when right to receive payment is established and it is probable that the economic benefits associated
with the transaction will flow to the Company and the amount of the revenue can be measured reliably.

13. Foreign Currency Transactions

Functional currency is the currency of the primary economic environment in which the Company operates whereas presentation
currency is thecurrency in which the financial statements are presented. Indian Rupee is the functional as well as presentation currency
for the Company.
A foreign currency transaction is recorded, on initial recognition in the functional currency, by applying to the foreign currency amount
the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

262
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

13. Foreign Currency Transactions (contd.)
A
 t the end of each reporting period, foreign currency monetary items are translated using the closing rate whereas non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction;
and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when
the fair value was measured.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at
which they were translated on initial recognition during the period or in previous Financial Statements are recognised in the Standalone
Statement of Profit and Loss in the period in which they arise. When a gain or loss on a non-monetary item is recognised in Other
Comprehensive Income, any exchange component of that gain or loss is recognised in Other Comprehensive Income. Conversely,
when a gain or loss on a non-monetary item is recognised in Standalone Statement of Profit and Loss, any exchange component of
that gain or loss is recognised in Standalone Statement of Profit and Loss.
14. Taxation
Income tax
Income tax comprises current tax and deferred tax expense. It is recognised in Standalone Statement of Profit and Loss except to the
extent that it relates to a business combination or to an item recognised directly in Equity or in Other Comprehensive Income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax
payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected
to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws)
enacted or substantively enacted by the reporting date.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax is not recognised for:
a temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss at the time of the transaction;
b taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can
be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case
of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary
differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset
can be realised. Deferred tax assets – unrecognised or recognised, are reviewed at each reporting date and are recognised/reduced
to the extent that it is probable/no longer probable respectively that the related tax benefit will be realised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled,
based on the laws that have been enacted or substantively enacted by the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at
the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
15. Lease
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low
value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use
the underlying assets.
(i) Right-of-use Assets (ROU Assets)
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful
lives of the assets, as follows:
Leasehold land 90 to 99 years
Buildings 2 to 10 years
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to
impairment. Refer to the accounting policies in note 19 Impairment of non-financial assets.

263
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
Note 1: Significant Accounting Policies (contd.)
15. Lease (contd.)
(ii) Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In
calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change
in the assessment of an option to purchase the underlying asset.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified
as financing cash flows.

(iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e.,
those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option).
It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low
value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis
over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset
are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in
which they are earned.

16. Financial Instruments

(a) Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and
financial liabilities are initially recognised when the Company becomes a party to the contractual terms of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at Fair Value through Profit and Loss
(FVTPL), transaction costs that are directly attributable to its acquisition or issue.

(b) Classification and subsequent measurement

Financial assets
On initial recognition, a financial asset is measured at
— amortised cost;
— Fair Value through Other Comprehensive Income (FVOCI) – debt investment;
— Fair Value through Other Comprehensive Income – equity investment; or
— FVTPL
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its
business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
— the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
— the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subse-
quent changes in the investment’s fair value in OCI (designated as FVOCI – equity investment). This election is made on an
investment‑by‑investment basis.

264
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

16. Financial Instruments (contd.)
(b) Classification and subsequent measurement (contd.)
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that oth-
erwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Financial assets: Subsequent measurement and gains and losses
Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any
interest or dividend income, are recognised in Standalone Statement of Profit and Loss.
Financial assets at These assets are subsequently measured at amortised cost using the effective interest
amortised cost method. The amortised cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses and impairment are recognised in Standalone Statement of Profit
and Loss. Any gain or loss on derecognition is recognised in Statement of Profit and Loss.
Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income under the effective
interest method, foreign exchange gains and losses and impairment are recognised in
Standalone Statement of Profit and Loss. Other net gains and losses are recognised in
OCI. On derecognition, gains and losses accumulated in OCI are reclassified to Standalone
Statement of Profit and Loss.
Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income
in Standalone Statement of Profit and Loss unless the dividend clearly represents a recovery
of part of the cost of the investment. Other net gains and losses are recognised in OCI and
are not reclassified to Standalone Statement of Profit and Loss.
Financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and losses, including any interest expense, are recognised in Statement of Profit and Loss.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in Standalone Statement of Profit and Loss. Any gain or loss on derecognition
is also recognised in Standalone Statementof Profit and Loss.
(c) Derecognition
Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks
and rewards of ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are
substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference
between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised
in Standalone Statement of Profit and Loss.
(d) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to
realise the asset and settle the liability simultaneously.
(e) Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risk. Such
derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered and are
subsequently re-measured at fair value. Any changes therein are recognised in the statement of profit and loss.

17. Borrowing Cost

The Company capitalises borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
as part of the cost of that asset. The Company recognises other borrowing costs as an expense in the period in which it incurs them.
Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds including exchange
differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

265
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
Note 1: Significant Accounting Policies (contd.)
18. Earnings Per Share
Basic earnings per share
The Company calculates basic earnings per share amounts for profit or loss attributable to ordinary equity holders and, if presented,
profit or loss from continuing operations attributable to those equity holders.
Basic earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders (the numerator) by the weighted
average number of ordinary shares outstanding (the denominator) during the period.
The weighted average number of ordinary shares outstanding during the period and for all periods presented shall be adjusted for
events, other than the conversion of potential ordinary shares, that have changed the number of ordinary shares outstanding without a
corresponding change in resources.
Diluted earnings per share
The Company calculates diluted earnings per share amounts for profit or loss attributable to ordinary equity holders and, if presented,
profit or loss from continuing operations attributable to those equity holders.
For the purpose of calculating diluted earnings per share, the Company adjusts profit or loss attributable to ordinary equity holders, and
the weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares, if any.
For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares calculated for calculating basic
earnings per share and adjusted the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive
potential ordinary shares into ordinary shares. Dilutive potential ordinary shares are deemed to have been converted into ordinary
shares at the beginning of the period or, if later, the date of the issue of the potential ordinary shares.

19. Impairment Loss

Impairment of Financial Assets
The Company recognises loss allowances for expected credit losses on:
— financial assets measured at amortised cost; and
— financial assets measured at FVOCI- debt investments.
At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit‑impaired. A financial asset
is ‘credit impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset
have occurred.
In accordance with Ind AS 109 – Financial Instruments, the Company follows ‘simplified approach’ for recognition of impairment loss
allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based on lifetime expected credit loss at each reporting date, right from its initial
recognition.
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of
recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that
could generate sufficient cash flows to repay the amounts subject to the write‑off. However, financial assets that are written off could
still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.
Impairment of Non Financial Assets
An impairment loss is the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount.
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs of disposal and its value in use.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Value in use is based on the estimated future cash flows, discounted to their present value using
a pre-tax discount rate.
The Company assesses at the end of each reporting period whether there is any indication that an asset is impaired. In assessing
whether there is any indication that an asset may be impaired, the Company considers External as well as Internal Source of Information.
If any such indication exists, the Company estimates the recoverable amount for the individual asset. If, and only if, the recoverable
amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An
impairment loss is recognised immediately in profit or loss, unless the asset is carried at revalued amount in accordance with another
Accounting Standards.
If it is not possible to estimate the recoverable amount of the individual asset, the Company determines the recoverable amount of the
cash generating unit to which the asset belongs (the asset’s cash-generating unit). A cash-generating unit is the smallest identifiable
group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The
Company recognises impairment loss for a cash-generating unit if, and only if, the recoverable amount of the cash-generating unit is
less than the carrying amount of the cash-generating unit. The Company allocates impairment loss of cash-generating units first to the
carrying amount of goodwill allocated to the cash-generating units, if any, and then, to the other assets of the cash-generating units
pro rata on the basis of the carrying amount of each asset in the cash-generating unit. These reductions in carrying amounts shall be
treated as impairment losses on individual assets and recognised accordingly.

266
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

20. Measurement of fair values
A number of the Companies accounting policies and disclosures require the measurement of fair values, for both financial and non-
financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team
that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly
to the Chief Financial Officer.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as
broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third
parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy
in which the valuations should be classified.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used
to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement
is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
has occurred.
21. Business Combination
Business combinations arising from transfers or interests in entities that are under the control of the shareholders that controls the
Company are accounted for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later,
at the date that common control was established; for this purpose comparatives are revised, The assets and liabilities acquired are
recognised at their carrying amounts. The identity of the reserves is preserved and they appear in the standalone financial statements
of the Company in the same form in which they appeared in the standalone financial statements of the acquired entity. The difference,
if any, between the net assets acquired and cancellation of share capital of the acquired entity is transferred to other equity.
22. Investment in Subsidiaries
A subsidiary is an entity that is controlled by the Company.
The Company accounts for the investments in equity shares of subsidiaries at cost in accordance with Ind AS 27 – Separate Financial
Statements.

267
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

2. Property, Plant and Equipment ` in Crores

Gross Block Accumulated Depreciation Net Block

Description As at As at As at As at As at
1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March, 31st March,
2021 2022 2021 2022 2022

Freehold Land ..................... 90.06 — — 90.06 — — — — 90.06

(90.06) (—) (—) (90.06) (—) (—) (—) (—) (90.06)
Buildings............................... 757.48 109.29 — 866.77 168.06 23.75 — 191.81 674.96
(734.31) (23.70) (0.53) (757.48) (145.75) (22.44) (0.13) (168.06) (589.42)
Plant and Equipments.......... 1249.42 59.53 0.90 1308.05 461.04 58.48 0.83 518.69 789.36
(1194.97) (60.27) (5.82) (1249.42) (409.72) (57.09) (5.77) (461.04) (788.38)
Furniture and Fixtures.......... 22.12 0.56 0.01 22.67 16.75 0.92 0.01 17.66 5.01
(20.81) (1.49) (0.18) (22.12) (16.09) (0.84) (0.18) (16.75) (5.37)

Vehicles................................ 1.32 0.11 0.37 1.06 1.02 0.08 0.34 0.76 0.30
(1.17) (0.15) (—) (1.32) (0.93) (0.09) (—) (1.02) (0.30)
Office Equipments................ 14.41 0.79 0.01 15.19 12.29 0.91 0.01 13.19 2.00
(14.21) (0.34) (0.14) (14.41) (11.54) (0.89) (0.14) (12.29) (2.12)

Computers............................. 51.31 8.05 6.70 52.66 43.94 3.81 6.70 41.05 11.61
(49.65) (1.91) (0.25) (51.31) (40.13) (4.06) (0.25) (43.94) (7.37)
Assets for Scientific 78.27 0.59 — 78.86 20.53 3.06 — 23.59 55.27
Research*............................. (76.35) (1.92) (—) (78.27) (17.48) (3.05) (—) (20.53) (57.74)
Assets given on 351.79 31.53 7.27 376.05 281.55 29.07 7.27 303.35 72.70
Operating Lease
(Refer Note 2.5).................... (337.65) (24.31) (10.17) (351.79) (262.99) (28.73) (10.17) (281.55) (70.24)

Total Tangible Assets......... 2616.18 210.45 15.26 2811.37 1005.18 120.08 15.16 1110.10 1701.27
(2519.18) (114.09) (17.09) (2616.18) (904.63) (117.19) (16.64) (1005.18) (1611.00)

* Net block includes Buildings ₹ 24.58 Crores (2020-2021 ₹ 25.01 Crores), Plant and Equipment ₹ 26.94 Crores (2020-2021
₹ 28.37 Crores) and Furniture and Fixtures ₹ 3.75 Crores (2020-2021 ₹ 4.36 Crores).
2.1. Figures in the brackets are the corresponding figures in respect of the previous year.
2.2. No items of Property, Plant and Equipment were pledged as security for liabilities during any part of the current and comparative period.
2.3. Nil amount of borrowing costs is capitalised during the current and comparative period.
2.4. Nil amount of impairment loss is recognised during the current and comparative period.
2.5 The Company has given Colour Dispenser Machines on operating lease to its dealers. Particulars in respect of such leases are as
follows:
(a) (i) The gross carrying amount and the accumulated depreciation at the Balance Sheet date are ₹ 376.05 Crores (2020-2021
₹ 351.79 Crores) and ₹ 303.35 Crores (2020-2021 ₹ 281.55 Crores) respectively.
(ii) Depreciation recognised in the Standalone Statement of Profit and Loss is ₹ 29.07 Crores (2020-2021 ₹ 28.73 Crores).
(b) The Company enters into three years cancellable lease agreements. However, the corresponding lease rentals may be receivable
for a shorter period or may be waived off. The minimum aggregate lease payments to be received in future is considered as ₹ Nil.
Accordingly, the disclosure of the present value of minimum lease payments receivable at the Balance Sheet date is not made.

268
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

2A. Capital work-in-progress Ageing Schedule

As at 31st March, 2022 ₹ in Crores
Amount in CWIP for a period of
Particulars Less than 1 year More than 3 Total
1-2 years 2-3 years years
Projects in progress............................... 78.78 44.00 75.61 17.45 215.84
Projects temporarily suspended*........... 1.03 4.35 1.66 1.00 8.04
Total ..................................................... 79.81 48.35 77.27 18.45 223.88

As at 31st March, 2021 ₹ in Crores

Amount in CWIP for a period of
Particulars Total
Less than 1 year 1-2 years 2-3 years More than 3 years
Projects in progress............................... 97.86 84.88 18.66 4.43 205.83

Projects temporarily suspended............ — — — — —

Total . .................................................... 97.86 84.88 18.66 4.43 205.83
Project completion is overdue or has exceeded its cost compared to its original plan : Not Applicable
* Vizag project has been temporarily suspended.

2B. Right of Use Assets (ROU) ` in Crores

Gross Block Accumulated Amortisation Net Block

Description As at As at As at As at As at
1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March, 31st March,
2021 2022 2021 2022 2022
Leasehold Land........................ 75.50 — — 75.50 5.53 0.84 — 6.37 69.13
(75.50) (—) (—) (75.50) (4.68) (0.85) (—) (5.53) (69.97)

Buildings................................... 108.52 43.75 5.83 146.44 27.94 26.66 4.18 50.42 96.02
(67.03) (54.91) (13.42) (108.52) (13.61) (24.12) (9.79) (27.94) (80.58)

Total Right of Use ­Assets

(ROU) ...................................... 184.02 43.75 5.83 221.94 33.47 27.50 4.18 56.79 165.15
(142.53) (54.91) (13.42) (184.02) (18.29) (24.97) (9.79) (33.47) (150.55)

2B.1. Figures in the brackets are the corresponding figures in respect of the previous year.
2B.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
2B.3. Nil amount of impairment loss is recognised during the current and comparative periods.
2B.4. The title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements
are duly executed in favour of the lessee) included in Right of use assets (ROU), which are not held in the name of the
Company are as indicated below:

Description of Property Gross Held in name of Whether Period held Reason for not being held in the
carrying value promoter, – indicate name of Company
(₹ in Crores) director or range, where
their relative appropriate
or employee
Leasehold land at Goa 0.30 Marpol Private Limited No Less than 1 These properties were acquired
year pursuant to a scheme of
amalgamation and continue to
Leasehold land at Vapi 0.12 Perma Construction Aids No Less than 1 be registered in the name of
Private Limited year amalgamating Companies.

269
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

3. Investment Property
` in Crores
Gross Block Accumulated Depreciation Net Block

Description As at As at As at As at As at
1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March, 31st March,
2021 2022 2021 2022 2022

Freehold Land ........................ 0.07 — — 0.07 — — — — 0.07

(0.07) (—) (—) (0.07) (—) (—) (—) (—) (0.07)
Leasehold Land....................... 0.01 — — 0.01 — — — — 0.01
(0.01) (—) (—) (0.01) (—) (—) (—) (—) (0.01)
Buildings . ............................... 3.39 — — 3.39 3.29 — — 3.29 0.10
(3.39) (—) (—) (3.39) (3.29) (—) (—) (3.29) (0.10)
Total Investment Property.... 3.47 — — 3.47 3.29 — — 3.29 0.18
(3.47) (—) (—) (3.47) (3.29) (—) (—) (3.29) (0.18)

3.1. Figures in the brackets are the corresponding figures in respect of the previous year.
3.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
3.3. Nil amount of impairment loss is recognised during the current and comparative periods.
3.4. During the financial year, no rental income was generated from the investment properties whereas direct operating expenses of
₹ 0.26 Crores (2020-2021 ₹ 0.27 Crores) were incurred and recorded as expense in the Standalone Statement of Profit and Loss.
3.5. Total fair value of Investment Property is ₹ 1354.98 Crores (2020-2021 ₹ 1400.29 Crores).

Fair Value Hierarchy

The fair value of investment property has been determined by external independent property valuers, having
appropriate recognised professional qualification and recent experience in the location and category of the property
being valued.
The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on
the inputs to the valuation techniques used.

Description of Valuation Technique used


The Company obtains Independent Valuations of its investment property. The fair value of the investment property
have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of
the investment property to similar properties that have actually been sold in arms-length distance from investment
property or are offered for sale in the same region. This approach demonstrates what buyers have historically been
willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly
useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads
to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity
to the investment property; these instances have been assessed for their locational comparative advantages and
disadvantages while arriving at the indicative price assessment for investment property.

4. Other Intangible Assets

` in Crores
Gross Block Accumulated Amortisation Net Block

Description As at As at As at As at As at
1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March, 31st March,
2021 2022 2021 2022 2022

Software .............................................. 19.15 0.78 — 19.93 17.93 1.02 — 18.95 0.98

(19.15) (—) (—) (19.15) (16.30) (1.63) (—) (17.93) (1.22)
Customer Relationship ........................ 5.45 — — 5.45 2.18 1.09 — 3.27 2.18
(5.45) (—) (—) (5.45) (1.09) (1.09) (—) (2.18) (3.27)
Brand and Technical Knowhow............ 14.38 — — 14.38 7.33 2.88 — 10.21 4.17
(14.38) (—) (—) (14.38) (4.45) (2.88) (—) (7.33) (7.05)
Non-compete . ..................................... 6.28 — — 6.28 3.01 1.25 — 4.26 2.02
(6.28) (—) (—) (6.28) (1.76) (1.25) (—) (3.01) (3.27)

Total Other Intangible Assets........... 45.26 0.78 — 46.04 30.45 6.24 — 36.69 9.35
(45.26) (—) (—) (45.26) (23.60) (6.85) (—) (30.45) (14.81)
4.1. Figures in the brackets are the corresponding figures in respect of the previous year.
4.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
4.3. Nil amount of impairment loss is recognised during the current and comparative periods.

270
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

5. Non-current Investments
` in Crores
As at As at
31st March, 2022 31st March, 2021

Investments in Equity Instruments:

i. Subsidiary Companies at Cost (Unquoted)
1. KNP Japan Private Limited...................................... 7.87 7.87
8,84,000 Equity Shares of NPR 100 each fully
paid up (8,84,000 Equity Shares of NPR 100 each
fully paid up)
2. Kansai Paints Lanka (Private) Limited.................... 35.61 35.61
10,39,99,998 Equity Shares of LKR 10 each fully
paid up (10,39,99,998 Equity Shares of LKR
10 each fully paid up)
Less: Impairment loss (Refer Note 44).................. (22.21) (10.82)
13.40 24.79
3. Kansai Nerolac Paints (Bangladesh) Limited......... 56.51 56.51
(formerly known as RAK Paints Limited)
5,06,00,000 Equity Shares of BDT 10 each fully
paid up (5,06,00,000 Equity Shares of BDT
10 each fully paid up)
4. Nerofix Private Limited........................................... 12.00 12.00
1,20,00,000 Equity Shares of ₹ 10 each fully paid
up (1,20,00,000 Equity Shares of ₹ 10 each fully
paid up)
ii. Others at FVTPL
1. National Thermal Power Corporation Ltd. 0.66 0.52
(Quoted).................................................................
48,628 Equity Shares of ₹ 10 each fully paid up
(48,628 Equity Shares of ₹ 10 each fully paid up)
2. Paints and Coatings Skill Council (Unquoted)........ 0.02 0.02
10 Equity Shares of ₹ 25,000 each fully paid up
(10 Equity Shares of ₹ 25,000 each fully paid up)
3. Beta Wind Farm Pvt Ltd. (Unquoted)..................... 0.36 0.36
1,90,741 Equity Shares of ₹ 10 each fully paid up
(1,90,741 Equity Shares of ₹ 10 each fully paid up)
Investments in Debenture:
1. 8.49% National Thermal Power Corporation 0.05 0.05
(NTPC) (Quoted)....................................................
40,524 Non Convertible Debenture of ₹ 10 each
fully paid up (40,524 Non Convertible Debenture
of ` 10 each fully paid up)

Total Non-current Investments 90.87 102.12

Aggregate book value of quoted investments..............

0.71 0.57
Aggregate market value of quoted investments........... 0.71 0.57
Aggregate amount of unquoted investments............... 112.37 112.37
Aggregate amount of impairment in value of
investments......................................................................... 22.21 10.82

271
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

6. Other Financial Assets

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Security Deposits................................................................................................... 13.70 14.72
13.70 14.72

7. Other non-current assets

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Capital Advances................................................................................................... 56.16 64.93
Prepaid Expenses.................................................................................................. 8.25 2.85
Balances with Indirect Tax Authorities.................................................................... 23.21 22.39
87.62 90.17

8. Inventories
` in Crores
As at As at
31st March, 2022 31st March, 2021
Raw Materials . .......................................................................................................... 478.50 345.01
Packing Materials....................................................................................................... 18.15 14.58
Work-in-progress........................................................................................................ 141.30 99.33
Finished Goods.......................................................................................................... 807.90 585.54
Stock-in-trade............................................................................................................. 74.66 58.04
Stores and Spares...................................................................................................... 11.03 9.31
1531.54 1111.81
Inventories of erstwhile Marpol Priavte Limited were hypothecated as security for liabilities during the comparable period for working
capital loan taken.
Nil amount of inventories were written down to net realisable value during the current and comparable period. Similarly, Nil amount
of reversal of write down was accounted during the current and comparable periods.
Cost of inventory recognised as an expense during the year as per note 29 to 30.

9. Current Investments
` in Crores
As at As at
31st March, 2022 31st March, 2021

(A) Investments in Bonds at FVTPL (Quoted).......................................................... 9.52 16.23

(B) Mutual Funds at FVTPL (Unquoted)................................................................... 199.94 651.83
Total Current Investment (A + B)................................................... 209.46 668.06

Aggregate book value of quoted investments................................... 9.52 16.23

Aggregate market value of quoted investments............................... 9.52 16.23
Aggregate amount of unquoted investments.................................... 199.94 651.83
Aggregate amount of impairment in value of investments................ Nil Nil

272
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

10. Trade Receivables

` in Crores
As at As at
31st March, 2022 31st March, 2021
Secured, Considered Good......................................................... — —
Unsecured, Considered Good*................................................... 965.43 846.50
Significant increase in Credit Risk .............................................. — —
Credit Impaired............................................................................ 35.22 32.86
Loss Allowance............................................................................ (35.22) (32.86)
— —
965.43 846.50
* R
 eceivable from subsidiary company, in which director of
the Company is a director
KNP Japan Private Limited.......................................................... 1.97 0.86
Kansai Paints Lanka (Private) Limited........................................ 0.62 1.49
Kansai Nerolac Paints (Bangladesh) Limited 5.35 3.67
(formerly known as RAK Paints Limited).....................................
Nerofix Private Limited................................................................ 0.56 0.24

Trade receivables of erstwhile Marpol Priavte Limited were hypothecated as security for liabilities during the comparable period for
working capital loan taken.

Trade Receivables Ageing Schedule

As at 31 March 2022 ` in Crores
Outstanding for following periods from due date of payment
Particulars Not Due Less than 6 months 1-2 years 2-3 years More than Total
6 months -1 year 3 years
(i) Undisputed Trade receivables – considered good............... 807.73 135.28 14.01 4.67 1.86 1.89 965.43
(ii) Undisputed Trade Receivables – which have significant
increase in credit risk............................................................ — — — — — — —
(iii) Undisputed Trade Receivables – credit impaired................. — — — — — — —
(iv) Disputed Trade Receivables considered good..................... — — — — — — —
(v) Disputed Trade Receivables – which have significant
increase in credit risk............................................................ — — — — — — —
(vi) Disputed Trade Receivables – credit impaired . .................. — — 2.59 6.05 4.56 22.02 35.22

As at 31 March 2021 ` in Crores

Outstanding for following periods from due date of payment
Particulars Not Due Less than 6 months 1-2 2-3 years More than Total
6 months -1 year years 3 years
(i) Undisputed Trade receivables – considered good.............. 721.88 106.92 6.39 5.14 3.90 2.27 846.50
(ii) Undisputed Trade Receivables – which have significant
increase in credit risk........................................................... — — — — — — —
(iii) Undisputed Trade Receivables – credit impaired................ — — — — — — —
(iv) Disputed Trade Receivables considered good.................... — — — — — — —
(v) Disputed Trade Receivables – which have significant
increase in credit risk........................................................... — — — — — — —
(vi) Disputed Trade Receivables – credit impaired . ................. — — — 6.70 11.10 15.06 32.86

11. Cash and Cash equivalents

` in Crores

As at As at
31st March, 2022 31st March, 2021
Cash on hand............................................................................................................. 0.08 0.08
Cheques on hand....................................................................................................... 23.34 16.78
Banks balances.......................................................................................................... 43.02 63.44
66.44 80.30

273
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

12.  Bank Balance other than Cash and cash equivalents

` in Crores

As at As at
31st March, 2022 31st March, 2021
Unpaid Dividend Accounts....................................................................................... 2.46 2.37
Fixed Deposit with Bank with more than 3 months but less than 12 month maturity..... 11.75 0.64
14.21 3.01

13. Other Current Financial Assets

` in Crores

As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Security Deposits.................................................................................................. 7.09 6.30
GST Incentive Receivable..................................................................................... 9.86 —
Other Receivable*
[Includes receivable from mutual fund ₹ Nil (2020-2021 ₹ 48.00 Crores)]............ 12.22 55.51
29.17 61.81
* Includes ₹ 2.36 Crores (2020-2021 ₹ 2.10 Crores) receivable from subsidiary company – KNP Japan Private Limited, private
company in which director of the Company is a director

14. Other Current Assets

` in Crores

As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Balances with Indirect Tax Authorities . ................................................................ 80.37 94.93
Trade Advances.................................................................................................... 53.35 48.89
Prepaid Expenses................................................................................................. 11.40 16.15
Other Receivable.................................................................................................. 9.94 3.22
155.06 163.19

15. Share Capital

As at As at
31st March, 2022 31st March, 2021
1. Authorised Share Capital (` in Crores)................................................... 66.50 66.50
Par Value per Share (`)........................................................................... 1.00 1.00

Number of Equity Shares........................................................................ 66,50,00,000 66,50,00,000

2. Issued, Subscribed and Fully Paid up (₹ in Crores)................................ 53.89 53.89

Par Value per Share (`)........................................................................... 1.00 1.00
Number of Equity Shares........................................................................ 53,89,19,720 53,89,19,720

3. Details of Shareholders holding more than 5% of shares:

% No. of % No. of
Shares Shares
Holding Company:
Kansai Paint Co., Ltd., Japan............................................................ 74.99 40,41,35,898 74.99 40,41,35,898
4. Aggregated number of bonus share issued during the period of five years
immediately preceding the reporting date by capitalisation of security
premium reserve..................................................................................... Nil Nil

274
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

15. Share Capital (contd.)

As at As at
31st March, 2022 31st March, 2021
5. The Company has issued one class of shares, i.e. equity shares,
which enjoys similar rights in respect of voting, payment of dividend
and repayment of capital. On winding up of the Company, the holders
of equity shares will be entitled to receive the residual assets of the
Company, remaining after distribution of all preferential amounts in
proportion to the number of equity shares held.
6. Reconciliation of the number of shares outstanding:
Number of shares at the beginning of the year....................................... 53,89,19,720 53,89,19,720
Issued during the year............................................................................ — —

Number of shares at the end of the year................................................ 53,89,19,720 53,89,19,720

7. Disclosure of Shareholding of Promoters:
Name of Promotor:
Kansai Paint Co., Ltd., Japan
Details of shares held by promoters:
No. of shares at the beginning of the year.............................................. 40,41,35,898 40,41,35,898
Change during the year.......................................................................... — —
No. of shares at the end of the year........................................................ 40,41,35,898 40,41,35,898
% of Total Shares.................................................................................... 74.99 74.99
% change during the year....................................................................... — —
8. Capital Management:
For the purpose of the Company’s capital management, capital includes
issued equity share capital and all other equity reserves attributable to
the equity holders of the Company. The Company’s policy is to maintain
a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business.
Management monitors the return on capital, as well as the levels of
dividends to equity shareholders. The Company is not subject to any
externally imposed capital requirements.

