FINANCIAL STATEMENTS

OF SUBSIDIARIES FOR THE

FINANCIAL YEAR 2022-23
INDEX
Sr. No. Name of the Subsidiaries

1 Asian Paints Industrial Coatings Limited

2 Maxbhumi Developers Limited

3 Sleek International Private Limited

4 Weatherseal Fenestration Private Limited

5 Asian Paints (Nepal) Private Limited

6 Asian Paints International Private Limited

7 Samoa Paints Limited

8 Asian Paints (South Pacific) Pte Limited

9 Asian Paints (S.I) Limited

10 Asian Paints (Vanuatu) Limited

11 Asian Paints (Middle East) SPC

12 Asian Paints (Bangladesh) Limited

13 SCIB Chemicals S.A.E.

14 Berger Paints Bahrain W.L.L.

15 Berger Paints Emirates Limited Group

16 Nirvana Investments Limited

17 Enterprise Paints Limited

18 Universal Paints Limited

19 Kadisco Paint and Adhesive Industry Share Company

20 PT Asian Paints Indonesia

21 PT Asian Paints Color Indonesia

22 Causeway Paints Lanka (Pvt) Ltd

Note:
In accordance with Section 136 of the Companies Act, 2013, the Financial Statements of Asian Paints PPG Private Limited,
Associate Company for the Financial Year 2022-23 is available for inspection by the members of the Company up to the date
of Annual General Meeting of the Company to be held on Tuesday, 27th June, 2023 at 11.00 a.m. IST.
Asian Paints Industrial
Coatings Limited
BOARD OF DIRECTORS
Mr. Hiral Raja (Non-Executive Director)
Mr. Sagar Khade (Non-Executive Director)
Mr. Rajes Bardia (Non-Executive Director)
Mr. Venkateswaran Gopalan (Non-Executive Director)
Mr. Satyendra Kumar Patidar (Non-Executive Director)
Mr. Anurag Sahai (Additional Director) (Appointed with effect from 20th August, 2022)

KEY-MANAGERIAL PERSONNEL
Mr. Rakesh Patel (Manager) (Retired with effect from 25th April, 2023)
Mr. Pramod Kumar Chand (Manager) (Appointed with effect from 26th April, 2023)
Mr. Vikram Jain (Chief Financial Officer)
Mr. Jay Shah (Company Secretary) (Appointed with effect from 17th January, 2023)

AUDITORS
Deloitte Haskins & Sells LLP, Chartered Accountants

REGISTERED OFFICE
6A, Shantinagar,
Santacruz (East), Mumbai - 400055
Maharashtra

FACTORIES
Plot No. 1914, GIDC,
Phansa Road,
Sarigam 396 135
Dist. Valsad, Gujarat
Contents
Board’s Report......................................................................................................................................................................................... 4-11

Independent Auditor’s Report........................................................................................................................................................... 12-20

Balance Sheet..............................................................................................................................................................................................21

Statement of profit and loss.....................................................................................................................................................................22

Cash Flows Statement..........................................................................................................................................................................23-24

Statement of Changes in Equity...............................................................................................................................................................25

Notes to the financial statements.....................................................................................................................................................26-67

 Asian Paints Industrial Coatings Limited

Board’s Report
For the year ended 31st March 2023

Dear Members,

The Board of Directors are pleased to present the Twenty-Second Annual Report of Asian Paints Industrial Coatings
Limited along with the audited financial statements for the financial year ended 31st March, 2023.

FINANCIAL RESULTS
The financial performance of the company for the year ended 31st March, 2023 is summarised below:

(Amount in ` Lakhs)
Particulars 2022-23 2021-22
Revenue from Operations 1925.13 1,687.10
Other Operating Revenues 24.79 14.51
Other Income 157.86 106.6
Total Revenue 2,107.78 1,808.21
Expenses 1,762.91 1,499.20
Earnings before Interest, Tax, Depreciation And Amortization (EBITDA) 344.87 309.01
Less: Finance Cost 0.92 0.56
Less: Depreciation and Amortisation Expenses 187.32 179.33
Profit Before Exceptional Item & Tax 156.63 129.12
Exceptional Item - 414.28
Profit Before Tax 156.63 543.40
Less: Tax Expense - 27.17
Profit After Tax 156.63 516.23
Other Comprehensive Income 4.77 (14.73)
Total comprehensive Income/ Loss 161.40 501.50

OVERVIEW OF THE COMPANY’S PERFORMANCE
AND STATE OF AFFAIRS
During the financial year 2022-23:
• Net revenue from operations increased to
` 1,925.13 lakhs as against ` 1,687.10 lakhs in the
previous year.
• The Company earned profit of ` 156.63 lakhs after
tax as against a profit of ` 516.23 lakhs in the
previous year. The previous year profit includes
` 414.28 lakhs of exceptional gains on account
of disposal of land and building of the Company
situated in Baddi, Himachal Pradesh.
There are no material changes and commitments
affecting the financial position of the Company which
have occurred between the end of the financial year
2022-23 and the date of this report. There has been no
change in the nature of business of the Company.
There was no revision of financial statements and Board’s
Report of the Company during the year under review.
INDUSTRIAL RELATIONS
The Company has always considered its workforce as its
valuable asset and continues to invest in their excellence
and development programs. The industrial relations of
the Company remained peaceful and cordial.

The Company is engaged in toll manufacturing of powder

SHARE CAPITAL
coatings for Asian Paints PPG Private Limited and PPG
Asian Paints Private Limited, Associate Companies of The paid-up Equity Share Capital of the Company as on
Asian Paints Limited, Holding Company. 31st March, 2023 is ` 3,045 lakhs.

The Company’s plant at Sarigam, Gujarat continues its During the financial year 2022-23, there was no change
normal operations and is sufficient to cater to the future in the authorised, issued, subscribed and paid-up share
requirements. capital of the Company.
4

Board’s Report (Contd.)
Confirmations:
a. During the year under review, the Company has not:
(i) issued any shares, warrants, debentures, bonds,
or any other convertible or non-convertible
securities.
(ii) issued equity shares with differential rights as
to dividend, voting or otherwise.
(iii) issued any sweat equity shares to its Directors
or employees.
(iv) issued any equity shares under the employees
stock option scheme, further, the Company
doesn’t have any employees stock option
scheme.
(v) made any change in voting rights.
(vi) reduced its share capital or bought back shares.
(vii) changed the capital structure resulting from
restructuring.
(viii) failed to implement any corporate action.
b. The Company’s securities are not listed on any stock
exchanges, hence there doesn’t arise a scenario of
its shares being suspended for trading during the
year.
c. The disclosure pertaining to explanation for any
deviation or variation in connection with certain
terms of a public issue, rights issue, preferential
issue, etc. is not applicable to the Company.
DIVIDEND
During the year under review, the Board of Directors has
not recommended dividend on the equity shares of the
Company.
UNCLAIMED DIVIDEND & IEPF
The Company does not have any unclaimed dividend
outstanding for payment to shareholders of the
Company. Further, the Company has not transferred any
amount to the Investor Education & Protection Fund
(“IEPF”).
TRANSFER TO RESERVES
During the year under review, there was no amount
transferred to any of the reserves of the Company.
5
Statutory Reports
SUBSIDIARY STATUS
The Company continues to be a wholly owned Subsidiary
of Asian Paints Limited. Whereas the Company does not
have any Subsidiary, Associate or Joint Venture Company.
DEPOSITS
During the year under review, the Company has not
accepted any deposit within the meaning of Section
73 and 74 of the Companies Act, 2013 (“the Act”) read
together with the Companies (Acceptance of Deposit)
Rules, 2014. Hence, the requirement for furnishing of
details relating to deposits covered under Chapter
V of the Act or the details of deposits which are not
in compliance with the Chapter V of the Act is not
applicable.
PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS
Details of Loans, Guarantees and Investments, if any,
covered under the provisions of Section 186 of the act are
given in the notes to the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Change in Directorate
Mr. Jitendra Kalra (DIN: 06677319), Director, stepped
down from the Board of Directors of the Company with
effect from 19th August, 2022.
The Board of Directors of the Company vide resolution
passed through circulation appointed Mr. Anurag Sahai
(DIN: 09346336) as Additional Director of the Company in
terms of Section 161 of the Act with effect from
20th August, 2022. As an Additional Director of the
Company, Mr. Anurag Sahai would hold office upto the
ensuing AGM of the Company.
Mr. Anurag Sahai being eligible offers himself for
appointment as Non-Executive Director of the Company
liable to retire by rotation at the ensuing AGM in terms of
Section 152 of the Act.
The Company has received a Notice under Section 160 of
the Companies Act, 2013 from one of the members of the
Company recommending the appointment of Mr. Anurag
Sahai as Non-Executive Director of the Company, liable to
retire by rotation
Appropriate resolution for appointment of Mr. Anurag
Sahai (DIN: 09346336) as Director of the Company
liable to retire by rotation is placed for approval of the
shareholders at the ensuing Annual General Meeting
 Asian Paints Industrial Coatings Limited

Board’s Report (Contd.)

(“AGM”). The Board of Directors of the Company The shareholders had thereafter re-appointed Mr.
recommends his appointment as a Director of the Patel further for two terms of two years ending
Company. on 25th April, 2023. Further, Mr. Patel has retired
from the post of manager of the Company under
Retirement by rotation and subsequent the Act with effect from 25th April, 2023. The Board
re-appointment places on record appreciation for the contributions
made by Mr. Patel towards the development of the
In accordance with the provisions of Section 152 and
Company.
other applicable provisions, if any, of the Act read with
Companies (Appointment and Qualification of Directors)
• Pursuant to the retirement of Mr. Patel, the Board of
Rules, 2014 (including any statutory modification(s) or
Directors of the Company at their meeting held on
re-enactment(s) thereof for the time being in force) and
24th April, 2023, have approved the appointment of
the Articles of Association of the Company, Mr. Sagar
Mr. Pramod Kumar, as the Manager of the Company
Khade (DIN: 08735274), of the Company is liable to retire
pursuant to Sections 196, 197, 203, Schedule V and
by rotation at the ensuing AGM and being eligible, have
other applicable provisions, if any, of the Companies
offered himself for re-appointment.
Act, 2013 read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
Based on performance evaluation, the Board of Directors
2014, for a period of three years commencing
recommends re-appointment of Mr. Sagar Khade as
from 26th April, 2023 till 25th April, 2026, subject to
Non-Executive Directors of the Company, liable to retire
approval of the shareholders of the Company at
by rotation.
ensuing Annual General Meeting.

Key Managerial Personnel

During the year under review, following were the changes
in the Key Managerial Personnel of the Company:
• The Board of Directors of the Company at their
meeting held on 16th January, 2023 took note and
approved the resignation of Ms. Saloni Arora as
Company Secretary of the Company with effect from
16th January, 2023. Further, the Board of Directors
of the Company at the said meeting approved the
appointment of Mr. Jay Shah as Company Secretary
of the Company with effect from 17th January, 2023.
Mr. Jay Shah is an Associate member of the Institute
of Company Secretaries of India, accordingly, he is
eligible to be appointed.
• The shareholders of the Company at their annual
general meeting held on 18th June, 2018, based on
the recommendations of the Board of Directors
of the Company had inter alia approved the
appointment of Mr. Rakesh Patel as the Manager
of the Company pursuant to Sections 196, 197, 203,
Schedule V and other applicable provisions, if any, of
the Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014 for a period of one year
commencing from 26th April, 2018 to 25th April, 2019.
Accordingly, the resolution for appointment along
with details of remuneration of Mr. Pramod Kumar
Chand as Manager of the Company for a term
of 3 (three) years commencing from 26th April,
2023 till 25th April, 2026 is placed for approval of
the shareholders at the ensuing AGM. The Board
of Directors of the Company recommends his
appointment as a Manager of the Company.
Mr. Vikram Jain is the Chief Financial Officer of the
Company. Further, there was no other change in the Key
Managerial Personnel of the Company during the year
under review.
The Board of Directors of the Company has been
validly constituted as per Section 149 of the Act and
corresponding Rules thereunder.
Declaration from Directors
None of the Directors of the Company are disqualified
from being appointed as Directors as specified under
Section 164(1) and 164(2) of the Act read with Rule
14(1) of the Companies (Appointment and Qualification
of Directors) Rules, 2014 (including any statutory
modification(s) and/or re-enactment(s) thereof for the
time being in force).

6

Board’s Report (Contd.)
DISCLOSURE RELATING TO REMUNERATION
OF DIRECTORS, KEY MANAGERIAL PERSONNEL
AND PARTICULARS OF EMPLOYEES
During the year under review, no remuneration was paid
to the directors of the Company.
Remuneration to Manager for FY 2022-23
In accordance with the provisions of Section 197, 203
Schedule V and other applicable provisions, if any, of
the Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, following are the details of the
remuneration paid to
Mr. Rakesh Patel, Manager of the Company during the
financial year 2022-23:
Particulars Amount (in `)
Gross Salary 60,29,613
Others 4,17,540
Total 64,47,153
Further, the details of remuneration paid to Directors and
Key Managerial Personnel, as may be applicable, of the
Company are also being disclosed in the Annual Return of
the Company under Section 92 of the Act.
The Company has not employed any individual other than
as disclosed whose remuneration falls within the purview
of the limits prescribed under the provisions of Section
197 of the Act read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
Remuneration to Non-Executive Directors for
FY 2023-24 onwards
The shareholders of Asian Paints Limited (“APL”), holding
company had at their 75th Annual General Meeting held
on 29th June, 2021, have authorised its Board to offer,
issue and provide stock options to the eligible employees
of the Company and its subsidiaries under the Asian
Paints Employee Stock Option Plan 2021 (“2021 Plan”).
As per the 2021 Plan, the eligible employees also include
Directors of APL and its subsidiaries.
The 2021 Plan was introduced by APL to incentivize,
retain, and attract key talent through this performance-
based stock option grant program, and consequently
enhance shareholder value. The 2021 Plan aims to create
a sense of ownership among the eligible employees and
to align their medium and long-term compensation with
the company’s performance.
7
Statutory Reports
Following Non-Executive directors of the Company are
eligible to receive stock options grant as per the 2021
Plan:
Name of Director Designation Date of
Appointment
Mr. Anurag Sahai Non-Executive 20/08/2022
Director
Mr. Sagar Khade Non-Executive 24/04/2020
Director
Mr. Venkateswaran Non-Executive 27/07/2021
Gopalan Director
Mr. Rajes Bardia Non-Executive 27/07/2021
Director
Mr. Satyendra Kumar Non-Executive 28/07/2021
Patidar Director
Mr. Hiral Raja, Non-Executive Director is not entitled
to the Stock Options in the capacity of Non-Executive
Director of the Company as he is Nominee Director
of Asian Paints Limited and is already receiving Stock
Options in his capacity as Associate Vice President –
Accounts, SSC & Taxation of Asian Paints Limited, Holding
Company.
In accordance with the pursuance of provisions of
section 197, 198 and other applicable provisions of the
Act (including any statutory modification(s) and/or re-
enactment(s) thereof for the time being in force) and the
Rules made thereunder read with Schedule V, Articles
of Association of the Company, the Board of Directors
of the Company at their meeting held on 8th May, 2023
have approved the remuneration to be payable to the
aforesaid Non-Executive Directors of the Company, and
recommends the Special Resolution as set out in the
Notice for approval of shareholders of the Company at
the ensuing AGM.
Performance evaluation of the Board
In accordance with the provisions of Section 134(3)(p)
of the Companies Act, 2013, the Company is required to
carry out annual evaluation of the performance of the
Board as a whole and of its individual directors.
The annual performance evaluation of the Board and
its individual directors was carried out based on various
aspects including level of flow of information, board
composition, participation of directors, understanding
the roles and responsibilities, business and competitive
environment. The structured assessment sheets
were circulated among the directors for rating the
performance of the Board and other directors.
 Asian Paints Industrial Coatings Limited

Board’s Report (Contd.)

The overall outcome of this exercise was positive and Number of Board meetings attended by individual
members expressed their satisfaction. Directors during the financial year 2022-23 is as follows:

DIRECTORS’ RESPONSIBILITY STATEMENT Sr. Name of the Number of Number of

Pursuant to Section 134(3)(c) of the Act the Directors No. Director meeting(s) meeting(s)
confirm that: entitled to attended
attend
A. In the preparation of the annual accounts for the 1. Mr. Hiral Raja 4 4
financial year ended 31st March, 2023, the applicable 2. Mr. Sagar Khade 4 4
accounting standards and Schedule III of the
3. Mr. Rajes Bardia 4 4
Companies Act, 2013, have been followed and there
are no material departures from the same; 4. Mr. Venkateswaran 4 4
Gopalan
B. The Directors have selected such accounting policies 5. Mr. Satyendra Kumar 4 4
and applied them consistently and made judgments Patidar
and estimates that are reasonable and prudent so as 6. Mr. Anurag Sahai* 2 2
to give a true and fair view of the state of affairs of
7. Mr. Jitendra Kalra# 2 2
the Company as on 31st March, 2023 and profit of the
Company as on 31st March, 2023;
Note:
C. Proper and sufficient care has been taken for the * Mr. Anurag Sahai was appointed as Director of the
maintenance of adequate accounting records Company with effect from 20th August, 2022.
in accordance with the provisions of the Act for #Mr. Jitendra Kalra stepped down as Director of the
safeguarding the assets of the Company and Company with effect from 19th August, 2022.
for preventing and detecting fraud and other
The Company has complied with the applicable
irregularities;
Secretarial Standards in respect of all the above Board
meetings.
D. The annual accounts have been prepared on a ‘going
concern’ basis;
RELATED PARTY TRANSACTIONS
E. Proper internal financial controls laid down by the During the financial year 2022-23, the Company has
Directors were followed by the Company and that entered into transactions with related parties as defined
such financial controls are adequate and operating under Section 2(76) of the Act read with the Companies
effectively; and (Specification of Definitions Details) Rules, 2014 all of
which were in the ordinary course of business and on
F. Proper systems to ensure compliance with the arm’s length basis and in accordance with the provisions
provisions of all applicable laws were in place and of the Act read with the Rules issued thereunder.
that such systems were adequate and operating
effectively. There are no materially significant related party
transactions that may have potential conflict with
MEETINGS OF THE BOARD interest of the Company at large. Further, there are no
contracts or arrangements entered into under Section
During the financial year 2022-23, four (4) meetings of
188(1) of the Act, hence no justification have been
the Board of Directors were held on 29th April, 2022; 22nd
separately provided in that regard.
July, 2022; 18th October, 2022; and 16th January, 2023. The
maximum time gap between two (2) meetings did not
The details of the related party transactions are set out in
exceed one hundred and twenty days.
Notes to the financial statements of the Company.