16. Other Equity

` in Crores
Capital Securities General Retained
Total
Reserve I Premium I Reserve I Earnings I
Balance as at 1 April, 2021................................................
st
0.30 12.56 487.67 3522.60 4023.13
Profit for the period............................................................. — — — 374.33 374.33
Other Comprehensive Income:
Remeasurement of Employee Defined Benefit Liability ..... — — — 3.35 3.35
Deferred Tax on Remeasurement of Employee Defined
Benefit Liability.................................................................. — — — (0.84) (0.84)
Total Other Comprehensive Income for the period,
net of tax...................................................................... — — — 2.51 2.51
Total Comprehensive Income for the Year........................ — — — 376.84 376.84
Transaction with Owners in their Capacity as Owners,
recorded directly in equity:
Dividends......................................................................... — — — (282.93) (282.93)
— — — (282.93) (282.93)
Balance as at 31 March, 2022...........................................
st
0.30 12.56 487.67 3616.51 4117.04

275
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

16. Other Equity (contd.)

` in Crores
Capital Securities General Retained
Total
Reserve Premium Reserve Earnings
Balance as at 1st April, 2020.................................................. 0.30 12.56 487.67 3232.45 3732.98
Net Assets/(Reserves) acquired on account of merger of
Marpol Private Limited [Refer note 45(a)]............................... — — — (3.25) (3.25)
Net Assets/(Reserves) acquired on account of merger of
Perma Construction Aids Private Limited [Refer note 45(b)]. — — — (0.35) (0.35)
Restated balance as at 1 April, 2020...................................
st
0.30 12.56 487.67 3228.85 3729.38
Profit for the year................................................................... 530.60 530.60
Other Comprehensive Income:
Remeasurement of Employee Defined Benefit Liability... — — — 0.34 0.34
Deferred Tax on Remeasurement of Employee Defined
Benefit Liability................................................................. — — — (0.07) (0.07)
Total Other Comprehensive Income for the Year, net of tax...... — — — 0.27 0.27
Total Comprehensive Income for the Year............................ — — — 530.87 530.87
Transaction with Owners in their Capacity as Owners,
recorded directly in equity:
Dividends......................................................................... — — — (237.12) (237.12)
— — — (237.12) (237.12)
Balance as at 31 March, 2021.............................................
st
0.30 12.56 487.67 3522.60 4023.13

Analysis of Accumulated OCI, Net of Tax

` in Crores
Remeasurement of Defined Benefit Liability/(Asset) As at As at
31st March, 2022 31st March, 2021
Opening Balance...................................................................................................... (10.58) (10.85)
Remeasurement of Employee Defined Benefit Liability, net of tax........................... 2.51 0.27
Closing Balance ....................................................................................................... (8.07) (10.58)
Capital Reserve
Capital reserve includes profit on re-issue of forfeited shares.
Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the
Companies Act, 2013.
General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified
percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in
a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the
total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer
a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the
general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
Dividend
For the year 2020-2021, the Directors had recommended and Shareholders had approved a interim and final dividend of 125% and
400% respectively (₹ 5.25 per share), which has been accounted in current year.
The Board has recommended a final dividend of 100% (₹ 1.00 per share) for the year, in addition the Company had declared interim
dividend of 125% (₹ 1.25 per share) paid on November 22, 2021. Accordingly, the total dividend is 225% (₹ 2.25 per share) for the
financial year ended March 31, 2022 as compared to total dividend of 525% (₹ 5.25 per share) declared last year.
The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed
dividend of ₹ 53.89 Crores (2020-2021 ₹ 215.56 Crores) have not been recognised as liabilities.

276
---------
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

17. Lease Liabilities

` in Crores
As at As at
31st March, 2022 31st March, 2021
Non-current Lease Liabilities................................................................................... 85.93 72.69
85.93 72.69
The maturity analysis of lease liabilities is disclosed in Note 43.

18. Provisions
` in Crores
As at As at
31st March, 2022 31st March, 2021
Provision for Compensated Absences (Refer Note 38)............................................ — 0.41
Provision for Retirement Benefits to Executive Directors (Refer Note 38)............... 22.27 —
22.27 0.41

19. Income Taxes

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
A. The major components of income tax expense for the year are as under:
(i) Income tax recognised in the Standalone Statement of Profit and Loss
Current tax:
In respect of current year........................................................................................... 132.35 181.93
Deferred tax:
In respect of current year........................................................................................... (1.56) 1.54
Income tax expense recognised in the Standalone Statement of Profit and
 130.79 183.47
Loss...........................................................................................................................
(ii) Income tax expense recognised in OCI
Deferred tax expense on remeasurements of defined benefit plans.......................... (0.84) (0.07)
Income tax expense recognised in OCI.................................................................
 (0.84) (0.07)
B. Reconciliation of tax expense and the accounting profit for the year is as under:
Profit before tax................................................................................................................. 505.12 714.07
Income tax expense calculated at 25.17% (2020-2021 @ 25.17%)................................. 127.14 179.73
Tax effect on non-deductible expenses............................................................................. 9.79 5.73
Effect of Income that is exempted from tax....................................................................... (0.28) (0.25)
Others............................................................................................................................... (5.86) (1.74)
Total.................................................................................................................................. 130.79 183.47
Tax expense as per Standalone Statement of Profit and Loss................................... 130.79 183.47

The tax rate used for reconciliation above is the corporate tax rate of 25.17% (2020-2021 25.17%) payable by corporate entities in india
on taxable profits under indian tax law.

277
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

19. Income Taxes (contd.)

C. The major components of deferred tax (liabilities) / assets arising on account of timing differences are as follows:
` in Crores
Particulars Balance Statement OCI Balance Balance Statement OCI Balance
Sheet of Profit Sheet Sheet of Profit Sheet
and Loss and Loss
01.04.2021 2021-2022 2021-2022 31.03.2022 01.04.2020 2020-2021 2020-2021 31.03.2021
Difference between written down value / capital work in
progress of Property, Plant and Equipment as per the books
of accounts and Income-tax Act,1961.................................. (130.52) (3.99) — (134.51) (123.05) (7.47) — (130.52)
Tax adjustment on account on indexation of freehold land. 17.44 2.03 — 19.47 15.79 1.65 — 17.44
Expense claimed for tax purpose on payment basis.............. 5.64 0.37 — 6.01 4.40 1.24 — 5.64
Provision for doubtful debts and Advances........................ 7.86 1.03 — 8.89 5.38 2.48 — 7.86
Remeasurement benefit of the defined benefit plans
through OCI........................................................................ 2.87 — (0.84) 2.03 2.94 — (0.07) 2.87
Net fair value loss on investment through FVTPL................... (1.75) 1.18 — (0.57) (1.45) (0.30) — (1.75)
Lease Rentals.................................................................... 2.19 0.94 — 3.13 1.33 0.86 — 2.19
Deferred tax (expense)/income
Net Deferred tax liabilities.................................................. (96.27) 1.56 (0.84) (95.55) (94.66) (1.54) (0.07) (96.27)

20. Borrowings
` in Crores
As at As at
31st March, 2022 31st March, 2021
Working Capital Loan................................................................................................... — 8.34
— 8.34
The Company has obtained at 7.95% - 9.20% (2020-2021 6.75% - 9.25% ) overdrafts and cash credit facilities from bank to fund
working capital requirements, secured by hypothecation of trade receivable (Refer Note 10) and inventories (Refer Note 8), These
facilities are repayable on demand.

21. Lease Liabilities

` in Crores
As at As at
31st March, 2022 31st March, 2021
Lease Liabilities - Current............................................................................................ 22.95 17.41
22.95 17.41

22. Trade Payables

` in Crores
As at As at
31st March, 2022 31st March, 2021
Trade Payables:
Total Outstanding dues of Micro Enterprises and Small Enterprises (Refer Note 42).. 101.29 90.95
Total Outstanding dues of creditors other than Micro Enterprises and Small
Enterprises.............................................................................................................. 789.11 731.94
890.40 822.89

Trade Payables Ageing Schedule

As at 31st March, 2022 ` in Crores
Outstanding for following periods from due date of payment
Particulars Unbilled Not Due Less than 1-2 2-3 More than Total
1 year years years 3 years
(i) MSME...................................... — 101.29 — — — — 101.29
(ii) Others ..................................... 180.43 234.90 373.31 0.28 0.16 0.03 789.11
(iii) Disputed dues – MSME .......... — — — — — — —
(iv) Disputed dues – Others .......... — — — — — — —

278
--------
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

22. Trade Payables (contd.)

Trade Payables Ageing Schedule (contd.)
As at 31st March, 2021 ` in Crores
Outstanding for following periods from due date of payment
Particulars Unbilled Not Due Less than 1-2 2-3 More than Total
1 year years years 3 years
(i) MSME...................................... — 90.95 — — — — 90.95
(ii) Others...................................... 159.31 419.39 150.89 1.47 0.78 0.10 731.94
(iii) Disputed dues – MSME........... — — — — — — —
(iv) Disputed dues – Others........... — — — — — — —

23. Other Financial Liabilities

` in Crores
As at As at
31st March, 2022 31st March, 2021
2.46
Unclaimed/Unpaid Dividends*...................................................................................... 2.37
29.08
Trade Deposits............................................................................................................. 79.31
19.97
Creditors for Capital Goods@ (Refer Note 42)............................................................ 13.24
51.51 94.92
* There are no amounts due and outstanding to be transfered to Investor Education and Protection Fund.
@ Includes Outstanding dues of Micro Enterprises and Small Enterprises ₹ 3.73 Crores (2020-2021 ₹ 4.59 Crores)

24. Other Current Liabilities

` in Crores
As at As at
31st March, 2022 31st March, 2021
Statutory Obligations*.................................................................................................. 17.63 8.74
Trade Receivables with Credit Balance....................................................................... 14.98 13.75
32.61 22.49
* Includes payable toward GST, TDS and Employee Related Statutory Obligations.

25. Provisions
` in Crores
As at As at
31st March, 2022 31st March, 2021
Provision for Compensated Absences (Refer Note 38)................. 12.78 13.38
Provision for Gratuity (Refer Note 38)........................................... — 3.51
Provision for Retirement Benefits to Executive Directors
(Refer Note 38).............................................................................. 1.94 —
Provision for Indirect Taxes:
Opening Balance..................................................................... 3.86 3.82
Add: Provision during the year................................................ — 0.04
Less: Utilisation / reversal during the year............................... — —
3.86 3.86
18.58 20.75

26. Current Tax Liabilities (Net)

` in Crores
As at As at
31st March, 2022 31st March, 2021
Current Tax Liabilities (Net)...................................................................................... 4.99 4.99
4.99 4.99

279
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

27. Revenue from Operations

` in Crores

Year ended Year ended

31st March, 2022 31st March, 2021
Sale of Products
Sales ....................................................................................... 6563.24 5319.53
Less: Discounts and Rebates ................................................. 703.77 583.26
Total Sale of Products........................................................... 5859.47 4736.27
Other Operating Revenues
Sale of Scrap........................................................................... 21.45 15.67
GST Incentives......................................................................... 9.86 —
Others*..................................................................................... 58.12 18.96
89.43 34.63
Revenue from Operations..................................................... 5948.90 4770.90

* Include writeback of trade deposits amounting to ₹ 47.44 Crores (2020-2021 ₹ 8.23 Crores)

27.1. Disaggregation of revenue from contracts with customers

The Company derives revenue from sale of products from following major segments:
` in Crores

Particulars Year ended Year ended

31st March, 2022 31st March, 2021
1) Revenue from contracts with customers:
Sale of products (Transferred at point in time)
Manufacturing
India....................................................................................................................... 5382.62 4328.27
Export..................................................................................................................... 11.60 9.39
(A).................................................. 5394.22 4337.66
Trading
India....................................................................................................................... 465.25 398.61
(B).................................................. 465.25 398.61
(C) = (A) + (B)................................ 5859.47 4736.27
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
2) Other operating revenue:
Sale of Scrap......................................................................................................... 21.45 15.67
GST Incentive........................................................................................................ 9.86 —
Others.................................................................................................................... 58.12 18.96
(D).................................................. 89.43 34.63
Total Revenue (C) + (D)............... 5948.90 4770.90
Major Product lines
Paint....................................................................................................................... 5859.47 4736.27
5859.47 4736.27
Sales by performance obligations
Upon delivery......................................................................................................... 5859.47 4736.27
5859.47 4736.27
Reconciliation of revenue from contract with customer:
Revenue from contracts with customer as per the contract price.......................... 6563.24 5319.53
Adjustments made to contract price on account of:
a) Discounts / Rebates / Incentives...................................................................... (703.77) (583.26)
b) Other Operating Revenue................................................................................ 89.43 34.63
Revenue from contracts with customer as per the Standalone Statement of

Profit and Loss.................................................................................................... 5948.90 4770.90

280
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

28. Other Income

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Dividend Income
Dividend from Investment in Equity Shares ............................ 2.52 2.24
2.52 2.24
Interest Income
Interest on Loans and Deposit at amortised cost..................... 0.26 4.16
Interest on Bonds recognised through FVTPL......................... 1.19 0.99
1.45 5.15
Profit on Sale of Current Investments (Net).................................. 14.29 10.12
Fair Value Gain on Financial Instruments recognised through
FVTPL........................................................................................... — 4.24
Other Non-operating Income
Profit on Sale of Property, Plant and Equipment (Net)............. 0.19 2.36
Foreign Exchange Gain (Net).................................................. 7.00 8.51
Insurance Claims Received..................................................... 3.88 4.27
Miscellaneous Income............................................................. 3.53 1.96
14.60 17.10
32.86 38.85

29. Cost of Materials Consumed

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Raw Material Consumed
Opening Stock......................................................................... 345.01 285.23
Add: Purchase......................................................................... 3677.86 2462.43
Less: Sales.............................................................................. 15.75 13.62
Less: Closing Stock................................................................. 478.50 345.01
3528.62 2389.03
Packing Material Consumed
Opening Stock......................................................................... 14.58 9.90
Add: Purchase......................................................................... 488.93 357.23
Less: Closing Stock................................................................. 18.15 14.58
485.36 352.55
4013.98* 2741.58*
* Includes ₹ 3.95 Crores (2020-2021 ₹ 1.88 Crores) expenditure incurred on Research and Development

30. Changes in Inventories of Finished Goods, Work-in-progress and Stock-in-trade

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Opening Stock
Finished Goods......................................................................... 585.55 493.75
Work-in-progress....................................................................... 99.33 87.58
Stock-in-trade (in respect of goods acquired for trading).......... 58.04 62.12
742.92 643.45
Less: Closing Stock
Finished Goods......................................................................... 807.90 585.55
Work-in-progress....................................................................... 141.30 99.33
Stock-in-trade (in respect of goods acquired for trading).......... 74.66 58.04
1023.86 742.92
(280.94) (99.47)

281
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

31. Employee Benefits Expense

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Salaries and Wages.................................................................................................... 275.35 235.97
Contribution to Provident and Other Funds (Refer Note 38)....................................... 22.30 21.20
Staff Welfare Expense................................................................................................. 14.72 11.45
312.37* 268.62*
* Includes ₹ 20.22 Crores (2020-2021 ₹ 18.93 Crores) expenditure incurred on Research and Development

32. Finance Cost

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Interest on Lease Liabilities (Refer Note 43)............................................................... 9.49 7.49
Interest on Working Capital Loan................................................................................ 0.38 0.99
9.87 8.48

33. Depreciation and Amortisation

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Depreciation on Property, Plant and Equipment (Refer Note 2).................................. 120.08 117.19
Amortisation on Other Intangible Assets (Refer Note 4)............................................. 6.24 6.85
Amortisation on Right of use assets (ROU) (Refer Note 2B)...................................... 27.50 24.97
153.82* 149.01*
* Includes ₹ 3.06 Crores (2020-2021 ₹ 3.05 Crores) depreciation and amortisation expenses on Research and Development

34. Other Expenses

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Consumption of Stores and Spare Parts..................................................................... 28.98 23.35
Power and Fuel........................................................................................................... 69.09 62.98
Repairs to Buildings.................................................................................................... 0.40 0.59
Repairs to Machinery.................................................................................................. 14.04 11.65
Freight and Forwarding Charges................................................................................. 327.54 277.87
Advertisement and Sales Promotion........................................................................... 210.75 147.52
Rent............................................................................................................................. 13.16 15.58
Rates and Taxes.......................................................................................................... 3.06 2.03
Insurance..................................................................................................................... 11.80 10.91
Miscellaneous Expenses ............................................................................................ 181.11 148.83
859.93* 701.31*
*  Includes ₹ 5.18 Crores (2020-2021 ₹ 4.82 Crores) expenditure incurred on Research and Development

34.1. Payments to Auditors

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Auditors’ Remuneration excluding GST (Included in Miscellaneous Expenses in Note 34)
As Auditor
Statutory Audit ....................................................................................................... 0.25 0.25
Report under Section 44AB of the Income-tax Act, 1961...................................... 0.04 —
Limited Review of Quarterly Results...................................................................... 0.18 0.18
In other capacity
Certification............................................................................................................ 0.08 0.09
Other Matters......................................................................................................... 0.19 0.14
Reimbursements of Expenses................................................................................. 0.01 0.02
0.75 0.68

282
---------
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

34.2. Research and Development Expenses

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
 evenue Expenditure on Research and Development recognised in Standalone
R
Statement of Profit and Loss is................................................................................... 32.41 28.68

35. Contingent Liabilities and Commitments

(to the extent not provided for)
` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
a. 
Claims against the Company not acknowledged as debt:
Excise and Service Tax.......................................................................................... 8.38 7.15
Sales Tax................................................................................................................ 18.15 18.15
The Company has made adequate provisions in the accounts for claims against
the Company related to direct and indirect taxes matters, except for certain claims
not acknowledged as debts, totalling to ₹ 26.53 Crores (2020-2021 ₹  25.30
Crores) from the Excise / Service Tax / Sales Tax / GST Authorities, in respect
of disallowance of Cenvat Credit of Excise / Service Tax and Input Tax Credit of
Sales Tax / GST.
In addition, the Company is subject to other legal proceedings in respect of other
matters arisen in the ordinary course of business. The Company’s management
is of the opinion that ultimate liability in respect of these litigations shall not
exceed the amount provided in books of account, and shall not have any material
adverse effect on the Company’s operation and financial position.
b. Commitments:
Estimated amount of contracts remaining to be executed on capital account and
not provided for (Net of advances)........................................................................ 63.93 62.17
Company has entered into Share holding agreement (SHA) with M/s Amplus
Energy Solutions Private Limited to source green power through Group Captive
arrangement.......................................................................................................... 2.05 —
Corporate guarantee

Stand by Letter of Credit (SBLC) given to Bank for loan taken by Kansai
Nerolac Paints (Bangladesh) Limited (formerly known as RAK Paints Limited) -
Subsidiary Company.............................................................................................. 25.83 25.45
Corporate guarantee given to Bank for loan taken by Kansai Nerolac Paints
(Bangladesh) Limited (formerly known as RAK Paints Limited) - Subsidiary
Company............................................................................................................... 81.01 79.82
Corporate guarantee given to Bank for Kansai Paints Lanka (Private) Limited -
Subsidiary Company............................................................................................. 8.92 12.75
208.27 205.49
c. Contribution to Provident Fund
There are numerous interpretative issues relating to the Supreme Court (SC)
judgment dated February 28, 2019 on Provident Fund (PF) on the inclusion
of allowances for the purpose of PF contribution as well as its applicability of
effective date. The impact is not expected to be material as per the assessment
made by the Company.

283
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

36. Earnings Per Equity Share

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Numerator:
Profit attributable to Equity Shareholders (` in Crores).......................................... 374.33 530.60
Denominator:

Weighted Average Number of ordinary shares at the beginning and end of the
year........................................................................................................................ 53,89,19,720 53,89,19,720
Basic and Diluted Earnings Per Equity Share (in `)............................................... 6.95 9.85

37. Related Party Disclosures

A related party is a person or entity that is related to the entity that is preparing its Financial Statements
(a) A person or a close member of that person’s family is related to a reporting entity if that person:
(i) has control or joint control of the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow
subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of
which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the
reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of
the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting
entity or to the parent of the reporting entity.
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related
party, regardless of whether a price is charged.
Parent and ultimate controlling entity
Name % Shareholding Type Principal Place of
2022 2021 Activities Incorporation
Kansai Paint Co., Ltd., Japan ................... 74.99 74.99 Parent and Manufacturing Japan
ultimate paints and
controlling other related
entity materials
Kansai Paint Co., Ltd., Japan is the immediate and ultimate holding company of Kansai Nerolac Paints Ltd. and is based and listed
in Japan. Financial Statements of Kansai Paint Co., Ltd., Japan are available in public domain.
Subsidiaries Companies
Name % Shareholding Type Principal Place of
2022 2021 Activities Incorporation
KNP Japan Private Limited.......................... 68 68 Subsidiary Manufacturing Nepal
paints and other
related materials
Kansai Paints Lanka (Private) Limited........ 60 60 Subsidiary Manufacturing Srilanka
paints and
other related
materials
Kansai Nerolac Paints (Bangladesh) 55 55 Subsidiary Manufacturing Bangladesh
Limited (formerly known as RAK Paints paints and
Limited)........................................................ other related
materials
Nerofix Private Limited................................ 60 60 Subsidiary Manufacturing India
paints and
other related
materials

284
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Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

37. Related Party Disclosures (contd.)

Fellow Subsidiaries Companies
Name Type Principal Place of
Activities Incorporation
Kansai Paint Philippines Inc.............................................................................. Fellow Manufacturing Philippines
Subsidiary paints and
other related
materials
Kansai Paint Asia Pacific SDN.BHD. ................................................................ Fellow Manufacturing Malaysia
Subsidiary paints and
other related
materials
Kansai Plascon Kenya Ltd................................................................................ Fellow Manufacturing Kenya
Subsidiary paints and
other related
materials
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of
the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel includes
(1) Mr. P. P. Shah, Chairman (2) Mr. H. M. Bharuka, Vice Chairman and Managing Director (upto 31st March 2022) (3) Mr. N. N. Tata,
Director (4) Mr. Anuj Jain, Wholetime Director (Managing Director w.e.f 1st April 2022), (5) Ms. Sonia Singh, Director (6) Mr. P. D. Pai, CFO
and (7) Mr. G. T. Govindarajan, Company Secretary.

Other entities where significant influence exist

— Kansai Nerolac Paints Limited Provident Fund

Transaction with related parties and Disclosure as per Regulation 53(f) of SEBI (Listing Obligation and disclosure
requirement) Regulations
` in Crores
Transaction Type Relation 2021-2022 2020-2021
Sale of finished goods/Intermediates
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary 0.77 2.64
— Kansai Paint Philippines Inc.............................................. Fellow Subsidiary 2.93 0.81
— Kansai Plascon Kenya Ltd................................................. Fellow Subsidiary 1.05 1.49
Purchase of Goods
— Nerofix Private Limited....................................................... Subsidiary 23.19 8.10
Dividend Paid
— Kansai Paint Co., Ltd., Japan............................................ Parent and ultimate 212.17 177.82
controlling entity
Dividend Income
— KNP Japan Private Limited................................................ Subsidiary 2.48 2.21
Transfer under license agreements
Royalty Expense
— Kansai Paint Co., Ltd., Japan............................................ Parent and ultimate 15.31 12.10
controlling entity
Technical Fees Including Reimbursement of Expenses
— Kansai Paint Co., Ltd., Japan............................................ Parent and ultimate
controlling entity 0.06 0.27
Royalty Income
— KNP Japan Private Limited................................................ Subsidiary 1.35 0.71
— Kansai Paints Lanka (Private) Limited............................... Subsidiary 0.20 0.16
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary 2.24 1.61
— Nerofix Private Limited....................................................... Subsidiary 0.81 0.56
Corporate guarantee given for
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary — 79.82
— Kansai Paints Lanka (Private) Limited............................... Subsidiary — 12.75

285
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

37. Related Party Disclosures (contd.)

Transaction with related parties and Disclosure as per Regulation 53(f) of SEBI (Listing Obligation and disclosure
requirement) Regulations (contd.)

` in Crores
Transaction Type Relation 2021-2022 2020-2021
Stand by Letter of Credit (SBLC) given for
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary — 25.45
Income from Corporate guarantee issued
— Kansai Paints Lanka (Private) Limited............................... Subsidiary 0.01 0.01
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary 0.04 0.03
Equity Investment
— Kansai Paints Lanka (Private) Limited............................... Subsidiary — 12.00
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary — 14.34
Reimbursement of Expenses Recovered
— Kansai Paint Co., Ltd., Japan ................................................. Parent and ultimate
controlling entity 0.55 0.31
— KNP Japan Private Limited................................................... Subsidiary 0.63 0.69
— Kansai Paints Lanka (Private) Limited ................................. Subsidiary 0.21 0.18
— Nerofix Private Limited....................................................... Subsidiary 0.21 0.19
Contributions during the year (includes Employees'
share and contribution)
— Kansai Nerolac Paints Limited Provident Fund................. Other entities 1.37 1.41
Amount of outstanding balances, including commitments
in settlement
Receivable as at Year End
— Kansai Paint Co., Ltd., Japan............................................ Parent and ultimate
controlling entity 0.55 0.31
— KNP Japan Private Limited................................................ Subsidiary 4.33 2.96
— Kansai Paints Lanka (Private) Limited............................... Subsidiary 0.62 1.49
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary 5.35 3.67
— Nerofix Private Limited....................................................... Subsidiary 0.56 0.24
— Kansai Paint Philippines Inc.............................................. Fellow Subsidiary 0.35 —
— Kansai Plascon Kenya Ltd. ............................................... Fellow Subsidiary 0.40 —
Payable as at Year End
— Kansai Paint Co., Ltd., Japan............................................ Parent and ultimate
controlling entity 0.01 0.06
— Nerofix Private Limited....................................................... Subsidiary 2.74 1.68
Corporate guarantee
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary 81.01 79.82
— Kansai Paints Lanka (Private) Limited............................... Subsidiary 8.92 12.75
Stand by Letter of Credit (SBLC)
— Kansai Nerolac Paints (Bangladesh) Limited.................... Subsidiary 25.83 25.45
Key Management Personnel
— Employee benefits#........................................................... 21.37* 10.91
— Commission to Independent Directors............................... 1.05 0.95
— Fee for attending Board / Committee Meetings to
0.12 0.10
Independent Directors.......................................................

Related Party Transactions:

Related party transactions were made on terms equivalent to those that prevail in an arm's length transactions. Outstanding
balances at the year-end are unsecured, interest free and will be settled in cash.
* Employee Benefits to Mr. H. M. Bharuka include retirement benefits of ₹ 8.24 Crores towards Gratuity, Leave Encashment and
Ex-gratia.
# Includes Company's contribution to Provident Fund and Superannuation Fund. Further, as the future liabilities for gratuity,
leave encashment and pension to Executive Director along with medical benefits are provided on an actuarial valuation basis
for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.

286
----------
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

38. Employee Benefits

A. Defined Contribution Plans:
Contribution to defined contribution plan, recognised in the Standalone Statement of Profit and Loss under Company’s
Contribution to Provident Fund and Other Funds in Employee Benefits Expenses for the year are as under:
` in Crores

Particulars Year ended Year ended

31st March, 2022 31st March, 2021
Employer's contribution to Regional Provident Fund Commissioner.................. 4.12 3.17
Employer's contribution to Family Pension Fund............................................... 4.58 4.60
Employer's contribution to Superannuation Fund............................................... 7.55 7.33

B. Defined Benefit Plans:

a. Gratuity
The following tables setout the funded status of the gratuity plans and the amounts recognised in the Company’s Financial
Statements as at 31st March, 2022 and 31st March, 2021:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Change in Defined Benefit Obligation
Defined Benefit Obligation at the beginning.............................................. 46.68 44.16
Current Service Cost................................................................................. 3.59 3.75
Interest Expense....................................................................................... 2.85 2.88
Benefit Payments from Plan Assets*......................................................... (10.79) (2.99)
Remeasurements - Actuarial (gains) / losses............................................ (2.65) (1.12)
Defined Benefit Obligation at the end........................................................ 39.68 46.68

Change in Fair Value of Plan Assets

Fair Value of Plan Assets at the beginning................................................ 43.18 42.54
Interest Income.......................................................................................... 2.61 2.89
Employer Contributions.............................................................................. 3.37 1.52
Benefit Payments from Plan Assets........................................................... (4.37) (2.99)
Remeasurements – Return on plan assets excluding amounts included in
interest income........................................................................................... 0.70 (0.78)
Fair Value of Plan Assets at the end.......................................................... 45.49 43.18
Net Asset/(liability)..................................................................................... 5.81 (3.50)
*  Includes direct payment by employer.