The Form AOC-2 pursuant to Section 134(3)(h) of the Act

and Rule 8(2) of the Companies (Accounts) Rules, 2014 is
set out as Annexure [1].

8

Board’s Report (Contd.)
VIGIL MECHANISM
The Company is not required to have Vigil Mechanism as
per section 177(10) of the Act.
The Board of Directors of the Company in good
governance on voluntarily basis have adopted the Whistle
Blower Policy of Asian Paints Limited, holding company.
The Policy provides for protection to the employees
and business associates who report unethical practices
and irregularities. Any incidents that are reported are
investigated and suitable action is taken in line with the
Whistle Blower Policy of APL.
AUDITORS AND AUDITORS’ REPORT
Deloitte Haskins & Sells LLP, Chartered Accountants (Firm
Registration No. 117366W/W-100018), were re-appointed
as Statutory Auditors of the Company at the 21st AGM
held on 13th June, 2022, to hold office till the conclusion
of the ensuing 26th AGM.
Deloitte Haskins & Sells LLP has confirmed that they
are not disqualified from continuing as Auditors of the
Company.
The Auditors’ Report for the financial year ended 31st
March, 2023 on the financial statements of the Company
is a part of this Annual Report. The Auditors’ Report
for the financial year ended 31st March, 2023 does not
contain any qualifications, reservation or adverse remark.
There were no incidences of reporting of frauds by
Statutory Auditors of the Company under Section 143(12)
of the Act read with Companies (Accounts) Rules, 2014.
PARTICULARS OF CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS & OUTGO
A) Steps taken on conservation or impact on
conservation of energy:
The manufacturing units continue their efforts to
reduce the specific energy consumption. Apart
from regular practices and measures for energy
conservation, many new initiatives were driven
across units. Further the Company has redesigned
parts of grinding mills to improve throughout
leading to energy conservation.
B) Steps taken by the company for utilising alternate
Source of energy:
The Company has been exploring possibilities of
usage of solar panels for street lighting within its
manufacturing facility situated at Sarigam.
9
Statutory Reports
C) Capital investment on energy conservation
equipment
The Company has not made any capital investment
on energy conservation equipment.
TECHNOLOGY ABSORPTION
A) Efforts made towards technology absorption:
The Research and Technology function (R & T) of
the Company is carrying out various activities to
fulfill short-term and long-term business goals of
the Company which include energy savings and
development of durable products.
B) Benefits derived as a result of the above efforts:
• Development of new specialty products for
profitable opportunities.
• Significant cost reduction achieved as a result
of use of cost effective local and imported
raw materials have helped maintain cost
competitiveness.
• The Company has retained its recognition from
DSIR in respect of the research facilities.
C) The Company has not imported any technology
and has not entered into any technology transfer
agreement.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There are no earnings in foreign currency. Outflow of
foreign currencies during the financial year 2022-23 was
` 58.55 lakhs (equivalent value of various currencies).
RISK MANAGEMENT
The Board has put in place appropriate framework and
mechanism to review the risks for the Company including
the operational and business risks. The Board reviews the
risk mitigation plans from time to time.
The Company recognises that risk is an integral and
inevitable part of the business and is fully committed to
manage risks in a proactive and efficient manner. The
Company has a Risk Management Policy which articulates
the approach to address the uncertainties in its
endeavour to achieve its stated and implicit objectives.
 Asian Paints Industrial Coatings Limited
Board’s Report (Contd.)
POLICY ON PREVENTION OF SEXUAL
HARASSMENT AT WORKPLACE
The Company has in place a Policy on Prevention
of Sexual Harassment at Workplace in line with the
requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013 and Rules framed thereunder, and an Internal
Complaints Committee has also been set up to redress
complaints received regarding sexual harassment.
During the financial year 2022-23, no complaints were
received by the Company. The Company is committed to
provide a safe and conducive work environment to all of
its employees and associates.
INTERNAL FINANCIAL CONTROLS AND THEIR
ADEQUACY
The Company has in place adequate internal financial
controls with reference to Financials. The same is subject
to review periodically by the Board of Directors for its
effectiveness. The control measures adopted by the
Company have been found to be effective and adequate
to the Company’s requirements.
MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records
as specified by the Central Government under Section
148(1) of the Act.
SIGNIFICANT AND MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS
There are no significant material orders passed by the
Regulators or Courts or Tribunals impacting the going
concern status of the Company and its operations.
ANNUAL RETURN
As the Company doesn’t have its own website, the
requirement to upload Annual Return of the Company
on its website as on 31st March, 2023 in Form MGT - 7
in accordance with Section 92(3) of the Act read with
Companies (Management and Administration) Rules,
2014, is not applicable to the Company.
10
COMPLIANCE WITH SECERTARIAL STANDARDS
The Company has complied with Secretarial Standards
issued by the Institute of Company Secretaries of India on
Meeting of Board of Directors and General Meeting.
OTHER DISCLOSURES
I. No credit rating has been obtained by the Company
with respect to its securities
II. No application has been made under the Insolvency
and Bankruptcy Code; hence the requirement to
disclose the details of application made or any
proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year
alongwith their status as at the end of the financial
year is not applicable; and
III. The requirement to disclose the details of difference
between amount of the valuation done at the time
of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions
along with the reasons thereof, is not applicable.
ACKNOWLEDGEMENTS
Your Directors acknowledge with deep sense of
appreciation the co-operation received from various
other Central and State Government agencies, other
Ministries, Customers, Bankers and other stakeholders.
Your Directors express deep sense of appreciation for
the dedicated and sincere services rendered by the
employees of the Company at all levels.
Your Directors also wish to express gratitude to all the
Shareholders for the confidence reposed by them in
the Company and for the continued support and co-
operation.
For and on Behalf of the Board of Directors
ANURAG SAHAI
CHAIRMAN
(DIN: 09346336)
Place: Mumbai
Date: 8th May, 2023
 11
Annexure 1 To Board’s Report

Financial Statements
For the year ended 31st March 2023

FORM AOC – 2 b. Details of material contracts or arrangement or

transactions at arm’s length basis
(Pursuant to Section 134(3)(h) of the Companies Act, 2013
and Rule 8 (2) of the Companies (Accounts) Rules, 2014)
There were no material contracts or arrangements, or
transactions entered into during the year ended 31st
Form for disclosure of particulars of contracts/
March, 2023.
arrangements entered into by the company with related
parties referred to in section 188(1) of the Companies
All related party transactions are in the ordinary course
Act, 2013 including certain arms’ length transactions
of business and on arm’s length basis and are approved by
under fourth proviso thereto
the Board of Directors of the Company.

a. Details of contracts or arrangements or

For and on Behalf of the Board of Directors
transactions not at arm’s length basis

There were no contracts or arrangements, or

ANURAG SAHAI
transactions entered into during the year ended
CHAIRMAN
31st March, 2023, which were not at arm’s length
(DIN: 09346336)
basis.
Place: Mumbai
Date: 8th May, 2023
 Asian Paints Industrial Coatings Limited
Independent Auditor’s Report
To The Members of Asian Paints Industrial Coatings
Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements
of Asian Paints Industrial Coatings (“the Company”),
which comprise the Balance Sheet as at March 31, 2023,
and the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and
the Statement of Changes in Equity for the year then
ended, and 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
financial statements give the information required by
the Companies Act, 2013 (“the Act”) in the manner so
required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under
section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, (“Ind
AS”) and other accounting principles generally accepted
in India, of the state of affairs of the Company as at March
31, 2023, and its profit, total 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 financial statements
in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. Our
responsibilities under those Standards are further
described in the Auditor’s Responsibility for the Audit
of the 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 (ICAI) together with the ethical
requirements that are relevant to our audit of the
financial statements under the provisions of the Act and
the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. We believe
that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our audit opinion on
the financial statements.
12
Information Other than the Financial Statements and
Auditor’s Report Thereon
•  he Company’s Board of Directors is responsible
T
for the other information. The other information
obtained at the date of this auditor’s report is
Board’s Report including the annexures to the
Board’s Report, but does not include the financial
statements and our auditor’s report thereon.
•  ur opinion on the financial statements does not
O
cover the other information and we do not express
any form of assurance conclusion thereon.
• I n connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with
the financial statements or our knowledge obtained
during the course of our 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 and Those Charged
with Governance for the 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 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 Ind AS and other accounting
principles generally accepted in India. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting
policies; making judgments and estimates that are
reasonable and prudent; and 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 financial statement
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Independent Auditor’s Report (Contd.)
In preparing the 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 the Board of Directors
either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Company’s Board of Directors are also responsible
for overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance
about whether the 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 financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• I dentify and assess the risks of material
misstatement of the 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.
•  btain an understanding of internal financial
O and timing of the audit and significant audit findings,
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
13
Financial Statements
statements in place and the operating effectiveness
of such controls.
•  valuate the appropriateness of accounting
E
policies used and the reasonableness of accounting
estimates and related disclosures made by the
management.
•  onclude on the appropriateness of management’s
C
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.
•  valuate the overall presentation, structure and
E
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the
financial statements that, individually or in aggregate,
makes it probable that the economic decisions of
a reasonably knowledgeable user of the financial
statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the
scope of our audit work and in evaluating the results of
our work; and (ii) to evaluate the effect of any identified
misstatements in the financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope
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
 Asian Paints Industrial Coatings Limited
Independent Auditor’s Report (Contd.)
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on
our audit 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 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.
d) In our opinion, the aforesaid financial
statements comply with the Ind AS specified
under Section 133 of the Act.
e) On the basis of the written representations
received from the directors as on March 31,
2023 taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2023 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 financial
statements of the Company and the operating
effectiveness of such controls, refer to our
separate Report in “Annexure A”. Our report
expresses an unmodified opinion on the
adequacy and operating effectiveness of the
Company’s internal financial controls over
financial reporting.
g) With respect to the other matters to be
included in the Auditor’s Report in accordance
with the requirements of section 197(16) of the
Act, as amended;
14
The Company does not pay remuneration to any
of its Directors. Consequently, this clause has
not been reported upon.
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 financial statements. Refer Note 28
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 were no amounts which were
required to be transferred to the Investor
Education and Protection Fund by the
Company.
iv. (a) T
 he Management has represented that,
to the best of it’s knowledge and belief,
as disclosed in the note 37(vii) to the
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, 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 it’s knowledge and
belief, as disclosed in the note 37(vii) to
 15
Independent Auditor’s Report (Contd.)

Financial Statements
the financial statements, no funds have Auditors) Rules, 2014 is not applicable for the
been received by the Company from financial year ended March 31, 2023.
any person(s) or entity(ies), including
foreign entities. 2. As required by the Companies (Auditor’s Report)
Order, 2016 (“the Order”) issued by the Central
(c) B
 ased on the audit procedures that Government in terms of Section 143(11) of the Act,
has been considered reasonable and we give in “Annexure B” a statement on the matters
appropriate in the circumstances, specified in paragraphs 3 and 4 of the Order.
nothing has come to our notice that
has caused us to believe that the
representations under sub-clause (i)
and (ii) of Rule 11(e), as provided under
(a) and (b) above, contain any material
misstatement.

For DELOITTE HASKINS & SELLS LLP

v. T
 he Company has not declared or paid
Chartered Accountants
any dividend during the year and has not
(Firm‘s Registration No.117366W/W-100018)
proposed final dividend for the year.

Rupen K. Bhatt
vi. Proviso to Rule 3(1) of the Companies
Partner
(Accounts) Rules, 2014 for maintaining books
(Membership No. 46930)
of account using accounting software which
UDIN: 23046930BGXRJ43078
has a feature of recording audit trail (edit
log) facility is applicable to the Company
Place: Mumbai
w.e.f. April 1, 2023, and accordingly, reporting
under Rule 11(g) of Companies (Audit and Date: 8 May, 2023
 Asian Paints Industrial Coatings Limited
Annexure “A” to the Independent Auditor’s Report
(Referred to in paragraph 1(f) under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
Report on the Internal Financial Controls with
reference to financial statements 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 the financial statements of Asian Paints
Industrial Coatings Limited (“the Company”) as of March
31, 2023 in conjunction with our audit of the Ind AS
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 with reference to financial
statements 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”. 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 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 financial statements of the Company 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”) issued by
the Institute of Chartered Accountants of India and the
Standards on Auditing prescribed under Section 143(10)
of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls with reference to
financial statements. 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
16
controls with reference to 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 financial statements and their
operating effectiveness. Our audit of internal financial
controls with reference to financial statements included
obtaining an understanding of internal financial controls
with reference to 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 Company’s internal financial controls
system with reference to financial statements.
Meaning of Internal Financial Controls with reference
to financial statements
A company’s internal financial control with reference to
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 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.
 17
Annexure “A” Independent Auditor’s Report (Contd.)

Financial Statements
Inherent Limitations of Internal Financial Controls financial control with reference to financial statements
with reference to financial statements established by the Company considering the essential
Because of the inherent limitations of internal financial components of internal control stated in the Guidance
controls with reference to financial statements, including Note on Audit of Internal Financial Controls Over
the possibility of collusion or improper management Financial Reporting issued by the Institute of Chartered
override of controls, material misstatements due to error Accountants of India.
or fraud may occur and not be detected. Also, projections
of any evaluation of the internal financial controls with
reference to financial statements to future periods are
subject to the risk that the internal financial control
with reference to financial statements may become
inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may For DELOITTE HASKINS & SELLS LLP
deteriorate. Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)
Opinion
Rupen K. Bhatt
In our opinion, to the best of our information and
Partner
according to the explanations given to us, the Company
(Membership No. 46930)
has, in all material respects, an adequate internal
UDIN: 23046930BGXRJ43078
financial controls with reference to financial statements
and such internal financial controls with reference to
Place: Mumbai
financial statements were operating effectively as
Date: 8 May, 2023
at March 31, 2023, based on the criteria for internal
 Asian Paints Industrial Coatings Limited
Annexure “B” to the Independent Auditor’s Report
(Referred to in paragraph 2 under ‘Report on Other Legal
and Regulatory Requirements’ section of our report of
even date)
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) T
 he Company has maintained proper
records showing full particulars, including
quantitative details and situation of the
property, plant and equipment and capital
work- in-progress and relevant details of
right-of-use assets.
(B) T
 he Company has maintained proper records
showing full particulars of intangible assets.
(b) The Company has a program of verification of
property, plant and equipment so as to cover
all the items once every three (3) years which
in our opinion, is reasonable having regard
to the size of the Company and the nature of
its assets. Pursuant to the program, no such
assets were due for verification during the year.
Since no physical verification of property, plant
and equipment was due during the year, the
question of reporting on material discrepancies
noted on verification does not arise.
(c) Based on our examination of the registered
sale deed / transfer deed / conveyance deed
provided to us, we report that, the title deeds
of all the immovable properties, (other than
immovable properties where the Company is
the lessee and the lease agreements are duly
executed in favour of the Company) disclosed in
the financial statements included in property,
plant and equipment are held in the name of
the Company as at the balance sheet date.
(d) The Company has not revalued its Property,
Plant and Equipment (including Right of Use
assets) and intangible assets during the year.
(e) No proceedings have been initiated or is
pending against the Company as at March 31,
2023 for holding any benami property under the
18
Benami Transactions (Prohibition) Act, 1988 (as
amended in 2016) and rules made thereunder.
ii. (a) The inventories were physically verified during
the year by the management at reasonable
intervals. In our opinion and based on the
information and explanations given to us, the
coverage and procedure of such verification by
the Management is appropriate having regard
to the size of the Company and the nature of its
operations. No discrepancies of 10% or more
in the aggregate for each class of inventories
were noticed on such physical verification of
inventories when compared with the books of
account.
(b) According to the information and explanations
given to us, at any point of time of the year,
the Company has not been sanctioned any
working capital facility from banks or financial
institutions on the basis of security of current
assets, and hence reporting under clause (ii)(b)
of the Order is not applicable
iii. The Company has not made any investments in,
provided any guarantee or security, and granted any
loans or advances in the nature of loans, secured
or unsecured, to companies, firms, Limited Liability
Partnerships or any other parties during the year,
and hence reporting under clause (iii) of the Order is
not applicable.
iv. The Company has not granted any loans, made
investments or provided guarantees or securities
and hence reporting under clause (iv) of the Order is
not applicable.
v. The Company has not accepted any deposit or
amounts which are deemed to be deposits. Hence,
reporting under clause (v) of the Order is not
applicable.
vi. The maintenance of cost records has not been
specified by the Central Government under Section
148(1) of the Companies Act, 2013.
vii. (a) Undisputed statutory dues, including Goods and
Service tax, Provident Fund, Employees’ State
Insurance, Income-tax, Sales Tax, Service Tax,
duty of Custom, duty of Excise, Value Added
 19
Annexure “B” Independent Auditor’s Report (Contd.)

Tax, cess and other material statutory dues
applicable to the Company have been regularly
deposited by it with the appropriate authorities
in all cases during the year.
(b) There were no undisputed amounts payable
in respect of Service tax, Provident Fund,
Employees’ State Insurance, Income-tax, Sales
Tax, duty of Customs, duty of Excise, Value
Added Tax, cess and other material statutory
dues in arrears as at March 31, 2023 for a period
of more than six months from the date they
became payable.
(c) Details of statutory dues referred to in sub
clause (a) above which have not been deposited
as on March 31, 2023 on account of disputes are
given below:
Financial Statements
(c) The Company has not taken any term loan
during the year and there are no unutilised term
loans at the beginning of the year and hence,
reporting under clause (ix)(c) of the Order is not
applicable.
(d) On an overall examination of the financial
statements of the Company, funds raised on
short-term basis have, prima facie, not been
used during the year for long-term purposes by
the Company.
(e) The Company did not have any subsidiary or
associate or joint venture and hence, reporting
under clause (ix)(e) of the Order is not
applicable.
(f) The Company has not raised loans during

Forum where Period to which

Name of the Amount involved Amount unpaid
Nature of dues the dispute is the amount
statute (Rs. in lakhs) (Rs. in lakhs)
pending relates
Commissioners
of Income tax
IT Matters under (Appeals) /
Income Tax AY 2017-18 95.21 95.21
dispute Remanded back
to Assessing
Officer
Sales Tax / VAT
Assessment Dues High Court 2003-04, 2004-05 132.00 79.20
/ CST
First Appellate 2006-07, 2013-14 6.38 5.48
Tribunal 2005-06, 2006-07 150.25 75.12

viii. There were no transactions relating to previously
unrecorded income that were surrendered or
disclosed as income in the tax assessments under
the Income Tax Act, 1961 (43 of 1961) during the
year.
ix. (a) In our opinion, the Company has not defaulted
in the repayment of loans or other borrowings
or in the payment of interest thereon to any
lender during the year.
(b) The Company has not been declared wilful
defaulter by any bank or financial institution or
government or any government authority.
the year on the pledge of securities held in
its subsidiaries or joint ventures or associate
companies.
x. (a) The Company has not raised moneys by way
of initial public offer or further public offer
(including debt instruments) during the year
and hence reporting under clause (x)(a) of the
Order is not applicable.
(b) During the year the Company has not made any
preferential allotment or private placement of
shares or convertible debenture (fully or partly
or optionally) and hence reporting under clause
(x)(b) of the Order is not applicable to Company.
 Asian Paints Industrial Coatings Limited
Annexure “B” Independent Auditor’s Report (Contd.)
xi. (a) To the best of our knowledge, no fraud by the
Company and no material fraud on the Company
has been noticed or reported during the year.
(b) To the best of our knowledge, no report
under sub-section (12) of section 143 of the
Companies Act has been filed in Form ADT-4 as
prescribed under rule 13 of Companies (Audit
and Auditors) Rules, 2014 with the Central
Government, during the year and upto the date
of this report.
(c) As represented to us by the Management, there
were no whistle blower complaints received by
the Company during the year (and upto the date
of this report).
xii. The Company is not a Nidhi Company and hence
reporting under clause (xii) of the Order is not
applicable.
xiii. In our opinion, the Company is in compliance with
Section 177 and 188 of the Companies Act, where
applicable, for all transactions with the related
parties and the details of related party transactions
have been disclosed in the financial statements etc.
as required by the applicable accounting standards.
xiv. The Company is not required to have an internal
audit system under Section 138 of the Companies
Act, 2013 and hence reporting under clause (xriv) of
the Order is not applicable.
xv. In our opinion during the year the Company has not
entered into any non-cash transactions with any of
its directors or directors of it’s holding Company,
subsidiary Company, associate Company or persons
connected with such directors and hence provisions
of section 192 of the Companies Act, 2013 are not
applicable to the Company.
xvi. T
 he Company is not required to be registered under
section 45-IA of the Reserve Bank of India Act, 1934.
Hence, reporting under clause (xvi)(a), (b), (c) and (d)
of the Order is not applicable.
xvii. The Company has not incurred cash losses during
the financial year covered by our audit and the
immediately preceding financial year.
20
xviii. There has been no resignation of the statutory
auditors of the Company during the year.
xix. On the basis of the financial ratios, ageing and
expected dates of realization of financial assets and
payment of financial liabilities, other information
accompanying the financial statements and
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 indicating that Company is
not capable of meeting its liabilities existing at the
date of balance sheet date 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.  he Company was not having net worth of rupees
T
five hundred crore or more, or turnover of rupees
one thousand crore or more or a net profit of rupees
five crore or more during the immediately preceding
financial year and hence, provisions of Section 135
of the Act are not applicable to the Company during
the year. Accordingly, reporting under clause 3(xx)
of the Order is not applicable for the year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)
Rupen K. Bhatt
Partner
(Membership No. 46930)
UDIN: 23046930BGXRJ43078
Place: Mumbai
Date: 8 May, 2023
 21
Balance Sheet

Financial Statements
As at 31 March 2023
(₹ in Lakhs)
Particulars Notes As at As at
31.03.2023 31.03.2022
ASSETS
Non Current assets
Property, Plant and Equipment 2A 1,259.54 1353.11
Right of Use Assets 2B 16.74 26.27
Capital work-in-progress 3 1.45 4.95
Other Intangible Assets 4 2.80 4.23
Financial Assets
Other Financial Assets 5 217.55 210.77
Income Tax Assets (Net) 6 234.99 182.25
Other Non Current Assets 7 136.91 170.37
1,869.98 1,951.95
Current assets
Inventories 8 72.39 82.70
Financial Assets
Investments 9 2,648.34 1,598.97
Trade Receivables 10 256.65 984.83
Cash and Cash Equivalents 11 65.22 145.38
Other Financial Assets 5 209.71 204.69
Other Current Assets 7 48.95 46.80
3,301.26 3,063.37
Total Assets 5,171.24 5,015.32
EQUITY AND LIABILITIES
Equity
Equity Share Capital 12 3,045.00 3,045.00
Other Equity 13 1,599.99 1,438.59
4,644.99 4,483.59
Liabilities
Non-Current Liabilities
Financial Liabilities
Lease Liabilities 14 - 7.06
Provisions 15 209.34 254.04
209.34 261.10
Current Liabilities
Financial Liabilities
Lease Liabilities 14 7.05 9.46
Other Financial Liabilities 16 213.51 187.17
Other Current Liabilities 17 33.66 33.53
Provisions 15 62.69 40.47
316.91 270.63
Total Equity And Liabilities 5,171.24 5,015.32
Significant accounting policies and Key accounting estimates 1
and judgements
See accompanying notes to the financial statements 2-38

As per our report of even date attached For and on behalf of the Board of Directors of
Asian Paints Industrial Coatings Limited
CIN: U24220MH2001PLC133523
For Deloitte Haskins & Sells LLP Anurag Sahai Hiral Raja
Chartered Accountants Director Director
Firm’s Registration No: 117366W/W-100018 DIN: 09346336 DIN: 08735226

Rupen K. Bhatt Jay Shah Vikram Jain

Partner Company Secretary Chief Financial Officer
Membership No: 046930
Mumbai Mumbai
08th May, 2023 08th May, 2023
 Asian Paints Industrial Coatings Limited

Statement of Profit and Loss

For the year ended 31 March 2023

(₹ in Lakhs)
Particulars Notes Year Year
2022-23 2021-22
REVENUE FROM OPERATIONS
Revenue from sale of services 18(A) 1,925.13 1,687.10
Other Operating Revenues 18(B) 24.79 14.51
Other Income 19 (A) 157.86 106.60
TOTAL INCOME (I) 2,107.78 1,808.21
EXPENSES
Employee Benefits Expense 20 900.79 802.73
Other Expenses 21 862.12 696.47
TOTAL EXPENSES (II) 1,762.91 1,499.20
EARNING BEFORE INTEREST,TAX, DEPRECIATION AND 344.87 309.01
AMORTISATION (EBITDA) (I-II)
Finance Costs 22 0.92 0.56
Depreciation and Amortisation Expense 23 187.32 179.33
PROFIT BEFORE EXCEPTIONAL ITEMS & TAX 156.63 129.12
EXCEPTIONAL ITEM 19(B) - 414.28
PROFIT BEFORE TAX 156.63 543.40
Tax expense
Short tax provision for earlier year 24 - 27.17
PROFIT AFTER TAX 156.63 516.23
OTHER COMPREHENSIVE INCOME (OCI)
(A) Items that will not be reclassified to profit or loss
Remeasurement of defined benefit plans 4.77 (14.73)
TOTAL OTHER COMPREHENSIVE INCOME 4.77 (14.73)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 161.40 501.50
Earnings per equity share (Face value of ₹ 10 each) 31
Basic & Diluted (in ₹) 0.51 1.70
Significant accounting policies and Key accounting estimates 1
and judgements
See accompanying notes to the financial statements 2-38

As per our report of even date attached For and on behalf of the Board of Directors of
Asian Paints Industrial Coatings Limited
CIN: U24220MH2001PLC133523
For Deloitte Haskins & Sells LLP Anurag Sahai Hiral Raja
Chartered Accountants Director Director
Firm’s Registration No: 117366W/W-100018 DIN: 09346336 DIN: 08735226

Rupen K. Bhatt Jay Shah Vikram Jain

Partner Company Secretary Chief Financial Officer
Membership No: 046930
Mumbai Mumbai
08th May, 2023 08th May, 2023

22
 23
Cash Flows Statement

Financial Statements
For the year ended 31 March 2023

(₹ in Lakhs)
Particulars Year Year
2022-23 2021-22
(A) Cash Flow From Operating Activities
Profit before tax 156.63 543.40
Adjustments for :
Depreciation and amortisation expense 187.32 179.33
Interest income (12.76) (18.40)
Finance costs 0.92 0.56
Sundry Balances written off (7.20) -
Net unrealised foreign exchange loss/(gain) - 0.52
Gain on sale of Property, plant and equipment (net) (4.85) (418.41)
Operating profit before working capital changes 320.06 287.00
Adjustments for :
Decrease/(Increase) in trade and other receivables 754.89 (816.31)
Decrease in inventories 10.31 7.25
Increase in other payables 8.78 0.20
Cash generated/(used in) from Operating activities 1094.04 (521.86)
Net income tax (paid)/ refund (net) (52.74) 0.63
Cash generated/(used in) from Operating activities 1041.30 (521.23)
(B) Cash Flow from Investing Activities
Purchase of Property, plant and equipment (80.18) (169.33)
Sale of Property, plant and equipment 5.71 490.01
Interest Income 12.76 -
Net Cash (used in)/generated Investing activities (61.71) 320.68
(C) Cash Flow from Financing Activities
Finance costs paid - (0.28)
Repayment of lease liabilities (including interest on lease (10.38) (9.55)
liabilities)
Net Cash (used in) Financing activities (10.38) (9.83)
(D) Net Increase / (Decrease) in cash and cash equivalents: 969.21 (210.38)
Cash and cash equivalents as at 1st April 1,744.35 1,954.73
Cash and cash equivalents as at 31 March
st
2,713.56 1,744.35
Notes
(a) ‘The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian
Accounting Standard (Ind AS-7) - Statement of Cash Flow.
 Asian Paints Industrial Coatings Limited

Statement Cash Flows Statements (Contd.)

As at As at
31.03.2023 31.03.2022
Cash and Cash equivalents comprises of
Cash on hand 0.55 0.06
Balances with Bank:
- Current Accounts 64.67 145.32
Cash and cash equivalents (Refer Note 11A) 65.22 145.38
Add: Investment in liquid mutual funds (Refer Note 9) 2,648.34 1,598.97
Cash and cash equivalents in Cash Flow Statement 2,713.56 1,744.35
Significant accounting policies and Key accounting 1
estimates and judgements
See accompanying notes to the financial statements 2-38

As per our report of even date attached For and on behalf of the Board of Directors of
Asian Paints Industrial Coatings Limited
CIN: U24220MH2001PLC133523
For Deloitte Haskins & Sells LLP Anurag Sahai Hiral Raja
Chartered Accountants Director Director
Firm’s Registration No: 117366W/W-100018 DIN: 09346336 DIN: 08735226

Rupen K. Bhatt Jay Shah Vikram Jain

Partner Company Secretary Chief Financial Officer
Membership No: 046930
Mumbai Mumbai
08th May, 2023 08th May, 2023

24
 25

Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023

A) EQUITY SHARE CAPITAL

(₹ in Lakhs)
Particulars As at As at
31.03.2023 31.03.2022
Balance at the beginning of the reporting year 3,045.00 3,045.00
Changes in Equity Share capital during the year - -
Balance at the end of the reporting year 3,045.00 3,045.00

B) OTHER EQUITY
(₹ in Lakhs)
Reserves and Surplus
Retained Remeasurement
Total
Earnings on defined
benefit plans
Balance as at 1st April 2021 965.96 (28.87) 937.09
Additions during the year
Profit for the year 516.23 516.23
Items of Other Comprehensive Income for the year, net
of tax
Remeasurement on defined benefit plans (14.73) (14.73)
Total Comprehensive Income for the year 516.23 (14.73) 501.50
Balance as on 31st March 2022 1,482.19 (43.60) 1,438.59
Additions during the year
Profit for the year 156.63 156.63
Items of Other Comprehensive Income for the year, net
of tax
Remeasurement on defined benefit plans 4.77 4.77
Total Comprehensive Income for the year 156.63 4.77 161.40
Balance as on 31 March 2023
st
1,638.82 (38.83) 1,599.99
Significant accounting policies and Key accounting 1
estimates and judgements
See accompanying notes to the financial statements 2-38

As per our report of even date attached For and on behalf of the Board of Directors of
Asian Paints Industrial Coatings Limited
CIN: U24220MH2001PLC133523
For Deloitte Haskins & Sells LLP Anurag Sahai Hiral Raja
Chartered Accountants Director Director
Firm’s Registration No: 117366W/W-100018 DIN: 09346336 DIN: 08735226

Rupen K. Bhatt Jay Shah Vikram Jain

Partner Company Secretary Chief Financial Officer
Membership No: 046930
Mumbai Mumbai
08th May, 2023 08th May, 2023
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements
for the year ended 31 March 2023
Company Overview
Asian Paints Industrial Coatings Limited (the ‘Company’)
was incorporated in India under the Indian Companies
Act, 1956. The registered office of the Company is located
at 6A, Shanti Nagar, Santacruz East, Mumbai – 400055.
The Company has a manufacturing plant at Sarigam,
Gujarat and is primarily engaged in toll manufacturing of
powder coatings for some of its group companies.
1. Significant Accounting Policies
and Key accounting estimates and
judgements
1.1. Basis of preparation of financial statements
These financial statements of the Company have
been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under section 133 of
the Companies Act 2013, read together with the
Companies (Indian Accounting Standards) Rules,
2015 (as amended).
These financial statements have been prepared and
presented under the historical cost convention, on
the accrual basis of accounting except for certain
financial assets and financial liabilities that are
measured at fair values at the end of each reporting
period, as stated in the accounting policies set out
below. The accounting policies have been applied
consistently over all the periods presented in these
financial statements.
The financial statements are presented in Indian
Rupees (which is also the functional currency of the
Company) and is rounded off to the nearest lakhs
except otherwise indicated. Amounts less than Rs
0.50 lakhs have been presented as “0”.
1.2. Current / Non-Current Classification
Any asset or liability is classified as current if it
satisfies any of the following conditions:
i. the asset/liability is expected to be realized/
settled in the Company’s normal operating
cycle;
ii. the asset is intended for sale or consumption;
iii. the asset/liability is held primarily for the
purpose of trading;
26
iv. the asset/liability is expected to be realized/
settled within twelve months after the
reporting period;
v. the asset 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;
vi. in the case of a liability, the Company does not
have an unconditional right to defer settlement
of the liability for at least twelve months after
the reporting date.
All other assets and liabilities are classified as non-
current.
For the purpose of current/non-current
classification of assets and liabilities, the Company
has ascertained its normal operating cycle as twelve
months. This is based on the nature of services
and the time between the acquisition of assets or
inventories for processing and their realization in
cash and cash equivalents.
1.4 Summary of Significant accounting policies
a) Property, plant and equipment
Measurement at recognition:
An item of property, plant and equipment
that qualifies as an asset is measured on initial
recognition at cost. Following initial recognition,
items of property, plant and equipment are carried
at its cost less accumulated depreciation and
accumulated impairment losses.
The Company identifies and determines cost of each
part of an item of property, plant and equipment
separately, if the part has a cost which is significant
to the total cost of an item of property, plant and
equipment and has useful life that is materially
different from that of the remaining item.
The cost of an item of property, plant and equipment
comprises of its purchase price, including import
duties and other non-refundable purchase taxes
or levies, directly attributable cost of bringing
the asset to its working condition for its intended
use and the initial estimate of decommissioning,
restoration and similar liabilities, if any. Any trade
 27
Notes to the Financial Statements (Contd.)

Financial Statements
discounts and rebates are deducted in arriving at the line method based on the useful life of the asset as
purchase price. Cost includes cost of replacing a part estimated by the management and is charged to the
of a plant and equipment if the recognition criteria Statement of Profit and Loss as per the requirement
are met. Expenditure related to plans, designs and of Schedule II of the Companies Act, 2013. The
drawings of buildings or plant and machinery is estimated useful life of items of property, plant and
capitalized under relevant heads of property, plant equipment is mentioned below:
and equipment if the recognition criteria are met.
Expenditure related to plans, designs and drawings Particulars Years
of buildings or plant and machinery is capitalized Factory Buildings 30
under relevant heads of property, plant and
Buildings (other than 60
equipment if the recognition criteria are met.
factory buildings)
Plant and Equipment 10-20
Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset, Scientific research 8
as appropriate, only when it is probable that future equipment
economic benefits associated with the item will Furniture and Fixtures 8
flow to the Company and the cost of the item can Office Equipment 5
be measured reliably. The carrying amount of any Information Technology 4
component accounted for as a separate asset is Hardware
derecognized when replaced.
Freehold land is not depreciated. Leasehold
Items such as spare parts, stand-by equipment and improvements are amortized over the period of the
servicing equipment that meet the definition of lease.
property, plant and equipment are capitalized at
cost and depreciated over their useful life. Costs in The Company, based on technical assessment made
nature of repairs and maintenance are recognized by technical expert and management estimate,
in the Statement of Profit and Loss as and when depreciates certain items of property plant and
incurred. equipment (as mentioned below) over estimated
useful lives which are different from the useful
The Company had elected to consider the carrying lives prescribed under Schedule II to the Companies
value of all its property, plant and equipment Act, 2013. The management believes that these
appearing in the financial statements prepared in estimated useful lives are realistic and reflect fair
accordance with Accounting Standards notified approximation of the period over which the assets
under the section 133 of the Companies Act 2013, are likely to be used:
read together with Rule 7 of the Companies
(Accounts) Rules, 2014 and used the same as deemed •  he useful lives of certain plant and equipment
T
cost in the opening Ind AS Balance sheet prepared are estimated in the range of 10-20 years. These
on 1st April, 2015. lives are different from those indicated in
Schedule II.
Capital work in progress and capital advances:
Cost of assets not ready for intended use, as on •  cientific research equipment are depreciated
S
the balance sheet date, is shown as capital work in over the estimated useful life of 8 years, which
progress. Advances given towards acquisition of is higher than the life prescribed in Schedule II.
fixed assets outstanding at each balance sheet date
are disclosed as other non-current assets. • I nformation Technology hardware are
depreciated over the estimated useful life of 4
Depreciation: years, which is higher than the life prescribed in
Depreciation on each part of an item of property, Schedule II.
plant and equipment is provided using the straight
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements (Contd.)
The useful lives, residual values of each part of an
item of property, plant and equipment and the
depreciation methods are reviewed at the end of
each financial year. If any of these expectations
differ from previous estimates, such change is
accounted for as a change in an accounting estimate.
Derecognition:
The carrying amount of an item of property, plant
and equipment is derecognized 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 measured as the difference between
the net disposal proceeds and the carrying amount
of the item and is recognized in the Statement of
Profit and Loss when the item is derecognized.
b) Intangible assets
Measurement at recognition:
Intangible assets acquired separately are measured
on initial recognition at cost. Internally generated
intangibles including research cost are not capitalized and
the related expenditure is recognized in the Statement of
Profit and Loss in the period in which the expenditure is
incurred. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and
accumulated impairment loss, if any.
Amortization:
Intangible Assets with finite lives are amortized
on a straight line basis over the estimated useful
economic life. The amortization expense on
intangible assets with finite lives is recognized in the
Statement of Profit and Loss. The estimated useful
life of intangible assets is mentioned below:
Particulars Years
Computer Software 4
The amortization period and the amortization
method for an intangible asset with finite useful life
is reviewed at the end of each financial year. If any of
these expectations differ from previous estimates,
such change is accounted for as a change in an
accounting estimate.
28
Derecognition:
The carrying amount of an intangible asset is
derecognized 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 intangible asset is measured as
the difference between the net disposal proceeds
and the carrying amount of the intangible asset and
is recognized in the Statement of Profit and Loss
when the asset is derecognized.
The Company had elected to consider the carrying
value of all its intangible assets appearing in the
financial statements prepared in accordance with
Accounting Standards notified under the section
133 of the Companies Act 2013, read together with
Rule 7 of the Companies (Accounts) Rules, 2014 and
used the same as deemed cost in the opening Ind AS
Balance sheet prepared on 1st April, 2015.
c) Impairment
Assets that are subject to depreciation and
amortization are reviewed for impairment, whenever
event or changes in circumstances indicate that
carrying amount may not be recoverable. Such
circumstances include, though are not limited
to, significant or sustained decline in revenues
or earnings and material adverse changes in the
economic environment.
An impairment loss is recognized whenever the
carrying amount of an asset or its cash generating
unit (CGU) exceeds its recoverable amount. The
recoverable amount of an asset is the greater of
its fair value less cost to sell and value in use. To
calculate value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
rates and the risk specific to the asset. For an asset
that does not generate largely independent cash
inflows, the recoverable amount is determined
for the CGU to which the asset belongs. Fair value
less cost to sell is the best estimate of the amount
obtainable from the sale of an asset in an arm’s
length transaction between knowledgeable, willing
parties, less the cost of disposal. Impairment losses,
if any, are recognized in the Statement of Profit and
Loss and included in depreciation and amortization
expense.