Components of Defined Benefit Cost recognized in the Standalone Statement of Profit and Loss under Employee
Benefit Expenses:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Current Service Cost.................................................................................. 3.59 3.75
Net Interest Cost........................................................................................ 0.24 (0.01)
Defined Benefit Cost recognised in the Statement of Profit and Loss ......... 3.83 3.74

Components of Defined Benefit Cost recognized in the Statement of Other Comprehensive Income:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Actuarial (gains) / losses on Defined Benefit Obligation............................ (2.65) (1.12)

(Return)/loss on plan assets excluding amounts included in the net

interest on the net defined benefit liability/(asset).................................... (0.70) 0.78
Defined Benefit Cost recognised in the Statement of Other
Comprehensive Income............................................................................ (3.35) (0.34)

287
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

38. Employee Benefits (contd.)

B. Defined Benefit Plans (contd.)
a. Gratuity (contd.)

The assumptions used to determine net periodic benefit cost are set out below:
Particulars Valuation Date
31st March, 2022 31st March, 2021
Discount Rate............................................................................................ 7.00% 6.91%
Salary Escalation....................................................................................... 5% in next 3% and 5% in next
1 year and 7.5% 1st and 2nd Year
thereafter respectively and
7.5% thereafter
Weighted average duration of the defined benefit obligation (years).......... 10.59 10.97

Sensitivity Analysis:
 he sensitivity analyses are based on a change in a significant assumption, keeping all other assumptions constant. The
T
sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that
changes in assumptions would occur in isolation from one another.
 iscount Rate, Salary Escalation Rate and Withdrawal Rate are significant actuarial assumptions. The change in the
D
Present Value of Defined Benefit Obligation for a change of 100 Basis Points from the assumed assumption is given below:
` in Crores
Scenario 31st March, 2022 31st March, 2021
Under Base Scenario................................................................................ 39.68 45.00
Salary Escalation - Up by 1% ................................................................... 41.97 48.63
Salary Escalation - Down by 1%............................................................... 37.57 41.79
Withdrawal Rates - Up by 1% .................................................................. 39.58 44.77
Withdrawal Rates - Down by 1%............................................................... 39.78 45.27
Discount Rates - Up by 1%....................................................................... 37.76 41.93
Discount Rates - Down by 1%................................................................... 41.80 48.54

Expected Rate of Return on Planned Asset.............................................. 7.00% 6.91%

Maturity Profile of Defined Benefit Obligations

Mortality Table 31st March, 2022 31st March, 2021

Attained Age Male Female Male Female
20 0.09% 0.09% 0.09% 0.09%
25 0.09% 0.09% 0.09% 0.09%
30 0.10% 0.10% 0.10% 0.10%
35 0.12% 0.12% 0.12% 0.12%
40 0.17% 0.17% 0.17% 0.17%
45 0.26% 0.26% 0.26% 0.26%
50 0.44% 0.44% 0.44% 0.44%
55 0.75% 0.75% 0.75% 0.75%
60 1.11% 1.11% 1.12% 1.12%

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life
Insurance Corporation of India.
The Company contributes all ascertained liabilities towards gratuity to the fund maintained by the Life Insurance
Corporation of India.
The Company expects to contribute ₹ Nil (2020-2021 ₹ 3.50 Crores) to the fund during the subsequent accounting year.

288
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

38. Employee Benefits (contd.)

B. Defined Benefit Plans (contd.)
b. Provident fund (Managed by the Trust set up by the Company)
 he Company has contributed ₹ 1.37 Crores (2020-2021 ₹ 1.41 Crores) to the Provident Fund Trust. The Company has
T
an obligation to fund any shortfall on the yield of the trust’s investments over the guaranteed interest rates on an annual
basis. These administered rates are determined annually predominantly considering the social rather than economic
factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has
provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based
on the below provided assumptions there is no shortfall.

The details of fund and plan asset position are given below:
` in Crores

As at As at
Particulars
31st March, 2022 31st March, 2021
Plan assets at period end, at fair value....................................................... 74.11 68.88
Present value of benefit obligation at period end......................................... 71.65 64.58
Asset recognised in balance sheet.............................................................. Nil Nil

The plan assets have been primarily invested in Government Securities which comprises of Special Deposit Schemes
(SDS), State Development Loans (SDLs) and Government Bonds.

Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic
Approach:
` in Crores
As at As at
Particulars
31st March, 2022 31st March, 2021
Discount Rate (%)...................................................................................... 6.63 6.40
Guranteed Interest Rate (%)...................................................................... 8.10 8.50
Expected Average Remaining Working Lives of Employees (Years).......... 11.07 10.30

c. Retirement Benefits to Executive Directors

` in Crores
As at As at
Particulars
31st March, 2022 31st March, 2021
Opening defined benefit obligation ............................................................ — —
Current service cost .................................................................................. 0.05 —
Past Service Cost ...................................................................................... 24.46 —
Remeasurement (gain)/loss ...................................................................... — —
Benefits paid .............................................................................................. 0.29 —
Closing defined benefit obligation .............................................................. 24.22 —

d. Compenseted Absenses
In FY 2021-2022 decrease in provision for compensated absences for the year is ₹ 1.01 Crores (2020-2021 ₹ 1.47 Crores).

39. Segment Reporting

The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of
allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency
of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function
is being performed by the Management Committee. The financial information presented to the Management Committee in the
context of results and for the purposes of approving the annual operating plan is on a consolidated basis for paints and other
related products of the Company. As the Management Committee monitors the business activity as a single business segment viz.
‘Paints’ and the sales substantially being in the domestic market, the financial statement are reflective of the information required by
Ind AS 108 “Operating Segments”.

289
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

40. Corporate Social Responsibilities

 uring the year, the Company has spent ₹ 14.06 Crores (2020-2021 ₹ 14.32 Crores) towards ‘Corporate Social Responsibility
D
Activities’ (CSR Activities).
(a) Gross amount required to be spent by the Company during the year ₹ 14.01 Crores (2020-2021 ₹ 14.30 Crores).
(b) Amount spent during the year on:
` in Crores
In Cash Yet to be Total
paid in cash
(i) Construction/acquisition of any asset......................................... — — —
(ii) On purposes other than (i) above............................................... 14.06 — 14.06
(14.32) — (14.32)*
(previous year figures are in brackets)
(c) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a fund specified
in Schedule VII of the Companies Act (the Act), in compliance with second proviso to sub section 5 of section 135 of the Act.
(d) There are no unspent amounts in respect of ongoing projects, that are required to be transferred to a special account in
compliance of provision of sub section (6) of section 135 of Companies Act.
(e) Disclosure for excess CSR spent and carried forward for set-off in next year:
In case of S. 135(5) Excess amount spent
` in Crores
Opening Balance Amount required to be Amount spent Closing Balance
spent during the year during the year
0.02 14.01 14.06 0.07
* Pursuant to appeal dated 30 March, 2020 by the Secretary of Ministry of Corporate Affairs for contribution to the Prime
th

Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES fund) and based on the legal opinion, in
respect of recent amendments by MCA to CSR rules, the Company has set-off excess amount expensed towards CSR in FY
2019-2020 of ₹ 2.43 Crores against FY 2020-2021 CSR obligations.

41. Financial Instruments: Fair Values and Risk Management

(A) Accounting Classifications and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels
in the fair value hierarchy.
` in Crores
Year At FVTPL Level 1 Level 2 Level 3 Total
Financial Assets measured at Fair Value
Non-current Assets: Investments (Note 5)........... 2022 1.09 0.73 — 0.36 1.09
2021 0.95 0.59 — 0.36 0.95
Current Assets: Investments (Note 9).................. 2022 209.46 — 209.46 — 209.46
2021 668.06 — 668.06 — 668.06
There have been no transfers between Level 1 and Level 2 during the year and previous year.

(B) Financial Risk Management

The Company has exposure to the following risks arising from financial instruments:
— Credit Risk
— Liquidity Risk
— Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management
Committee thatadvises on financial risks and the appropriate financial risk governance framework for the Company. The
Risk Management Committee provides assurance to the management that Company’s risk activities are governed by
appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the
Company’s policies and risk objectives.
The Company’s Risk Management Policies are established to identify and analyses the risks faced by the Company to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems
are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its
training and management standards and procedures, aims to maintain a disciplined and constructive control environment
in which all employees understand their roles and obligations.

290
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Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

41. Financial Instruments: Fair Values and Risk Management (contd.)

(B) Financial Risk Management (contd.)
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Company’s receivables from customers, loans and investments
in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables:
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk
Management Committee has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s
review includes financial statements, credit agency information, industry information and in some cases bank references.
Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval
from the management.
The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing
more than 5% of the total balance of trade receivables. For trade receivables, as a practical expedient, the Company
computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically
observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

` in Crores

Movement in expected credit loss allowance on trade receivable 31st March, 2022 31st March, 2021

Balance at the beginning of the year............................................................ 32.86 24.11

Loss allowance measured at lifetime expected credit losses....................... 2.36 8.75
Balance at the end of the year....................................................................... 35.22 32.86

Financial Instruments and Cash Deposits

Credit risks from balances with banks and financial institutions is managed by the Company’s Treasury Department in
accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and
within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore
mitigate financial loss through counterparty’s potential failure to make payments.

(iii) Liquidity Risk

 iquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
L
liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is
to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Maturities of Financial Liabilities:

 he table below analyse the Company’s financial liabilities into relevant maturing grouping based on their contractual
T
maturities:
` in Crores

On Upto 3 months 6 months 1 year to 3 years

Year ended Total
demand 3 months to 6 months to 1 year 2 years and above

Borrowings........... 31-03-2022 — — — — — — —

31-03-2021 8.34 — — — — — 8.34

Trade Payables.... 31-03-2022 — 890.40 — — — — 890.40

31-03-2021 — 822.89 — — — — 822.89

Other Financial 31-03-2022 31.54 19.97 — — — — 51.51

Liabilities...............
31-03-2021 81.68 13.24 — — — — 94.92

For maturity profile of lease liabilities, refer note 43.

291
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

41. Financial Instruments: Fair Values and Risk Management (contd.)

(B) Financial Risk Management (contd.)
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such
as equity price risk and commodity price risk. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities
denominated in foreign currencies, the Company’s policy is to ensure that its net exposure is kept to an acceptable level.
Since the Company does not have any interest bearing borrowings, the exposure to risk of changes in market interest
rates is not applicable. Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes
in market traded price. Other price risk arises from financial assets such as investments in equity instruments, debentures
and bonds. Since the investments in equity instruments and debentures is not material and bonds being debt instruments,
the exposure to risk of changes in market rates is minimal. The details of such investments in equity instrument and
debentures is given in Note 5 and details of investments in bonds is given in Note 9.
Exposure to Currency Risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in
foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency
exposures relating to the recognised underlying liabilities and firm commitments. The Company's policy is to hedge its
exposures above predefined thresholds from recognised liabilities and firm commitments that fall due on timely basis. The
Company does not enter into any derivative instruments for trading or speculative purposes. The carrying amounts of the
Company's foreign currency denominated monetary items are as follows:
` in Crores
Financial Assets EURO JPY BDT USD Total
Trade Receivables......................................................... 31-03-2022 — — — 2.59 2.59
31-03-2021 — — — 2.74 2.74
Financial Liabilities
Trade Payables (net-off Hedge).................................... 31-03-2022 1.08 10.57 0.02 53.33 65.00
31-03-2021 0.58 6.62 — 75.65 82.85
Net exposure to Foreign Currency Risk (Liabilities)...... 31-03-2022 1.08 10.57 0.02 50.74 62.41
31-03-2021 0.58 6.62 — 72.91 80.11

(v) Foreign Currency Sensitivity Analysis

The following table demonstrate the sensitivity to a reasonable possible change in EURO, JPY, BDT and USD exchange
rates, with all other variable held constant.
` in Crores
Profit or Loss Equity net of tax
Strengthening Weakening Strengthening Weakening
31 March, 2022
st

EURO (5% movement)....................................... (0.05) 0.05 (0.04) 0.04

JPY (5% movement)........................................... (0.53) 0.53 (0.40) 0.40

BDT (5% movement).......................................... (0.00) 0.00 (0.00) 0.00

USD (5% movement)......................................... (2.54) 2.54 (1.90) 1.90

31st March, 2021

EURO (5% movement)....................................... (0.03) 0.03 (0.02) 0.02

JPY (5% movement)........................................... (0.33) 0.33 (0.25) 0.25

BDT (5% movement).......................................... — — — —

USD (5% movement)......................................... (3.65) 3.65 (2.73) 2.73

(vi) There are no outstanding Forward Foreign Exchange Contracts entered into by the Company during current and
previous year.

292
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

41. Financial Instruments: Fair Values and Risk Management (contd.)

(C) Valuation techniques and significant unobservable inputs

Type Valuation technique Significant unobservable Inter-relationship

inputs between significant
unobservable
inputs and fair value
measurement

Other Non-current Discounted cash flows: The valuation – Forecast Annual revenue Generally, a changes in
assets: Investment model considers the present value of growth the annual revenue growth
measured at expected receipt/payment discounted – Forecast EBIDA growth margin rate is accompanied similar
amortised cost using appropriate discounting rates. – Risk adjustment discounted rate change in EBIDA margin.

Current The fair values of investments in mutual Not applicable Not applicable
investments – in fund units is based on the net asset
mutual funds value (‘NAV’) as stated by the issuers of
these mutual fund units in the published
statements as at Balance Sheet date.
NAV represents the price at which the
issuer will issue further units of mutual
fund and the price at which issuers will
redeem such units from the investors.


Carrying amounts of cash and cash equivalents, trade receivables, loans, trade payables and other financial liabilities as at
31st March 2022 and 31st March 2021 approximate the fair value. Difference between carrying amounts and fair values of
bank deposits, earmarked balances with banks, other financial assets, other financial liabilities and borrowings subsequently
measured at amortised cost is not significant in each of the years presented.
42.  isclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for the year
D
2021-2022 and 2020-2021, to the extent the Company has received intimation from the “Suppliers” regarding their status
under the Act.
` in Crores
As at As at
31st March, 2022 31st March, 2021
(i) Principal amount and the interest due thereon remaining unpaid to each supplier
at the end of each accounting year (but within due date as per the MSMED Act)

Principal amount due to micro and small enterprise (Refer Note 22 and 23)...... 105.02 95.54

Interest due on above.......................................................................................... — —

(ii) Interest paid by the Company in terms of Section 16 of the Micro, Small and
Medium Enterprises Development Act, 2006, along-with the amount of the
payment made to the supplier beyond the appointed day during the period......... — —

(iii) Interest due and payable for the period of delay in making payment (which have
been paid but beyond the appointed day during the period) but without adding
interest specified under the Micro, Small and Medium Enterprises Act, 2006....... — —

(iv) 
The amount of interest accrued and remaining unpaid at the end of each
accounting year...................................................................................................... — —

(v) Interest remaining due and payable even in the succeeding years, until such date
when the interest dues as above are actually paid to the small enterprises.......... — —

 ues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of
D
information collected by the Management. This has been relied upon by the auditors.

293
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
43. Disclosure of Lease as per Ind AS 116
The following is the summary of practical expedients elected on application:
(i) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
(ii) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on
the date of initial application.
(iii) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
(iv) Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is
applied only to contracts that were previously identified as leases under Ind AS 17.
The weighted average incremental borrowing rate applied to lease liabilities as at 31st March 2022 is 8.50% (2020-2021 8.50%)
The changes in the carrying value of right of use (ROU) assets for the year ended 31st March 2022 and 31st March 2021 are
disclosed in Note 2B.
` in Crores
Amount as at Amount as at
Particulars
31st March, 2022 31st March, 2021
ROU Balance at the beginning of the year.................................................................... 150.55 124.24
Additions (Refer Note 2B)................................................................................................. 43.75 54.91
Amortisation cost accrued during the year (Refer Note 2B).............................................. (27.50) (24.97)
Deletions (Net off accumalated amortisation) ................................................................... (1.65) (3.63)
ROU Balance at the end of the year.............................................................................. 165.15 150.55

Lease Liabilities at the beginning of the year............................................................... 90.10 60.01

Additions............................................................................................................................ 43.77 54.90
Interest cost accrued during the year................................................................................ 9.49 7.49
Payment of lease liabilities................................................................................................ (32.76) (28.19)
Deletion............................................................................................................................. (1.72) (4.11)
Lease Liabilities at the end of the year......................................................................... 108.88 90.10

Current Lease Liabilities.................................................................................................... 22.95 17.41

Non-current Lease Liabilities............................................................................................. 85.93 72.69
Total Lease Liabilities...................................................................................................... 108.88 90.10

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet
the obligations related to lease liabilities as and when they fall due.
Rental expense recorded for short-term leases or cancelable in nature was ₹ 13.16 Crores (2020-2021 ₹ 15.58 Crores)
The table below provides details regarding the contractual maturities of lease liabilities on an undiscounted basis:
` in Crores
Amount as at Amount as at
Particulars
31st March, 2022 31st March, 2021
Not later than one year....................................................................................................... 31.10 24.11
Later than one year and not later than five years............................................................... 81.61 67.72
Later than five years........................................................................................................... 22.99 22.45

44. Exceptional Item


The Company has made an assessment of the recoverable amount for its long-term investment in Kansai Paints Lanka (Private)
Limited after taking in to account its past performance, current change in economic and market conditions consequent to the
severe detoriation of political and economic conditions, currency devaluation and very high inflation. Accordingly, the Company
determined the recoverable amount for this investment in subsidiary and recorded additional provision for impairment of
₹ 11.39 Crores (2020-2021 ₹ 10.82 Crores).

294
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

45. (a) Merger of Marpol Private Limited with Kansai Nerolac Paints Limited
(i) Pursuant to the scheme of Arrangement ('the Scheme') approved by the National Company Law Tribunal ('the NCLT'),
Mumbai Bench vide its order dated on 10th August 2021, Marpol Private Limited (the Merged Undertaking) wholly owned
subsidiary of the Company, merged with the Company with effect from 1st July 2019 ('the appointed date'). Pursuant to
necessary filings with the concerned Registrar of Companies, the Scheme has become effective from 21st October, 2021.
In accordance with Appendix C of Ind AS 103 'Business Combinations under common control' and comparatives have
been restated to give effect of the amalgamation from the beginning of the previous year, irrespective of the actual date of
the combination. Accordingly, business combination is accounted with effect from 1st April 2020.
(ii) The Merged Undertaking is engaged in the business of manufacturing powder and paint. The acquisition is in-line with the
Company's strategy to grow the business and saving in costs of operations.
(iii) Accounting treatment of the arrangement
Business combination is accounted for using the 'pooling of interests' method as per Appendix C of Ind AS 103 - Business
Combinations as notified under Section 230 to 232 of the Companies Act, 2013 and same is in line with the approved
scheme, which involves the following:
(a) The financial information in the financial statements in respect of prior periods is restated as if the business
combination had occured from the beginning of the preceding period in the financial statements, irrespective of the
actual date of the combination. Accordingly, business combinations is accounted with effect from 1st April 2020.
(b) The Company has recorded the asset and liabilities of the Merged Undertaking vested in it pursuant to this Scheme
at the respective book values appearing in the books of the Merged Undertaking.
(c) The value of investment in the Merged Undertaking in the books of the Company shall be cancelled.
(d) No adjustments are made to reflect fair values, or recognise any new assets or liabilities.
(e) As per clarification in Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 9, goodwill has been recognised
in the books of the Company.
(f) The difference between the net assets of the Merged Undertaking transferred to Company, after making adjustment
specified in (c) and (d) shall be adjusted in 'Other Equity' of the Company.
Accordingly, the merger has resulted in transfer of assets and liabilities in accordance with the terms of the Scheme at the
following summarised values:
` in Crores
Particulars As at As at
31st March, 2021 1st April, 2020
ASSETS
Non-current Assets
a) Property, Plant and Equipment....................................................................... 18.57 14.25
b) Capital Work-in-progress................................................................................ — 4.32
c) Right of Use Assets (ROU)............................................................................. 9.77 9.98
d) Investment Property ...................................................................................... — —
e) Other Intangible Assets.................................................................................. 4.20 6.28
f) Financial Assets:
i) Investments............................................................................................... — —
ii) Loans ........................................................................................................ — —
iii) Other financial assets................................................................................ — —
g) Non-current Tax Assets (Net).......................................................................... 0.62 0.23
h) Other Non-current Assets............................................................................... — —
Total Non-current Assets............................................................. 33.16 35.06
Current Assets
a) Inventories...................................................................................................... 18.19 13.69
b) Financial Assets:
i) Investments............................................................................................... — —
ii) Trade Receivables.................................................................................... 17.68 14.96
iii) Cash and Cash Equivalents...................................................................... 0.12 0.19
iv) Bank Balances other than Cash and Cash Equivalents............................ —
v) Other Financial Assets.............................................................................. 0.07 0.06
c) Other Current Assets...................................................................................... 0.71 0.56
Total Current Assets..................................................................... 36.77 29.46
Total Assets (A)............................................................................. 69.93 64.52

EQUITY AND LIABILITIES

Liabilities
Non-current Liabilities
a) Financial Liabilities:
Lease Liabilities................................................................................... — —
Other financial liabilities....................................................................... — —
b) Provisions.................................................................................................. 0.41 —
c) Deferred Tax Liabilities (Net)..................................................................... 5.12 6.09
Total Non-current Liabilities........................................................ 5.53 6.09

295
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

45. (a) Merger of Marpol Private Limited with Kansai Nerolac Paints Limited (contd.)
` in Crores
Particulars As at As at
31st March, 2021 1st April, 2020
Current Liabilities
a) Financial Liabilities:
i) Borrowings........................................................................................... 8.34 14.20
ii) Lease Liabilities................................................................................... —
iii) Trade Payables.................................................................................... 24.11 11.80
iv) Other Financial Liabilities..................................................................... 0.35 0.86
b) Other Current Liabilities............................................................................. 0.08 0.19
c) Provisions.................................................................................................. 1.73 0.31
d) Current Tax Liabilities (Net)....................................................................... — —
Total Current Liabilities................................................................ 34.61 27.36
Total Liabilities (B)........................................................................ 40.14 33.45

Total Net identifiable Assets acquired C = (A-B)....................... 29.79 31.07

Recognition of Goodwill (D)........................................................ — —
Cost of Investment in the Merged Undertaking (E)................... 34.32 34.32
Elimination of Inter-company Transactions (F)......................... — —

Net impact transferred to other Equity G= C+D-E-F.................. (4.53) (3.25)

Net impact in Retained Earnings...................................................................... — (3.25)

Total..................................................................................................................... — (3.25)
iv) Other adjustments/matters arising out of merger
As per Appendix C of Ind AS 103 'Business Combination' for all the business combinations under common controls the
financial information in the financial statements in respect of prior period should be restated as if the business combination
had occurred from the beginning of the preceding period in the financial statements, irrespective of acrual date of the
combination. Hence financial statements of the Merged Undertaking are merged with effect from 1 April 2020. Accordingly
figures for the year ended 31 March 2021 reinstated are after giving effect to the merger.

45. (b) Merger of Perma Construction Aids Private Limited with Kansai Nerolac Paints Limited
(i) Pursuant to the scheme of Arrangement ('the Scheme') approved by the National Company Law Tribunal ('the NCLT'),
Ahemdabad Bench vide its order dated 27th September 2021, Perma Construction Aids Private Limited (the Merged
Undertaking) wholly owned subsidiary of the Company, merged with the Company with effect from 1st July 2019 ('the
appointed date'). Pursuant to necessary filings with the concerned Registrar of Companies, the Scheme has become
effective from 21st October, 2021. In accordance with Appendix C of Ind AS 103 'Business Combinations under common
control' and comparatives have been restated to give effect of the amalgamation from the beginning of the previous
year, irrespective of the actual date of the combination. Accordingly, business combination is accounted with effect from
1st April 2020.
(ii) The Merged Undertaking is engaged in the business of manufacturing paint. The acquisition is in-line with the Company's
strategy to grow the business and saving in costs of operations.
(iii) Accounting treatment of the arrangement
Business combination is accounted for using the 'pooling of interests' method as per Appendix C of Ind AS 103 - Business
Combinations as notified under Section 230 to 232 of the Companies Act, 2013 and same is in line with the approved
scheme, which involves the following:
(a)  he financial information in the financial statements in respect of prior periods is restated as if the business
T
combination had occured from the beginning of the preceding period in the financial statements, irrespective of the
actual date of the combination. Accordingly, business combinations is accounted with effect from 1st April 2020.
(b) The Company has recorded the asset and liabilities of the Merged Undertaking vested in it pursuant to this Scheme
at the respective book values appearing in the books of the Merged Undertaking.
(c) The value of investment in the Merged Undertaking in the books of the Company shall be cancelled.
(d) No adjustments are made to reflect fair values, or recognise any new assets or liabilities
(e) As per clarification in Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 9, goodwill has been recognised
in the books of the Company
(f)  he difference between the net assets of the Merged Undertaking transferred to Company, after making adjustment
T
specified in (c) and (d) shall be adjusted in 'Other Equity' of the Company.

296
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

45. (b) Merger of Perma Construction Aids Private Limited with Kansai Nerolac Paints
Limited (contd.)
Accordingly, the merger has resulted in transfer of assets and liabilities in accordance with the terms of the Scheme at the
following summarised values:
` in Crores
Particulars As at As at
31st March, 2021 1st April, 2020
ASSETS
Non-current assets
a) Property, Plant and Equipment....................................................................... 5.25 5.73
b) Capital Work-in-progress................................................................................ — —
c) Right of Use Assets (ROU)............................................................................. 3.21 3.21
d) Investment Property....................................................................................... — —
e) Other Intangible Assets.................................................................................. 9.44 12.59
f) Financial Assets
i) Investments............................................................................................... — —
ii) Loans ........................................................................................................ 0.13 0.13
iii) Other Financial Assets.............................................................................. — —
g) Non-current Tax Assets (Net).......................................................................... 0.21 —
h) Other Non-current Assets............................................................................... — —
Total Non-current Assets............................................................. 18.24 21.66
Current Assets
a) Inventories...................................................................................................... 3.42 3.65
b) Financial Assets..............................................................................................
i) Investments............................................................................................... — —
ii) Trade Receivables.................................................................................... 6.60 6.74
iii) Cash and Cash Equivalents...................................................................... 7.90 2.68
iv) Bank Balances other than Cash and Cash Equivalents............................ —
v) Other Financial Assets.............................................................................. — —
c) Other Current Assets ..................................................................................... 0.14 0.81
Total Current Assets..................................................................... 18.06 13.88
Total Assets (A)............................................................................. 36.30 35.54

EQUITY AND LIABILITIES

Liabilities
Non-current liabilities
a) Financial Liabilities....................................................................................
Lease Liabilities................................................................................... — —
Other Financial Liabilities..................................................................... — —
b) Provisions.................................................................................................. — —
c) Deferred Tax Liabilities (Net)..................................................................... 2.77 3.60
Total Non-current Liabilities........................................................ 2.77 3.60
Current Liabilities
a) Financial Liabilities....................................................................................
i) Borrowings........................................................................................... — —
ii) Lease Liabilities................................................................................... —
iii) Trade Payables.................................................................................... 3.70 2.58
iv) Other Financial Liabilities..................................................................... 0.02 0.16
b) Other Current Liabilities............................................................................ 0.28 0.20
c) Provisions.................................................................................................. 0.01 0.41
d) Current Tax Liabilities (Net)....................................................................... — 0.04
Total Current Liabilities................................................................ 4.01 3.39
Total Liabilities (B)........................................................................ 6.78 6.99

Total net identifiable assets acquired C = (A-B)........................ 29.52 28.55

Recognition of goodwill (D)......................................................... 0.20 0.20
Cost of investment in the Merged Undertaking (E)................... 29.10 29.10
Elimination of inter-company transactions (F).......................... — —

Net impact transferred to other equity G= C+D-E-F.................. 0.62 (0.35)

Net impact in Retained Earnings............................................................................... — (0.35)

Total.......................................................................................................................... — (0.35)
iv) Other adjustments/matters arising out of merger
A  s per Appendix C of Ind AS 103 'Business Combination' for all the business combinations under common controls the
financial information in the financial statements in respect of prior period should be restated as if the business combination
had occurred from the beginning of Ihe preceding period in the financial statements, irrespective of acrual date of the
combination. Hence financial statements of the Merged Undertaking are merged with effect from 1st April 2020. Accordingly
figures for the year ended 31st March 2021 reinstated are after giving effect to the merger.

297
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022

46. 
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the
Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:
(i) Details of Investments made are given in Note 5.
(ii) There are no Loans given by the Company in accordance with section 186 of the Companies Act, 2013 read with rules issued
thereunder.
(iii) Details of guarantees/ standby letter of credits (SBCL) issued by the Company in accordance with Section 186 of the
Companies Act, 2013 read with rules issued thereunder.
` in Crores

Name of the party Transaction Relationship Amount as at Amount as at

31st March, 2022 31st March, 2021
Kansai Nerolac Paints (Bangladesh) Limited SBLC Subsidiary
(formerly known as RAK Paints Limted) Company
(in respect of loan taken from bank) ............. 25.83 25.45
Kansai Nerolac Paints (Bangladesh) Limited Guarantees Subsidiary
(formerly known as RAK Paints Limted) Company
(in respect of loan taken from bank).............. 81.01 79.82
Kansai Paints Lanka (Private) Limited Guarantee Subsidiary
(in respect of loan taken from bank) ............. Company 8.92 12.75

47. COVID-19 Assessment

The Company has considered the impact of COVID-19 pandemic on its business operations and financial results based on its
review of current indicators of future economic conditions and expects that the carrying amount of the assets will be recovered.
However, the impact assessment of this pandemic is a continuing process given the uncertainties associated with its nature and
duration. Despite reduced cases of COVID-19 being reported in the country, there have been massive disruptions in supply chain
especially from global. Accordingly, the Company will continue to monitor any material changes to future economic conditions.

48. Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company
for holding any Benami property.
(ii) T
 he Company has identified transaction with one struck off company i.e. Chemene Bombay Private Limited as Clearing and
Forwarding Agent with whom transaction during the year amounts to ₹ 0.13 Crores (2020-2021 - ₹ 0.12 Crores).
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity, including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
(a) d
 irectly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) d
 irectly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other
relevant provisions of the Income-tax Act, 1961

298
----------------------'-
Standalone

Notes to the Standalone Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

49. Ratio Analysis and its Elements

Ratios Numerator Denominator 2021-2022 2020-2021 % Variance
Current Ratio Times Current Assets Current Liabilities 2.91 2.96 (1.65%)
Debt-Equity Ratio Times Total Debt Shareholder’s 0.02 0.02 8.12%
Equity
Debt Service Times Earnings for debt service Debt service 13.06 18.21 (28.25%)
Coverage ratio = Net profit after taxes = Interest &
+ Non-cash operating Lease Payments
expenses + Principal
Repayments
Return on Equity % Net Profits after taxes – Average 9.08% 13.50% (32.60%)
ratio Preference Dividend Shareholder’s
Equity
Inventory Turnover Times Cost of goods sold Average Inventory 3.12 2.87 8.77%
ratio
Trade Receivable Times Net credit sales Average Trade 6.47 6.16 4.91%
Turnover Ratio Receivable
Trade Payable Times Net credit purchases = Average Trade 5.33 4.64 14.77%
Turnover Ratio Gross credit purchases - Payables
purchase return
Net Capital Times Net sales = Total sales - Working capital = 3.01 2.67 12.72%
Turnover Ratio sales return Current assets –
Current liabilities
Net Profit ratio % Net Profit Net sales = Total 6.39% 11.20% (42.97%)
sales - sales return
Return on Capital % Earnings before interest Capital Employed 12.06% 17.23% (30.02%)
Employed and taxes = Tangible Net
Worth + Total Debt
+ Deferred Tax
Liability
Return on % Interest (Finance Income) Investment 4.12% 3.94% 4.57%
Investment

 eason for variation in ratios of more than 25% change is mainly due to unprecedented inflation resulting in compression in
R
margins during the financial year.

50. 
Figures pertaining to 31st March, 2021 have been recast to give effect of merger of Marpol Private Limited and Perma Construction
Aids Private Limited with Company.

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E/E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

299
 FORM AOC-I

300
(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts Rules, 2014)
Statement Containing salient features of the Financial Statement of Subsidiaries/ Associate Companies/ Joint Ventures
PART "A" : Subsidiaries
` in Crores
Profit/ Profit/ Extent of
The date since Reserves Provision
Name of Reporting Share Total Total (Loss) (Loss) Proposed Shareholding
Period when subsidiary and Investments Turnover for
Subsidiary Currency Capital Assets Liabilities before after Dividend (in
was acquired Surplus Taxation
Taxation Taxation percentage)

KNP Japan 2021-22 8.17 47.88 88.95 32.90 Nil 84.00 11.88 2.80 9.08 3.60 68%
1st October, 2012 NPR
Private Limited 2020-21 8.17 42.65 93.25 42.37 Nil 69.58 13.18 2.94 10.24 3.22 68%
Kansai Lanka 2021-22 59.36 (55.52) 34.42 30.58 Nil 23.71 (17.64) Nil (17.64) Nil 60%
Paints (Private) 30th July, 2015 LKR
Limited 2020-21 59.36 (40.24) 40.74 21.63 Nil 15.17 (7.68) Nil (7.68) Nil 60%
Kansai
Nerolac Paints 2021-22 77.93 (119.58) 169.95 211.60 Nil 230.54 (21.04) 1.38 (22.41) Nil 55%
(Bangladesh)
th
Limited 17 July, 2018 BDT
(formerly known
KANSAI NEROLAC PAINTS LIMITED

as RAK Paints 2020-21 77.93 (95.75) 145.06 162.88 Nil 163.95 (4.89) 1.21 (6.09) Nil 55%
Ltd.)
Nerofix Private 2021-22 20.00 (8.27) 73.88 62.15 Nil 110.42 (3.69) Nil (3.69) Nil 60%
17th July, 2019 INR
Limited 2020-21 20.00 (4.58) 71.55 56.12 Nil 70.00 (3.71) Nil (3.71) Nil 60%
Notes:
1. The assets and Liabilities are translated at the exchange rate prevailing at the Balance Sheet date, and income and expense items are translated at average rates of exchange for the year.
2. The reporting period of KNP Japan Pvt. Ltd, Kansai Lanka Paints Pvt. Ltd., Kansai Nerolac Paints (Bangladesh) Limited (formerly known as RAK Paints Ltd.) and Nerofix Private Limited
are same as that of holding company i.e.1st April,2020 to 31st March, 2021.
3. Names of subsidiaries which are yet to commence operations as at 31st March, 2021 - Nil
4. Names of subsidiaries which have been liquidated or sold during the year - Nil
Since the company does not have any Associates or Joint Ventures, information pertaining to Part “B” to this form relating to Associates and Joint Ventures is not given.
II

For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
P.P. Shah Anuj Jain
Chairman Managing Director
DIN: 00066242 DIN: 08091524
N.N. Tata Sonia Singh
Director Director
DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
FINANCIAL STATEMENTS

Mumbai, 10th May, 2022

-------------------'-
Consolidated

Independent Auditor’s Report

To the Members of
102nd Annual Report 2022

Kansai Nerolac Paints Limited

Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the accompanying consolidated financial statements of Kansai Nerolac Paints Limited (hereinafter referred
to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the
Group”) comprising of the consolidated Balance sheet as at March 31 2022, the consolidated Statement of Profit and Loss,
including other comprehensive income, the consolidated Cash Flow Statement and the consolidated Statement of Changes
in Equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration
of reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, the
aforesaid consolidated financial statements give the information required by the Companies Act, 2013, as amended (“the Act”)
in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India,
of the consolidated state of affairs of the Group as at March 31, 2022, their consolidated profit including other comprehensive
income, their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing (SAs), as
specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements’ section of our report. We are independent of the
Group in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the
ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements for the financial year ended March 31, 2022. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have
fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The
results of audit procedures performed by us and by other auditors of components not audited by us, as reported by them in
their audit reports furnished to us by the management, including those procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying consolidated financial statements.
Key audit matters How our audit addressed the key audit matter
Revenue recognition on sale of goods (as described in note 27 of the consolidated financial statements)
Revenue is measured based on the transaction Our audit procedures included, amongst others the following:
price, which is the consideration, adjusted for • We read and evaluated the Group’s policies for revenue recognition
volume discounts, rebates, scheme allowances, and assessed its compliance with Ind AS 115 ‘Revenue from
price concessions, incentives and returns, if any, contracts with customers’;
(‘variable consideration’) as specified in the • We obtained an understanding, evaluated the design and tested
contracts with the customers. the operating effectiveness of internal controls related to sales
including variable consideration;
An estimate of variable consideration payable to • We performed the following tests for a sample of transactions
the customers is recorded as at the year-end. relating to variable consideration:
Such estimation is done based on the terms of •  Read the terms of contract including rebates and discounts
contracts, rebates and discounts schemes and schemes as approved by authorized personnel.
historical experience.
• Assessed computation of variable consideration by comparing
We identified estimation of variable consideration it with the budget, schemes, past trends and evaluated the
as a key audit matter because the Group’s reasons for deviation, if any.
management exercises judgment in calculating
the said variable consideration. • We read and assessed the relevant disclosures made within the
consolidated financial statements.

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KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Independent Auditor’s Report (Continued)

Other Information
The Holding Company’s Board of Directors is responsible for the other information. The other information comprises the information
included in the Annual report, but does not include the consolidated financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether such other information is materially inconsistent with the consolidated financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management for the Consolidated Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated financial
statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated
financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes
in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) specified under section 133 of the Act read with the Companies Indian Accounting Standards) Rules, 2015,
as amended. The respective Board of Directors of the companies included in the Group are responsible for maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for
preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and
are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the
consolidated financial statements by the Directors of the Holding Company, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group
are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management either intends to liquidate
the Group or to cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial
reporting process of the Group.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether
the Holding Company has adequate internal financial controls with reference to financial statements in place and the
operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.

302
-------------------'-
Consolidated

Independent Auditor’s Report (Continued)

102nd Annual Report 2022

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group of which we are the independent auditors, to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the audit of the financial statements
of such entities included in the consolidated financial statements of which we are the independent auditors. For the
other entities included in the consolidated financial statements, which have been audited by other auditors, such
other auditors remain responsible for the direction, supervision and performance of the audits carried out by them.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance of the Holding Company and such other entities included in the
consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements for the financial year ended March 31, 2022 and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
Other Matter
(a) We did not audit the financial statements and other financial information, in respect of 3 subsidiaries whose financial
statements include total assets of Rs. 293.33 Crores as at March 31, 2022, total revenues of Rs. 338.25 Crores and net
cash outflows of Rs. 21.14 Crores for the year ended on that date. These financial statement and other financial information
have been audited by other auditors, whose financial statements, other financial information and auditor’s reports have
been furnished to us by the management. Our opinion on the consolidated financial statements, in so far as it relates to the
amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-sections (3) of Section 143
of the Act, in so far as it relates to the aforesaid subsidiaries is based solely on the report(s) of such other auditors.
Certain of these subsidiaries are located outside India whose financial statements and other financial information have
been prepared in accordance with accounting principles generally accepted in their respective countries and which have
been audited by other auditors under generally accepted auditing standards applicable in their respective countries.
The Holding Company’s management has converted the financial statements of such subsidiaries located outside India
from accounting principles generally accepted in their respective countries to accounting principles generally accepted
in India. We have audited these conversion adjustments made by the Holding Company’s management. Our opinion in
so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other
auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us.
Our opinion above on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements
below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the
other auditors and the financial statements and other financial information certified by the Management.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified
in paragraph 3(xxi) of the Order.
2. As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors
on separate financial statements and the other financial information of subsidiaries, as noted in the ‘other matter’
paragraph we report, to the extent applicable, that:
(a) We/the other auditors whose report we have relied upon have sought and obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the
aforesaid consolidated financial statements;
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation
of the financial statements have been kept so far as it appears from our examination of those books and reports
of the other auditors;
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement of
Other Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes
in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of
preparation of the consolidated financial statements;
(d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified
under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2022
taken on record by the Board of Directors of the Holding Company and the subsidiary company, none of the
directors of the Group’s companies, incorporated in India, is disqualified as on March 31, 2022 from being
appointed as a director in terms of Section 164 (2) of the Act;

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KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Independent Auditor’s Report (Continued)

(f) With respect to the adequacy of the internal financial controls with reference to consolidated financial statements
of the Holding Company and its subsidiary company, incorporated in India, and the operating effectiveness of
such controls, refer to our separate Report in “Annexure 2” to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid / provided by the
Holding Company and its subsidiary incorporated in India to their directors in accordance with the provisions of
section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information
and according to the explanations given to us and based on the consideration of the report of the other auditors
on separate financial statements as also the other financial information of the subsidiaries, as noted in the
‘Other matter’ paragraph:
i. The consolidated financial statements disclose the impact of pending litigations on its consolidated financial
position of the Group in its consolidated financial statements – Refer Note 35 to the consolidated financial
statements;
ii. The Group did not have any material foreseeable losses in long-term contracts including derivative contracts
during the year ended March 31, 2022;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Holding Company during the year ended March 31, 2022. There were no amounts
which were required to be transferred to Investor Education and Protection Fund by the subsidiary company
incorporated in India during the year ended March 31, 2022;
iv. a) The respective managements of the Holding Company and its subsidiary company which is incorporated
in India whose financial statements have been audited under the Act have represented to us that, to
the best of its knowledge and belief, and as disclosed in the note 47 to the consolidated financial
statements, no funds have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) by the Holding Company or such subsidiary
company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or
indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the respective Holding Company or such subsidiary company (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The respective managements of the Holding Company and its subsidiary company which is incorporated
in India whose financial statements have been audited under the Act have represented to us that, to the
best of its knowledge and belief, and as disclosed in the note 47 to the consolidated financial statements,
no funds have been received by the respective Holding Company or such subsidiary company from any
person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether
recorded in writing or otherwise, that the Holding Company or such subsidiary company shall, whether,
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries; and
c)  Based on the audit procedures that have been considered reasonable and appropriate in the
circumstances performed by us, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (a) and (b) contain any material mis-statement.
v. The final dividend paid by the Holding Company during the year in respect of the same declared for the
previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid during the year by the Holding Company and until the date of this
audit report is in accordance with section 123 of the Act.
As stated in note 17 to the consolidated financial statements, the Board of Directors of the Holding Company
have proposed final dividend for the year which is subject to the approval of the members at the ensuing
Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it
applies to declaration of dividend.
No dividend has been declared or paid during the year by the subsidiary company, incorporated in India.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003

per Anil Jobanputra

Partner
Membership Number: 110759
UDIN: 22110759AISDCB6465
Place of Signature: Mumbai
Date: May 10, 2022

304
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Consolidated

Annexure 1 to the Independent Auditor’s Report

102nd Annual Report 2022

Annexure ‘1’ referred to in paragraph under the heading “Report on other legal and regulatory requirements”
of our report of even date
Re: Kansai Nerolac Paints Limited (“the Holding Company”)
In terms of the information and explanations sought by us and given by the Holding Company its subsidiary
company incorporated in India and the books of account and records examined by us in the normal course of audit
and to the best of our knowledge and belief, we state that:
There are no qualifications or adverse remarks in the Companies (Auditors Report) Order (CARO) report of the subsidiary
company incorporated in India included in the consolidated financial statements. Accordingly, the requirement to report on
clause 3(xxi) of the Order is not applicable to the Holding Company.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Anil Jobanputra
Partner
Membership Number: 110759
UDIN: 22110759AISDCB6465
Place of Signature: Mumbai
Date: May 10, 2022

305
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Annexure 2 to the Independent Auditor’s Report

Annexure 2 to the Independent Auditor’s Report of even date on the consolidated financial statements of
Kansai Nerolac Paints Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies
Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of Kansai Nerolac Paints Limited (hereinafter referred
to as the “Holding Company”) as of and for the year ended March 31, 2022, we have audited the internal financial controls
with reference to consolidated financial statements of the Holding Company and its subsidiary (the Holding Company and
its subsidiary together referred to as “the Group”), which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the companies included in the Group, which are companies incorporated in India, are
responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting
criteria established by the Holding Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence
to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors,
the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Holding Company’s internal financial controls with reference to these
consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, specified
under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both, issued by ICAI.
Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether adequate internal financial controls with reference to consolidated financial
statements was established and maintained and if such controls operated effectively in all material respects.
Our responsibility is to express an opinion on the company’s internal financial controls over financial reporting with reference
to these consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing,
both, issued by Institute of Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act,
to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting with reference to these consolidated financial statements was established
and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
with reference to these consolidated financial statements and their operating effectiveness. Our audit of internal financial
controls with reference to consolidated financial statements included obtaining an understanding of internal financial controls
with reference to these consolidated financial statements, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion
on the internal financial controls with reference to these consolidated financial statements.
Meaning of Internal Financial Controls with Reference to Consolidated Financial Statements
A company’s internal financial control with reference to consolidated financial statements is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal financial control with
reference to consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets

306
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Consolidated

Annexure 2 to the Independent Auditor’s Report (Contd.)

102nd Annual Report 2022

of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
of the company are being made only in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition
of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with Reference to Consolidated Financial Statements
Because of the inherent limitations of internal financial controls with reference to consolidated financial statements, including
the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to consolidated
financial statements to future periods are subject to the risk that the internal financial controls with reference to consolidated
financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company and its subsidiary company, which are companies incorporated in India, have,
maintained in all material respects, adequate internal financial controls with reference to these consolidated financial
statements and such internal financial controls with reference to these consolidated financial statements were operating
effectively as at March 31,2022, based on the internal control over financial reporting criteria established by the Holding
Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For S R B C & CO LLP

Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003

per Anil Jobanputra

Partner
Membership Number: 110759
UDIN: 22110759AISDCB6465
Place of Signature: Mumbai
Date: May 10, 2022

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KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Consolidated Balance Sheet as at 31 st

March, 2022
` in Crores
Note As at 31 March, 2022
st
As at 31 March, 2021
st

ASSETS
Non-current Assets
Property, Plant and Equipment............................................................ 2 1775.38 1691.50
Capital Work-in-progress..................................................................... 224.58 206.85
Right of Use Assets (ROU).................................................................. 3 174.00 160.71
Investment Property ........................................................................... 4 0.18 0.18
Goodwill on Consolidation .................................................................. 5A 19.78 19.78
Other Intangible Assets....................................................................... 5B 26.82 40.02
2220.74 2119.04
Financial Assets:
Investments.................................................................................... 6 1.08 0.95
Other Financial Assets.................................................................... 7 13.87 14.84
14.95 15.79
Non-Current Tax Assets (Net).............................................................. 155.77 130.47
Other Non-current Assets.................................................................... 8 87.64 90.19
.Total Non-current Assets.................................................. 2479.10 2355.49
Current Assets
Inventories........................................................................................... 9 1629.55 1197.93
Financial Assets:
Investments.................................................................................... 10 209.46 668.06
Trade Receivables......................................................................... 11 1093.33 956.35
Cash and Cash Equivalents........................................................... 12 77.04 102.94
Bank Balances other than Cash and Cash Equivalents................ 13 28.96 21.59
Other Financial Assets................................................................... 14 26.49 60.19
1435.28 1809.13
Other Current Assets........................................................................... 15 165.45 170.80
.Total Current Assets......................................................... 3230.28 3177.86
Total Assets....................................................................... 5709.38 5533.35
EQUITY AND LIABILITIES
Equity
Equity Share Capital............................................................................ 16 53.89 53.89
Other Equity......................................................................................... 17 4078.33 3999.01
Equity attributable to owners of the Company.................................... 4132.22 4052.90
Non-Controlling Interests..................................................................... 17 19.29 36.28
Total Equity........................................................................ 4151.51 4089.18
Liabilities
Non-current Liabilities
Financial Liabilities:
Borrowings................................................................................ 18 10.94 17.19
Lease Liabilities........................................................................ 45 92.11 77.12
Provisions...................................................................................... 19 22.27 0.45
Deferred Tax Liabilities (Net).......................................................... 20 106.49 108.89
.Total Non-current Liabilities............................................. 231.81 203.65
Current Liabilities
Financial Liabilities:
Borrowings................................................................................ 21 192.06 155.91
Lease Liabilities........................................................................ 45 23.60 18.78
Trade Payables......................................................................... 22
Total Outstanding dues of Micro Enterprises and Small
Enterprises.......................................................................... 102.37 93.64
 Total Outstanding dues of creditors other than Micro
Enterprises and Small Enterprises.................................... 878.27 813.18
980.64 906.82
Other Financial Liabilities............................................................... 23 52.98 94.20
1249.28 1175.71
Other Current Liabilities................................................................. 24 51.17 37.69
Provisions...................................................................................... 25 20.62 22.21
Current Tax Liabilities (Net)............................................................ 26 4.99 4.91
.Total Current Liabilities.................................................... 1326.06 1240.52
.Total Liabilities.................................................................. 1557.87 1444.17
.Total Equity and Liabilities............................................... 5709.38 5533.35
Significant Accounting Policies.................................................................. 1
The notes referred to above form an integral part of Consolidated Financial Statements

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E/E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

308
----------------------'-
Consolidated

Consolidated Statement of Profit and Loss for the year ended 31

102nd Annual Report 2022

st
March, 2022
` in Crores
Year ended Year ended
Note 31st March, 2022 31st March, 2021
Income
Revenue from Operations...................................................................... 27 6369.35 5074.25
Other Income......................................................................................... 28 25.41 38.21
Total Income......................................................................................... 6394.76 5112.46
Expenses
Cost of Materials Consumed.................................................................. 29 4318.57 2935.79
Purchases of Stock-in-trade................................................................... 401.54 317.21
 Changes in Inventories of Finished Goods, Work-in-progress and
Stock-in-trade.................................................................................................. 30 (292.81) (106.47)
Employee Benefits Expense.................................................................. 31 355.58 304.68
Finance Costs........................................................................................ 32 28.59 23.74
Depreciation and Amortisation Expenses.............................................. 33 169.77 165.30
Other Expenses..................................................................................... 34 937.11 759.76
Total Expenses..................................................................................... 5918.35 4400.01
Profit Before Tax......................................................................................... 476.41 712.45
Tax Expense
Current Tax............................................................................................. 20 136.46 186.02
Deferred Tax........................................................................................... 20 (3.20) 0.71
Total Tax Expense................................................................................ 133.26 186.73
Profit for the Year....................................................................................... 343.15 525.72
Other Comprehensive Income
(i) Items that will not be reclassified to Consolidated Statement of
Profit and Loss
(a) Remeasurement of Employee Defined Benefit Liability................... 3.05 0.20
(b) Income tax relating to items that will not be reclassified to
Consolidated Statement of Profit and Loss...................................... (0.84) (0.07)
Net Other Comprehensive income not to be reclassified subsequently
to Consolidated Statement of Profit and Loss............................................... 2.21 0.13
(ii) Items that will be subsequently reclassified to Consolidated Statement
of Profit and Loss
(a) Exchange Differences on translation of financial statements of
foreign subsidiaries.......................................................................... 1.00 (0.22)
(b) Income tax relating to items that will be reclassified to Consolidated
Statement of Profit and Loss............................................................ — —
Net Other Comprehensive income to be reclassified subsequently
to Consolidated Statement of Profit and Loss........................................ 1.00 (0.22)
Other Comprehensive Income (net of taxes)........................................... 3.21 (0.09)
Total Comprehensive Income for the year............................................... 346.36 525.63
Profit Attributable to:
Owners of the Company........................................................................ 358.86 529.74
Non-Controlling Interests....................................................................... (15.71) (4.02)
Profit for the year................................................................................. 343.15 525.72
Other Comprehensive Income attributable to:
Owners of the Company........................................................................ 3.35 (0.02)
Non-Controlling Interests....................................................................... (0.14) (0.07)
Other Comprehensive Income for the year 3.21 (0.09)
Total Comprehensive Income attributable to:
Owners of the Company........................................................................ 362.21 529.72
Non-Controlling Interests....................................................................... (15.85) (4.09)
Total Comprehensive Income for the year............................................... 346.36 525.63

Earnings per Share (of ₹ 1 each):

Basic and Diluted (in `).......................................................................... 36 6.66 9.83
Significant Accounting Policies................................................................ 1
The notes referred to above form an integral part of Consolidated Financial Statements

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E/E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

309
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Consolidated Statement of Changes in Equity

for the year ended 31st March, 2022
A. Equity Share Capital ` in Crores
Balance as at 1st April, 2020......................................................................................................................................... 53.89
Changes in Equity Share Capital during 2020-21..................................................................................................... —
Balance as at the 31st March, 2021.............................................................................................................................. 53.89
Changes in Equity Share Capital during 2021-22..................................................................................................... —
Balance as at the 31st March, 2022.............................................................................................................................. 53.89

B. Other Equity
` in Crores
Foreign Total
Capital Securities General Retained Currency attributable to Attributable
Total
Reserve Premium Reserve Earnings Translation owners of the to NCI

Balance as at 1st April, 2021...................................... 0.30

I 12.56
I 488.51
I 3,504.18
IReserve
(6.54)
I
Company
3,999.01
I 36.28
I 4,035.30
Profit for the year........................................................ — — — 358.86 — 358.86 (15.71) 343.15
Other Comprehensive Income:
Remeasurement of Employee Defined Benefit
Liability..................................................................... — — — 3.18 — 3.18 (0.13) 3.05
 Deferred Tax on Remeasurement of Employee
Defined Benefit Liability........................................... — — — (0.84) — (0.84) — (0.84)
Exchange differences on translation of foreign
operations................................................................ — — — — 1.00 1.00 — 1.00
Other Comprehensive Income, (net of tax)............. — — — 2.34 1.00 3.34 (0.13) 3.21
Total Comprehensive Income for the Year.............. — — — 361.20 1.00 362.20 (15.84) 346.36
Transaction with Owners in their Capacity as
Owners:
Dividends................................................................. — — — (282.89) — (282.89) (1.15) (284.04)
— — — (282.89) — (282.89) (1.15) (284.04)
Balance as at 31st March, 2022................................. 0.30 12.56 488.51 3582.49 (5.54) 4078.33 19.29 4097.62

` in Crores
Foreign Total
Capital Securities General Retained Currency attributable to Attributable Total
Reserve Premium Reserve Earnings Translation owners of the to NCI
Reserve Company
Balance as at 1st April, 2020....................................... 0.30 12.56 488.51 3211.36 (6.32) 3706.41 21.68 3728.09
Profit for the year........................................................ — — — 529.74 — 529.74 (4.02) 525.72
Other Comprehensive Income:
Remeasurement of Employee Defined Benefit
Liability.................................................................. — — — 0.27 — 0.27 (0.07) 0.20
 Deferred Tax on Remeasurement of Employee
Defined Benefit Liability........................................ — — — (0.07) — (0.07) — (0.07)
Exchange differences on translation of foreign
operations............................................................. — — — — (0.22) (0.22) — (0.22)
Other Comprehensive Income, (net of tax)..................... — — — 0.20 (0.22) (0.02) (0.07) (0.09)
Total Comprehensive Income for the Year................. — — — 529.94 (0.22) 529.72 (4.09) 525.63
Transaction with Owners in their Capacity as Owners:
Issue of Share Capital.......................................... — — — — — — 19.73 19.73
Dividends.............................................................. — — — (237.12) — (237.12) (1.03) (238.15)
— — — (237.12) — (237.12) 18.70 (218.42)
Balance as at 31st March, 2021.................................. 0.30 12.56 488.51 3504.18 (6.54) 3999.01 36.28 4035.30

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E/E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

310
----------------------'-
Consolidated

Consolidated Statement of Cash Flows

for the year ended 31st March, 2022
102nd Annual Report 2022

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021

Cash Flow from Operating Activities

Net Profit before tax...................................................................................... 476.41 712.45
Adjustments for:
Depreciation and Amortization Expenses................................................ 169.77 165.30
Fair Value Loss/(Gain) on Financial Instruments recognised through FVTPL 0.61 (4.24)
Unrealised Foreign Exchange (Gain) (net).............................................. (0.95) (0.28)
Profit on Sale of Current Investments (Net)............................................. (14.29) (10.12)
Interest Income........................................................................................ (2.59) (6.20)
Dividend Income...................................................................................... (0.03) (0.03)
Finance Cost........................................................................................... 28.59 23.74
(Profit) on Sale of Property, Plant and Equipment (Net).......................... (0.60) (2.46)
Impairment loss allowance on trade receivables..................................... 2.81 11.92
Provisions/Liabilities no longer required written back.............................. (47.44) (8.23)
135.88 169.40
Operating Profit before Working Capital Changes........................................ 612.29 881.85
(Increase) in Trade And Other Receivables.................................................. (106.00) (211.35)
(Increase) in Inventories............................................................................... (431.61) (189.58)
Increase in Trade Payables, Other Financial Liabilities and Provisions....... 111.85 322.09
(425.76) (78.84)
Cash Generated from Operations................................................................. 186.53 803.01
Direct Taxes Paid (Net of Refunds)............................................................... (161.76) (157.14)
Net Cash Flows generated from Operating Activities............................. 24.77 645.87
Cash Flow from Investing Activities
Purchase of Property, Plant and Equipment and Other Intangible Assets
(Including Adjustments on Account of Capital Work-In-Progress, Capital
Creditors and Capital Advances)................................................................. (219.01) (103.79)
Proceeds from Sale Property, Plant, Equipment........................................... 1.07 2.92
Purchase of non current Investments.......................................................... (0.14) (0.11)
Purchase of current Investments................................................................. (3,014.36) (3,276.89)
Proceeds from Sale/ Redemption of Investments......................................... 3,486.64 2,928.29
Interest Received.......................................................................................... 2.59 6.20
Dividend Received........................................................................................ 0.03 0.03
Investments in fixed deposits........................................................................ (7.28) (9.49)
Net Cash Flows generated from / (used in) Investing Activities............ 249.54 (452.84)
Cash Flow from Financing Activities
Issue of Equity Share Capital........................................................................ — 19.73
(Repayment of) Long-term Borrowings......................................................... (0.05) (4.96)
Proceeds from / (Repayment of) Current Borrowings................................... 26.99 (3.90)
Payment of Lease Liabilities......................................................................... (34.11) (29.91)
Interest Paid.................................................................................................. (18.10) (15.95)
Dividend Paid................................................................................................ (284.04) (239.17)
Net Cash Flows (used in) Financing Activities........................................ (309.31) (274.16)
Net (Decrease) in Cash and Cash Equivalents........................................ (35.00) (81.13)

311
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Consolidated Statement of Cash Flows

for the year ended 31st March, 2022
` in Crores

Year ended Year ended

31st March, 2022 31st March, 2021
 ash and Cash Equivalents at Beginning of the year the components
C
being: (Refer note 11)
Cash on Hand.......................................................................................... 0.30 1.03
Cheques on hand.................................................................................... 16.78 3.55
Balances with Banks............................................................................... 85.86 49.67
Deposit with Banks with less than 3 months maturity.............................. — 125.13
Bank overdrafts and Cash Credit (Refer Note 21)................................... (79.00) (75.26)
Effect of exchange rate fluctuation.......................................................... (0.11) 0.84
23.83 104.96
Cash and Cash Equivalents at end of the year the components

being: (Refer note 11)
Cash on Hand.......................................................................................... 1.11 0.30
Cheques on hand.................................................................................... 23.34 16.78
Balances with Banks................................................................................ 51.61 85.86
Bank overdrafts and Cash Credit (Refer Note 21).................................... (88.21) (79.00)
Effect of exchange rate fluctuation............................................................ 0.98 (0.11)
(11.17) 23.83
Net (Decrease) as disclosed above................................................................ (35.00) (81.13)

Debt Reconciliation Statement in accordance with Ind AS 7

` in Crores
31 March, 2022
st
31 March, 2021
st

Opening Balances
Long-term Borrowings....................................................................................................... 17.19 23.44
Current Borrowings (Excluding Bank overdrafts and Cash Credit)................................... 72.09 79.52

Movements
Long-term Borrowings....................................................................................................... (6.25) (6.25)
Current Borrowings (Excluding Bank overdrafts and Cash Credit)................................... 31.76 (7.43)

Closing Balances
Long-term Borrowings....................................................................................................... 10.94 17.19
Current Borrowings (Excluding Bank overdrafts and Cash Credit)................................... 103.85 72.09

Notes:
i) Figures in brackets are outflows/deductions.
ii) The above cash flow statement is prepared under the “Indirect Method” as set out in the Indian Accounting Standard (Ind AS-7) -
Statement of Cash Flows.