Notes to the Financial Statements (Contd.)
Impairment losses are reversed in the Statement of
Profit and Loss only to the extent that the asset’s
carrying amount does not exceed the carrying
amount that would have been determined if no
impairment loss had previously been recognized.
d) Revenue recognition
Revenue from contracts with customers is
recognized on transfer of control of promised
goods or services to a customer at an amount that
reflects the consideration to which the Company
is expected to be entitled to in exchange for those
goods or services. Revenue towards satisfaction
of a performance obligation is measured at the
amount of transaction price (net of variable
consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered is net of variable consideration
on account of various discounts and schemes
offered by the Group as part of the contract. This
variable consideration is estimated based on the
expected value of outflow. Revenue (net of variable
f)
consideration) is recognized only to the extent that
it is highly probable that the amount will not be
subject to significant reversal when uncertainty
relating to its recognition is resolved.
Rendering of services:
Revenue from rendering services is recognized over
time by measuring progress towards satisfaction of
performance obligation for the services rendered.
Input method is used for measurement of revenue
from processing service as it is directly linked to the
expense incurred by the Company.
e) Inventory
Stores & spares, components and consumables are
carried at lower of cost and net realizable value
as these are mainly used for operational purpose.
Spares for certain machineries and equipment’s are
stored by Plant to meet emergency purpose.
Damaged, unserviceable and inert stocks are
monitored on a regular basis and in case any item is
deemed as not usable, value impact pertaining to
such stock is recognized in the books of accounts.
In determining the cost of stores, spares,
components and consumables, weighted average
29
Financial Statements
cost method is used. Cost of inventory comprises all
costs of purchase, duties, taxes (other than those
subsequently recoverable from tax authorities) and
all other costs incurred in bringing the inventory to
their present location and condition.
Cost of finished goods and work-in-progress includes
the cost of raw materials, packing materials, an
appropriate share of fixed and variable production
overheads, excise duty as applicable and other costs
incurred in bringing the inventories to their present
location and condition. Fixed production overheads
are allocated on the basis of normal capacity of
production facilities.
The Company considers factors like estimated
shelf life, product discontinuances and ageing of
inventory in determining the provision for slow
moving, obsolete and other non-saleable inventory
and adjusts the inventory provisions to reflect the
recoverable value of inventory.
Financial Instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement:
The Company recognizes a financial asset in its
balance sheet when it becomes party to the
contractual provisions of the instrument. All
financial assets are recognized initially at fair value
plus, in the case of financial assets not recorded at
fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the
financial asset.
Where the fair value of a financial asset at initial
recognition is different from its transaction price,
the difference between the fair value and the
transaction price is recognized as a gain or loss in the
Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted
market price in an active market for an identical
asset (i.e. level 1 input) or through a valuation
technique that uses data from observable markets
(i.e. level 2 input).
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements (Contd.)
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the Statement of Profit and Loss only to the
extent that such gain or loss arises due to a change
in factor that market participants take into account
when pricing the financial asset.
However, trade receivables that do not contain a
significant financing component are measured at
transaction price.
Subsequent measurement:
For subsequent measurement, the Company
classifies a financial asset in accordance with the
below criteria:
i. The Company’s business model for managing
the financial asset and
ii. The contractual cash flow characteristics of the
financial asset.
Based on the above criteria, the Company classifies
its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through
other comprehensive income (FVTOCI)
iii. Financial assets measured at fair value through
profit or loss (FVTPL)
i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized
cost if both the following conditions are met:
a) The Company’s business model objective
for managing the financial asset is to
hold financial assets in order to collect
contractual cash flows, and
b) 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.
30
This category applies to cash and bank balances,
trade receivables, loans and other financial
assets of the Company (refer note 25 for further
details). Such financial assets are subsequently
measured at amortized cost using the effective
interest method.
Under the effective interest method, the future
cash receipts are exactly discounted to the
initial recognition value using the effective
interest rate. The cumulative amortization using
the effective interest method of the difference
between the initial recognition amount and
the maturity amount is added to the initial
recognition value (net of principal repayments,
if any) of the financial asset over the relevant
period of the financial asset to arrive at the
amortized cost at each reporting date. The
corresponding effect of the amortization
under effective interest method is recognized
as interest income over the relevant period of
the financial asset. The same is included under
other income in the Statement of Profit and
Loss.
The amortized cost of a financial asset is also
adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both
of the following conditions are met:
a) The Company’s business model objective
for managing the financial asset is achieved
both by collecting contractual cash flows
and selling the financial assets, and
b) 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.
This category applies to certain investments
in debt instruments. Such financial assets
are subsequently measured at fair value at
each reporting date. Fair value changes are
recognized in the Other Comprehensive Income
(OCI). However, the Company recognizes
 31
Notes to the Financial Statements (Contd.)

Financial Statements
interest income and impairment losses and its The financial asset and the associated liability are
reversals in the Statement of Profit and Loss. measured on a basis that reflects the rights and
obligations that the Company has retained.
iii. Financial assets measured at FVTPL:
A financial asset is measured at FVTPL unless On derecognition of a financial asset (except as
it is measured at amortized cost or at FVTOCI mentioned in ii. above for financial assets measured
as explained above. This is a residual category at FVTOCI), the difference between the carrying
applied to all other investments of the amount and the consideration received is recognized
Company excluding investments in subsidiary in the Statement of Profit and Loss.
and associate companies. Such financial assets
Impairment of financial assets:
are subsequently measured at fair value at
each reporting date. Fair value changes are The Company applies expected credit losses (ECL)
recognized in the Statement of Profit and Loss. model for measurement and recognition of loss
allowance on the following:
Derecognition:
A financial asset (or, where applicable, a part of a i. Trade receivables,
financial asset or part of a group of similar financial
ii. Financial assets measured at amortized cost
assets) is derecognized (i.e. removed from the
(other than trade receivables),
Company’s balance sheet) when any of the following
occurs:
iii. Financial assets measured at fair value through
other comprehensive income (FVTOCI)
i. The contractual rights to cash flows from the
financial asset expires;
In case of trade receivables, the Company follows
a simplified approach wherein an amount equal to
ii. The Company transfers its contractual rights
lifetime ECL is measured and recognized as loss
to receive cash flows of the financial asset and
allowance.
has substantially transferred all the risks and
rewards of ownership of the financial asset;
In case of other assets (listed as ii. and iii. above), the
Company determines if there has been a significant
iii. The Company retains the contractual rights to
increase in credit risk of the financial asset since
receive cash flows but assumes a contractual
initial recognition. If the credit risk of such assets
obligation to pay the cash flows without
has not increased significantly, an amount equal to
material delay to one or more recipients
12-month ECL is measured and recognized as loss
under a ‘pass-through’ arrangement (thereby
allowance. However, if credit risk has increased
substantially transferring all the risks and
significantly, an amount equal to lifetime ECL is
rewards of ownership of the financial asset);
measured and recognized as loss allowance.
iv. The Company neither transfers nor retains,
Subsequently, if the credit quality of the financial
substantially all risk and rewards of ownership,
asset improves such that there is no longer a
and does not retain control over the financial
significant increase in credit risk since initial
asset.
recognition, the Company reverts to recognizing
In cases where Company has neither transferred nor impairment loss allowance based on 12-month ECL.
retained substantially all of the risks and rewards
ECL is the difference between all contractual cash
of the financial asset, but retains control of the
flows that are due to the Company in accordance
financial asset, the Company continues to recognize
with the contract and all the cash flows that the
such financial asset to the extent of its continuing
entity expects to receive (i.e., all cash shortfalls),
involvement in the financial asset. In that case, the
discounted at the original EIR. (Effective interest
Company also recognizes an associated liability.
rate)
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements (Contd.)
Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected
life of a financial asset. 12-month ECL are a portion
of the lifetime ECL which result from default
events that are possible within 12 months from the
reporting date.
ECL are measured in a manner that they reflect
unbiased and probability weighted amounts
determined by a range of outcomes, taking
into account the time value of money and other
reasonable information available as a result of past
events, current conditions and forecasts of future
economic conditions.
As a practical expedient, the Company uses a
provision matrix to measure lifetime ECL on its
portfolio of trade receivables. 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. At each
reporting date, the historical observed default rates
and changes in the forward-looking estimates are
updated.
ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income/ expense in the Statement of Profit and Loss
under the head ‘Other expenses’.
Financial Liabilities
Initial recognition and measurement:
The Company recognizes a financial liability in
its balance sheet when it becomes party to the
contractual provisions of the instrument. All
financial liabilities are recognized initially at fair
value minus, in the case of financial liabilities not
recorded at fair value through profit or loss (FVTPL),
transaction costs that are attributable to the
acquisition of the financial liability.
Where the fair value of a financial liability at initial
recognition is different from its transaction price,
the difference between the fair value and the
transaction price is recognized as a gain or loss in the
Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted
market price in an active market for an identical
32
asset (i.e. level 1 input) or through a valuation
technique that uses data from observable markets
(i.e. level 2 input).
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the Statement of Profit and Loss only to the
extent that such gain or loss arises due to a change
in factor that market participants take into account
when pricing the financial liability.
Subsequent measurement:
All financial liabilities of the Company are
subsequently measured at amortized cost using the
effective interest method (refer note 25 for further
details).
Under the effective interest method, the future
cash payments are exactly discounted to the initial
recognition value using the effective interest rate.
The cumulative amortization using the effective
interest method of the difference between the
initial recognition amount and the maturity amount
is added to the initial recognition value (net of
principal repayments, if any) of the financial liability
over the relevant period of the financial liability to
arrive at the amortized cost at each reporting date.
The corresponding effect of the amortization under
effective interest method is recognized as interest
expense over the relevant period of the financial
liability. The same is included under finance cost in
the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same lender
on substantially different terms, or the terms of
an existing liability are substantially modified,
such an exchange or modification is treated as
the Derecognition of the original liability and
the recognition of a new liability. The difference
between the carrying amount of the financial
liability derecognized and the consideration paid
is recognized in the Statement of Profit and Loss.

Notes to the Financial Statements (Contd.)
The difference between the carrying amount of the
financial liability derecognized and the consideration
paid is recognized in the Statement of Profit and
Loss.
Offsetting of financial assets and financial
liabilities:
Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis or to realise the asset and settle
the liability simultaneously.
g) Fair Value
The Company measures financial instruments at fair
value in accordance with the accounting policies
mentioned above. 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. The fair value
measurement is based on the presumption that the
transaction to sell the asset or transfer the liability
takes place either:
• I n the principal market for the asset or liability,
or
• I n the absence of a principal market, in the most
advantageous market for the asset or liability.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized within the fair value hierarchy
that categorizes into three levels, described as
follows, the inputs to valuation techniques used to
measure value. The fair value hierarchy gives the
highest priority to quoted prices in active markets
for identical assets or liabilities (Level 1 inputs) and
the lowest priority to unobservable inputs (Level 3
inputs).
Level 1 — quoted (unadjusted) market prices in
active markets for identical assets or
liabilities
Level 2 — inputs other than quoted prices included
within Level 1 that are observable for
the asset or liability, either directly or
indirectly
33
Financial Statements
Level 3 — inputs that are unobservable for the asset
or liability.
For assets and liabilities that are recognized in the
financial statements at fair value on a recurring
basis, the Company determines whether transfers
have occurred between levels in the hierarchy by
re-assessing categorization at the end of each
reporting period and discloses the same.
h) Foreign Currency Translation
Initial Recognition:
On initial recognition, transactions in foreign
currencies entered into by the Company are
recorded in the functional currency (i.e. Indian
Rupees), 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. Exchange differences arising on foreign
exchange transactions settled during the year are
recognized in the Statement of Profit and Loss.
Measurement of foreign currency items at
reporting date:
Foreign currency monetary items of the Company
are translated at the exchange rates at the reporting
date. Non-monetary items that are measured at
historical cost in a foreign currency, are translated
using the exchange rate at the date of the
transaction. 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 is measured.
Exchange differences arising out of these
translations are recognized in the Statement of
Profit and Loss.
i) Income Taxes
Tax expense is the aggregate amount included in
the determination of profit or loss for the period in
respect of current tax and deferred tax.
Current tax:
Current tax is the amount of income taxes payable
in respect of taxable profit for a period. Taxable
profit differs from ‘profit before tax’ as reported in
the Statement of Profit and Loss because of items
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements (Contd.)
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have
been enacted by the end of reporting period for the
amounts expected to be recovered from or paid to
the taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation of
taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized
for all taxable temporary differences. However, in
case of temporary differences that arise from initial
recognition of assets or liabilities in a transaction
(other than business combination) that affect
neither the taxable profit nor the accounting profit,
deferred tax liabilities are not recognized. Also, for
temporary differences if any that may arise from
initial recognition of goodwill, deferred tax liabilities
are not recognized.
Deferred tax assets are generally recognized
for all deductible temporary differences to the
extent it is probable that taxable profits will be
available against which those deductible temporary
difference can be utilized. In case of temporary
differences that arise from initial recognition of
assets or liabilities in a transaction (other than
business combination) that affect neither the
taxable profit nor the accounting profit, deferred
tax assets are not recognized.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow the benefits of part or all of such deferred tax
assets to be utilized.
34
Deferred tax assets and liabilities are measured
at the tax rates that have been enacted or
substantively enacted by the balance sheet date and
are expected to apply to taxable income in the years
in which those temporary differences are expected
to be recovered or settled.
Uncertain tax positions:
The management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and considers whether it is probable
that a taxation authority will accept an uncertain
tax treatment. The Company reflects the effect
of uncertainty for each uncertain tax treatment
by using one of two methods, the expected value
method (the sum of the probability - weighted
amounts in a range of possible outcomes) or the
most likely amount (single most likely amount
method in a range of possible outcomes), depending
on which is expected to better predict the resolution
of the uncertainty. The Company applies consistent
judgements and estimates if an uncertain tax
treatment affects both the current and the deferred
tax.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income
or an expense in the Statement of Profit and Loss,
except when they relate to items that are recognized
in Other Comprehensive Income, in which case,
the current and deferred tax income/expense are
recognized in Other Comprehensive Income.
The Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and where
it intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
In case of deferred tax assets and deferred tax
liabilities, the same are offset if the Company has a
legally enforceable right to set off corresponding
current tax assets against current tax liabilities and
the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same tax
authority on the Company.

Notes to the Financial Statements (Contd.)
j) Provisions and contingencies
The Company recognizes provisions when a present
obligation (legal or constructive) as a result of a
past event exists and it is probable that an outflow
of resources embodying economic benefits will be
required to settle such obligation and the amount of
Post-Employment Benefits:
such obligation can be reliably estimated.
If the effect of time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time
is recognized as a finance cost.
A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation
that may, but probably will not require an outflow
of resources embodying economic benefits or the
amount of such obligation cannot be measured
reliably. When there is a possible obligation or a
present obligation in respect of which likelihood of
outflow of resources embodying economic benefits
is remote, no provision or disclosure is made.
k) Measurement of EBITDA
The Company has opted to present earnings before
interest (finance cost), tax, depreciation and
amortization (EBITDA) as a separate line item on
the face of the Statement of Profit and Loss for the
period. The Company measures EBITDA based on
profit/(loss) from continuing operations.
l) Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash
flow statement comprise cash and cheques in hand,
bank balances, demand deposits with banks where
the original maturity is three months or less and
other short term highly liquid investments net of
bank overdrafts which are repayable on demand as
these form an integral part of the Company’s cash
management.
m) Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve
months of rendering the service are classified
as short term employee benefits and they are
recognized in the period in which the employee
35
Financial Statements
renders the related service. The Company recognizes
the undiscounted amount of short term employee
benefits expected to be paid in exchange for
services rendered as a liability (accrued expense)
after deducting any amount already paid.
I. Defined contribution plans:
Defined contribution plans are Provident fund
scheme, Employee state insurance scheme and
Government administered pension fund scheme
for all applicable employees.
Recognition and measurement of defined
contribution plans:
The Company recognizes contribution payable
to a defined contribution plan as an expense
in the Statement of Profit and Loss when the
employees render services to the Company
during the reporting period. If the contributions
payable for services received from employees
before the reporting date exceeds the
contributions already paid, the deficit payable
is recognized as a liability after deducting the
contribution already paid. If the contribution
already paid exceeds the contribution due for
services received before the reporting date, the
excess is recognized as an asset to the extent
that the prepayment will lead to, for example, a
reduction in future payments or a cash refund.
II. Defined benefit plans:
i) Gratuity scheme:
Gratuity expense, a defined benefit
scheme, is recognized based on
contributions to the ‘Asian Paints Industrial
Coatings Limited Employee Group Gratuity
Assurance Scheme’ which in turn has taken
a ‘Group-Gratuity-cum-Life Assurance’
policy from Life Insurance Corporation
(LIC) of India. Besides the contribution
made on the basis of LIC’s demand which
specifies the contribution to be made on
an annual basis, the difference between
liability determined on the basis of
actuarial valuation done at the year end
by an independent actuary and balance
available with LIC has also been accrued.
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements (Contd.)
Recognition and measurement of defined benefit
plans:
The cost of providing defined benefits is determined
using the Projected Unit Credit method with
n)
actuarial valuations being carried out at each
reporting date. The defined benefit obligations
recognized in the Balance Sheet represent the
present value of the defined benefit obligations
as reduced by the fair value of plan assets, if
applicable. Any defined benefit asset (negative
defined benefit obligations resulting from this
calculation) is recognized representing the present
value of available refunds and reductions in future
contributions to the plan.
All expenses represented by current service cost,
past service cost if any and net interest on the
defined benefit liability (asset) are recognized in the
Statement of Profit and Loss. Remeasurements of
the net defined benefit liability (asset) comprising
actuarial gains and losses and the return on the
plan assets (excluding amounts included in net
interest on the net defined benefit liability/asset),
are recognized in Other Comprehensive Income.
Such remeasurements are not reclassified to the
Statement of Profit and Loss in the subsequent
periods.
The Company presents the above liability/(asset)
as current and non-current in the balance sheet as
per actuarial valuation by the independent actuary;
however, the entire liability towards gratuity is
considered as current as the Company will contribute
this amount to the gratuity fund within the next
twelve months.
Other Long Term Employee Benefits:
Entitlements to annual leave and sick leave are
recognized when they accrue to employees. Sick
leave can only be availed while annual leave can
either be availed or encashed subject to a restriction
on the maximum number of accumulation of leave.
The Company determines the liability for such
accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations being
carried out at each Balance Sheet date. Expenses
related to other long term employee benefits are
recognized in the Statement of Profit and loss
(including actuarial gain and loss).
36
The Company presents this liability as current and
non-current in the Balance Sheet as per actuarial
valuation by the independent actuary.
Leases accounting
Assets taken on lease (As a Lessee):
The Company mainly has lease arrangements for
land and warehouse spaces.
The Company assesses whether a contract is or
contains a lease at inception of the contract. The
assessment involves the exercise of judgement
about whether it depends on a specified asset,
whether the Company has substantially all the
economic benefits from the use of that asset, and
whether the Company has the right to direct the use
of the asset.
The Company recognises a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end
of the lease term. The estimated useful lives of
right-of-use assets are determined on the same basis
as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
re-measurements of the lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be
readily determined, the group uses an incremental
borrowing rate specific to the country, term and
currency of the contract. Generally, the company
uses its incremental borrowing rate as the discount
rate.

Notes to the Financial Statements (Contd.)
Lease payments included in the measurement of the
lease liability include Fixed payments, Variable lease
payments that depend on an index or a rate known
at the commencement date; and extension option
payments or purchase options which the group is
reasonable certain to exercise.
After the commencement date, the amount of
lease liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made and remeasured (with a corresponding
adjustment to the related ROU asset) when there
is a change in future lease payments in case of
renegotiation, changes of an index or rate or in case
of reassessment of options.
Short-term leases and leases of low-value assets
The company has elected not to recognize right-
of-use assets and lease liabilities for short term
leases as well as low value assets and recognizes the
lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
Assets given on lease:
In respect of assets provided on finance leases,
amounts due from lessees are recorded as
receivables at the amount of the Company net
investment in the leases. Finance lease income
is allocated to accounting periods to reflect a
constant periodic rate of return on the Company’s
net investment outstanding in respect of the leases.
In respect of assets given on operating lease, lease
rentals are accounted on accrual basis in accordance
with the respective lease agreements.
o) Research and Development
Expenditure on research is recognized as an expense
when it is incurred. Expenditure on development
which does not meet the criteria for recognition as
an intangible asset is recognized as an expense when
it is incurred.
Items of property, plant and equipment and
intangible assets utilized for research and
development are capitalized and depreciated in
accordance with the policies stated for Property,
plant and equipment and Intangible Assets.
37
Financial Statements
p) Events after reporting date
Where events occurring after the balance sheet
date provide evidence of conditions that existed at
the end of the reporting period, the impact of such
events is adjusted within the financial statements.
Otherwise, events after the balance sheet date of
material size or nature are only disclosed.
q) Non-current Assets held for sale
The Company classifies non-current assets as held
for sale if their carrying amounts will be recovered
principally through a sale rather than through
continuing use of the assets and actions required
to complete such sale indicate that it is unlikely
that significant changes to the plan will be made
or that the decision to sell will be withdrawn. Also,
such assets are classified as held for sale only if the
management expects to complete the sale within
one year from the date of classification.
Non-current assets classified as held for sale are
measured at the lower of their carrying amount and
the fair value less cost to sell. Non-current assets
held for sale are not depreciated or amortized.
r) Borrowing Cost
Borrowing cost includes interest, amortization
of ancillary costs incurred in connection with
the arrangement of borrowings and exchange
differences arising from foreign currency borrowings
to the extent they are regarded as an adjustment to
the interest cost.
Borrowings costs, if any, directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalized,
if any. All other borrowing costs are expensed in the
period in which they occur.
s) Segment Reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision Maker (CODM) of the
Company. The CODM is responsible for allocating
resources and assessing performance of the
operating segments of the Company.
 Asian Paints Industrial Coatings Limited
Notes to the Financial Statements (Contd.)
1.5. Key accounting estimates and judgements
The preparation of the Company’s financial
statements requires the management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year,
are described below:
a. Income taxes
The Company’s tax jurisdiction is India.
Significant judgements are involved in
estimating budgeted profits for the purpose of
paying advance tax, determining the provision
for income taxes, including amount expected to
be paid/recovered for uncertain tax positions
(Refer note 24).
b. Property, plant and equipment
Property, plant and equipment is one of the
key assets for the company. The charge in
respect of periodic depreciation is derived after
determining an estimate of an asset’s expected
useful life and the expected residual value at
the end of its life. The useful lives and residual
values of Company’s assets are determined
by the management at the time the asset is
acquired and reviewed periodically, including
at each financial year end. The lives are based
on historical experience with similar assets as
well as anticipation of future events, which may
impact their life, such as changes in technical
or commercial obsolescence arising from
changes or improvements in production or from
a change in market demand of the product or
service output of the asset.
38
c. Defined Benefit Obligation
The costs of providing pensions and other
post-employment benefits are charged to the
Statement of Profit and Loss in accordance
with IND AS 19 ‘Employee benefits’ over the
period during which benefit is derived from the
employees’ services. The costs are assessed
on the basis of assumptions selected by the
management. These assumptions include salary
escalation rate, discount rates, expected rate of
return on assets and mortality rates. The same
is disclosed in Note 27, ‘Employee benefits’.
d. Right of use assets and lease liability
The Company has applied judgement in
determining whether each contract is or
contains a lease. This included an assessment
about whether the contract depends on a
specified asset, whether the Company obtains
substantially all the economic benefits from the
use of that asset, and whether the Company
has the right to direct the use of that asset.
The Company has also exercised judgement
in determining the lease term as the non-
cancellable term of the lease, together with the
impact of options to extend or terminate the
lease if it is reasonably certain to be exercised.
Where the rate implicit in the lease is not
readily available, an incremental borrowing
rate is applied. This incremental borrowing
rate reflects the rate of interest that the lessee
would have to pay to borrow over a similar term,
with a similar security, the funds necessary to
obtain an asset of a similar nature and value
to the right-of-use asset in a similar economic
environment. Determination of the incremental
borrowing rate requires estimation.
NOTE 2A : PROPERTY, PLANT AND EQUIPMENT
(₹ in lakhs)
Gross Carrying Value Depreciation Net
Carrying
value
As at Additions Adjustment/ As at As at Additions Adjustment/ As at As at
01.04.22 Deductions 31.03.23 01.04.22 Deductions 31.03.23 31.03.23
Buildings 290.91 - - 290.91 94.52 13.61 - 108.13 182.78
Plant and Equipment 1,613.87 54.00 22.28 1,645.59 506.38 151.27 21.39 636.26 1,009.33
Scientific Research :
Buildings 12.00 - - 12.00 2.59 0.73 - 3.32 8.68
Equipment 55.07 24.04 0.08 79.03 31.94 4.91 0.09 36.76 42.27
Furniture and Fixtures 10.64 0.46 - 11.10 5.96 0.92 - 6.88 4.22
Office Equipment 18.34 5.18 - 23.52 8.86 3.27 - 12.13 11.39
Information Technology 8.51 - - 8.51 5.98 1.66 - 7.64 0.87
Notes to the Financial Statements (Contd.)

Hardware
Total 2,009.34 83.68 22.36 2,070.66 656.23 176.37 21.48 811.12 1,259.54

(₹ in lakhs)
Gross Carrying Value Depreciation Net
Carrying
value
As at Additions Adjustment/ As at As at Additions Adjustment/ As at As at
01.04.21 Deductions 31.03.22 01.04.21 Deductions 31.03.2022 31.03.22
Buildings 287.21 3.70 - 290.91 80.97 13.55 - 94.52 196.39
Plant and Equipment 1,570.18 133.85 90.16 1,613.87 444.68 145.85 84.15 506.38 1,107.49
Scientific Research :
Buildings 12.00 - - 12.00 1.87 0.73 0.01 2.59 9.41
Equipment 43.40 12.07 0.40 55.07 29.37 2.97 0.40 31.94 23.13
Furniture and Fixtures 8.85 2.28 0.49 10.64 5.27 1.13 0.44 5.96 4.68
Office Equipment 14.39 5.45 1.50 18.34 7.94 2.42 1.50 8.86 9.48
Information Technology 8.53 - 0.02 8.51 4.27 1.73 0.02 5.98 2.53
Hardware
Total 1,944.56 157.35 92.57 2,009.34 574.37 168.38 86.52 656.23 1,353.11
39

Financial Statements
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 2B : RIGHT OF USE ASSETS

(₹ in lakhs)
Movement in net carrying amount 2022-23 2021-22
Building Leasehold Land Building Leasehold Land
Net Carrying Amount
Balance at 1st April 16.41 9.86 - 10.00
Additions - 25.79 -
Depreciation 9.39 0.14 9.38 0.14
Deletions - - - -
Balance at 31 March
st
7.02 9.72 16.41 9.86

NOTE 3: CAPITAL WORK IN PROGRESS

Details as on 31st March 2023 (₹ in lakhs)
Particulars Amount in Capital work in progress for a period of Total
Less than 1 1 to 2 years 2 to 3 years More than 3
year years
Projects in progress 1.45 - - - 1.45

Details as on 31st March 2022 (₹ in lakhs)

Particulars Amount in Capital work in progress for a period of Total
Less than 1 1 to 2 years 2 to 3 years More than 3
year years
Projects in progress 4.95 - - - 4.95

There are no projects in capital work in progress, whose completion is overdue or has exceeded its cost compared to
its original plans.

NOTE 4 : INTANGIBLE ASSETS (Acquired seperately)

(₹ in lakhs)
Particulars Gross Carrying Value Amortisation Net Block
As at Additions Deductions As at As at Additions Deductions As at As at
01.04.22 31.03.23 01.04.22 31.03.23 31.03.23
Computer Software 5.73 - - 5.73 1.50 1.43 - 2.93 2.80
Total Intangible 5.73 - - 5.73 1.50 1.43 - 2.93 2.80
Assets

(₹ in lakhs)
Particulars Gross Carrying Value Amortisation Net Block
As at Additions Deductions As at As at Additions Deductions As at As at
01.04.21 31.03.22 01.04.21 31.03.22 31.03.22
Computer Software 6.53 - 0.80 5.73 0.87 1.43 0.80 1.50 4.23
Total Intangible 6.53 - 0.80 5.73 0.87 1.43 0.80 1.50 4.23
Assets

40
 41
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 5 : OTHER FINANCIAL ASSETS
(₹ in Lakhs)
Non-Current Current
As at As at As at As at
31.03.2023 31.03.2022 31.03.2023 31.03.2022
Unsecured & considered good
(a) Security Deposits 51.28 50.96 - -
(b)Term deposits held as margin money 166.27 159.81 209.71 204.69
against bank guarantee and other
commitments
TOTAL 217.55 210.77 209.71 204.69

NOTE 6 : CURRENT TAX ASSETS (NET)

(₹ in Lakhs)
Non-Current Current
As at As at As at As at
31.03.2023 31.03.2022 31.03.2023 31.03.2022
Advance payment of income tax (Net) 234.99 182.25 - -
TOTAL 234.99 182.25 - -

NOTE 7 : OTHER ASSETS

(₹ in Lakhs)
Non-Current Current
As at As at As at As at
31.03.2023 31.03.2022 31.03.2023 31.03.2022
(a) Capital Advances - 0.01 - -
(b)Advances other than capital
advances
(i) Balances with government 135.37 168.13 8.35 10.09
authorities
(ii) Advances/claims recoverable in cash - - 21.76 16.11
or in kind
(iii) Advances to employees - - 10.06 8.91
(iv) Prepaid expenses 1.54 2.23 8.48 11.39
(v) Refund receivable - - 0.30 0.30
TOTAL 136.91 170.37 48.95 46.80
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 8 : INVENTORIES (At lower of cost and net realisable value)

(₹ in Lakhs)
Current
As at As at
31.03.2023 31.03.2022
Stores and spares 72.39 82.70
TOTAL 72.39 82.70
The cost of inventories recognised as an expense during the year is disclosed in Note 21 under head consumption of
stores and spare parts. The cost of inventories recognised as an expense includes Rs 4.01 Lakhs (Previous year
Rs 11.37 Lakhs)

NOTE 9 : CURRENT INVESTMENTS

(₹ in Lakhs)
Current
As at As at
31.03.2023 31.03.2022
Investments in Quoted Mutual Funds measured at FVTPL
Investments in Liquid Mutual Funds 2,648.34 1,598.97
Total Quoted Current Investment 2,648.34 1,598.97
Aggregate amount of quoted investments at Cost 2,494.37 1,517.33
Aggregate amount of quoted investments at Market value 2,648.34 1,598.97

NOTE 10 : TRADE RECEIVABLES

(₹ in Lakhs)
Current
As at As at
31.03.2023 31.03.2022
Trade receivables
(a) Unsecured, considered good (Refer Note 30) 256.65 984.83
(b) Unsecured, considered doubtful 68.76 68.76
325.41 1053.59
Less - Allowance for unsecured doubtful debts (68.76) (68.76)
TOTAL 256.65 984.83

42
 43
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 10 : TRADE RECEIVABLES (contd.)

Trade Receivable Ageing schedule

(₹ in Lakhs)
Trade receivables Not Due Outstanding for following periods from due date of payment Total
(unsecured) as on
Less than 6 months - 1-2 years 2-3 years More than
31st March 2023
6 months 1 year 3 years
(a) Undisputed, considered 252.77 0.09 0.03 3.77 - - 256.65
good
(b) Undisputed, - - - - - 68.76 68.76
considered doubtful
(c) Disputed, considered - - - - - - -
good
(d) Disputed, considered - - - - - - -
doubtful
TOTAL 252.77 0.09 0.03 3.77 - 68.76 325.41
Less : Allowance for 68.76
unsecured doubtful debts
Total Trade Receivables - 256.65
Current

(₹ in Lakhs)
Trade receivables Not Due Outstanding for following periods from due date of payment
(unsecured) as on
Less than 6 months - 1-2 years 2-3 years More than Total
31st March 2022
6 months 1 year 3 years
(a) Undisputed, considered 138.95 830.12 15.76 - - - 984.83
good
(b) Undisputed, - - - - - 68.76 68.76
considered doubtful
(c) Disputed, considered - - - - - - -
good
(d) Disputed, considered - - - - - - -
doubtful
TOTAL 138.95 830.12 15.76 - - 68.76 1,053.59
Less : Allowance for 68.76
unsecured doubtful debts
Total Trade Receivables - 984.83
Current
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 11 : CASH AND BANK BALANCES

(₹ in Lakhs)
Current
As at As at
31.03.2023 31.03.2022
Cash and Cash equivalent
(a) Balances with banks :
(i) Current Accounts 64.67 145.32
(b) Cash on hand 0.55 0.06
TOTAL 65.22 145.38

NOTE 12 : EQUITY SHARE CAPITAL

(₹ in Lakhs)
As at As at
31.03.2023 31.03.2022
Authorised
33,000,000 (Previous year 33,000,000) Equity Shares of ₹10/- each 3,300.00 3,300.00
3,300.00 3,300.00
Issued, Subscribed and Paid up capital
30,450,000 (Previous year 30,450,000)Equity Shares of ₹10/- each fully paid 3,045.00 3,045.00
3,045.00 3,045.00

a) Reconciliation of the number of share outstanding at the beginning and at the end of the year

As at 31.03.2023 As at 31.03.2022
Fully paid Equity Shares No. of Shares ₹ in lakhs No. of Shares ₹ in lakhs
At the beginning of the year 3,04,50,000 3,045.00 3,04,50,000 3,045.00
Add : Issued during the year - - - -
At the end of the year 3,04,50,000 3,045.00 3,04,50,000 3,045.00

b) Details of Shareholders Holding more than 5% equity shares in the company #

Name of Share holder As at 31.03.2023 As at 31.03.2022
No. of Equity Percentage No. of Equity Percentage
Shares Holding Shares Holding
Asian Paints Limited (Holding Company) 3,04,50,000 100% 3,04,50,000 100%
and its nominees
# As per the records of the company, including its register of members

c) Terms/rights attached to shares

The Company has only one class of shares i.e. equity having par vale of Rs.10/- Per share. The shareholders have
voting rights in the proportion of their shareholding. The shareholders are entitled to dividend, if declared and
paid by the Company. In the event of liquidation, these shareholders are entitled to receive remaining assets of
the Company after distribution of all preferential amount if any, in the proportion of their shareholding.
44
 45
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 12 : EQUITY SHARE CAPITAL (contd.)
d) Shares held by promoters as defined in the Companies Act, 2013 at the end of the year
Promoter Name As at 31st March 2023 As at 31st March 2022 % change during
No. of Shares % of total shares No. of Shares % of total shares the year
Asian Paints Limited 3,04,50,000 100% 3,04,50,000 100% -
(Holding Company)
and its nominees

NOTE 13 : OTHER EQUITY

(₹ in Lakhs)
Particulars Reserves and Surplus Total
Retained Remeasurement
Earnings on defined
benefit plans
Balance as at 1st April, 2021 965.96 (28.87) 937.09
Additions during the year
Profit for the year 516.23 516.23
Items of Other Comprehensive Income for the year, net of
tax
Remeasurement loss on defined benefit plans (14.73) (14.73)
Total Comprehensive Income for the year 516.23 (14.73) 501.50
Balance as on 31 March,2022
st
1,482.19 (43.60) 1,438.59
Additions during the year
Profit for the year 156.63 - 156.63
Items of Other Comprehensive Income for the year, net of
tax
Remeasurement gain on defined benefit plans - 4.77 4.77
Total Comprehensive Income for the year 156.63 4.77 161.40
Balance as on 31st March, 2023 1,638.82 (38.83) 1,599.99

NOTE 14 : LEASE LIABILITIES

(₹ in Lakhs)
Non-Current Current
As at As at As at As at
31.03.2023 31.03.2022 31.03.2023 31.03.2022
Lease liabilities - 7.06 7.05 9.46
TOTAL - 7.06 7.05 9.46

 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 14 : LEASE LIABILITIES (Contd.)