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah Anuj Jain
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E/E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. Tata Sonia Singh
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. Pai G.T. Govindarajan
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

312
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

A. Corporate Information
 Kansai Nerolac Paints Limited (the “Holding Company”) is a public limited company domiciled in India and incorporated under the
provisions of the Companies Act. Company’s shares are listed on National Stock Exchange and Bombay Stock Exchange. The
registered office of the Company is located at Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai - 400013. The Holding
Company is principally engaged in the manufacturing of Paints.
Kansai Paint Co., Ltd., Japan is immediate and ultimate holding company of Kansai Nerolac Paints Limited and is based and listed
in Japan. Financial Statements of Kansai Paint Co., Ltd., Japan are available in public domain.
The Consolidated Financial Statements relate to Kansai Nerolac Paints Ltd (the “Holding Company”) and its Subsidiary Companies,
KNP Japan Private Limited, a company incorporated in Nepal in which the Holding Company has 68% equity holding, Kansai Paints
Lanka (Private) Limited, a company incorporated in Sri Lanka in which the Holding Company has 60% equity holding, Kansai Nerolac
Paints (Bangladesh) Limited (formerly known as RAK Paints Limited), a company incorporated in Bangladesh in which the Holding
Company has 55% equity holding and Nerofix Private Limited, a company incorporated in India in which the Holding Company has
60% equity holding, hereinafter referred to as the “Group”.
The Consolidated Financial Statements for the year ended 31st March, 2022 have been reviewed by the Audit Committee and
approved by the Board of Directors of the Holding Company at their meetings held on 10th May, 2022.

B. Basis of Preparation
1. Statement of Compliance
The Consolidated Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the
Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (there ‘Act’) and other
relevant provisions of the Act, as amended from time to time.
Details of Group’s Accounting Policies are included in Note 1.
2. Functional and Presentation Currency
The Consolidated Financial Statements are presented in Indian Rupees (INR), which is also the Group’s functional currency. All amounts
have been rounded-off to the nearest crores, unless otherwise indicated.
3. Basis of Measurement
The Consolidated Financial Statements have been prepared on the historical cost basis except for investments in mutual funds, non‑trade
equity shares, bonds and employee defined benefit plans, which are measured at fair values at the end of each reporting period.
4. Use of Estimates and Judgements
Critical accounting judgments and key sources of estimation uncertainty:
The preparation of the Consolidated financial statements in conformity with the Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and
disclosures as at date of the Consolidated financial statements and the reported amounts of the revenues and expenses for the years
presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates under different assumptions and conditions.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if
the revision affects both current and future periods.
i) Impairment of Goodwill
Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a
cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans,
future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of
value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cash generating unit
or groups of cash-generating units which are benefitting from the synergies of the acquisition and which represents the lowest
level at which goodwill is monitored for internal management purposes.
Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management
has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital
and estimated operating margins. Cash flow projections take into account past experience and represent management’s best
estimate about future developments.
ii) Critical Judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, which have the
most significant effect on the amount recognised in the financial statements.
Discount rate used to determine the carrying amount of the Group’s employees defined benefit obligation.
In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of
government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
Contingencies and Commitments
In the normal course of business, contingent liabilities may arise from litigations and other claims against the Group. Where
the potential liabilities have a low probability of crystallising or are very difficult to quantify reliably, we treat them as contingent
liabilities. Such liabilities are disclosed in the notes but are not provided for in the consolidated financial statements. Although
there can be no assurance regarding the final outcome of the legal proceedings, we do not expect them to have a materially
adverse impact on our financial position or profitability.

313
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

B. Basis of Preparation (contd.)

4. Use of estimates and judgements (contd.)
iii) Key Sources of Estimation Uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below:
Useful Lives of Property, Plant and Equipment
As described in Note 1(3)(c), the Group reviews the estimated useful lives and residual values of property, plant and equipment
at the end of each reporting period. During the current financial year, the management determined that there were no changes
to the useful lives and residual values of the property, plant and equipment.
Impairment loss allowance on trade receivables
The Group makes loss allowances for credit impaired debts based on an assessment of the recoverability of trade and other
receivables. The identification of credit impaired debts requires use of judgments and estimates. Where the expectation is
different from the original estimate, such difference will impact the carrying value of the trade and other receivables and credit
impaired debts expenses in the period in which such estimate has been changed.
Allowances for Inventories
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the
aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to
be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance
for obsolete and slow-moving inventories has been made in the consolidated financial statements.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow
model, which involve various judgements and assumptions.
Defined Benefit Plans
The costs and present value of the defined benefit gratuity plan and other long-term employee benefits are determined using
actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in
future. These include the determination of appropriate discount rate, salary escalation rate, expected rate of return on assets
and mortality rates. Due to the complexities involved in the valuation and its long-term nature, defined benefit plans are highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date and the same are disclosed in
Note 38, ‘Employee benefits’.

C. Basis of Consolidation
 he Consolidated Financial Statements comprise the financial statements of the Holding Company and its subsidiaries as at
T
31st March, 2022. Subsidiaries are entities controlled by the Holding Company. The Holding Company controls an entity when it is
exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date
on which control commences until the date on which control ceases.
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group’s interest in the net
fair value of the identifiable assets, liabilities and contingent liabilities of the entity of the entity recognised at the date of acquisition.
Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
Non-controlling Interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests
which are not owned directly or indirectly by the equity holders of the Group. They are shown separately in the consolidated statement
of comprehensive income, statement of changes in equity and consolidated balance sheet. Total comprehensive income is attributed
to the non-controlling interests based on their respective interests in a subsidiary, even if this results in non-controlling interests
having a deficit balance. Non-controlling interests (NCI) are measured at their proportionate share of the acquiree’s net identifiable
assets at the date of acquisition.
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions are eliminated.
Unrealised gains arising from transactions with equity accounted investees are eliminated against the Investments to the extent of
the Holding Company’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.

D. Recent Accounting Pronouncement

Standards issued but not yet effective
 inistry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 has notified
M
certain amendments to existing Ind AS via notification dated 23 March 2022. The same shall come into force from annual
reporting period beginning on or after *1st April 2022* which the Group has not applied as they are not effective for annual period
beginning on or after 1 April 2021. Key synopsis are as under:
– Ind AS 16 Property, Plant and Equipment - For items produced during testing/trail phase, clarification added that revenue
generated out of the same shall not be recognised in statement of profit and loss and considered as part of cost of PPE.
– Ind AS 37 Provisions, Contingent Liabilities & Contingent Assets - Guidance on what constitutes cost of fulfilling contracts
(to determine whether the contract is onerous or not) is included.

314
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

D. Recent Accounting Pronouncement (contd.)

– Ind AS 101 - First time Adoption of Ind AS - Measurement of Foreign Currency Translation Difference in case of subsidiary/
associate/ JV’s date of transition to Ind AS is subsequent to that of Parent - FCTR in the books of subsidiary/associate/JV
can be measured based Consolidated Financial Statements.
– Ind AS 103 - Business Combination - Reference to revised Conceptual Framework. For contingent liabilities/ levies,
clarification is added on how to apply the principles for recognition of contingent liabilities from Ind AS 37. Recognition of
contingent assets is not allowed.
– Ind AS 109 Financial Instruments - The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’
test in assessing whether to derecognise a financial liability.
 hile preparing the financial statement for the year ended 31 March 2022, the above amendments are not considered for
W
disclosure as standards notified by Ministry of Corporate Affairs, but not yet effective, in accordance with IND AS.

Note 1: Significant Accounting Policies

1. Classification of Assets and Liabilities
Schedule III to the Act, requires assets and liabilities to be classified as either Current or Non-current.
(a) An asset shall be classified as current when it satisfies any of the following criteria:
(i) it is expected to be realised in, or is intended for sale or consumption in, the Group’s normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is expected to be realised within twelve months after the reporting date; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting date.
(b) All assets other than current assets shall be classified as non-current.
(c) A liability shall be classified as current when it satisfies any of the following criteria:
(i) it is expected to be settled in the Group’s normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is due to be settled within twelve months after the reporting date; or
(iv) the Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the
reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
(d) All liabilities other than current liabilities shall be classified as non-current.
2. Operating Cycle
An operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents.
The Group has ascertained the operating cycle as twelve months for the purpose of current or non-current classification of assets
and liabilities.
Property, Plant and Equipment
3.
(a) Recognition and Measurement
An item of Property, Plant and Equipment that qualifies for recognition as an asset is initially measured at its cost and then
carried at the cost less accumulated depreciation and accumulated impairment, if any.
The cost of an item of Property, Plant and Equipment comprises its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates and any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended by management. The initial estimate
of the costs of dismantling and removing the item and restoring the site on which it is located is included in the cost of an item
of property, plant and equipment.
The cost of a self-constructed item of Property, Plant and Equipment comprises the cost of materials and direct labor, any other
costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and
removing the item and restoring the site on which it is located.
Tangible Property, Plant and Equipment under construction are disclosed as Capital Work-in-progress. Item of Capital Work-in-
progress is carried at cost using the principles of valuation of item of property, plant and equipment till it is ready for use, the
manner in which intended by management.
(b) Subsequent Measurement
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will
flow to the Group.
(c) Depreciation
The depreciable amount of an item of property, plant and equipment is allocated on a systematic basis over its useful life. The
Group provides depreciation on the straight line method. The Group believes that straight line method reflects the pattern in which
the asset’s future economic benefits are expected to be consumed by the Group. The depreciation method is reviewed at least at
each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future economic
benefits embodied in the asset, the method is changed to reflect the changed pattern. Such a change is accounted for as a change
in an accounting estimate in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.

315
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

Note 1: Significant Accounting Policies (contd.)

3. Property, Plant and Equipment (contd.)
(c) Depreciation (contd.)
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is
depreciated separately.
The depreciation charge for each period is generally recognised in the Consolidated Statement of Profit and Loss unless it is
included in the carrying amount of another asset.
The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 -
Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives for the current and comparable
periods are as follows:
Useful Lives Useful Lives
Asset Class (in years) (in years)
– as per Companies Act, 2013 – as estimated by the Group
Buildings 30-60 20-60
Plant and Equipments 10-20 10-25
Furniture and Fixtures 10 10-15
Vehicles 10 5-10
Office Equipments 5 5-10
Computers 3-6 3-6
Assets for Scientific Research 10-20 20
Assets on Operating lease NA 5
Tools and Appliances 10 4

Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use
(disposed off).
Depreciation charge for the year is displayed as depreciation on the face of Consolidated Statement of Profit and Loss.
(d) Disposal
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic
benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and
equipment is included in consolidated statement of profit and loss when the item is derecognised.
4. Investment Property
(a) Recognition and Measurement
Land or building held to earn rentals or for capital appreciation or both rather than for use in the production or supply of goods
or services or for administrative purposes; or sale in the ordinary course of business is recognised as Investment Property. Land
held for a currently undetermined future use is also recognised as Investment Property.
An investment property is measured initially at its cost. The cost of an Investment Property comprises its purchase price and
any directly attributable expenditure. After initial recognition, the Group chooses the cost model and carries the investment
properties at the cost less accumulated depreciation and accumulated impairment, if any.
(b) Depreciation
After initial recognition, the Group measures all of its investment properties in accordance with Ind AS 16’s requirements for
cost model. The depreciable amount of an item of investment properties is allocated on a systematic basis over its useful life.
The Group provides depreciation on the straight line method. The Group believes that straight line method reflects the pattern in
which the asset’s future economic benefits are expected to be consumed by the Group. The depreciation method is reviewed at
least at each financial year-end and, if there has been a significant change in the expected pattern of consumption of the future
economic benefits embodied in the asset, the method is changed to reflect the changed pattern. Such a change is accounted
for as a change in an accounting estimate in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates
and Errors.
The depreciation charge for each period is generally recognised in the Consolidated Statement of Profit and Loss.
The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 -
Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives for the current and comparable
periods are as follows:

Useful Lives Useful Lives

Asset Class (in years) (in years)
– as per Companies Act, 2013 – as estimated by the Group
Buildings 30-60 30-60

316
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Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

4. Investment Property (contd.)
(c) Fair Value
Fair value of investment properties is based on a valuation by an independent valuer who holds a recognised and relevant
professional qualification and has recent experience in the location and category of the investment property being valued. The
fair value of investment property is disclosed in the Note 3.
(d) Gain or loss on Disposal
Any gain or loss on disposal of an Investment Property is recognised in the Consolidated Statement of Profit and Loss.

5. Other Intangible Assets

(a) Recognition and Measurement
 n intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are initially measured at
A
its cost and then carried at the cost less accumulated impairment, if any.
Research and Development
Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge
and understanding. Expenditure incurred on research of an internal project is recognised as an expense in Consolidated
Statement of Profit and Loss, when it is incurred.
 evelopment is the application of research findings or other knowledge to a plan or design for the production of new or
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substantially improved materials, devices, products, processes, systems or services before the start of commercial production
or use. An intangible asset arising from development is recognised if, and only if, the following criteria are met:
(a) it is technically feasibile to complete the intangible asset so that it will be available for use or sale.
(b) the Group intends to complete the intangible asset and use or sell it.
(c) the Group has ability to use or sell the intangible asset.
(d) the Group can demonstrate how the intangible asset will generate probable future economic benefits.
(e) the Group has adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset.
(f) the Group has ability to measure reliably the expenditure attributable to the intangible asset during its development.
Expenditure on research activities is recognised in Consolidated Statement of Profit and Loss as incurred.

(b) Subsequent Expenditure

 ubsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset
S
to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in
Consolidated Statement of Profit and Loss as incurred.

(c) Amortisation
 he Group amortises Other Intangible Assets on the straight line method. The Group believes that straight line method reflects
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the pattern in which the asset’s future economic benefits are expected to be consumed by the Group. The amortisation method
is reviewed at each financial year-end and, if there has been any significant change in the expected pattern of consumption of
the future economic benefits embodied in the asset, the method is changed to reflect the changed pattern. Such a change is
accounted for as a change in accounting estimate in accordance with Ind AS 8- Accounting Policies, Changes in Accounting
Estimates and Errors.
The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ
from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 -
Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives as estimated by management are
as follows:

Useful Lives (in years)

Asset Class
– as estimated by the Group
Software 3-5
Non-Compete 5
Brand and Technical Knowhow 5-10
Customer Relationships 5

317
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

Note 1: Significant Accounting Policies (contd.)

6. Non-current assets or disposal group held for sale
Non-current assets, or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that they
will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any
resultant loss on a disposal group is allocated first to goodwill, and then to remaining assets and liabilities on pro rata basis, except
that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets, and biological assets, which
continue to be measured in accordance with the Group’s other accounting policies. Losses on initial classification as held for sale and
subsequent gains and losses on re-measurement are recognised in Consolidated Statement of Profit and Loss.
 nce classified as held-for-sale, then Property, Plant & Equipment, Investment Property and Other Intangible Assets are no longer
O
required to be amortised or depreciated.

7. Employee Benefits
(a) Short-term Employee Benefits:
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Group has a
present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount
of obligation can be estimated reliably.

(b) Post-Employment Benefits:

Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay further amounts.

(i) Provident and Family Pension Fund

The eligible employees of the Group are entitled to receive post employment benefits in respect of provident and family
pension fund, in which both the employees and the Group make monthly contributions at a specified percentage of the
employees’ eligible salary (currently 12% of employees’ eligible salary). The contributions are made to the provident fund
managed by the trust set up by the Group, or to the Regional Provident Fund Commissioner (RPFC) which are charged
to the Consolidated Statement of Profit and Loss as incurred.
In respect of contribution to RPFC, the Group has no further obligations beyond making the contribution, and hence, such
employee benefit plan is classified as Defined Contribution Plan. The Group’s contribution is recognised as an expense in
the Consolidated Statement of Profit and Loss.
In respect of contribution to the trust set up by the Group, since the Group is obligated to meet interest shortfall, if any,
with respect to covered employees, such employee benefit plan is classified as Defined Benefit Plan. Any obligation in this
respect is measured on the basis of independent actuarial valuation.

(ii) Superannuation
The eligible employees of the Group are entitled to receive post employment benefits in respect of superannuation fund in
which the Group makes annual contribution at a specified percentage of the employees’ eligible salary (currently 15% of
employees’ eligible salary). The contributions are made to the Life Insurance Corporation of India (LIC). Superannuation
is classified as Defined Contribution Plan as the Group has no further obligations beyond making the contribution. The
Group’s contribution is recognised as an expense in the Consolidated Statement of Profit and Loss.

Defined Benefit Plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in
respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the
current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value
of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan
(‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding
requirements.
 emeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
R
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Group determines
the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used
to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset),
taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and
benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in Consolidated
Statement of Profit and Loss.
 hen the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service
W
(‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss. The Group
recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

318
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

7. Employee Benefits (contd.)
(b) Post-Employment Benefits (contd.):
Gratuity
 he Group has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides
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a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of
an amount equivalent to 15 days salary payable for each completed year of service or part there of equal to or in excess
of six months. Vesting occurs upon completion of five years of service. The Group has obtained insurance policies with the
Life Insurance Corporation of India (LIC) and makes an annual contribution to LIC for amounts notified by LIC. The Group
accounts for gratuity benefits payable in future based on an independent external actuarial valuation carried out at the end of the
year using the projected unit credit method. Actuarial gains and losses are recognised as Other Comprehensive Income or Loss.
Provident Fund Trust
In respect of contribution to the trust set up by the Group, since the Group is obligated to meet interest shortfall, if any,
with respect to covered employees, such employee benefit plan for eligible employees is classified as Defined Benefit Plan.
Any obligation in this respect is measured on the basis of independent actuarial valuation.
(c) Retirement Benefits to Executive Directors of Holding Company
 he liability for special retirement benefit to the Executive Directors of Holding Company who became entitled prior to the
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discontinuation of the policy, is recognised in the balance sheet at its present value of the defined benefit obligation at the end of
the reporting period. The defined benefit obligation is calculated annually by actuaries using the projected united credit method.
 he present value of the said obligation is determined by discounting the estimated future cash outflows, using market yields of
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government bonds that have tenure approximating the tenures of the related liability.
 he interest expense is calculated by applying the discount rate to the defined benefit liability. The interest expense on the
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defined benefit liability is recognised in the Consolidated Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised
in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the
Consolidated Statement of Changes in Equity and in the Consolidated Balance Sheet.
 hanges in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised
C
immediately in profit or loss as past service cost.
(d) Other Long-term Employee Benefits – Compensated Absences:
The Group provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate
leave subject to certain limits for future encashment/availment. The Group makes provision for compensated absences based on
an independent actuarial valuation carried out at the end of the year. Actuarial gains and losses are recognised in the Consolidated
Statement of Profit and Loss.
8. Inventories
(a) Measurement of Inventory
The Group measures its inventories at the lower of cost and net realisable value.
(b) Cost of Inventories
The cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.
The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently
recoverable by the entity from the tax authorities), and transport, handling and other costs directly attributable to the acquisition
of finished goods, materials and services. Trade discounts, rebates and other similar items are deducted in determining the
costs of purchase.
 he costs of conversion of inventories include costs directly related to the units of production and a systematic allocation of fixed
T
and variable production overheads that are incurred in converting materials into finished goods.
Other costs are included in the cost of inventories only to the extent that they are incurred in bringing the inventories to their
present location and condition.
The cost of inventories is assigned by weighted average cost formula. The Group uses the same cost formula for all inventories
having a similar nature and use to the Group.
(c) Net Realisable Value
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale. Net realisable value is ascertained for each item of inventories with reference
to the selling prices of related finished products.
The practice of writing inventories down below cost to net realisable value is consistent with the view that assets should not
be carried in excess of amounts expected to be realised from their sale or use. Inventories are usually written down to net
realisable value item by item. Estimates of net realisable value of finished goods and stock-in-trade are based on the most

319
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

Note 1: Significant Accounting Policies (contd.)

8. Inventories (contd.)
reliable evidence available at the time the estimates are made, of the amount the inventories are expected to realise. These
estimates take into consideration fluctuations of price or cost directly relating to events occurring after the end of the period to
the extent that such events confirm conditions existing at the end of the period. Materials and other supplies held for use in the
production of inventories are not written down below cost if the finished products in which they will be incorporated are expected
to be sold at or above cost. However, when a decline in the price of materials indicates that the cost of the finished products
exceeds net realisable value, the materials are written down to net realisable value.
Amount of any reversal of write-down of inventories shall be recognised as an expense as when the event occurs.
A new assessment is made of net realisable value in each subsequent period. When the circumstances that previously caused
inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the amount of the write-down is reversed.
(d) Valuation of Spare parts, stand-by equipments and servicing equipments
Spare parts, stand-by equipment and servicing equipment are recognised as Property, Plant and Equipment if and only if it is
probable that future economic benefits associated with them will flow to the Group and their cost can be measured reliably.
Otherwise such items are classified and recognised as Inventory.
9. Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held
for the purpose of meeting short-term cash commitments rather than for investment or other purposes. For an investment to qualify
as a cash equivalent it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in
value. Therefore, an investment normally qualifies as a cash equivalent only when it has a short maturity of, say, three months or less
from the date of acquisition. For the purpose of Cash Flow Statement, Cash and Cash Equivalents includes Bank overdrafts which
are repayable on demand.

10. Government Grants

Government grants are assistance by government in the form of transfers of resources to the Group in return for past or future
compliance with certain conditions relating to the operating activities of the Group. Government grants are not be recognised until
there is reasonable assurance that the Group will comply with the conditions attaching to them and the grants will be received.
Government grants are recognised in Statement of Profit and Loss on a systematic basis over the periods in which the Group
recognises as expenses the related costs for which the grants are intended to compensate.

11. Provisions and Contingent Liabilities

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on technical
evaluation, historical warranty data and a weighting of all possible outcomes by their associated probabilities.
Restructuring
A provision for restructuring is recognised when the Group has approved a detailed formal restructuring plan, and the restructuring
either has commenced or has been announced publicly.
Onerous contracts
A contract is considered to be onerous when the expected economic benefits to be derived by the Group from the contract are lower
than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the
present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
Before such a provision is made, the Group recognises any impairment loss on the assets associated with that contract.

12. Revenue Recognition

Sale of Goods
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which
the Group expects to receive in exchange for those goods.
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which is usually on
dispatch/delivery.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, rebates, scheme
allowances,price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes
taxes collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated (using the
most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short
nature of credit period given to customers, there is no financing component in the contract.

320
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Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

12. Revenue Recognition (contd.)
 he Group has adopted Ind AS 115 Revenue from contracts with customers, with effect from April 1, 2018. Ind AS 115 establishes
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principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash flows arising from the
contracts with its customers and replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts.
The Group has adopted Ind AS 115 using the cumulative effect method whereby the effect of applying this standard is recognised at
the date of initial application (i.e. 1 April, 2018). Accordingly, the comparative information in the Consolidated Statement of Profit and
Loss is not restated.

Interest Income
Interest income is recognised using the effective interest method as set out in Ind AS 39 - Financial Instruments: Recognition and
Measurement, when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of
the revenue can be measured reliably. The effective interest method is a method of calculating the amortised cost of a financial asset
or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over
the relevant period.
Royalty Income
Royalty income is recognised on an accrual basis in accordance with the substance of the relevant agreement when it is probable that
the economic benefits associated with the transaction will flow to the Group and the amount of the revenue can be measured reliably.
Dividend Income
 ividend income is recognised when right to receive payment is established and it is probable that the economic benefits associated
D
with the transaction will flow to the Group and the amount of the revenue can be measured reliably.
13. Foreign Currency Transactions
Functional currency is the currency of the primary economic environment in which the Group operates whereas presentation currency
is the currency in which the financial statements are presented. Indian Rupee is the functional as well as presentation currency for
the Group.
A foreign currency transaction is recorded, on initial recognition in the functional currency, by applying to the foreign currency amount
the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
At the end of each reporting period, foreign currency monetary items are translated using the closing rate whereas non-monetary
items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the
transaction; and non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was measured.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at
which they were translated on initial recognition during the period or in previous Consolidated Financial Statements are recognised
in the Consolidated Statement of Profit and Loss in the period in which they arise. When a gain or loss on a non-monetary item is
recognised in Other Comprehensive Income, any exchange component of that gain or loss is recognised in Other Comprehensive
Income. Conversely, when a gain or loss on a non-monetary item is recognised in Consolidated Statement of Profit and Loss, any
exchange component of that gain or loss is recognised in Consolidated Statement of Profit and Loss.
14. Taxation
Income tax
Income tax comprises current and deferred tax. It is recognised in Consolidated Statement of Profit and Loss except to the extent that
it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax
payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected
to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws)
enacted or substantively enacted by the reporting date.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax is not recognised for:
a. temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss at the time of the transaction;
b. taxable temporary differences arising on the initial recognition of goodwill.
 eferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can
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be used. The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore, in case
of a history of recent losses, the Group recognises a deferred tax asset only to the extent that it has sufficient taxable temporary
differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset
can be realised. Deferred tax assets – unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced
to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

321
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

Note 1: Significant Accounting Policies (contd.)

14. Taxation (contd.)
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled,
based on the laws that have been enacted or substantively enacted by the reporting date.
 he measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at
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the reporting date, to recover or settle the carrying amount of its assets and liabilities.
 eferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they
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relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
15. Lease
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the
underlying assets.

(i) Right-of-use Assets (ROU Assets)

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of
the assets, as follows:

Leasehold land 90 to 99 years

Buildings 2 to 10 years

If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject
to impairment. Refer to the accounting policies in note 19 Impairment of non-financial assets.

(ii) Lease Liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the
option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they
are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating
the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because
the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes
to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.
 ease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified
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as financing cash flows.

(iii) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value.
Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over
the lease term.

Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified
as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred
in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease
term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

322
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Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

16. Financial Instruments

(a) Recognition and initial Measurement

 rade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and
T
financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss
(FVTPL), transaction costs that are directly attributable to its acquisition or issue.
(b) Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at
— amortised cost;
— Fair Value through Other Comprehensive Income (FVOCI) – debt investment;
— Fair Value through Other Comprehensive Income – equity investment; or
— FVTPL
 inancial assets are not reclassified subsequent to their initial recognition, except if and in the period the Group changes its
F
business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:
— the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
— the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent
changes in the investment’s fair value in OCI (designated as FVOCI – equity investment). This election is made on an investment
– by – investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL.
This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that
otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Financial Assets: Subsequent Measurement and Gains and Losses

Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in Consolidated Statement
of profit and loss.
Financial assets at amortised cost These assets are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment are recognised in Consolidated
Statement of Profit and Loss. Any gain or loss on derecognition is recognised in
Consolidated Statement of Profit and Loss.
Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income under the
effective interest method, foreign exchange gains and losses and impairment are
recognised in Consolidated Statement of profit and loss. Other net gains and losses
are recognised in OCI. On derecognition, gains and losses accumulated in OCI are
reclassified to profit or loss.
Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as
income in profit or loss unless the dividend clearly represents a recovery of part of the
cost of the investment. Other net gains and losses are recognised in OCI and are not
reclassified to profit or loss.

323
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

Note 1: Significant Accounting Policies (contd.)

16. Financial Instruments (contd.)
Financial Liabilities: Classification, Subsequent Measurement and Gains and Losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held for trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL
are measured at fair value and net gains and losses, including any interest expense, are recognised in Consolidated Statement
of profit and loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognised in Consolidated Statement of profit and loss. Any gain
or loss on derecognition is also recognised in Consolidated Statement of profit and loss.