(₹ in Lakhs)
Movement in lease liabilities 2022-23 2021-22
Balance as at 1st April 16.52 -
Additions - 25.79
Deletions - -
Finance cost 0.92 0.28
Repayment (including interest on lease liabilities) 10.39 9.55
Balance as at 31 March
st
7.05 16.52

Amounts with respect to leases recognised in the Statement of Profit & Loss and Cash Flow Statement

(₹ in Lakhs)
Year 2022-23 Year 2021-22
Amounts recognised in Statement of Profit and Loss
Interest on lease liabilities 0.92 0.28
Depreciation expense 9.52 9.52
Expenses relating to short-term leases and leases of low-value assets 0.95 1.34
Amounts recognised in Cash Flow Statement
In Financing activity
Repayment of lease liabilities 9.46 9.27
Interest paid on lease liabilities 0.92 0.28

NOTE 15 : PROVISIONS
(₹ in Lakhs)

Non-Current Current
As at As at As at As at
31.03.2023 31.03.2022 31.03.2023 31.03.2022
(a) Provision for Employee Benefits
(Refer Note 27)
Provision for Compensated Absences 58.78 58.98 17.77 12.79
Provision for Gratuity 150.56 195.06 44.92 27.68
209.34 254.04 62.69 40.47
(b) Other (Refer Note 29)
Provisions for Central Sales Tax /VAT/ - - - -
Excise
TOTAL 209.34 254.04 62.69 40.47

46
 47
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 16 : OTHER FINANCIAL LIABILITIES
(₹ in Lakhs)
Current
As at As at
31.03.2023 31.03.2022
Payable towards capital expenditure 11.01 1.95
Payable towards services received 75.49 66.92
Payable towards stores spares & consumables 17.83 26.86
Payable to employees 77.56 60.20
Advance from customer 1.35 1.35
Payable towards other expenses 30.27 29.89
TOTAL 213.51 187.17

NOTE 17 : OTHER CURRENT LIABILITIES

(₹ in Lakhs)
Current
As at As at
31.03.2023 31.03.2022
Statutory Payables
Payable towards Provident Fund and Profession tax 26.02 24.64
Payable towards Tax Deducted at Source 7.21 8.89
Payable towards GST 0.43 -
TOTAL 33.66 33.53

NOTE 18 : REVENUE FROM OPERATIONS

(₹ in Lakhs)
Year 2022-23 Year 2021-22
Revenue from Contract with Customers disaggregated based on nature of
service
(A) Revenue from sale of services
Processing income (Refer Note 30) 1,925.13 1,687.10
Total 1,925.13 1,687.10
(B) Other operating revenues
Scrap sales 24.79 14.51
Total 24.79 14.51
TOTAL (A+B) 1,949.92 1,701.61

The amounts receivable from customers become due after expiry of credit period which on an average is less than
30 days. There is no significant financing component in any transaction with the customers.
There are no contracts for sale of services wherein, performance obligation is unsatisfied to which transaction price
has been allocated.
The company has recognized revenue of Rs Nil (Previous year Nil) from the amounts included under advance
received from customers at the beginning of the year.
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 19A: OTHER INCOME

(₹ in Lakhs)

Year 2022-23 Year 2021-22

(a) Interest Income

Financial assets carried at amortised cost 12.76 18.40

(b) Other non-operating Income

Sundry balances written back 7.20 -

Net gain arising on financial assets measured at FVTPL# 133.05 47.37

Provisions write back for indirect taxes - 36.70

(c) Other gains and losses

Gain on sale of Property, Plant and equipment (Net) 4.85 4.13

TOTAL 157.86 106.60

# Includes gain on sale of financial assets measured at FVTPL for Rs 72.38 Lakhs (Previous year - Rs 67.78 lakhs )

NOTE 19B: EXCEPTIONAL ITEM

During the previous year company has disposed off its Land and Building in baddi for Rs 480 lakhs and recorded gain
of Rs 414.28 lakhs net of transaction cost and the same has been disclosed as an exceptional item.

NOTE 20 : EMPLOYEE BENEFITS EXPENSE

(₹ in Lakhs)

Year 2022-23 Year 2021-22

Salaries and wages 795.60 715.39

Contribution to provident and other funds (Refer Note 27) 81.01 73.38

Staff welfare expenses 24.18 13.96

TOTAL 900.79 802.73

48
 49
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 21 : OTHER EXPENSES
(₹ in Lakhs)
Year 2022-23 Year 2021-22
Consumption of stores and spare parts 153.41 107.80
Power and fuel 312.39 240.86
Repairs and maintenance:
Buildings 43.77 8.36
Machinery 17.62 49.48
Others 11.85 14.12
73.24 71.96
Rent* 0.95 1.34
Rates and taxes 2.55 2.23
Water charges 9.52 4.87
Insurance 27.64 27.45
Printing, stationery and communication expenses 5.83 4.37
Travelling expenses 14.55 7.15
Payment to auditors 5.82 5.72
Bank charges 0.07 0.10
Legal and professional expenses 46.54 23.31
Factory laboratory expenses 18.67 16.15
Machinery cleaning expenses 126.64 109.79
Safety and security expenses 46.45 60.92
Miscellaneous expenses 17.80 11.93
Foreign Exchange Loss (Net) 0.05 0.52
TOTAL 862.12 696.47
*Expenses relating to Leases of Low value assets Rs.0.95 Lakhs (Previous Year Rs.1.34 Lakhs )

NOTE 22 : FINANCE COSTS

(₹ in Lakhs)
Year 2022-23 Year 2021-22
Interest
Interest on lease liability 0.92 0.28
Interest on others - 0.28
TOTAL 0.92 0.56

NOTE 23 : DEPRECIATION AND AMORTISATION EXPENSE

(₹ in Lakhs)
Year 2022-23 Year 2021-22
Depreciation of property, plant and equipment (Refer Note 2A) 176.37 168.38
Amortisation of Intangible assets (Refer Note 4) 1.43 1.43
Amortisation on RoU Assets (Refer Note 2B) 9.52 9.52
TOTAL 187.32 179.33
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 24 : INCOME TAXES

(₹ in Lakhs)
Year 2022-23 Year 2021-22
A. The major components of income tax expense for the year
are as under :
(i) Income tax recognised in the Statement of Profit and Loss
Current tax
In respect of current year - -
Adjustments in respect of previous year - 27.17
Deferred tax:
In respect of current year - -
Income tax expense recognised in the Statement of Profit and Loss - 27.17
(ii) Income tax expense recognised in OCI
Deferred tax
Deferred tax benefit on remeasurement benefit of defined benefit plans - -
Income tax (expense) recognised in OCI - -
B. Reconciliation of tax expense and the accounting profit
for the year is as under :
Profit before tax 156.63 543.40
Income tax expense calculated at 25.168% 39.42 136.76
Tax effect on non-deductible expenses (5.59) 9.30
Incentive tax credits - -
Effect of Income which is taxed at special rates (59.86)
Effect of Income that is exempted from tax (18.22) 5.14
Effect of change in tax rate - -
Others 13.48 8.23
Unused tax loss and unabsorbed deprecitation (29.09) (99.57)
Total - -
Adjustments in respect of current income tax of previous year - 27.17
Tax expense as per Statement of Profit and Loss - 27.17
The tax rate used for reconciliation above is the corporate tax rate of 25.168% payable by corporate entities in India
on taxable profits under Indian tax law.

50
 51
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 24 : INCOME TAX (Contd.)

C. The major components of deferred tax (liabilities)/assets arising on account of

temporary differences as at 31st March, 2023 are as follows:
(₹ in Lakhs)
Particulars Balance Sheet Profit and loss
31-Mar-23 31-Mar-23
Difference between Written Down Value of fixed assets as per the books of (126.29) -
accounts and Income Tax Act,1961.
Expenses claimed for tax purposes on payment basis (5.59) -
Others (Fair valuation gain, etc) 18.22
Business Losses and unabsorbed deprecitation carried forward under Income 124.95 -
Tax Act, 1961
11.30
Deferred tax asset (net of liability) not recognised* 11.30 -
Deferred tax expense - -

(₹ in Lakhs)
Particulars Balance Sheet Profit and loss
31-Mar-22 31-Mar-22
Difference between Written Down Value of fixed assets as per the books of (132.98) -
accounts and Income Tax Act,1961.
Expenses claimed for tax purposes on payment basis 9.30 -
Others (Fair valuation gain, etc) (5.14)
Business Losses and unabsorbed deprecitation carried forward under Income 154.81 -
Tax Act, 1961
25.99
Deferred tax asset (net of liability) not recognised* 25.99 -
Deferred tax expense - -

*Deferred tax asset is recognized only to the extent of deferred tax liability. The remaining deferred tax asset is not
recognized as it is not considered to be probable of realization.

The Company has the following unused tax losses under the Income Tax Act, 1961, for which no deferred tax asset has
been recognised in the Balance Sheet.

As at 31st March 2023 (₹ in Lakhs)

Financial Year Business Loss Expiry Date Depreciation Expiry Date Total
2015-2016 - FY 2023 - 24 59.66 NA 59.66
2016-2017 24.21 FY 2024 - 25 73.34 NA 97.55
2017-2018 29.68 FY 2025 - 26 73.46 NA 103.14
2018-2019 33.17 FY 2026 - 27 109.96 NA 143.13
2019-2020 - FY 2027 - 28 92.98 NA 92.98
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 24 : INCOME TAX (Contd.)

As at 31st March 2022 (₹ in Lakhs)

Financial Year Business Loss Expiry Date Depreciation Expiry Date Total
2014-2015 13.51 FY 2022 - 23 45.77 NA 59.28
2015-2016 9.86 FY 2023 - 24 74.56 NA 84.42
2016-2017 58.80 FY 2024 - 25 73.34 NA 132.14
2017-2018 29.68 FY 2025 - 26 73.46 NA 103.14
2018-2019 33.17 FY 2026 - 27 109.96 NA 143.13
2019-2020 - FY 2027 - 28 92.98 NA 92.98

NOTE 25 (A) : CATERGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENTS

(₹ in Lakhs)
Non-Current Current Non-Current Current
As at As at As at As at
31.03.2023 31.03.2023 31.03.2022 31.03.2022
Financial assets measured at fair value through
profit and loss
Quoted investments in Mutual Funds (Refer Note 9) - 2,648.34 - 1,598.97
- 2,648.34 - 1,598.97
Financial assets measured at amortised cost
Trade receivables (Refer Note 10) - 256.70 - 984.83
Cash and Cash Equivalents (Refer Note 11A) - 65.22 - 145.38
Term deposits held as margin money against bank 166.27 209.71 159.81 204.69
guarantee and other commitments (Refer Note 5b)
Sundry Deposits (Refer Note 5a) 51.28 - 50.96 -
217.55 531.63 210.77 1,334.90
Financial liabilities recognised at amortised cost
Payable towards capital expenditure (Refer Note 16) - 11.01 - 1.95
Payable towards services received (Refer Note 16) - 75.49 - 66.92
Payable towards stores spares and consumables - 17.83 - 26.86
(Refer Note 16)
Payable to employees (Refer Note 16) - 77.56 - 60.20
Advance from customer (Refer Note 16) - 1.35 - 1.35
Payable towards other expenses (Refer Note 16) - 30.27 - 29.89
Lease liabilities (Refer Note 14) - 7.05 7.06 9.46
- 220.56 7.06 196.63

52
 53
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 25 (B) : FAIR VALUE MEASUREMENTS
(i) The following table provides the fair value measurement hierarchy of the Company’s financial assets and
financial liabilities:

As at 31st March, 2023 (₹ in Lakhs)

Financial assets/ financial liabilities Fair value Fair value hierarchy
As at Quoted Significant Significant
31.03.2023 prices in observable unobservable
active inputs inputs
markets (Level 2) (Level 3)
(Level 1)
Financial assets measured at fair value through
profit and loss
Quoted investments in mutual funds (Refer Note 9) 2,648.34 2,648.34 - -

As at 31st March 2022 (₹ in Lakhs)

Financial assets/ financial liabilities Fair value Fair value hierarchy
As at Quoted Significant Significant
31.03.2022 prices in observable unobservable
active inputs inputs
markets (Level 2) (Level 3)
(Level 1)
Financial assets measured at fair value through
profit and loss
Quoted investments in mutual funds (Refer Note 9) 1,598.97 1,598.97 - -

(ii) The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial
statements are a reasonable approximation of their fair values since the Company does not anticipate that
the carrying amounts would be significantly different from the values that would eventually be received or
settled.

NOTE 25 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company’s financial liabilities comprise mainly of other payables. The Company’s financial assets comprise mainly
of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

The Company is exposed to Market risk, Credit risk and Liquidity risk. The management has been continuously
monitoring the risks that the Company was exposed to due to outbreak of COVID 19 and has taken all necessary
actions to mitigate the risks identified basis the information and situation present.

The following disclosures summarize the Company’s exposure to financial risks.Quantitative sensitivity analyses have
been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows
and financial position of the Company.
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 25 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES (contd.)

1) 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 risk comprises three types of risks: interest rate risk, currency risk and other
price risk. Financial instruments affected by market risk include investments, trade payables, trade receivables &
other receivables.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Since the Company has no borrowings, there is no exposure to
risk of changes in market interest rates.

The Exposure of Company’s financial assets and liabilities to interest rate risk is as follows :-

(₹ in Lakhs)
As at Floating rate Fixed rate Non- interest
31.03.2023 bearing
Financial assets 3,397.47 - 427.26 2,970.21
Financial liabilities 220.56 - 7.05 213.51

(₹ in Lakhs)
As at Floating rate Fixed rate Non- interest
31.03.2022 bearing
Financial assets 3,144.64 - 415.46 2,729.18
Financial liabilities 203.69 - 16.52 187.17

b) Foreign 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. Since the Company has insignificant foreign currency transactions,
exposure to the risk of changes in foreign currency rate is minimal.

The carrying amounts of the Company’s foreign currency denominated monetary items are as follows:

(₹ in Lakhs)
Currency Liabilities Assets
As at 31.03.2023 As at 31.03.2022 As at 31.03.2023 As at 31.03.2022
USD 9.06 2.94 - -
EUR 3.52 2.04 - -
GBP 1.23 0.73 - -
CHF 12.74 13.73 - -

The above table represents total exposure of the Company towards foreign exchange denominated assets
and liabilities. None of the exposures have been hedged during the current year or previous year.

54
 55
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 25 (D) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company is mainly exposed to changes in USD, EURO, GBP and CHF. The below table demonstrates the sensitivity
to a 5% increase or decrease in the USD, EURO, GBP and CHF against INR, with all other variables held constant. The
sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents
management’s assessment of the reasonably possible change in foreign exchange rate.

(₹ in Lakhs)
Change in foreign currency rate Effect on profit after tax Effect on total equity
As at As at As at As at
31.03.2023 31.03.2022 31.03.2023 31.03.2022
5% (USD) 0.45 0.15 0.45 0.15
-5% (USD) (0.45) (0.15) (0.45) (0.15)
5% (EUR) 0.18 0.10 0.18 0.10
-5% (EUR) (0.18) (0.10) (0.18) (0.10)
5% (GBP) 0.06 0.04 0.06 0.04
-5% (GBP) (0.06) (0.04) (0.06) (0.04)
5% (CHF) 0.64 0.69 0.64 0.69
-5% (CHF) (0.64) (0.69) (0.64) (0.69)

2) Credit Risk

Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual
funds, other balances with banks, loans and other receivables.

The Company’s counterparties are limited to one of it’s fellow subsidiaries and associate of the holding company.
Therefore the credit risk arising from Trade Receivables is limited.

Credit risk arising from investment in mutual funds and other balances with banks is limited and there is no
collateral held against these because the counterparties are banks and recognised financial institutions with high
credit ratings assigned by the international credit rating agencies.

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy,
procedures and control relating to customer credit risk management. 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. The provision matrix at the end of the reporting period is given below.

Net Outstanding > 365 days Credit loss allowance

Yes Yes, to the extent of lifetime expected credit losses outstanding as at reporting
date.
Yes Yes, to the extent of lifetime expected credit losses pertaining to balances
outstanding for more than one year.
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 25 (D) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES (contd.)

2) Credit Risk (contd.)

(₹ in Lakhs)
Movement in expected credit loss allowance on trade receivables 2022-23 2021-22
Balance at the beginning of the year 68.76 68.76
Loss allowance measured at lifetime expected credit losses - -
Balance at the end of the year 68.76 68.76

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk
may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term
and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity
risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities
agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely
and cost-effective manner.

The table below analyses non-derivative financial liabilities of the Company into relevant maturity groupings
based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed
in the table are the contractual undiscounted cash flows.

(₹ in Lakhs)
Less than 1 Between 1 Over 5 Total Carrying
year to 5 years years Value
As at 31st March, 2023
Lease Liabilities (Refer Note 14) 8.19 - - 8.19 7.05
Other financial liabilities (Refer Note 16) 213.51 - - 213.51 213.51
As at 31 March, 2022
st

Lease Liabilities (Refer Note 14) 10.32 8.19 - 18.51 16.52

Other financial liabilities (Refer Note 16) 187.17 - - 187.17 187.17

The Company does not have any derivative financial liabilities.

NOTE 25 (E) : CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company when managing capital is
to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.

As at 31st March, 2023, the Company has only one class of equity shares and has no debt. Consequent to such capital
structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital
structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its
long term financial plans.
56
 57
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 26 : KEY FINANCIAL RATIOS

Sr.
Ratios Numerator Denominator FY 2022-23 FY 2021-22 % Variance Remarks
No.
1 Current ratio Current Current Liabilities 10.42 11.32 -7.97% -
Assets
2 Debt-equity Total Debt Total Equity NA NA
ratio (Borrowings)
3 Debt service Earning Finance Costs NA NA
coverage ratio available for (excluding cost
debt service pertaining to
lease liabilities)
+ Repayment of
borrowings
4 Return on Profits after Average Total Equity 3.43% 12.20% -71.86% Exceptional
Equity tax gain due to sale
of Land in FY
2021-22
5 Inventory Cost of goods Average Inventory NA NA
turnover ratio sold
6 Trade Revenue from Average Trade 2.83 2.95 -4.03% Due to decrease
receivables operations receivables in receivables
turnover ratio from group
company.
7 Trade payables Net Purchases Average Trade NA NA
turnover ratio of raw payables
material,
packing
material and
stock-in-trade
8 Net capital Revenue from Working Capital 0.65 0.61 7.24%
turnover ratio operations (Current Assets -
Current Liabilities)
9 Net profit Profit after Revenue from 8.03% 30.34% -73.52% Exceptional
ratio tax operations gain due to sale
of Land in FY
2021-22
10 Return Profit before Average Capital 3.39% 12.85% -73.61% Exceptional
on capital interest and Employed [Total gain due to sale
employed tax Equity + Total Debt of Land in FY
(Borrowings)] 2021-22
11 Return on Income during Time weighted 3.49% 4.71%
investment the year average of 5.87% 3.49%
(a) Fixed investment
Deposit
(b) Mutual
Funds
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 27 : EMPLOYEE BENEFITS

1) Post-employment benefits :

The Company has the following post-employment benefit plans:

a) Defined benefit gratuity plan (Funded)

The Company has defined benefit gratuity plan for its employees, which requires contributions to be
made to a separately administered fund which is managed by Life Insurance Corporation of India (LIC). It is
governed by the Payment of Gratuity Act, 1972 (“Act”). Under the act, employee who has completed five
years of service is entitled to specific benefit. The level of benefits provided depends on the member’s
length of service and salary at retirement age. The Board of Trustees of the fund is responsible for the
administration of the plan assets including investment of the funds in accordance with the norms prescribed
by the Government of India.

The plan mentioned above typically expose the Company to actuarial risks such as: investment risk, interest rate
risk, longevity risk and salary risk.

Investment Risk These plans invest in long term debt instruments such as government
securities and highly rated corporate bonds. The valuation of which is inversely
proportionate to the interest rate movements. There is risk of volatility in assets
due to market fluctuations and impairment of assets due to credit losses.
Interest Risk A decrease in the bond interest rate will increase the plan liability; however, this
will be partially offset by an increase in the return on the plan’s investments.
Longevity Risk The present value of the defined benefit liability is calculated by reference to
the best estimate of the mortality of plan participants both during and after
their employment. An increase in the life expectancy of the plan participants
will increase the plan’s liability.
Salary Risk The present value of the defined benefit liability is calculated by reference to
the future salaries of plan participants. As such, an increase in salary of the plan
participants will increase the plan’s liability.

The most recent actuarial valuation of the plan assets and the present value of defined obligation were carried
out as at 31st March 2023 by M/s Transvalue Consultants. The present value of the defined benefit obligation
and the related current service cost were measured using the projected unit credit method.

58
 59
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 27 : EMPLOYEE BENEFITS (Contd.)

The following tables summarise the components of net benefit expense recognised in the Statement of Profit or Loss
and the funded status and amounts recognised in the balance sheet for gratuity plans:

(₹ in Lakhs)
Particulars Gratuity (Funded Plan)
As at As at
31.03.2023 31.03.2022
(i) Opening defined benefit obligation 232.75 192.10
(ii) Current service cost 17.93 15.28
(iii) Interest cost 16.73 13.12
(iv) Past Service Cost - -
(v) Sub-total included in Statement of Profit and Loss(ii+iii+iv) 34.66 28.40
(vi) Actuarial gain/(loss) from :
Financial assumptions 3.39 (7.43)
Demographic assumptions 0.00 (0.51)
Experience adjustment (8.97) 21.25
(vii) Sub-total included in Other Comprehensive Income(vi) (5.58) 13.31
(viii) Benefits paid (27.37) (0.72)
(ix) Intercompany transfer (6.42) (0.34)
(x) Closing defined benefit obligation(i+v+vii+viii) 228.04 232.75
(xi) Opening fair value of plan assets 10.03 1.33
(xii) Expected return on plan assets 0.74 0.09
(xiii) Sub-total included in Statement of Profit and Loss(xi) 0.74 0.09
(xiv) Return on plan assets (0.83) (1.42)
(xv) Sub-total included in Other Comprehensive Income(xiii) (0.83) (1.42)
(xvi) Contributions by employer 50.00 10.75
(xvii) Benefits paid (27.37) (0.72)
(xviii) Closing fair value of plan assets(x+xii+xiv+xv+xvi) 32.56 10.03
(xix) Net Liability (x-xvii) 195.48 222.72
Expense recognised in:
(xx) Statement of Profit and Loss(v-xii) 33.93 28.31
(xxi) Statement of Other Comprehensive Income(vii-xiv) (4.77) 14.73
(xxii) Weighted average duration of defined benefit obligation 10.84 11.49
(xxiii) Maturity profile of defined benefit obligation
1 Within the next 12 months 46.53 28.68
2 Between 1 and 5 years 115.91 126.46
3 Between 5 and 10 years 95.82 110.49

The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below:
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 27 : EMPLOYEE BENEFITS (Contd.)

Particulars Gratuity (Funded Plan)

As at As at
31.03.2023 31.03.2022
Discount Rate 7.31% 7.34%
Salary Escalation Rate Next one year : Next one year :
10% Thereafter 9% Thereafter
: 8% : 8%

Particulars Demographic Assumptions

As at As at
31.03.2023 31.03.2022
Mortality IALM (2012-14) IALM (2012-14)
Ultimate Ultimate
Employee Turnover For Workmen / Workmen: 5%,
Operator : 5% Others: 12%
For Others :
12%
Retirement Age 58 years 58 Years

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and
expected salary increase. The sensitivity analyses below have been determined based on reasonably possible
changes of the respective assumptions occurring at the end of the reporting period, while holding all other
assumptions constant.

(₹ in Lakhs)
Particulars Gratuity (Funded Plan)
As at As at
31.03.2023 31.03.2022
Defined Benefit Obligation - Discount Rate + 100 basis points (15.67) (17.69)
Defined Benefit Obligation - Discount Rate - 100 basis points 18.18 18.38
Defined Benefit Obligation – Salary Escalation Rate + 100 basis points 12.67 13.46
Defined Benefit Obligation - Salary Escalation Rate - 100 basis points (11.85) (12.23)

The sensitivity analyses presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the
defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting
period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the
balance sheet.

The average duration of the defined benefit plan obligation at the end of the reporting period is 10.84 years (Previous
Year: 11.49 years).

The Company expects to make a contribution of ₹ 219.49 Lakhs (Previous Year: ₹ 240.67 lakhs) to the defined benefit
plans during the next financial years.

60
 61
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 27 : EMPLOYEE BENEFITS (Contd.)

b) Defined Contribution plan:

Provident Fund

Provident Fund contributions are made to the Regional Provident Fund Commissioner (RPFC) which are charged
to the Statement of Profit and Loss of Rs. 26.30 Lacs (Previous year Rs.24.14 Lacs) as and when employee renders
service to the Company. 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.

c) Other Long term employee benefits:

Annual Leave and Sick Leave assumptions

The liability towards compensated absences (annual leave and sick leave) for the year ended 31st March, 2023
based on actuarial valuation carried out by using Projected Accrued Benefit Method resulted in increase by
₹ 4.78 Lakhs. (Previous Year there was an increase in liability by ₹ 8.02 lakhs)

Financial Assumptions
Particulars As at As at
31.03.2023 31.03.2022
Discount Rate 7.31% 7.34%
Basic salary increases allowing for Price inflation For First Year: For First Year:
10% Thereafter: 9% Thereafter:
8% 8%

Demographic Assumptions
Particulars As at As at
31.03.2023 31.03.2022
Mortality IALM (2012-14) IALM (2012-14)
Ultimate Ultimate
Employee Turnover Workmen: 5%, Workmen: 5%,
Others: 12% Others: 12%
Leave Availment Ratio 4% 4%

NOTE 28 : CONTINGENT LIABILITIES AND COMMITMENTS:

(i) Contingent Liabilities

(₹ in Lakhs)
As at As at
31.03.2023 31.03.2022
Claims against the company not acknowledged as debts
i. Tax matters in dispute under appeal
- Income Tax 95.21 95.21
- Value Added Tax, 6.38 6.38
- Sales Tax, Entry Tax, Octroi & Trade Tax 288.31 288.31
TOTAL 389.91 389.91
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 28 : CONTINGENT LIABILITIES AND COMMITMENTS : (Contd.)

(ii) Commitments
(₹ in Lakhs)
As at As at
31.03.2023 31.03.2022
Bank Guarantees issued by bankers towards dispute with tax authorities 75.13 75.13
Estimated amount of contracts remaining to be executed on capital account 38.18 38.81
and not provided towards Property, plant and equipment.
TOTAL 113.31 113.94

NOTE 29 : Pursuant to the Accounting Standard (IND AS-37) – Provisions, Contingent

Liabilities and Contingent Assets, the disclosure relating to provisions made in the
accounts for the year ended 31st March, 2023 is as follows:

(₹ in Lakhs)
Provision for defect in processing Provision for Sales Tax/VAT/Excise
2022-23 2021-22 2022-23 2021-22
Opening Balance - - - 31.06
Additions - - - -
Utilizations - - - -
Reversals - - - (31.06)
Closing Balance - - - -

NOTE 30 : INFORMATION ON RELATED PARTY TRANSACTIONS AS REQUIRED BY IND AS – 24 ON

RELATED PARTY DISCLOSURES FOR THE YEAR ENDED MARCH 31, 2023

a) Holding Company (Control exists):

Asian Paints Limited

b) Associate of Holding Company:

PPG Asian Paints Private Limited

c) Fellow Subsidiaries:
Asian Paints PPG Private Limited

d) Key Managerial Personnel (Non-Executive Directors):

Hiral Raja
Sagar Khade
Rajesh Bardia
Venkateswaran Gopalan
Satyendra Kumar Patidar
Anurag Sahai*
Jitendra Kalra@
*Resigned w.e.f. 20th August, 2022.
@Appointed w.e.f. 31st March,2020 and resigned on 19th August 2022.
62
 63
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 30 : INFORMATION ON RELATED PARTY TRANSACTIONS AS REQUIRED BY IND AS – 24 ON
RELATED PARTY DISCLOSURES FOR THE YEAR ENDED MARCH 31, 2023 (Contd.)

e) Other entities where significant influence exists Post-employment benefit plan entity:
Asian Paints Industrial Coatings Limited Employees’ Gratuity Fund

f) Transactions with Related Parties during the year :

(₹ in Lakhs)
Name of the related Nature of transaction 2022-23 2021-22
party and nature of Transaction Outstanding Transaction Outstanding
relationship value amounts value amounts
carried in carried in
Balance Balance
Sheet Sheet
Asian Paints Limited Other Services - paid 3.54 3.24 2.83 2.59
(Holding) Reimbursement of 7.51 0.38 3.18 3.12
Expenses - paid
Reimbursement of - - - -
Expenses - received
Purchase of Assets 0.98 0.98 - -
Asian Paints PPG Revenue from Sale of 9.87 - 2.43 -
Private Limited ( Fellow Products (Scrap)
Subsidiary) Processing Income 2,122.16 251.75 1,848.19 961.63
Reimbursement of 3.29 - 1.04 -
Expenses - paid
PPG Asian Paints Processing Income 36.12 5.24 42.74 21.31
Private Limited
(Associate of Holding)

g) Terms and conditions of transactions with related parties

The sales of services to related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured, interest free and will be settled in cash. There
have been no guarantees received or provided for any related party receivables or payables.

NOTE 31 : EARNINGS PER SHARE (EPS)

(₹ in Lakhs)
Particulars 2022-23 2021-22
Basic and Diluted Earnings per share in rupees (Face Value ₹ 10 per share) 0.51 1.70
Profit after tax as per Statement of Profit and Loss (₹ in Lakhs) 156.63 516.23
Weighted average number of equity shares outstanding during the year 3,04,50,000 3,04,50,000

Earning per share is calculated by dividing the Profit for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

NOTE 32 : SEGMENT REPORTING

The Company’s business constitutes of processing of powder coatings which is a single business segment in the
context of IND AS 108 – Operating Segments. Accordingly, no segmental information is disclosed. For information
regarding major customers being related parties, Refer Note 30.

NOTE 33 : PAYMENTS TO AUDITORS (Excluding Taxes):

(₹ in Lakhs)
Particulars 2022-23 2021-22
Statutory audit fee 3.42 3.42
Tax audit fee 1.80 1.80
For other services 0.60 0.50
For reimbursement of expenses - -
TOTAL 5.82 5.72

NOTE 34 : THE COMPANY HAS INCURRED FOLLOWING EXPENDITURE ON RESEARCH AND

DEVELOPMENTS:

(₹ in Lakhs)
Particulars 2022-23 2021-22
a. Revenue Expenditure
Employee cost 130.46 109.64
Repairs and Maintenance 10.03 4.73
Testing and Laboratory expenditure 4.54 5.52
Travelling Expenditure 8.31 3.16
Depreciation and amortisation 1.14 3.70
Others 12.07 0.19
166.55 126.94
b. Capital Expenditure 24.04 12.07
TOTAL (A+B) 190.59 139.01

64
 65
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 35 : DISCLOSURE UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT
ACT, 2006 ARE PROVIDED AS UNDER FOR THE YEAR 2021-22, TO THE EXTENT THE COMPANY HAS
RECEIVED INTIMATION FROM THE “SUPPLIERS” REGARDING THEIR STATUS UNDER THE ACT.

(₹ in Lakhs)

Particulars 2022-23 2021-22

(i) Principal amount and the interest due thereon remaining unpaid to each
supplier at the end of each accounting year

Principal amount due to micro and small enterprise* 44.41 37.27

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) 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

*Represents Amount Payable towards Other Financial Liabilities

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.

NOTE 36 : CHANGES IN LIABILITIES ARISING FROM FINANCIAL ACTIVITIES

(₹ in Lakhs)
Non-cash changes
Particulars As at Cash Flow Fair Value Additions As at
31.03.2022 Changes 31.03.2023
Lease Liabilities 16.52 (10.39) 0.92 - 7.05

(₹ in Lakhs)
Non-cash changes
Particulars As at Cash Flow Fair Value Additions As at
31.03.2021 Changes 31.03.2022
Lease Liabilities - (9.55) 0.28 25.79 16.52
 Asian Paints Industrial Coatings Limited

Notes to the Financial Statements (Contd.)

Note 37 Additional regulatory information required by Schedule III to the Companies

Act, 2013
(i) Details of benami property held

The Company does not have any benami property. No proceedings have been initiated on or are pending against
the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
Rules made thereunder.

(ii) Cash Credit/ Working Capital Demand Loan facility secured against current assets
The Company has no Cash Credit / Working Capital Demand Loan facility from banks.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or other lender or
government or any government authority.

(iv) Struck off


The Company has no transactions with Companies struck off under Companies Act, 2013 or Companies Act, 1956

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements


The Company has not entered into any scheme of arrangement which has an accounting impact in current or
previous financial year.

(vii) Utilisation of borrowed funds and share premium


I The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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 Company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries”

II The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company 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”

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax
Act, 1961, that has not been recorded in the books of account.

66
 67
Notes to the Financial Statements (Contd.)

Financial Statements
Note 37 Additional regulatory information required by Schedule III to the Companies
Act, 2013 (Contd.)
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the year.

(x) Valuation of PP&E, intangible asset and investment property


The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets during the year. The Company does not have investment property.

(xi) Charge to be registered with ROC

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

NOTE 38 :
The financial statements are approved for issue by the Board of Directors at its meeting held on 08th May, 2023.
Maxbhumi Developers Limited
BOARD OF DIRECTORS
Mr. R J Jeyamurugan (Non-Executive Director)
Mr. Harish Jairam Lade (Non-Executive Director)
Mr. Aashish Kshetry (Non-Executive Director)

AUDITORS
Deloitte Haskins & Sells LLP
Chartered Accountants

REGISTERED OFFICE
Plot No. 5,
Gaiwadi Industrial Estate,
S.V.Road, Goregaon (West),
Mumbai – 400 062
Contents
Board’s Report........................................................................................................................................................................................... 4-9

Independent Auditor’s Report........................................................................................................................................................... 10-17

Balance Sheet..............................................................................................................................................................................................18

Statement of Profit and Loss....................................................................................................................................................................19

Cash Flows....................................................................................................................................................................................................20

Statement of Changes in Equity...............................................................................................................................................................21

Notes to the financial statements.....................................................................................................................................................22-34

 Maxbhumi Developers Limited

Board’s Report
For the year ended 31st March 2023

Dear Members,

The Board of Directors are pleased to present the 16th (Sixteenth) Annual Report of Maxbhumi Developers Limited
along with the audited financial statements for the financial year ended 31st March, 2023.