(c) Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks
and rewards of ownership and does not retain control of the financial asset.
If the Group enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.
 he Group also derecognises a financial liability when its terms are modified and the cash flows under the modified terms
T
are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The
difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms
is recognised in Consolidated Statement of profit and loss.

(d) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to
realise the asset and settle the liability simultaneously.

(e) Derivative Financial Instruments

The Group uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risk.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
and are subsequently re-measured at fair value. Any changes therein are recognised in the Consolidated Statement of
profit and loss.

17. Borrowing Cost

The Group capitalises borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset as part of the cost of that asset. The Group recognises other borrowing costs as an expense in the period in which it
incurs them. Borrowing costs are interest and other costs that the Group incurs in connection with the borrowing of funds
including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to
interest costs.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.

18. Earnings Per Share

Basic earnings per share

 he Group calculates basic earnings per share amounts for profit or loss attributable to ordinary equity holders and, if presented,
T
profit or loss from continuing operations attributable to those equity holders.
Basic earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders (the numerator) by the weighted
average number of ordinary shares outstanding (the denominator) during the period.
The weighted average number of ordinary shares outstanding during the period and for all periods presented shall be adjusted for
events, other than the conversion of potential ordinary shares, that have changed the number of ordinary shares outstanding without
a corresponding change in resources.

324
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

Note 1: Significant Accounting Policies (contd.)

18. Earnings Per Share (contd.)
Diluted earnings per share
The Group calculates diluted earnings per share amounts for profit or loss attributable to ordinary equity holders and, if presented,
profit or loss from continuing operations attributable to those equity holders.
 or the purpose of calculating diluted earnings per share, the Group adjusts profit or loss attributable to ordinary equity holders, and
F
the weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares, if any.
For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares calculated for calculating
basic earnings per share and adjusted the weighted average number of ordinary shares that would be issued on the conversion of all
the dilutive potential ordinary shares into ordinary shares. Dilutive potential ordinary shares are deemed to have been converted into
ordinary shares at the beginning of the period or, if later, the date of the issue of the potential ordinary shares.

19. Measurement of Fair Values

 number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-
A
financial assets and liabilities.

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that
has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to
the Chief Financial Officer.

 he valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as
T
broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the
third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value
hierarchy in which the valuations should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. If the inputs
used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement
is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
has occurred.

20. Impairment Loss

Impairment of Financial Assets
The Group recognises loss allowances for expected credit losses on:
— financial assets measured at amortised cost; and
— financial assets measured at FVOCI- debt investments.

 t each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset
A
is ‘credit impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset
have occurred.

In accordance with Ind AS 109, the Group follows ‘simplified approach’ for recognition of impairment loss allowance on trade
receivables. The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises
impairment loss allowance based on liftime expected credit loss at each reporting date, right from its initial recognition.

 he gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic
T
prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources
of income that could generate sufficient cash flows to repay the amounts subject to the write off. However, financial assets
that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of
amounts due.

325
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

Note 1: Significant Accounting Policies (contd.)

20. Impairment Loss (contd.)
Impairment of Non Financial Assets
An impairment loss is the amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable
amount. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs of disposal and its value
in use. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Value in use is based on the estimated future cash flows, discounted to their present
value using a pre-tax discount rate.
The Group assesses at the end of each reporting period whether there is any indication that an asset is impaired. In assessing whether
there is any indication that an asset may be impaired, the Group considers External as well as Internal Source of Information. If any such
indication exists, the Group estimates the recoverable amount for the individual asset. If, and only if, the recoverable amount of an asset
is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss, unless the asset is carried at revalued amount in accordance with another Standard.
If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the
cash-generating unit to which the asset belongs (the asset’s cash-generating unit). A cash-generating unit is the smallest identifiable
group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
The Group recognises impairment loss for a cash-generating unit if, and only if, the recoverable amount of the cash-generating unit
is less than the carrying amount of the cash-generating unit. The Group allocates impairment loss of cash-generating units first to the
carrying amount of goodwill allocated to the cash-generating units, if any, and then, to the other assets of the cash-generating units
pro rata on the basis of the carrying amount of each asset in the cash-generating unit. These reductions in carrying amounts shall be
treated as impairment losses on individual assets and recognised accordingly.

21. Business Combinations

Business combinations (other than common control business combinations)
In accordance with Ind AS 103, the Group accounts for these business combinations using the acquisition method when control is
transferred to the Group. The consideration transferred for the business combination is generally measured at fair value as at the date the
control is acquired (acquisition date), as are the net identifiable assets acquired. Any goodwill that arises is tested annually for impairment.
Any gain on a bargain purchase is recognised in OCI and accumulated in equity as capital reserve if there exists clear evidence of the
underlying reasons for classifying the business combination as resulting in a bargain purchase; otherwise the gain is recognised directly in
equity as capital reserve. Transaction costs are expensed as incurred, except to the extent related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships with the acquiree. Such
amounts are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that
meets the definition of a financial instrument is classified as equity, then it is not re-measured subsequently and settlement is accounted
for within equity. Other contingent consideration is remeasured at fair value at each reporting date and changes in the fair value of the
contingent consideration are recognised in the consolidated statement of profit and loss. The valuation team regularly reviews significant
unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure
fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations
meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

If a business combination is achieved in stages, any previously held equity interest in the acquiree is re-measured at its acquisition
date fair value and any resulting gain or loss is recognised in the consolidated statement of profit and loss or OCI, as appropriate.

Common control transactions

Business combinations involving entities that are controlled by the Group are accounted for using the pooling of interests method as follows:
(i) The assets and liabilities of the combining entities are reflected at their carrying amounts.
(ii) No adjustments are made to reflect fair values, or recognise any new assets and liabilities. Adjustments are only made to
harmonise accounting policies.
(iii) T
 he financial information in the financial statements in respect of prior periods is restated as if the business combination had
occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination.
However, where the business combination had occurred after that date, the prior period information is restated only from that date.
(iv) T
 he balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding
balance appearing in the financial statements of the transferee or is adjusted against general reserve.
(v) The identity of the reserves are preserved and the reserves of the transferor become reserves of the transferee.
(vi) T
 he difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form
of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented
separately from other capital reserves.

326
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

2. Property, Plant and Equipment ` in Crores

Gross Block Accumulated Depreciation Net Block

Description As at As at As at
As at Additions/ Deductions/ Translation As at Additions/ Deductions/ Translation
31st March, 31st March, 31st March,
1st April, 2021 Adjustments Adjustments Difference 1st April, 2021 Adjustments Adjustments Difference
2022 2022 2022

Freehold Land .................................................... 120.72 0.11 — 0.02 120.85 — — — — — 120.85

(120.73) — — 0.01 (120.72) — — — — — (120.72)
Buildings.............................................................. 795.28 109.74 — (3.16) 901.86 177.28 25.14 — (0.40) 202.02 699.84
(772.62) (23.71) (0.53) 0.52 (795.28) (153.64) (23.93) (0.13) 0.16 (177.28) (618.00)
Plant and Equipments......................................... 1281.14 60.20 0.90 (1.85) 1338.59 476.56 60.83 0.83 (0.12) 536.44 802.15
(1225.39) (63.22) (5.82) 1.65 (1281.14) (422.37) (60.20) (5.77) 0.24 (476.56) (804.58)
Furniture and Fixtures......................................... 23.84 1.02 0.01 (0.06) 24.79 17.42 1.17 — (0.08) 18.51 6.28
(22.49) (1.54) (0.18) 0.01 (23.84) (16.59) (1.01) (0.18) — (17.42) (6.42)
Vehicles............................................................... 7.73 0.11 1.60 0.13 6.37 5.89 0.31 1.17 0.06 5.09 1.28
(7.38) (0.41) — 0.06 (7.73) (5.29) (0.64) — 0.04 (5.89) (1.84)
Office Equipments............................................... 17.47 1.69 0.01 (0.10) 19.05 13.88 1.35 — (0.06) 15.17 3.88
(16.99) (0.65) (0.14) 0.03 (17.47) (12.85) (1.17) (0.14) (0.00) (13.88) (3.59)
 omputers............................................................
C 52.45 8.13 6.70 (0.21) 53.67 44.77 3.93 6.70 (0.22) 41.78 11.89
(50.63) (2.20) (0.25) 0.13 (52.45) (40.89) (4.20) (0.25) 0.07 (44.77) (7.68)
Assets for Scientific Research*............................. 78.28 0.59 — — 78.87 20.68 3.10 — — 23.78 55.09

(76.36) (1.92) — — (78.28) (17.61) (3.07) — — (20.68) (57.60)

Assets on Operating Lease 351.79 31.57 7.27 (0.05) 376.04 281.90 29.07 7.27 — 303.70 72.34
(Refer Note 2.6)...................................................
(337.65) (24.32) (10.17) 0.01 (351.79) (263.33) (28.73) (10.16) — (281.90) (69.89)
Colourant Machine........................................... 0.71 0.59 — (0.23) 1.07 — — — — — 1.07
(0.40) (0.49) — 0.18 (0.71) — — — — — (0.71)
Tools and Appliances....................................... 0.94 0.61 0.19 (0.07) 1.29 0.47 0.28 — (0.17) 0.58 0.71
(0.58) (0.37) — 0.01 (0.94) (0.32) (0.16) — — (0.47) (0.47)
Total Tangible Assets........................................ 2730.35 214.36 16.68 (5.58) 2922.45 1038.85 125.18 15.97 (0.99) 1147.07 1775.38

(2631.22) (118.83) (17.09) (2.61) (2730.35) (932.89) (123.11) (16.63) (0.51) (1038.50) (1691.50)

* Net block includes Buildings ₹ 24.58 Crores (2020-2021 ₹ 24.99 Crores), Plant and Equipment ₹ 26.76 Crores (2020-2021 ₹ 28.25 Crores)
and Furniture and Fixtures ₹ 3.75 Crores (2020-2021 ₹ 4.36 Crores).
2.1. Figures in the brackets are the corresponding figures in respect of the previous year.

2.2. In above assets, net block for Plant and Machinery - ₹ 3.77 Crores (2020-2021: ₹ 4.61 Crores) are being secured against the term loans from banks
(Refer Note 18).

2.3. In above assets, net block for Freehold Land - ₹ 1.99 Crores (2020-2021: ₹ 1.99 Crores), Buildings - ₹ 5.59 Crores (2020-21: ₹ 5.91 Crores)
are being secured against the term loans from banks (Refer Note 21).

2.4. Nil amount of borrowing costs is capitalised during the financial year.

2.5. Nil amount of impairment loss is recognised during the financial year.
2.6. The Group has given Colour Dispenser Machines on operating lease to its dealers. Particulars in respect of such leases are as follows:

(a) (i) The gross carrying amount and the accumulated depreciation at the Balance Sheet date are 376.04 Crores (2020-2021 ₹ 351.79 Crores)
and ₹ 303.70 Crores (2020-2021 ₹ 281.90 Crores) respectively.

(ii) Depreciation recognised in the Consolidated Statement of Profit and Loss is ₹ 29.07 Crores (2020-2021 ₹ 28.73 Crores).

(b) The Group enters into three years cancellable lease agreements. However, the corresponding lease rentals may be receivable for a shorter
period or may be waived off. The minimum aggregate lease payments to be received in future is considered as Nil. Accordingly, the disclosure
of the present value of minimum lease payments receivable at the Balance Sheet date is not made.

2.7. CWIP ageing schedule is not given as it is not material to the group i.e. it is not more than 10% of the respective balance sheet item in Consolidated
Financial Statements.

327
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

3. Right of Use Assets (ROU) ` in Crores

Gross Block Accumulated Amortisation Net Block
Description As at As at As at As at As at
Translation Translation
1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March, 31st March,
Difference Difference
2021 2022 2021 2022 2022

Leasehold Land................................. 83.48 — — (1.27) 82.21 5.77 1.14 0.05 (0.19) 6.67 75.54
(83.73) — (0.25) — (83.48) (4.61) (0.84) (0.07) (0.39) (5.77) (77.71)

Buildings............................................ 112.56 45.53 5.83 (0.19) 152.07 29.56 28.46 4.18 (0.23) 53.61 98.46
(67.03) (58.95) (13.42) — (112.56) (13.61) (25.74) (9.79) — (29.56) (83.00)

Total Right of Use Assets (ROU) 196.04 45.53 5.83 (1.46) 234.28 35.33 29.60 4.23 (0.42) 60.28 174.00
(150.76) (58.95) (13.67) — (196.04) (18.22) (26.58) (9.86) (0.39) (35.33) 160.71

3.1. Figures in the brackets are the corresponding figures in respect of the previous year.

3.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.

3.3. Nil amount of impairment loss is recognised during the current and comparative periods.

4. Investment Property
` in Crores
Gross Block Accumulated Depreciation Net Block

Description As at As at As at As at As at
1st April, Additions Deductions 31st March, 1st April, Additions Deductions 31st March, 31st March,
2021 2022 2021 2022 2022

Freehold Land ............................................... 0.07 — — 0.07 — — — — 0.07

(0.07) (—) (—) (0.07) (—) (—) (—) (—) (0.07)
Leasehold Land.............................................. 0.01 — — 0.01 — — — — 0.01
(0.01) (—) (—) (0.01) (—) (—) (—) (—) (0.01)
Buildings ........................................................ 3.39 — — 3.39 3.29 — — 3.29 0.10
(3.39) (—) (—) (3.39) (3.29) (—) (—) (3.29) (0.10)
Total Investment Property........................... 3.47 — — 3.47 3.29 — — 3.29 0.18
(3.47) (—) (—) (3.47) (3.29) (—) (—) (3.29) (0.18)

4.1. Figures in the brackets are the corresponding figures in respect of the previous year.
4.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
4.3. Nil amount of impairment loss is recognised during the current and comparative periods.
4.4. D
 uring the financial year, no rental income was generated from the investment properties whereas direct operating expenses
of ₹ 0.26 Crores (2020-2021 ₹ 0.27 Crores) were incurred and recorded as expense in the Consolidated Statement of
Profit and Loss.
4.5. Total fair value of Investment Property is ₹ 1354.98 Crores (2020-2021 ₹ 1400.29 Crores).

Fair Value hierarchy

The fair value of investment property has been determined by external independent property valuers, having appropriate recognised
professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on the inputs to the
valuation techniques used.

Description of Valuation Technique used

The Group obtains Independent Valuations of its investment property. The fair value of the investment property have been derived
using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar
properties that have actually been sold in arms-length distance from investment property or are offered for sale in the same region.
This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an
open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on
a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located
in close proximity to the investment property; these instances have been assessed for their locational comparative advantages and
disadvantages while arriving at the indicative price assessment for Investment Property.

328
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Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

5. Goodwill and Other Intangible Assets

5A. Goodwill on Consolidation
` in Crores
Gross Block Accumulated Amortisation Net Block

Description As at Additions/ Deductions/ As at As at Additions/ Deductions/ As at As at

1st April, Adjustments Adjustments 31st March, 1st April, Adjustments Adjustments 31st March, 31st March,
2021 2022 2021 2022 2022

Goodwill.............................................................................................. 0.20 — — 0.20 — — — — 0.20

— — — (0.20) — — — — (0.20)

For KNP Japan Pvt Ltd....................................................................... 2.27 — — 2.27 — — — — 2.27

(2.27) — — (2.27) — — — — (2.27)

For Kansai Nerolac Paints (Bangladesh) Limited (Formerly known

as RAK Paints Ltd)............................................................................ 17.31 — — 17.31 — — — — 17.31
(17.31) — — (17.31) — — — — (17.31)

Total Goodwill on consolidation..................................................... 19.78 — — 19.78 — — — — 19.78

(19.78) — — (19.78) — — — — (19.78)

5B. Other Intangible Assets

` in Crores
Gross Block Accumulated Amortisation Net Block

Description As at Additions/ Deduc- Trans- As at As at Additions/ Trans- As at As at

Deductions/
1st April, Adjust- tions/Ad- lation 31st March, 1st April, Adjust- lation 31st March, 31st March,
Adjustments
2021 ments justments Difference 2022 2021 ments Difference 2022 2022

Software........................................................................ 19.69 2.38 — (0.71) 21.36 18.38 1.12 — 0.12 19.38 1.98
(19.66) (0.05) — 0.02 (19.69) (16.67) (1.73) — 0.02 (18.38) (1.31)

Customer Relationship.................................................. 29.33 — — — 29.33 14.05 5.87 — — 19.92 9.41

(29.33) — — — (29.33) (8.37) (5.68) — — (14.05) (15.28)

Brand and Technical Knowhow..................................... 20.29 — — — 20.29 8.11 3.47 — 0.01 11.59 8.70
(20.29) — — — (20.29) (4.64) (3.47) — — (8.11) (12.18)

Non-compete ................................................................ 22.64 — — — 22.64 11.39 4.53 — (0.01) 15.91 6.73

(22.64) — — — (22.64) (6.68) (4.73) — (0.02) (11.39) (11.25)

Total Other Intangible Assets..................................... 91.95 2.38 — (0.71) 93.62 51.93 14.99 — 0.12 66.80 26.82
(91.92) (0.05) — 0.02 (91.95) (36.36) (15.61) — (0.04) (51.93) (40.02)

5.1. Figures in the brackets are the corresponding figures in respect of the previous year.
5.2. Nil amount of borrowing costs is capitalised during the current and comparative period.
5.3. Nil amount of impairment loss is recognised during the current and comparative period.

6. Non-current Investments
` in Crores
As at As at
31st March, 2022 31st March, 2021

Investments in Equity Instruments:

i. Others at Fair value through profit or loss
Quoted ............................................................................................................... 0.65 0.52
Unquoted............................................................................................................ 0.38 0.38
Investments in Debentures:
Quoted................................................................................................................ 0.05 0.05
Total Non-current Investments....................................................................... 1.08 0.95
Aggregate book value of quoted investments.................................................... 0.70 0.57
Aggregate market value of quoted investments................................................. 0.70 0.57
Aggregate amount of unquoted investments...................................................... 0.38 0.38
Aggregate amount of impairment in value of investments................................. Nil Nil

329
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

7. Other Financial Assets

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Security Deposits................................................................................................... 13.87 14.84
13.87 14.84

8. Other Non-current Assets

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Capital Advances................................................................................................... 56.16 64.93
Prepaid Expenses.................................................................................................. 8.27 2.87
Balances with Indirect Tax Authorities.................................................................... 23.21 22.39
87.64 90.19

9. Inventories
` in Crores
As at As at
31st March, 2022 31st March, 2021
Raw Materials............................................................................................................. 527.01 394.19
Packing Materials....................................................................................................... 22.94 18.85
Work-in-progress........................................................................................................ 142.74 100.55
Finished Goods.......................................................................................................... 849.06 615.06
Stock-in-trade............................................................................................................. 74.66 58.04
Stores and Spares...................................................................................................... 13.14 11.24
1629.55 1197.93

Inventories amounting to ₹ 75.93 Crores (2020-2021 ₹ 83.93 Crores) were hypothecated as security for Borrowings from Banks (Refer Note 21).
Nil amount of inventories were written down to net realisable value during the current and comparable period. Similarly, Nil amount of reversal of write
down was accounted during the current and comparable periods.
Cost of Inventory recognised as an expense during the year as per note 29 and 30.

10. Current Investments

` in Crores
As at As at
31st March, 2022 31st March, 2021

(A) Investments in Bonds at FVTPL (Quoted).......................................................... 9.52 16.23

(B) Mutual Funds at FVTPL (Unquoted)................................................................... 199.94 651.83
Total Current Investment (A + B)................................................... 209.46 668.06

Aggregate book value of quoted investments................................... 9.52 16.23

Aggregate market value of quoted investments............................... 9.52 16.23
Aggregate amount of unquoted investments.................................... 199.94 651.83
Aggregate amount of impairment in value of investments................ Nil Nil

330
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

11. Trade Receivables

` in Crores
As at As at
31st March, 2022 31st March, 2021
Secured, Considered Good......................................................... — —
Unsecured, Considered Good..................................................... 1,093.33 956.35
Significant Increase in Credit Risk............................................... — —
Credit Impaired............................................................................ 49.40 46.59
Loss Allowance............................................................................ (49.40) (46.59)
— —
1093.33 956.35

Trade Receivables amounting to ₹ 102.94 Crores (2020-2021 ₹ 106.49 Crores) were hypothecated as security for Borrowings
from Banks (Refer Note 21)

Trade Receivables Ageing Schedule as at 31 March 2022

` in Crores
Outstanding for following periods from due date of payment
Particulars Not Due Less than 6 months - 1-2 2-3 More than Total
6 months 1 year years years 3 years
(i) 
Undisputed Trade receivables –
considered good .................................... 836.21 209.32 20.13 14.03 11.75 1.89 1,093.33
(ii) Undisputed Trade Receivables – which
have significant increase in credit risk.... — — — — — — —
(iii) Undisputed Trade Receivables – credit
impaired ................................................ — — — — — — —
(iv) Disputed Trade Receivables considered
good ...................................................... — — — — — — —
(v) 
Disputed Trade Receivables – which
have significant increase in credit risk.... — — — — — — —
Disputed Trade Receivables – credit
(vi) 
impaired ................................................ — — 3.12 10.26 9.41 26.61 49.40

Trade Receivables Ageing Schedule as at 31 March 2021

` in Crores
Outstanding for following periods from due date of payment
Particulars Not Due Less than 6 months - 1-2 2-3 More than Total
6 months 1 year years years 3 years
(i) 
Undisputed Trade receivables –
considered good .................................... 742.05 180.40 14.96 12.97 3.7 2.27 956.35
(ii) Undisputed Trade Receivables – which
have significant increase in credit risk.... — — — — — — —
(iii) Undisputed Trade Receivables – credit
impaired ................................................ — — — — — — —
(iv) Disputed Trade Receivables considered
good ...................................................... — — — — — — —
(v) 
Disputed Trade Receivables – which
have significant increase in credit risk.... — — — — — — —
(vi) 
Disputed Trade Receivables – credit
impaired ................................................ — 0.86 3.39 6.99 14.94 20.41 46.59

331
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

12. Cash and Cash equivalents

` in Crores
As at As at
31st March, 2022 31st March, 2021
Cash on hand............................................................................................................. 1.11 0.30
Cheques on hand....................................................................................................... 23.34 16.78
Banks balances.......................................................................................................... 52.59 85.86
77.04 102.94

13.  Bank Balance other than Cash and cash equivalents

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unpaid Dividend Accounts........................................................................................ 2.46 2.37
Fixed Deposit with Bank with more than 3 months but less than 12 months maturity.... 26.50 19.22
28.96 21.59

14. Other Current Financial Assets

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Security Deposits.................................................................................................. 7.68 6.78
GST Incentive Receivable..................................................................................... 9.86 —
 ther Receivable [Includes receivable from mutual fund ₹ NIL (2020-2021
O
₹ 48.00 Crores)]................................................................................................... 8.95 53.41
26.49 60.19

15. Other Current Assets

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unsecured and Considered Good:
Balances with Indirect Tax Authorities................................................................... 82.12 96.41
Trade Advances.................................................................................................... 56.19 51.61
Prepaid Expenses................................................................................................. 12.88 17.75
Other Receivable.................................................................................................. 14.26 5.03
165.45 170.80

332
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

16. Share Capital

As at As at
31st March, 2022 31st March, 2021
1. Authorised Share Capital (₹ in Crores).............................................. 66.50 66.50
Par Value per Share (₹)..................................................................... 1 1
Number of Equity Shares................................................................... 66,50,00,000 66,50,00,000
2. Issued, Subscribed and Fully Paid up ₹ in Crores)............................ 53.89 53.89
Par Value per Share (₹)..................................................................... 1 1
Number of Equity Shares................................................................... 53,89,19,720 53,89,19,720
3. Details of Shareholders holding more than 5% of shares:
% No. of Shares % No. of Shares
Ultimate Holding Company:
Kansai Paint Co., Ltd., Japan....................................................... 74.99 40,41,35,898 74.99 40,41,35,898
4. A
 ggregated number of bonus share issued during the period of five
years immediately preceding the reporting date by capitalisation of
security premium reserve................................................................... Nil Nil
5. The Holding Company has issued one class of shares, i.e. equity
shares, which enjoys similar rights in respect of voting, payment of
dividend and repayment of capital. On winding up of the Company,
the holders of equity shares will be entitled to receive the residual
assets of the Company, remaining after distribution of all preferential
amounts in proportion to the number of equity shares held.
6. Reconciliation of the number of shares outstanding:
Number of shares at the beginning of the year.................................. 53,89,19,720 53,89,19,720
Issued during the year....................................................................... — —
Number of shares at the end of the year........................................... 53,89,19,720 53,89,19,720
7. Disclosure of Shareholding of Promoters:
Name of Promoter: Kansai Paint Co., Ltd., Japan
Details of shares held by promoters:
No. of shares at the beginning of the year......................................... 40,41,35,898 40,41,35,898
Change during the year..................................................................... — —
No. of shares at the end of the year................................................... 40,41,35,898 40,41,35,898
% of Total Shares............................................................................... 74.99 74.99
% change during the year.................................................................. — —
8. Capital Management:
For the purpose of the Group's capital management, capital includes
issued equity share capital and all other equity reserves attributable
to the equity holders of the Group. The Group's policy is to maintain
a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business.
Management monitors the return on capital, as well as the levels of
dividends to equity shareholders.
As at 31st March, 2022, the Group has only one class of equity shares.
In order to maintain or achieve an optimal structure, the Group
allocates its capital for distribution as dividend or re-investment into
business based on its long term financial plans.
The Group monitors capital using adjusted net debt to equity ratio.
For this purpose, adjusted net debt is defined as total debt less cash
and bank balances.
Non-current Borrowings....................................................................... 10.94 17.19
Current Borrowings.............................................................................. 192.06 155.91
Gross Debt ....................................................................................... 203.00 173.10
Less : Cash and Cash Equivalent........................................................ 77.04 102.94
Less : Other Bank Deposits.................................................................. 26.50 19.22
Adjusted Net Debt............................................................................... 99.46 50.94
Total Equity ........................................................................................ 4151.51 4089.18
Adjusted Net Debt - Equity Ratio.......................................................... 0.024 0.012

333
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

17. Other Equity

` in Crores
Foreign Total
Capital Securities General Retained Currency attributable to Attributable
Total
Reserve Premium Reserve Earnings Translation owners of the to NCI

Balance as at 1st April, 2021............................... 0.30

I 12.56
I 488.51
IReserve
3,504.18
I
Company
(6.54)
I 3,999.01
I I
36.28 4,035.30
Profit for the year................................................. — — — 358.86 — 358.86 (15.71) 343.15
Other Comprehensive Income:
R
 emeasurement of Employee Defined Benefit
Liability.............................................................. — — — 3.18 — 3.18 (0.13) 3.05
Deferred Tax on Remeasurement of Employee
Defined Benefit Liability.................................... — — — (0.84) — (0.84) — (0.84)
E
 xchange differences on translation of foreign
operations......................................................... — — — — 1.00 1.00 — 1.00
Other Comprehensive Income, (net of tax)...... — — — 2.34 1.00 3.34 (0.13) 3.21
Total Comprehensive Income for the Year....... — — — 361.20 1.00 362.20 (15.84) 346.36
Transaction with Owners in their Capacity as
Owners:
Dividends.......................................................... — — — (282.89) — (282.89) (1.15) (284.04)
— — — (282.89) — (282.89) (1.15) (284.04)
Balance as at 31st March, 2022.......................... 0.30 12.56 488.51 3582.49 (5.54) 4078.33 19.29 4097.62

` in Crores
Foreign Total
Capital Securities General Retained Currency attributable to Attributable Total
Reserve Premium Reserve Earnings Translation owners of the to NCI
Reserve Company
Balance as at 1st April, 2020................................ 0.30 12.56 488.51 3211.36 (6.32) 3706.41 21.68 3728.09
Profit for the year................................................. — — — 529.74 — 529.74 (4.02) 525.72
Other Comprehensive Income:
 emeasurement of Employee Defined Benefit
R
Liability........................................................... — — — 0.27 — 0.27 (0.07) 0.20

Deferred Tax on Remeasurement of
Employee Defined Benefit Liability................ — — — (0.07) — (0.07) — (0.07)
 xchange differences on translation of
E
foreign operations.......................................... — — — — (0.22) (0.22) — (0.22)
Other Comprehensive Income, (net of tax).............. — — — 0.20 (0.22) (0.02) (0.07) (0.09)
Total Comprehensive Income for the Year.......... — — — 529.94 (0.22) 529.72 (4.09) 525.63
Transaction with Owners in their Capacity as
Owners:
Issue of Share Capital................................... — — — — — — 19.73 19.73
Dividends....................................................... — — — (237.12) — (237.12) (1.03) (238.15)
— — — (237.12) — (237.12) 18.70 (218.42)
Balance as at 31st March, 2021........................... 0.30 12.56 488.51 3504.18 (6.54) 3999.01 36.28 4035.30
Analysis of Accumulated OCI, Net of Tax
` in Crores
Remeasurement of Employee Defined Benefit Liability As at As at
31st March, 2022 31st March, 2021
Opening Balance...................................................................................................... (10.93) (11.06)
Remeasurement of Employee Defined Benefit Liability, net of tax........................... 2.21 0.13
Closing Balance ....................................................................................................... (8.72) (10.93)
` in Crores
Exchange differences on translation of foreign operations As at As at
31st March, 2022 31st March, 2021
Opening Balance...................................................................................................... (6.54) (6.32)
Exchange Difference on translation of foreign operations........................................ 1.00 (0.22)
Closing Balance ....................................................................................................... (5.54) (6.54)

334
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

17. Other Equity (contd.)

Capital Reserve
Capital reserve includes profit on re-issue of forfeited shares.
Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the
Companies Act, 2013.
General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified
percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution
in a given year is more than 10% of the paid-up capital of the Group for that year, then the total dividend distribution is less than the
total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer
a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the
general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
Foreign Currency Transaction Reserve
These comprise of all exchange differences arising from translation of financial statements of foreign subsidiaries.
Dividend
For the year 2020-2021, the Directors had recommended and Shareholders had approved a interim and final dividend of 125% and
400% respectively (₹ 5.25 per share), which has been accounted in current year.
The Board has recommended a final dividend of 100% (₹ 1.00 per share) for the year, in addition the Company had declared interim
dividend of 125% (₹ 1.25 per share) paid on November 22, 2021. Accordingly, the total dividend is 225% (₹ 2.25 per share) for the
financial year ended March 31, 2022 as compared to total dividend of 525% (₹ 5.25 per share) declared last year.
The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend
of ₹ 53.89 Crores (2020-2021 ₹ 215.56 Crores) have not been recognised as liabilities.

18. Non-Current Borrowings

` in Crores
As at As at
31st March, 2022 31st March, 2021
a. Term Loans from Banks*.................................................................................... 10.94 17.19
* Secured Loans from Bank at average interest rate of 8.15% (2020-2021: 8.60%)
secured by first charge of Plant and Equipments at the units for the purpose
of acquisition of assets under business combination repayable by quarterly
instalment from February 2021, where the last instalment is payable in November
2024. Current Maturities of these Term Loans is provided separately in Note 21.
10.94 17.19

19. Provisions
` in Crores
As at As at
31st March, 2022 31st March, 2021
Provision for Compensated Absences (Refer note 38)............................................ — 0.41
Provision for Gratuity (Refer note 38)....................................................................... — 0.04
Provision for Retirement Benefits to Executive Directors (Refer note 38)................ 22.27 —
22.27 0.45

20. Income Taxes

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
A. The major components of income tax expense for the year are as under:
(i) Income tax recognised in the Consolidated Statement of Profit and Loss
Current tax:
In respect of current year.............................................................................. 136.46 186.02
Deferred tax:
In respect of current year.............................................................................. (3.20) 0.71
 Income tax expense recognised in the Consolidated Statement of
Profit and Loss............................................................................................ 133.26 186.73
(ii) Income tax expense recognised in OCI
Deferred tax expense on remeasurements of defined benefit plans............. (0.84) (0.07)
Income tax expense recognised in OCI.................................................... (0.84) (0.07)

335
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

20. Income Taxes (contd.)

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
B. Reconciliation of tax expense and the accounting profit for the year
is as under:
Profit before tax................................................................................................... 476.41 712.45
Income tax expense calculated at 25.17% (2020-2021 : 25.17%)...................... 119.91 179.32
Tax effect on non-deductible expenses............................................................... 8.09 2.82
Effect of Income that is exempted from tax......................................................... (0.28) (0.25)
Impact of Tax on different rates on components................................................. (0.64) 1.33
Impact of Tax due to loss in components............................................................ 12.04 5.31
Others................................................................................................................. (5.86) (1.80)
Total.................................................................................................................... 133.26 186.73
Tax expense as per Consolidated Statement of Profit and Loss................. 133.26 186.73

The tax rate used for reconciliation above is the corporate tax rate of 25.17% (2020-2021 25.17%) payable by corporate entities
in India on taxable profits under Indian tax law.
C. The major components of deferred tax (liabilities) / assets arising on account of timing differences are as follows:
` in Crores
Balance Statement of Balance
OCI
Particulars Sheet Profit & Loss Sheet
01.04.2021 2021-22 2021-22 31.03.2022
Difference between written down value / capital work in progress of
Property, Plant and Equipment as per the books of accounts and
Income-tax Act,1961........................................................................... (123.10) (4.05) — (127.15)
Tax adjustment on account on indexation of freehold land............. 17.44 2.03 — 19.47
Expense claimed for tax purpose on payment basis................................ 5.50 0.37 — 5.87
Provision for doubtful debts and Advances..................................... 7.77 1.03 — 8.80
Remeasurement benefit of the employee defined benefit plans
through OCI..................................................................................... 2.92 — (0.84) 2.08
Deferred Tax on Distributable Accumulated Reserves of
Subsidiaries..................................................................................... (2.71) — — (2.71)
Deferred tax Liability due to Purchase Price Allocation Adjustment. (17.15) 1.70 — (15.45)
Lease Rentals................................................................................. 2.19 0.94 — 3.13
Net fair value loss on investment through FVTPL............................... (1.75) 1.18 — (0.57)
Deferred tax (expense) / income
Net Deferred tax liabilities............................................................ (108.89) 3.20 (0.84) (106.49)

` in Crores
Balance Statement of Balance
OCI
Particulars Sheet Profit & Loss Sheet
01.04.2020 2020-21 2020-21 31.03.2021
Difference between written down value / capital work in progress of
Property, Plant and Equipment as per the books of accounts and
Income-tax Act,1961 ...................................................................... (113.76) (9.34) — (123.10)
Tax adjustment on account on indexation of freehold land............ 15.79 1.65 — 17.44
Expense claimed for tax purpose on payment basis............................ 4.40 1.10 — 5.50
Provision for doubtful debts and Advances.................................... 5.38 2.39 — 7.77
Remeasurement benefit of the employee defined benefit plans
through OCI................................................................................... 2.95 0.04 (0.07) 2.92
Deferred Tax on Distributable Accumulated Reserves of
Subsidiaries................................................................................... (2.94) 0.23 — (2.71)
Deferred tax Liability due to Purchase Price Allocation Adjustment..... (19.81) 2.66 — (17.15)
Lease Rentals................................................................................. 1.33 0.86 — 2.19
Net fair value loss on investment through FVTPL.............................. (1.45) (0.30) — (1.75)
Deferred tax (expense) / income
Net Deferred tax liabilities........................................................... (108.11) (0.71) (0.07) (108.89)

336
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102nd Annual Report 2022

21. Borrowings
` in Crores
As at As at
31st March, 2022 31st March, 2021
From Banks
Term Loans*......................................................................................... 95.94 65.79
Overdraft #........................................................................................... 88.21 83.82
Current Maturities of Long-term Borrowings........................................ 6.25 6.25
190.40 155.86
* The Group has obtained at 8.00% - 9.25% (2020-2021 4.50% - 9.25%)
term loans from bank to fund short-term fund requirement, secured
by personal guarantee of local directors incase of foreign subsidiaries
and hypothecation of trade receivable (Refer Note 11) and inventories
(Refer Note 9). These term loans are repayable within 180 days from
date of issue of such term loans.
# The Group has obtained at 7.00% - 9.00% (2020-2021 6.75% - 9.25%)
overdrafts and cash credit facilities from bank to fund working capital
requirements, secured by personal guarantee of local directors incase
of foreign subsidiaries, corporate guarantee by the Holding Company
(Refer Note 35), hypothecation of trade receivable (refer Note 11) and
inventories (Refer Note 9), pledging of Freehold Land and Building
(Refer Note 2.3). These facilities are repayable on demand.
From Other Body Corporate................................................................ 1.66 0.05
To support the working capital requirement, the Group had obtained
short term loan carrying interest at 10.30% (2020-2021 - 9.00%).
These loans are repayable on demand.
192.06 155.91

22. Trade Payables

` in Crores
As at As at
31st March, 2022 31st March, 2021
Trade Payables
Total Outstanding dues of Micro Enterprises and Small Enterprises
(Refer Note 41)..................................................................................................... 102.37 93.64
Total Outstanding dues of creditors other than Micro Enterprises and Small
Enterprises............................................................................................................ 878.27 813.18
980.64 906.82

Trade Payable Ageing Schedule

As at 31 March 2022 ` in Crores
Particulars Outstanding for following periods from due date of payment
Unbilled Not Due Less than 1-2 2-3 More than Total
1 year years years 3 years
(i) MSME ........................................................... — 102.37 — — — — 102.37
(ii) Others .......................................................... 208.72 267.68 394.78 6.63 0.43 0.03 878.27
(iii) Disputed dues - MSME ............................... — — — — — — —
(iv) Disputed dues - Others .............................. — — — — — — —

As at 31 March 2021 ` in Crores

Particulars Outstanding for following periods from due date of payment
Unbilled Not Due Less than 1-2 2-3 More than Total
1 year years years 3 years
(i) MSME ........................................................... — 93.64 — — — — 93.64
(ii) Others .......................................................... 187.36 457.67 161.63 5.20 1.22 0.10 813.18
(iii) Disputed dues - MSME ............................... — — — — — — —
(iv) Disputed dues - Others .............................. — — — — — — —

337
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

23. Other Financial Liabilities

` in Crores
As at As at
31st March, 2022 31st March, 2021
Unclaimed/Unpaid Dividends*.................................................................................... 2.30 0.16
Trade Deposits........................................................................................................... 30.52 80.54
Creditors for Capital Goods @ (Refer Note 41) ........................................................ 19.97 13.28
Other Current Liabilities.............................................................................................. 0.19 0.22
52.98 94.20

* There are no amounts due and outstanding to be transferred to Investor Education and Protection Fund.
@ Includes Outstanding dues of Micro Enterprises and Small Enterprises ₹ 3.73 Crores (2020-2021 ₹ 4.59 Crores)

24. Other Current Liabilities

` in Crores
As at As at
31st March, 2022 31st March, 2021
Statutory Obligations*................................................................................................. 32.40 22.19
Trade Receivables with Credit Balance...................................................................... 18.77 15.50
51.17 37.69
* Includes payable toward GST, TDS and Employee Related Statutory Obligations.

25. Provisions
` in Crores
As at As at
31st March, 2022 31st March, 2021
Provision for Compensated Absences (Refer note 38)................................ 14.82 14.68
Provision for Gratuity (Refer note 38)........................................................... — 3.66
Provision for Retirement Benefits to Executive Directors (Refer Note 38)... 1.94 —
Provision for Indirect Taxes:
Opening Balance.................................................................................... 3.87 2.25
Add: Provision during the year............................................................... — 1.62
Less: Utilisation / reversal during the year.............................................. 0.01 —
3.86 3.87
20.62 22.21

26. Current Tax Liabilities (Net)

` in Crores
As at As at
31st March, 2022 31st March, 2021
Current Tax Liabilities (Net)...................................................................................... 4.99 4.91
4.99 4.91

338
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

27. Revenue from Operations

` in Crores

Year ended Year ended

31st March, 2022 31st March, 2021
Sale of Products
Sales ....................................................................................... 7126.54 5722.66
Less: Discounts and Rebates ................................................. 844.16 681.27
Total Sale of Products.............................................................. 6282.38 5041.39
Other Operating Revenues
Sale of Scrap........................................................................... 22.96 16.69
GST Incentives......................................................................... 9.86 —
Others*..................................................................................... 54.15 16.17
86.97 32.86
Revenue from Operations..................................................... 6369.35 5074.25

*Include writeback of trade deposits amounting to ₹ 47.44 Crores (2020-2021 ₹ 8.23 Crores)

27.1. Disaggregation of revenue from contracts with customers

The Group derives revenue from sales of products from following major segments:
` in Crores

Particulars Year ended Year ended

31st March, 2022 31st March, 2021
1) Revenue from contracts with customers:
Sale of products (Transferred at point in time)
Manufacturing
India.................................................................................................................. 5469.20 4387.30
Asia (Other than India)..................................................................................... 341.04 252.70
(A).................................................. 5810.24 4640.00
Trading
India.................................................................................................................. 465.25 398.61
Asia (Other than India)..................................................................................... 6.89 2.78
(B).................................................. 472.14 401.39
(C) = (A) + (B)................................ 6282.38 5041.39
2) Other Operating Revenue
Sale of scrap and empties................................................................................ 22.96 16.69
GST Incentive................................................................................................... 9.86 —
Others............................................................................................................... 54.15 16.17
(D).................................................. 86.97 32.86
Total Revenue (C) + (D)............... 6369.35 5074.25
Major Product lines
Paints................................................................................................................ 6282.38 5041.39
6282.38 5041.39
Sales by performance obligations
Upon delivery......................................................................................................... 6282.38 5041.39
6282.38 5041.39
Reconciliation of revenue from contract with customer
Revenue from contract with customer as per the contract price............................ 7126.54 5722.66
Adjustments made to contract price on account of :-
a) Discounts/ Rebates/ Incentives........................................................................ (844.16) (681.27)
b) Other Operating Revenue................................................................................ 86.97 32.86
Revenue from contract with customer as per the Consolidated Statement
of Profit and Loss................................................................................................ 6369.35 5074.25

339
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

28. Other Income

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Dividend Income
Dividend from Equity Shares recognised through FVTPL........ 0.03 0.03
Interest Income
Interest on Loans and Deposit at amortised cost..................... 1.40 5.21
Interest on Bonds recognised through FVTPL......................... 1.19 0.99
Interest on Income Tax Refund................................................ — —
2.59 6.20
Profit on Sale of Current Investments (Net).................................. 14.29 10.12
Fair Value Gain on Financial Instruments recognised through
FVTPL.......................................................................................... — 4.24
Other Non-operating Income
Profit on Sale of Property, Plant and Equipment (Net)............. 0.60 2.46
Foreign Exchange Gain (Net).................................................. 0.40 8.51
Insurance Claims Received..................................................... 3.88 4.27
Miscellaneous Income............................................................. 3.62 2.38
8.50 17.62
25.41 38.21

29. Cost of Materials Consumed

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Raw Material Consumed
Opening Stock......................................................................... 394.19 317.51
Add: Purchase......................................................................... 3938.30 2645.71
Less: Sales.............................................................................. 20.85 17.38
Less: Closing Stock................................................................. 527.01 394.19
3784.63 2551.65
Packing Material Consumed
Opening Stock......................................................................... 18.85 13.60
Add: Purchase......................................................................... 538.03 389.39
Less: Closing Stock................................................................. 22.94 18.85
533.94 384.14
4318.57 2935.79

30. Changes in Inventories of Finished Goods, Work-in-progress and Stock-in-trade

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Opening Stock
Finished Goods......................................................................... 615.06 516.50
Work-in-progress....................................................................... 100.55 88.56
Stock-in-trade (in respect of goods acquired for trading).......... 58.04 62.12
773.65 667.18
Less: Closing Stock
Finished Goods......................................................................... 849.06 615.06
Work-in-progress....................................................................... 142.74 100.55
Stock-in-trade (in respect of goods acquired for trading).......... 74.66 58.04
1,066.46 773.65
(292.81) (106.47)

31. Employee Benefits Expense

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Salaries and Wages.................................................................................................... 314.33 268.85
Contribution to Provident and Other Funds (Refer Note 38)....................................... 24.36 22.82
Staff Welfare Expense................................................................................................. 16.89 13.01
355.58 304.68

340
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

32. Finance Cost

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Interest on Bank Borrowings....................................................................................... 17.30 15.54
Net Foreign Exchange Loss on borrowings (considered as finance cost).................. 0.80 0.13
Interest on Lease Liability (Refer Note 45).................................................................. 10.49 8.07
28.59 23.74

33. Depreciation and Amortisation

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Depreciation on Property, Plant and Equipment (Refer Note 2).................................. 125.18 123.11
Amortisation on Other Intangible Assets (Refer Note 5B)........................................... 14.99 15.58
Amortisation on Right of use assets (ROU) (Refer Note 3)......................................... 29.60 26.61
169.77 165.30

34. Other Expenses

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Consumption of Stores and Spare Parts..................................................................... 29.61 23.78
Power and Fuel........................................................................................................... 71.19 64.41
Repairs to Buildings.................................................................................................... 0.56 0.77
Repairs to Machinery.................................................................................................. 14.44 12.01
Freight and Forwarding Charges................................................................................. 343.21 289.32
Advertisement and Sales Promotion........................................................................... 242.77 171.10
Rent............................................................................................................................. 15.34 17.33
Rates and Taxes.......................................................................................................... 3.17 2.25
Insurance..................................................................................................................... 12.81 11.85
Miscellaneous Expenses............................................................................................. 204.01 166.94
937.11 759.76

34.1. Payments to Auditors

` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
Auditors’ Remuneration excluding GST (Included in Miscellaneous Expenses in
Note 34)
As Auditor
Statutory Audit ....................................................................................................... 0.47 0.46
Report under Section 44AB of the Income-tax Act, 1961...................................... 0.05 0.02
Limited Review of Quarterly Results...................................................................... 0.20 0.21
In other capacity
Certification........................................................................................................... 0.08 0.09
Other Matters........................................................................................................ 0.19 0.15
Reimbursements of Expenses................................................................................ 0.01 0.02
1.00 0.95

341
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

35. Contingent Liabilities and commitments (to the extent not provided for)
` in Crores
Year ended Year ended
31st March, 2022 31st March, 2021
A. 
Claims against the Group not acknowledged as debt:
Excise and Service Tax.......................................................................................... 8.59 7.64
Sales Tax................................................................................................................ 18.26 17.64
Income Tax............................................................................................................. 3.33 3.05
Customs Duty........................................................................................................ 0.61 1.62
The Group has made adequate provisions in the accounts for claims against the
Group related to direct and indirect taxes matters, except for certain claims not
acknowledged as debts, totaling to ₹ 26.53 Crores (2020-2021 ₹ 25.30 Crores)
from the Excise / Service Tax Authorities, in respect of disallowance of Excise/
Service Tax Cenvat Credit. In addition, the Group is subject to other legal
proceedings in respect of other matters arisen in the ordinary course of business.
The Group’s management is of the opinion that ultimate liability in respect of these
litigations shall not exceed the amount provided in books of account, and shall not
have any material adverse effect on the Group’s operation and financial position.
B. Commitments:
Estimated amount of contracts remaining to be executed on capital account and
not provided for (Net of advances)......................................................................... 63.93 62.17
The Holding Company has entered into Share holding agreement (SHA) with
M/s Amplus Energy Solutions Private Limited to source green power through
Group Captive arrangement.................................................................................. 2.05 —
Corporate guarantee
Stand by Letter of Credit (SBLC) given to Bank for loan taken by Kansai Nerolac
Paints (Bangladesh) Limited (formerly known as RAK Paints Limited) – Subsidiary
Company................................................................................................................ 25.83 25.45
Corporate guarantee given to Bank for loan taken by Kansai Nerolac Paints
(Bangladesh) Limited (formerly known as RAK Paints Limited) – Subsidiary
Company................................................................................................................ 81.01 79.82
Corporate guarantee given to Bank for Kansai Paints Lanka (Private) Limited -
Subsidiary Company.............................................................................................. 8.92 12.75
Counter guarantee to bank in respect of Bank guarantees issued to Government
authorities and others............................................................................................ — 0.35
Others Commitment
Unexpired Letter of Credit...................................................................................... 32.79 44.78
Bank Guarantee..................................................................................................... 2.41 0.52
247.73 255.79
C. Contribution to Provident Fund as per Supreme Court Judgment
There are numerous interpretative issues relating to the Supreme Court (SC)
judgment dated February 28, 2019 on Provident Fund (PF) on the inclusion
of allowances for the purpose of PF contribution as well as its applicability of
effective date. The impact is not expected to be material as per the assessment
made by the Group.

36. Earnings Per Equity Share

Year ended Year ended
31st March, 2022 31st March, 2021
Numerator:
Profit attributable to Equity Shareholders (` in Crores)........................................... 358.86 529.74
Denominator:

Weighted Average Number of ordinary shares at the beginning and end of the
year......................................................................................................................... 53,89,19,720 53,89,19,720
Basic and Diluted Earnings per Equity Share (in `)................................................ 6.66 9.83

342
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

37. Related Party Disclosures

A related party is a person or entity that is related to the entity that is preparing its Financial Statements
(a) A person or a close member of that person’s family is related to a reporting entity if that person:
(i) has control or joint control of the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow
subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of
which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related
to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting
entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of
the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting
entity or to the parent of the reporting entity.
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related
party, regardless of whether a price is charged.

Parent and ultimate controlling entity

Name % Shareholding Type Principal Place of

Activities Incorporation
2022 2021
Kansai Paint Co., Ltd., Japan.... 74.99 74.99 Parent and Manufacturing Japan
ultimate Paints
controlling
entity

Kansai Paint Co., Ltd., Japan is the immediate and ultimate holding company of Kansai Nerolac Paints Limited

Fellow Subsidiary Companies

Name Type Principal Activities Place of Incorporation

Kansai Paint Philippines Inc....................... Fellow Subsidiary Manufacturing Paints and Philippines
other related products
Kansai Paint Asia Pacific SDN.BHD........... Fellow Subsidiary Manufacturing Paints and Malaysia
other related products
Kansai Plascon Kenya Ltd......................... Fellow Subsidiary Manufacturing Paints and Kenya
other related products

Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.
Key  management personnel includes (1) Mr. P. P. Shah, Chairman (2) Mr. H. M. Bharuka, Vice Chairman and
Managing Director (upto 31st March 2022) (3) Mr. N. N. Tata, Director (4) Mr. Anuj Jain, Wholetime Director
(Managing Director w.e.f 1st April 2022), (5) Ms. Sonia Singh, Director (6) Mr. P. D. Pai, CFO and (7) Mr. G. T. Govindarajan,
Company Secretary.

Other entities where significant influence exist

— Kansai Nerolac Paints Limited Provident Fund

343
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

37. Related Party Disclosures (contd.)

Transaction with Related Party:

` in Crores
Transaction Type Relation 2021-2022 2020-2021
Sale of finished goods/Intermediates
— Kansai Paint Philippines Inc. ............................ Fellow Subsidiary 2.93 0.81
— Kansai Plascon Kenya Ltd................................. Fellow Subsidiary 1.05 1.49
Dividend Paid
— Kansai Paint Co., Ltd., Japan............................ Parent and ultimate 212.17 177.82
controlling entity
Transfer under license agreements
Royalty Expense
— Kansai Paint Co., Ltd., Japan............................ Parent and ultimate 15.31 12.10
controlling entity
Technical Fees Including Reimbursement of
Expenses
— Kansai Paint Co., Ltd., Japan............................ Parent and ultimate 0.06 0.27
controlling entity
Reimbursement of Expenses Recovered
— Kansai Paint Co., Ltd., Japan ................................ Parent and ultimate 0.55 0.31
controlling entity
Contributions during the year (includes
Employees' share and contribution)
— Kansai Nerolac Paints Limited Provident Fund. Other entities 1.37 1.41

Amount of outstanding balances, including

commitmentsin settlement
Receivable as at Year End
— Kansai Paint Co., Ltd., Japan............................ Parent and ultimate 0.55 0.31
controlling entity
— Kansai Paint Philippines Inc. ............................ Fellow Subsidiary 0.35 —
— Kansai Plascon Kenya Ltd................................. Fellow Subsidiary 0.40 —
Payable as at Year End
— Kansai Paint Co., Ltd., Japan............................ Parent and ultimate 0.01 0.06
controlling entity
Key Management Personnel
— Employee benefits #.......................................... 21.37* 10.91
— Commission to Independent Directors............... 1.05 0.95
— Fee for attending Board/Committee Meetings
0.12 0.10
to Independent Directors...................................

Related Party Transactions:

Related party transactions were made on terms equivalent to those that prevail in an arm's length transactions.
Outstanding balances at the year-end are unsecured, interest free and will be settled in cash.
* Employee Benefits to Mr. H. M. Bharuka include retirement benefits of ₹ 8.24 Crores towards Gratuity,
Leave Encashment and Ex-gratia.
# Includes company's contribution to Provident Fund and Superannuation Fund. Further, as the future liabilities for gratuity,
leave encashment and pension to Executive Director along with medical benefits are provided on an actuarial
valuation basis for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore
not included above.

344
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

38. Employee Benefits

A. Defined Contribution Plans:

Contribution to defined contribution plan, recognised in the Consolidated Statement of Profit and Loss under Groups
Contribution to Provident Fund and Other Funds in Employee Benefits Expenses for the year are as under:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Employer's contribution to Regional Provident Fund Commissioner................... 5.43 4.22
Employer's contribution to Family Pension Fund................................................ 4.58 4.39
Employer's contribution to Superannuation Fund................................................ 7.55 7.33

B. Defined Benefit Plans:

a. Gratuity
The following tables setout the funded status of the gratuity plans and the amounts recognised in the Group’s Financial
Statements as at 31 March, 2022 and 31 March, 2021:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Change in Defined Benefit Obligation
Defined Benefit Obligation at the beginning.............................................. 48.76 45.62
Current Service Cost................................................................................. 4.25 4.26
Interest Expense....................................................................................... 3.03 3.02
Benefit Payments from Plan Assets.......................................................... (11.14) (3.17)
Remeasurements - Actuarial (gains)/ losses............................................. (2.28) (0.96)
Defined Benefit Obligation at the end........................................................ 42.62 48.76

Change in Fair Value of Plan Assets

Fair Value of Plan Assets at the beginning................................................ 45.06 42.08
Interest Income.......................................................................................... 2.66 2.83
Employer Contributions............................................................................. 3.95 2.04
Benefit Payments from Plan Assets.......................................................... (4.68) (3.17)
Increase / (Decrease) due to Plan combination........................................ (0.21) 1.92
Remeasurements – Return on plan assets excluding amounts included in
interest income........................................................................................... 0.77 (0.64)
47.55 45.06
Net Asset/(Liability).................................................................................... 4.93 (3.70)

Components of Defined Benefit Cost recognized in the Consolidated Statement of Profit and Loss under
Employee Benefit Expenses:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Current Service Cost................................................................................. 4.25 4.26
Net Interest Cost....................................................................................... 0.37 0.24
Defined Benefit Cost recognised in the Consolidated Statement of Profit
and Loss................................................................................................... 4.62 4.50

345
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

38. Employee Benefits (contd.)

B. Defined Benefit Plans (contd.)
a. Gratuity (contd.)
Components of Defined Benefit Cost recognised in the Statement of Other Comprehensive Income:
` in Crores
Particulars Year ended Year ended
31st March, 2022 31st March, 2021
Actuarial (gains) / losses on Defined Benefit Obligation........................... (2.28) (0.93)
(Return)/loss on plan assets excluding amounts included in the net
interest on the net defined benefit liability/(asset)..................................... (0.77) 0.72
Defined Benefit Cost recognised in the Statement of Other Comprehensive
Income....................................................................................................... (3.05) (0.20)

The assumptions used to determine net periodic benefit cost are set out below:
Particulars Valuation Date
31 March, 2022
st
31st March, 2021
Discount Rate............................................................................................ 7.00% to 14.00% 6.30% to 9.41%
Salary Escalation....................................................................................... 5.00% to 12.00% 3.00% to 10.00%
Weighted average duration of the defined benefit obligation (years).......... 10.59 11.75

Sensitivity Analysis:
The sensitivity analyses are based on a change in a significant assumption, keeping all other assumptions constant.
The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely
that changes in ssumptions would occur in isolation from one another.
Discount Rate, Salary Escalation Rate and Withdrawal Rate are significant actuarial assumptions. The change in the
Present Value of Defined Benefit Obligation for a change of 100 Basis Points from the assumed assumption is given below:
` in Crores
Scenario 31 March, 2022
st
31 March, 2021
st

Under Base Scenario................................................................................ 42.60 45.51

Salary Escalation - Up by 1%.................................................................... 45.44 51.10
Salary Escalation - Down by 1%............................................................... 40.03 43.57
Withdrawal Rates - Up by 1%................................................................... 39.81 46.80
Withdrawal Rates - Down by 1%............................................................... 40.02 47.32
Discount Rates - Up by 1%....................................................................... 40.21 43.72
Discount Rates - Down by 1%................................................................... 45.29 51.02

Maturity Profile of Defined Benefit Obligations

Mortality Table 31st March, 2022 31st March, 2021
Attained Age Male Female Male Female
20 0.09% 0.09% 0.09% 0.09%
25 0.09% 0.09% 0.09% 0.09%
30 0.10% 0.10% 0.10% 0.10%
35 0.12% 0.12% 0.12% 0.12%
40 0.17% 0.17% 0.17% 0.17%
45 0.26% 0.26% 0.26% 0.26%
50 0.44% 0.44% 0.44% 0.44%
55 0.75% 0.75% 0.75% 0.75%
60 1.11% 1.11% 1.12% 1.12%

346
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

38. Employee Benefits (contd.)

B. Defined Benefit Plans (contd.)
a. Gratuity (contd.)
Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life
Insurance Corporation of India.
The Holding Company contributes all ascertained liabilities towards gratuity to the fund maintained by the Life Insurance
Corporation of India. Other companies in the Group have not funded their liabilities.
The Group expects to contribute ₹ Nil (2020-2021 ₹ 3.70 Crores) to the fund during the subsequent accounting year.

b. Provident fund (Managed by the Trust set up by the Group)

The Holding Company has contributed ₹ 1.37 Crores (2020-2021 ₹ 1.41 Crores) to the Provident Fund Trust. The Holding
Company has an obligation to fund any shortfall on the yield of the trust’s investments over the guaranteed interest rates
on an annual basis. These administered rates are determined annually predominantly considering the social rather than
economic factors and in most cases the actual return earned by the Holding Company has been higher in the past years.
The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of
India and based on the below provided assumptions there is no shortfall.

The details of fund and plan asset position are given below:
` in Crores

Particulars As at As at
31st March, 2022 31st March, 2021
Plan assets at period end, at fair value...................................................... 74.11 68.88
Present value of benefit obligation at period end........................................ 71.65 64.58
Asset recognised in balance sheet............................................................. Nil Nil

The plan assets have been primarily invested in government securities.

Assumptions used in determining the present value obligation of the interest rate guarantee under the Deterministic
Approach:
` in Crores
Particulars As at As at
31st March, 2022 31st March, 2021
Discount Rate (%).................................................................................... 6.63 6.40
Guranteed Interest Rate (%).................................................................... 8.10 8.50
Expected Average Remaining Working Lives of Employees (Years)........ 11.07 10.30

The Group other than the Holding Company in India contributes all ascertained liabilities towards provident fund as per
rules and regulations inforce in respective countries amounting to ₹ 1.31 Crores (2020-21 : ₹ 2.07 Crores) to respective
provident authority.

C. Retirement Benefits to Executive Directors

` in Crores
Particulars As at As at
31st March, 2022 31st March, 2021
Opening defined benefit obligation .......................................................... — —
Current service cost ................................................................................ 0.05 —
Past Service Cost..................................................................................... 24.46 —
Remeasurement (gain)/loss..................................................................... — —
Benefits paid ............................................................................................ 0.29 —
Closing defined benefit obligation ............................................................ 24.22 —

D. Compensated Absences:
In FY 2021-2022, decrease in provision for compensated absences for the year is ₹ 0.27 Crores. (In FY 2020-2021 ₹ 2.37 Crores
has been recognised in the Consolidated Statement of Profit and Loss as an expense for compensated absences)

347
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

39. Segment Reporting

The Management Committee of the Group, approved by the Board of Directors and Audit Committee performs the function of
allotment of resources and assessment of performance of the Group. Considering the level of activities performed, frequency of
their meetings and level of finality of their decisions, the Group has identified that Chief Operating Decision Maker function is being
performed by the Management Committee. The financial information presented to the Management Committee in the context of
results and for the purposes of approving the annual operating plan is on a consolidated basis for paints and other related products
of the Group. As the Management Committee monitors the business activity as a single business segment viz. ‘Paints’ and the
sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108
“Operating Segments”.
As the Group mainly caters to the domestic market in India, the total overseas turnover is 5.54% (2020-2021 5.07%) of the total
turnover of the group, which is insignificant and hence is not seperately monitored by the Management Committee.

40. Financial Instruments: Fair values and Risk Management

(A) Accounting Classifications and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels
in the fair value hierarchy.
` in Crores
Year At FVTPL Level 1 Level 2 Level 3 Total
Financial Assets measured at Fair Value
Non-current Assets: Investments (Note 5)........... 2022 1.08 0.70 — 0.38 1.08
2021 0.95 0.57 — 0.38 0.95
Current Assets: Investments (Note 9)..................
2022 209.46 — 209.46 — 209.46
2021 668.06 — 668.06 — 668.06
There have been no transfers between Level 1 and Level 2 during the year and previous year.

(B) Financial Risk Management

The Group has exposure to the following risks arising from financial instruments:
— Credit Risk
— Liquidity Risk
— Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management
Committee that advises on financial risks and the appropriate financial risk governance framework for the Group. The
Risk Management Committee provides assurance to the management that Group’s risk activities are governed by
appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the
Group’s policies and risk objectives.
The Group’s Risk Management Policies are established to identify and analyses the risks faced by the Group to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems
are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training
and management standards and procedures, aims to maintain a disciplined and constructive control environment in which
all employees understand their roles and obligations.

(ii) Credit Risk

Credit Risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers, loans and investments in debt
securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables:
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk
Management Committee has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review
includes financial statements, credit agency information, industry information and in some cases bank references. Sales
limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from
the management.
The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing
more than 5% of the total balance of trade receivables. For trade receivables, as a practical expedient, the Group computes
credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default
rates over the expected life of trade receivables and is adjusted for forward-looking estimates.

348
------
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

40. Financial Instruments: Fair Values and Risk Management (contd.)

(B) Financial Risk Management (contd.)

` in Crores

Movement in expected credit loss allowance on trade receivable 31st March, 2022 31st March, 2021

Balance as beginning of the year................................................................ 46.59 34.67

Loss allowance measured at lifetime expected credit losses...................... 2.81 11.92
Balance at the end of the year...................................................................... 49.40 46.59

Financial Instruments and Cash Deposits

Credit risks from balances with banks and financial institutions is managed by the Group’s Treasury Department in
accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within
credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate
financial loss through counterparty’s potential failure to make payments.
(iii) Liquidity Risk
Liquidity risk the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as
far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Maturities of Financial Liabilities:
The table below analyse the Group’s financial liabilities into relevant maturing grouping based on their contractual
maturities:
` in Crores

On Upto 3 months 6 months 1 year to 3 years

Year ended Total
demand 3 months to 6 months to 1 year 3 years and above

Borrowings 31-03-22 88.21 5.92 94.81 3.12 10.94 — 203.00

(Current and
Non‑current)......... 31-03-21 78.96 28.45 42.13 4.69 14.18 4.69 173.10

Trade Payables.... 31-03-22 — 980.64 — — — — 980.64

31-03-21 — 906.82 — — — — 906.82

Other Financial 31-03-22 33.01 19.97 — — — — 52.98

Liabilities...............
31-03-20 80.92 13.28 — — — — 94.20

For maturity profile of lease liabilities, refer note 45

(iv) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such
as equity price risk and commodity price risk. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities
denominated in foreign currencies, the Group’s policy is to ensure that its net exposure is kept to an acceptable level.
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.
Other price risk arises from financial assets such as investments in equity instruments, debentures and bonds. Since the
investments in equity instruments and debentures is not material and bonds being debt instruments, the exposure to risk
of changes in market rates is minimal. The details of such investments in equity instrument and debentures is given in
Note 5 and details of investments in bonds is given in Note 9.

Exposure to Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in
foreign exchange rates. The Group enters into forward exchange contracts to hedge against its foreign currency exposures
relating to the recognised underlying liabilities and firm commitments. The Group's policy is to hedge its exposures above
predefined thresholds from recognised liabilities and firm commitments that fall due on timely basis. The Group does not
enter into any derivative instruments for trading or speculative purposes. The carrying amounts of the Group's foreign
currency denominated monetary items are as follows:

349
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

40. Financial Instruments: Fair Values and Risk Management (contd.)

(B) Financial Risk Management (contd.)
(iv) Market Risk (contd.)
` in Crores
Financial Assets EURO JPY BDT USD Total
Trade Receivables............................. 31-03-22 — — — 2.59 2.59
31-03-21 — — — 2.02 2.02
Financial Liabilities
Trade Payables 31-03-22 (1.08) (10.57) (0.02) (53.93) (65.60)
(Net of Hedge)................................... 31-03-21 (0.58) (6.62) — (97.98) (105.18)
Net exposure to Foreign Currency 31-03-22 (1.08) (10.57) (0.02) (51.34) (63.01)
Risk (Liabilities)................................. 31-03-21 (0.58) (6.62) — (95.96) (103.16)

Foreign Currency Sensitivity Analysis

The following table demonstrate the sensitivity to a reasonable possible change in CHF, EURO, JPY, BDT, GBP and USD
exchange rates, with all other variable held constant.
` in Crores
Profit or Loss Equity Net of Tax
Strenghtening Weakening Strenghtening Weakening
31st March, 2022
EURO (5% movement)....................................... (0.05) 0.05 (0.04) 0.04
JPY (5% movement)........................................... (0.53) 0.53 (0.40) 0.40
BDT (5% movement).......................................... (0.00) 0.00 (0.00) 0.00
USD (5% movement)......................................... (2.57) 2.57 (1.92) 1.92

31st March, 2021

EURO (5% movement)....................................... (0.03) 0.03 (0.02) 0.02
JPY (5% movement)........................................... (0.33) 0.33 (0.25) 0.25
BDT (5% movement).......................................... — — — —
USD (5% movement)......................................... (4.80) 4.80 (3.59) 3.59

(v) There are no outstanding Forward Foreign Exchange Contracts entered into by the Company during current and
previous year.

(vi) Interest Rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is
the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash
flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of
fluctuations in the interest rates.
Exposure to interest rate risk
Group’s interest rate risk arises from borrowings and finance lease obligations. Borrowings issued at fixed rates exposes
to fair value interest rate risk. The interest rate profile of the Group’s interest-bearing financial instruments as reported to
the management of the Group is as follows:
` in Crores
As at As at
31st March, 2022 31st March, 2021
Fixed-Rate Instruments
Financial Assets......................................................................................... 26.50 19.22
Financial Liabilities..................................................................................... 188.50 161.59
Net Liabilities/ (Assets)............................................................................... 162.00 142.37
Variable-Rate Instruments
Financial Liabilities..................................................................................... 14.50 11.50
14.50 11.50

350
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

40. Financial Instruments: Fair Values and Risk Management (contd.)

(B) Financial Risk Management (contd.)
(vi) Interest Rate Risk (contd.)
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss.
Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / (decreased)
profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency
exchange rates, remain constant.

100 bps increase 100 bps decrease

31st March 2022
Variable-Rate Instruments........................................................................... 0.20 0.20
Cash Flow Sensitivity (net)....................................................................... 0.20 0.20
31st March 2021
Variable-Rate Instruments........................................................................... 0.30 0.30
Cash Flow Sensitivity (net).......................................................................... 0.30 0.30

(C) Valuation techniques and significant unobservable inputs

Type Valuation technique Significant unobservable Inter-relationship

inputs between significant
unobservable inputs and
fair value measurement
Other Non-current Discounted cash flows: The valuation – Forecast Annual revenue Generally, a changes in the
assets: model considers the present value of growth annual revenue growth rate is
Investment expected receipt/payment discounted – Forecast EBIDA growth margin accompanied similar change
measured at using appropriate discounting rates. – Risk adjustment discounted rate in EBIDA margin.
amortised cost
Current The fair values of investments in Not applicable Not applicable
investments – in mutual fund units is based on the net
mutual funds asset value (‘NAV’) as stated by the
issuers of these mutual fund units in
the published statements as at Balance
Sheet date. NAV represents the price
at which the issuer will issue further
units of mutual fund and the price at
which issuers will redeem such units
from the investors

The Group determined the fair value measurements of investments – unquoted categorised in Level 2 based on price agreed
in a sale transaction between unrelated parties.
Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at 31st March, 2022 and
31st March, 2021 approximate the fair value. Difference between carrying amounts and fair values of bank deposits, earmarked
balances with banks, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost
is not significant in each of the years presented.

351
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

41.  isclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for the year 2019-20, to
D
the extent the Group has received intimation from the “Suppliers” regarding their status under the Act.
` in Crores
As at As at
31st March, 2022 31st March, 2021
(i) Principal amount and the interest due thereon remaining unpaid to each supplier
at the end of each accounting year (but within due date as per the MSMED Act)
Principal amount due to micro and small enterprise (Refer Note 22 and 23)..... 106.10 98.23
Interest due on above......................................................................................... — —
(ii) Interest paid by the Group in terms of Section 16 of the Micro, Small and Medium
Enterprises Development Act, 2006, along-with the amount of the payment
made to the supplier beyond the appointed day during the period....................... — —
(iii) Interest due and payable for the period of delay in making payment (which have
been paid but beyond the appointed day during the period) but without adding
interest specified under the Micro, Small and Medium Enterprises Act, 2006...... — —
(iv) The amount of interest accrued and remaining unpaid at the end of each
accounting year..................................................................................................... — —
(v) Interest remaining due and payable even in the succeeding years, until such
date when the interest dues as above are actually paid to the small enterprises. — —

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information
collected by the Management. This has been relied upon by the auditors.

42. Impairment of Goodwill (Refer with Note 4A)

(a) Kansai Nerolac Paints (Bangladesh) Limited, Bangladesh (Formerly known as RAK Paints Limited)
The business was taken over by Kansai Nerolac Paints Limited on 17th July 2018. The recoverable amount of this CGU
was based on fair value less costs of disposal, estimated using discounted cash flows. The fair value measurement was
categorised as a Level 3 fair value based on inputs in the valuation technique used.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key
assumptions represent management's assessment of future trends in the relevant industries and have been based on historical
data from both external and internal sources.

Particulars Year ended Year ended

31st March, 2022 31st March, 2021
Discount Rate...................................................................................................... 10.58% 12.44%
Terminal Value Growth Rate................................................................................ 3.00% 3.00%
Sales Growth Rate.............................................................................................. 23.00 - 12.00% 15.00 - 12.00%

The discount rate for 2021-2022 was post tax measure estimated based on the weighted-average cost of capital, with the
possible debt leveraging of 40.00% (2020-2021 - 50.00%) at a market interest rate of 7.10% (2020-2021 - 6.65%).

The cash flow projections include specific estimates for five years and a terminal growth rate thereafter. The terminal growth
rate has been determined based on management’s estimate of the long-term business growth rate, consistent with the
assumptions that a market participant would make.

Sales growth rate has been considered based on past performance duly adjusted with future growth as envisaged by the
management.

With regard to assessment of value in use, no reasonably possible change in any of the above key assumptions would cause
the carrying amount of the CGU's to exceed their recoverable amount.

(b) KNP Japan Private Limited

The business was taken over by Kansai Nerolac Paints Limited on 1st October 2012. The recoverable amount of this CGU
was based on fair value less costs of disposal, estimated using discounted cash flows. The fair value measurement was
categorised as a Level 3 fair value based on inputs in the valuation technique used.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key
assumptions represent management's assessment of future trends in the relevant industries and have been based on historical
data from both external and internal sources.

352
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

42. Impairment of Goodwill (Refer with Note 4A) (contd.)

(b) KNP Japan Private Limited (contd.)

Particulars Year ended Year ended

31st March, 2022 31st March, 2021
Discount Rate..................................................................................................... 12.29% 12.29%

Terminal Value Growth Rate............................................................................... 5.00% 5.00%

Sales Growth Rate.............................................................................................. 12.00% 12.00%

The discount rate for 2021-2022 was post tax measure estimated based on the weighted-average cost of capital. with the no
debt leveraging as the company is debt-free.

The cash flow projections include specific estimates for five years and a terminal growth rate thereafter. The terminal growth
rate has been determined based on management’s estimate of the long-term business growth rate, consistent with the
assumptions that a market participant would make.
Sales growth rate has been considered based on past performance duly adjusted with future growth as envisaged by the
management.
With regard to assessment of value in use, no reasonably possible change in any of the above key assumptions would cause
the carrying amount of the CGU's to exceed their recoverable amount.

43. Disclosures as required under Schedule III to the Companies Act 2013 with respect to
Consolidated Financial Statements.
(a) As at and for the year ended 31 March, 2022

Name of the entity As at For the year ended For the year ended For the year ended
in the Group 31 March, 2022 31 March, 2022 31 March, 2022 31 March, 2022

Net assets* Share in profit or loss Share in other Share in total

comprehensive income comprehensive income

As % of ` in Crores As % of ` in Crores As % of ` in Crores As % of ` in Crores

consolidated consolidated consolidated consolidated
net assets profit or loss other total
comprehensive comprehensive
income income

Holding Company
Kansai Nerolac Paints Limited. 100.47% 4170.93 109.09% 374.33 78.19% 2.51 108.80% 376.84

Subsidiaries (Group's share)..

Indian
Nerofix Private Limited............. 0.28% 11.73 (1.08%) (3.69) — — (1.07%) (3.69)

Foreign
KNP Japan Private Limited ...... 1.35% 56.12 2.65% 9.08 — — 2.62% 9.08
Kansai Paints Lanka Private
Limited ..................................... 0.09% 3.84 (5.14%) (17.64) 0.00% — (5.09%) (17.64)
Kansai Nerolac Paints
(Bangladesh) Limited (formerly
known as RAK Paints Limited) . (1.00%) (41.64) (6.53%) (22.41) (9.35%) (0.30) (6.56%) (22.71)

Total Eliminations/
Adjustments............................ (1.19%) (49.46) 1.01% 3.48 — — 1.00% 3.48

Exchange differences
on translation of foreign
operations............................... — — — — 31.15% 1.00 0.29% 1.00

Total ........................................ 100.00% 4,151.51 100.00% 343.15 100.00% 3.21 100.00% 346.36

353
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

43. Disclosures as required under Schedule III to the Companies Act 2013 with respect to
Consolidated Financial Statements (contd.)
(b) As at and for the year ended 31 March, 2021

As at For the year ended For the year ended For the year ended
31 March, 2021 31 March, 2021 31 March, 2021 31 March, 2021

Net assets* Share in profit or loss Share in other Share in total

comprehensive income comprehensive income
Name of the entity
in the Group As % of ` in Crores As % of ` in Crores As % of ` in Crores As % of ` in Crores
consolidated consolidated consolidated consolidated
net assets profit or loss other total
comprehensive comprehensive
income income

Holding Company

Kansai Nerolac Paints Limited 99.70% 4,077.02 100.93% 530.60 (300.00%) 0.27 101.00% 530.87

Subsidiaries (Group's share)

Indian

Nerofix Private Limited 0.38% 15.42 (0.71%) (3.71) — — (0.71%) (3.71)

Foreign

KNP Japan Private Limited 1.24% 50.89 1.95% 10.24 — — 1.95% 10.24

Kansai Paints Lanka Private

Limited 0.47% 19.11 (1.46%) (7.68) (55.56%) 0.05 (1.45%) (7.63)

Kansai Nerolac Paints

(Bangladesh) Limited
(formerly known as RAK
Paints Limited) (0.44%) (17.82) (1.16%) (6.09) 222.22% (0.20) (1.20%) (6.29)

Total Eliminations/
Adjustments (1.36%) (55.44) (0.45%) 2.36 — — 0.45% 2.36

Exchange differences
on translation of foreign
operations — — — — 233.33% (0.21) (0.04%) (0.21)

Total 100.00% 4,089.18 100.00% 525.72 100.00% (0.09) 100.00% 525.63

* Net assets = total assets minus total liabilities

44. COVID - 19 Assessment

The Group has considered the impact of COVID-19 pandemic on its business operations and financial statements based on its
review of current indicators of future economic conditions and expects that the carrying amount of the assets will be recovered.
However, the impact assessment of this pandemic is a continuing process given the uncertainties associated with its nature and
duration. Despite reduced cases of COVID-19 being reported, there have been massive disruptions in supply chain especially from
global. Accordingly, the Group will continue to monitor any material changes to future economic conditions.

45. Disclosure of Lease as per Ind AS 116

The following is the summary of practical expedients elected on application:

(i) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

(ii) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on
the date of initial application.

(iii) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

(iv) Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is
applied only to contracts that were previously identified as leases under Ind AS 17.

The weighted average incremental borrowing rate applied to lease liabilities as at 31 March, 2022 is 8.50% (31st March 2021:
8.50%)

354
----------------------'-
Consolidated

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022
102st Annual Report 2022

45. Disclosure of Lease as per Ind AS 116 (contd.)

The changes in the carrying value of right of use (ROU) assets for the year ended 31 March 2022 and 31 March 2021 are disclosed
in Note 3.
` in Crores
Particulars Amount as at Amount as at
31st March, 2022 31st March, 2021
ROU Balance at the beginning of the year............................................................... 160.71 132.54

Additions (Refer Note 3)............................................................................................... 45.53 58.95

Deletions (Net off accumulated depreciation) (Refer Note 3)....................................... (1.60) (3.81)

Amortisation cost accrued during the year................................................................... (29.60) (26.58)

Translation difference................................................................................................... (1.04) (0.39)

ROU Balance at the end of the year......................................................................... 174.00 160.71

Lease Liabilities at the beginning of the year.......................................................... 95.90 63.75

Additions....................................................................................................................... 45.53 58.95

Interest cost accrued during the year........................................................................... 10.49 8.07

Payment of lease liabilities........................................................................................... (34.11) (29.91)

Deletion........................................................................................................................ (2.10) (4.96)

Lease Liabilities at the end of the year.................................................................... 115.71 95.90

Current Lease Liabilities................................................................................................ 23.60 18.78

Non-Current Lease Liabilities........................................................................................ 92.11 77.12

Total Lease Liabilities................................................................................................. 115.71 95.90

T
 he Group does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the
obligations related to lease liabilities as and when they fall due.

Rental expense recorded for short-term leases or cancelable in nature was ₹ 15.34 Crores (2020-2021 ₹ 17.33 Crores).

The table below provides details regarding the contractual maturities of lease liabilities on an undiscounted basis:
` in Crores
Particulars Amount as at Amount as at
31st March, 2022 31st March, 2021
Not later than one year................................................................................................. 31.96 26.30

Later than one year and not later than five years......................................................... 83.57 68.66

Later than five years..................................................................................................... 22.99 22.45

355
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

for the year ended 31st March, 2022

46. (a) Merger of Marpol Private Limited with Kansai Nerolac Paints Limited
The National Company Law Tribunal, Mumbai Bench and Goa Bench have approved the Scheme of Amalgamation
(“the Scheme”) of Marpol Private Limited ('Transferor Company'), wholly owned subsidiary, with the Company
('Transferee Company'). Pursuant to necessary filings with the concerned Registrar of Companies, the Scheme has become
effective from 21st October, 2021. The appointed date of the Scheme is 1st July, 2019. In accordance with Appendix C
of Ind AS 103 'Business Combinations under common control' and comparatives have been restated to give effect of the
amalgamation from the beginning of the previous year, irrespective of the actual date of the combination. Accordingly, business
combination is accounted with effect from 1 April 2020.
The Merged Undertaking is engaged in the business of manufacturing powder and paint.
There is no financial impact of Merger on consolidated financial statements of the Group.

(b) Merger of Perma Construction Aids Private Limited with Kansai Nerolac Paints Limited
The National Company Law Tribunal, Mumbai Bench and Ahmedabad Bench have approved the Scheme of Amalgamation
(“the Scheme”) of Perma Construction Aids Private Limited ('Transferor Company'), wholly owned subsidiary, with the
Company ('Transferee Company'). Pursuant to necessary filings with the concerned Registrar of Companies, the Scheme has
become effective from 21st October, 2021. The appointed date of the Scheme is 1st July, 2019. In accordance with Appendix C
of Ind AS 103 'Business Combinations under common control' and comparatives have been restated to give effect of the
amalgamation from the beginning of the previous year, irrespective of the actual date of the combination. Accordingly, business
combination is accounted with effect from 1 April 2020.
The Merged Undertaking is engaged in the business of manufacturing paint.
There is no financial impact of Merger on consolidated financial statements of the Group.

47. Other Statutory Information

(i) The Holding Company and subsidiary incorporated in India does not have any Benami property, where any proceeding has been
initiated or pending against the Holding Company and subsidiary incorporated in India for holding any Benami property.
(ii) The Holding Company and subsidiary incorporated in India has identified transaction with one struck off company i.e. Chemene
Bombay Private Limited as Clearing and Forwarding Agent with whom transaction during the year amounts to ₹ 0.13 Crores
(2020-2021 - ₹ 0.12 Crores).
(iii) The Holding Company and subsidiary incorporated in India does not have any charges or satisfaction which is yet to be registered
with ROC beyond the statutory period.
(iv) The Holding Company and subsidiary incorporated in India has not traded or invested in Crypto currency or Virtual Currency during
the financial year.
(v) The Group has not advanced or loaned or invested funds to any other person(s) or entity, including foreign entities (Intermediaries)
with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Group
(Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Group has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding
(whether recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Holding Company and subsidiary incorporated in India has no such transaction which is not recorded in the books of
accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income-tax Act, 1961.

48.  he figures for the previous year have been regrouped/ reclassified wherever necessary to confirm with the current year’s
T
classification.

As per our attached report of even date For and on behalf of the Board of Directors of Kansai Nerolac Paints Limited
For S R B C & CO LLP P.P. Shah ANUJ JAIN
Chartered Accountants Chairman Managing Director
ICAI Firm Registration No.: 324982E/E300003 DIN: 00066242 DIN: 08091524
per Anil Jobanputra N.N. TATA SONIA SINGH
Partner Director Director
Membership No.: 110759 DIN: 00024713 DIN: 07108778
P.D. PAI G.T. GOVINDARAJAN
CFO Company Secretary
ACS No. 8887
Mumbai, 10th May, 2022 Mumbai, 10th May, 2022

356
----------------------'-
Consolidated

Summarised Standalone Statement of Profit and Loss

of 15 Years
102st Annual Report 2022

` in Crores

Year Total Cost of Employee Other Finance Depreciation Exceptional Tax Profit Dividend Dividend Earnings Net
Revenue # Materials/ Benefits Expenses Costs and Item Expense after per per Worth
Products Expenses Amortisation Tax Share Share per
Expenses (`) (`) Share
(`)

2007-2008 1344.60 837.32 69.13 226.75 1.41 39.60 — 50.60 119.79 32.34 12.00 44.46 220.33

2008-2009 1396.71 899.58 73.30 244.20 1.84 37.61 — 41.60 98.58 32.34 12.00 36.59 242.87

2009-2010 1726.77 1071.82 75.05 295.83 1.20 44.26 — 73.11 165.50 40.42 15.00 30.71 ^ 286.80

2010-2011 2187.56 1400.25 91.64 356.34 0.84 49.36 — 83.15 205.98 53.89 10.00 ** 38.22 170.00 +

2011-2012 2624.84 1740.41 106.94 415.91 0.09 56.35 — 89.24 215.90 59.28 11.00 40.06 197.28

2012-2013 2872.94 1942.62 118.14 459.76 0.02 47.11 — 90.80 &

214.49 &
59.28 11.00 39.80 &
224.21 &

2013-2014 3174.35 2133.95 135.88 532.10 0.45 64.98 — 100.42 206.57 59.28 1.10 ~ 3.83 $
26.41 $

2014-2015 3570.85 2364.44 143.30 596.50 0.02 67.69 — 127.23 271.67 75.45 1.40 ~ 5.04 $
29.63 $

2015-2016 3765.88 2348.36 170.11 640.08 — 67.72 — 176.10 363.51 &

164.37 3.05 ^^ 6.65 &
46.44

2016-2017 4097.29 2342.95 198.12 727.31 — 69.49 — 253.48 505.94 161.67 €

3.00 €
9.39 52.06

2017-2018 4658.99 2774.07 226.56 796.17 — 75.79 — 270.00 516.40 140.12 €

2.60 €
9.58 57.99

2018-2019 5235.50 3302.53 255.38 873.71 — 90.47 — 246.06 467.35 140.12 €

2.60 €
8.67 63.55

2019-2020 4970.03 3057.62 269.38 834.55 5.00 119.88 — 148.20 535.40 169.76 €
3.15 €
9.94 70.00

2020-2021 4809.75 2957.44 268.62 701.31 8.48 149.01 10.82 183.47 530.60 282.93 *€ 5.25 *€ 9.85 75.65

2021-2022 5981.76 4129.26 312.37 859.93 9.87 153.82 11.39 130.79 374.33 121.25 *€ 2.25 *€ 6.95 77.40

# Net of Rebates & Excise Duty upto 2014-2015, From 2015-2016, net of Rebates and Discounts.
^ Re-calculated consequent to the Bonus Issue of 1:1 2010-2011.
** On enhanced Share capital consequent to the Bonus Issue in 2010-2011.
+ Consequent to the Bonus Issue in 2010-2011.
& Before Exceptional Items (Net of Tax).
$ Re-calculated consequent to the subdivision of Equity Share of face value of ₹ 10 each to 10 (ten) equity shares of ₹ 1 each.
~ Consequent to the subdivision of Equity Share.
^^ Includes Special Dividend of ₹ 1.25 per share.
€ The dividend proposed by the Directors is subject to approval of shareholders at the annual general meeting. The proposed dividend have not been
recognised as liabilities.
* Includes Interim Dividend ₹ 1.25 per share paid on 27th November 2020 and Special Dividend of ₹ 2.00 per share for FY 2020-2021.
Includes Interim Dividend ₹ 1.25 per share paid on 22nd November 2021 for FY 2021-2022.

Figures pertaining to 31 March, 2021 have been recast to give effect of merger of Marpol Private Limited and Perma Construction Aids Private Limited with
Company.
Figures from financial year 2015-2016 are Ind AS compliant.

357
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

NOTES

358
----------------------'-
Consolidated

NOTES
102st Annual Report 2022

359
KANSAI NEROLAC PAINTS LIMITED
II FINANCIAL STATEMENTS

NOTES

360
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