FINANCIAL RESULTS
The financial performance of the company for the year ended 31st March, 2023 is summarised below:

Amount in (Rs. ‘000)

Particulars 2022-23 2021-22
Revenue from Operations - -
Other Income 4,035 104
Total Revenue 4,035 104
Expenses 1,073 484
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) 2,962 (380)
Less: Finance Costs - -
Less: Depreciation and Amortisation Expenses - -
Profit/(Loss) Before Tax 2,962 (380)
Less: Tax Expense 921 -
Profit/(Loss) After Tax 2,041 (380)

OVERVIEW OF THE COMPANY’S PERFORMANCE
AND STATE OF AFFAIRS
The Company had no operations during the financial year
ended 31st March, 2023.
During the financial year 2022-23, there was no change
in the authorised, issued, subscribed and paid-up share
capital of the Company.
Confirmations:

During the year under review, the Company has sold

a. During the year under review, the Company has not:
the parcel of the land owned by the Company situated
at Sanaswadi, Pune, Maharashtra, based on approval of
(i) issued any shares, warrants, debentures, bonds,
Board of Directors of the Company to various parties on
or any other convertible or non-convertible
such terms and conditions as approved by the Board from
securities.
time to time.
(ii) issued equity shares with differential rights as
There are no material changes and commitments
to dividend, voting or otherwise.
affecting the financial position of the Company which
have occurred between the end of the financial year
(iii) issued any sweat equity shares to its Directors
2022-23 and the date of this report. There has been no
or employees.
change in the nature of business of the Company.
(iv) issued any equity shares under the employees
There was no revision of financial statements and Board’s
stock option scheme, further, the Company
Report of the Company during the year under review.
doesn’t have any employees stock option
scheme.
SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on (v) made any change in voting rights.
31st March, 2023 is Rs. 41,90,000.
(vi) reduced its share capital or bought back shares.

4

Board’s Report (Contd.)
(vii) changed the capital structure resulting from
restructuring.
(viii) failed to implement any corporate action.
b. The Company’s securities are not listed on any stock
exchanges, hence there doesn’t arise a scenario of
its shares being suspended for trading during the
year.
c. The disclosure pertaining to explanation for any
deviation or variation in connection with certain
terms of a public issue, rights issue, preferential
issue, etc. is not applicable to the Company.
DIVIDEND
During the year under review, the Board of Directors has
not recommended dividend on the equity shares of the
Company.
UNCLAIMED DIVIDEND & IEPF
The Company does not have any unclaimed dividend
outstanding for payment to shareholders of the
Company. Further, the Company has not transferred any
amount to the Investor Education & Protection Fund
(“IEPF”).
TRANSFER TO RESERVES
During the year under review, there was no amount
transferred to any of the reserves of the Company.
SUBSIDIARY STATUS
The Company continues to be a wholly owned Subsidiary
of Asian Paints Limited. Whereas the Company does not
have any subsidiary, associates or joint ventures.
DEPOSITS
During the year under review, the Company has not
accepted any deposit within the meaning of Section
73 and 74 of the Companies Act, 2013 (“the Act”) read
together with the Companies (Acceptance of Deposit)
Rules, 2014. Hence, the requirement for furnishing of
details relating to deposits covered under Chapter
V of the Act or the details of deposits which are not
in compliance with the Chapter V of the Act is not
applicable.
5
Statutory Reports
PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS
Details of Loans, Guarantees and Investments, if any,
covered under the provisions of Section 186 of the Act
are given in the notes to the Financial Statements.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company has been
validly constituted as per Section 149 of the Act and
corresponding Rules thereunder.
There has been no change in the Directors & Key
Managerial Personnel of the Company.
Declaration from Directors
None of the Directors of the Company are disqualified
from being appointed as Directors as specified under
Section 164(1) and 164(2) of the Act read with Rule
14(1) of the Companies (Appointment and Qualification
of Directors) Rules, 2014 (including any statutory
modification(s) and/or re-enactment(s) thereof for the
time being in force).
DISCLOSURE RELATING TO REMUNERATION
OF DIRECTORS, KEY MANAGERIAL PERSONNEL
AND PARTICULARS OF EMPLOYEES
During the year under review, no remuneration was paid
to the directors of the Company.
The Company has not employed any individual whose
remuneration falls within the purview of the limits
prescribed under the provisions of Section 197 of
the Companies Act, 2013, read with Rule 5(2) of the
Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
RETIREMENT BY ROTATION AND SUBSEQUENT
RE-APPOINTMENT
In accordance with the provisions of Section 152 and
other applicable provisions, if any, of the Act read
with the Companies (Appointment and Qualification
of Directors) Rules, 2014 (including any statutory
modification(s) and/or re-enactment(s) thereof for the
time being in force) and the Articles of Association of
the Company, Mr. R J Jeyamurugan (DIN: 00010124), of
the Company is liable to retire by rotation at the ensuing
Annual General Meeting (“AGM”) and being eligible,
offers himself for re-appointment.
 Maxbhumi Developers Limited

Board’s Report (Contd.)

The Board of Directors recommends re-appointment of Sr. Name of the Number of Number of
Mr. R J Jeyamurugan as Non-Executive Directors of the No. Director meeting(s) meeting(s)
Company, liable to retire by rotation. entitled to attended
attend
DIRECTORS’ RESPONSIBILITY STATEMENT
1. R J Jeyamurugan 4 4
a) In the preparation of the Annual Accounts for the
2. Harish Jairam Lade 4 2
financial year ended 31st March, 2023, the applicable
Accounting Standards and Schedule III of the Act 3. Aashish Kshetry 4 3
have been followed and there are no material
departures from the same; The Company has complied with the applicable
Secretarial Standards in respect of all the above Board
b) The Directors have selected such accounting policies Meetings.
and applied them consistently and made judgements
and estimates that are reasonable and prudent, so RELATED PARTY TRANSACTIONS
as to give a true and fair view of the state of affairs During the financial year 2022-23, the Company has
of the Company at the 31st March, 2023 and of the entered into transactions with related parties as defined
profit of the Company for the financial year ended under Section 2(76) of the Act read with the Companies
31st March, 2023; (Specification of Definitions Details) Rules, 2014 all of
which were in the ordinary course of business and on
c) Proper and sufficient care has been taken for the arm’s length basis and in accordance with the provisions
maintenance of adequate accounting records of the Act read with the Rules issued thereunder.
in accordance with the provisions of the Act for
safeguarding the assets of the Company and There are no materially significant related party
for preventing and detecting fraud and other transactions that may have potential conflict with
irregularities; interest of the Company at large. Further, there are no
contracts or arrangements entered into under Section
d) The annual accounts have been prepared on a ‘going 188(1) of the Act, hence no justification have been
concern’ basis; separately provided in that regard.

e) Proper internal financial controls as being laid down

The details of the related party transactions are set out in
by the Directors were followed by the Company and
Notes to the financial statements of the Company.
that such internal financial controls are adequate
and operating effectively; and
The Form AOC-2 pursuant to Section 134(3)(h) of the Act
and Rule 8(2) of the Companies (Accounts) Rules, 2014 is
f) Proper systems to ensure compliance with the
set out as Annexure [1].
provisions of all applicable laws were in place and
that such systems are adequate and operating
AUDITORS AND AUDITOR’S REPORT
effectively.
Deloitte Haskins & Sells LLP, Chartered Accountants
MEETINGS OF THE BOARD (Firm’s Registration No. 117366W/W-100018), were re-
appointed as Statutory Auditors of the Company at the
During the financial year 2022-23, 4 (four) meetings of
15th AGM held on 13th June, 2022, to hold office till the
the Board of Directors were held on 29th April, 2022; 22nd
conclusion of the ensuing 20th AGM.
July, 2022; 18th October, 2022 and 16th January, 2023
respectively.
Deloitte Haskins & Sells LLP has confirmed that they
are not disqualified from continuing as Auditors of the
The maximum time gap between 2 (two) meetings did not
Company.
exceed 120 (one hundred and twenty days).
The Auditors’ Report for the financial year ended 31st
Number of Board meetings attended by individual
March, 2023 on the financial statements of the Company
Directors during the financial year 2022-23 is as follows:
is a part of this Annual Report. The Auditors’ Report

6

Board’s Report (Contd.)
for the financial year ended 31st March, 2023 does not
contain any qualifications, reservation or adverse remark.
There were no incidences of reporting of frauds by
Statutory Auditors of the Company under Section 143(12)
of the Act read with Companies (Accounts) Rules, 2014.
VIGIL MECHANISM
The Company is not required to have Vigil Mechanism as
per section 177(10) of the Act.
The Board of Directors of the Company in good
governance on voluntarily basis have adopted the Whistle
Blower Policy of Asian Paints Limited, holding company.
The Policy provides for protection to the employees
and business associates who report unethical practices
and irregularities. Any incidents that are reported are
investigated and suitable action is taken in line with the
Whistle Blower Policy of APL.
PARTICULARS OF CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
The Company has not been carrying on any operations
during the year.
Accordingly, the information required to be published
under Section 134(3)(m) of the Act read with Companies
(Accounts) Rules, 2014, concerning conservation of
energy and technology absorption respectively are not
applicable to the Company.
There was no inflow and outgo of foreign exchange
involved during the financial year 2022-23.
RISK MANAGEMENT
The Board has put in place appropriate framework and
mechanism to review the risks for the Company including
the operational and business risks. The Board reviews the
risk mitigation plans from time to time.
The Company recognises that risk is an integral and
inevitable part of the business and is fully committed to
manage risks in a proactive and efficient manner. The
Company has a Risk Management Policy which articulates
the approach to address the uncertainties in its
endeavour to achieve its stated and implicit objectives.
7
Statutory Reports
POLICY ON PREVENTION OF SEXUAL
HARASSMENT AT WORKPLACE
The Company is not required to adopt policy under the
Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 as there are less
than 10 employees in the organization.
During the financial year 2022-23, no complaints were
received by the Company. The Company is committed to
provide a safe and conducive work environment to all of
its employees and associates.
INTERNAL FINANCIAL CONTROLS AND THEIR
ADEQUACY
The Company has in place adequate internal financial
controls with reference to Financials. The same is subject
to review periodically by the Board of Directors for its
effectiveness.
The Control measures adopted by the Company have
been found to be effective and adequate to the
Company’s requirements.
MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records
as specified by the Central Government under Section
148(1) of the Act.
SIGNIFICANT AND MATERIAL ORDERS PASSED
BY REGULATORS OR COURTS OR TRIBUNALS
There are no significant and material orders passed by
the regulators or courts or tribunals impacting the going
concern status of the Company and its operations in
future.
ANNUAL RETURN
As the Company doesn’t have its own website, the
requirement to upload Annual Return of the Company
on its website as on 31st March, 2023 in Form MGT-7
in accordance with Section 92(3) of the Act read with
Companies (Management and Administration) Rules,
2014, is not applicable to the Company.
COMPLIANCE WITH SECERTARIAL STANDARDS
The Company has complied with Secretarial Standards
issued by the Institute of Company Secretaries of India on
Meeting of Board of Directors and General Meeting.
 Maxbhumi Developers Limited
OTHER DISCLOSURES
I. No credit rating has been obtained by the Company
with respect to its securities.
II. No application has been made under the Insolvency
and Bankruptcy Code; hence the requirement to
disclose the details of application made or any
proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year
alongwith their status as at the end of the financial
year is not applicable; and
III. The requirement to disclose the details of difference
between amount of the valuation done at the time
of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions
along with the reasons thereof, is not applicable.
8
ACKNOWLEDGEMENTS
Your Directors acknowledge with deep sense of
appreciation the co-operation received from various
other Central and State Government agencies, other
Ministries, Customers, Bankers and other stakeholders.
Your Directors express deep sense of appreciation for
the dedicated and sincere services rendered by the
employees of the Company at all levels.
Your Directors also wish to express gratitude to all the
Shareholders for the confidence reposed by them in
the Company and for the continued support and co-
operation.
For and on behalf of the Board of Directors
R J JEYAMURUGAN
CHAIRMAN
(DIN: 00010124)
Place: Mumbai
Date: 8th May, 2023
 9
Annexure 1 To Board’s Report

FORM AOC – 2
(Pursuant to Section 134(3)(h) of the Companies Act, 2013
and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of particulars of contracts/
arrangements entered into by the company with related
parties referred to in Section 188(1) of the Companies
Act, 2013 including certain arms’ length transactions
under fourth proviso thereto
Statutory Reports
b. Details of material contracts or arrangement or
transactions at arm’s length basis
There were no material contracts or arrangements, or
transactions entered into during the year ended 31st
March, 2023.
All related party transactions are in the ordinary course
of business and on arm’s length basis and are approved by
the Board of Directors of the Company.

a. Details of contracts or arrangements or For and on behalf of the Board of Directors

transactions not at arm’s length basis

There were no contracts or arrangements, or

transactions entered into during the year ended R J JEYAMURUGAN
31st March, 2023, which were not at arm’s length CHAIRMAN
basis. (DIN: 00010124)

Place: Mumbai
Date: 8th May, 2023
 Maxbhumi Developers Limited
Independent Auditor’s Report
To The Members of Maxbhumi Developers Limited
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the accompanying standalone financial
statements of Maxbhumi Developers Limited (“the
Company”), which comprise the Balance Sheet as at
31st March 2023, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Cash Flow
Statement and the Statement of Changes in Equity
for the year then ended, and 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 (“the Act”) in
the manner so required and give a true and fair view
in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015,
as amended, (“Ind AS”) and other accounting principles
generally accepted in India, of the state of affairs of
the Company as at 31 March 2023, and its profit, total
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) specified under section 143(10) of the
Act. Our responsibilities under those Standards are
further described in the Auditor’s Responsibility 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 (ICAI) together with
the ethical requirements that are relevant to our audit of
the standalone financial statements under the provisions
of the Act and the Rules made thereunder, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAI’s Code of Ethics.
We believe that the audit evidence obtained by us is
sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.
10
Information Other than the Financial Statements and
Auditor’s Report Thereon
• The Company’s Board of Directors is responsible
for the other information. The other information
obtained at the date of this auditor’s report is
Board’s Report including the annexures to the
Board’s Report, but does not include the financial
statements and our auditor’s report thereon.
• Our opinion on the 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 financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with
the financial statements or our knowledge obtained
during the course of our 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 and Those Charged
with Governance 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 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 Ind AS and other accounting
principles generally accepted in India. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting
policies; making judgments and estimates that are
reasonable and prudent; and 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 financial statement
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Independent Auditor’s Report (Contd.)
In preparing the 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 the Board of Directors
either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Company’s Board of Directors are also responsible
for overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance
about whether the 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 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 financial
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.
11
Financial Statements
• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by the
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 standalone
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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the
financial statements that, individually or in aggregate,
makes it probable that the economic decisions of
a reasonably knowledgeable user of the financial
statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the
scope of our audit work and in evaluating the results of
our work; and (ii) to evaluate the effect of any identified
misstatements in the standalone financial statements.
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.
 Maxbhumi Developers Limited
Independent Auditor’s Report (Contd.)
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on
our audit 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 Other Comprehensive Income,
the Cash Flow Statement and Statement of
Changes in Equity dealt with by this Report
are in agreement with the relevant books of
account.
d) In our opinion, the aforesaid standalone
financial statements comply with the Ind AS
specified under Section 133 of the Act.
e) On the basis of the written representations
received from the directors as on 31st March,
2023 taken on record by the Board of Directors,
none of the directors is disqualified as on 31st
March, 2023 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 financial
statements of the Company and the operating
effectiveness of such controls, refer to our
separate Report in “Annexure A”. Our report
expresses an unmodified opinion on the
adequacy and operating effectiveness of the
Company’s internal financial over financial
reporting.
g) With respect to the other matters to be
included in the Auditor’s Report in accordance
with the requirements of section 197(16) of the
Act, as amended,
The Company does not pay remuneration to any
of its Directors. Consequently, this clause has
not been reported upon.
h) With respect to the other matters to be
included in the Auditor’s Report in accordance
12
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 XX 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 it’s knowledge and
belief, other than as disclosed in the
note X to the 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, 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 it’s knowledge and
belief, other than as disclosed in the
note X to the financial statements,
no funds have been received by
the Company from any person(s) or
entity(ies), including foreign entities.
(c) Based on the audit procedures
performed that have been considered
 13
Independent Auditor’s Report (Contd.)

reasonable and appropriate in the
circumstances, nothing has come
to our notice that has caused us to
believe that the representations
under sub-clause (i) and (ii) of Rule
11(e), as provided under (a) and
(b) above, contain any material
misstatement.
v. The company has not declared or paid
any dividend during the year and has not
proposed final dividend for the year.
Financial Statements
2. As required by the Companies (Auditor’s Report)
Order, 2020 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act,
we give in “Annexure B” a statement on the matters
specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm’s Registration No.117366W/ W-100018)

vi. Proviso to Rule 3(1) of the Companies Rupen K. Bhatt

(Accounts) Rules, 2014 for maintaining Partner
books of account using accounting Membership No. 046930
software which has a feature of recording UDIN: 23046930BGXRJV3785
audit trail (edit log) facility is applicable
to the Company w.e.f. April 1, 2023, and Place: Mumbai
accordingly, reporting under Rule 11(g)
of Companies (Audit and Auditors) Rules, Date: 8th May, 2023
2014 is not applicable for the financial year
ended March 31, 2023.
 Maxbhumi Developers Limited
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 (f) under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
Report on the Internal Financial Controls Over
Financial Reporting under Clause (i) of Sub-section 3
of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over
financial reporting of Maxbhumi Developers Limited
(“the Company”) as of March 31, 2023 in conjunction
with our audit of the Ind AS 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”. 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 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 over financial
reporting of the Company 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”) issued by
the Institute of Chartered Accountants of India and the
Standards on Auditing prescribed under Section 143(10)
of the Companies Act, 2013, 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 was
established and maintained and if such controls operated
effectively in all material respects.
14
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls system over financial reporting and their
operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining
an understanding of internal financial controls over
financial reporting, 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 Company’s internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
A company’s internal financial control over financial
reporting 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 over financial reporting 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.
Inherent Limitations of Internal Financial Controls
Over Financial Reporting
Because of the inherent limitations of internal financial
controls over financial reporting, 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 over financial
reporting to future periods are subject to the risk that
 15
Annexure “A” Independent Auditor’s Report (Contd.)

Financial Statements
the internal financial control over financial reporting may Over Financial Reporting issued by the Institute of
become inadequate because of changes in conditions, Chartered Accountants of India.
or that the degree of compliance with the policies or
procedures may deteriorate.

Opinion For DELOITTE HASKINS & SELLS LLP

In our opinion, to the best of our information and Chartered Accountants
according to the explanations given to us, the Company (Firm‘s Registration No.117366W/W-100018)
has, in all material respects, an adequate internal
financial controls system over financial reporting and Rupen K. Bhatt
such internal financial controls over financial reporting Partner
were operating effectively as at March 31, 2023, based (Membership No. 46930)
on the criteria for internal financial control over financial UDIN: 23046930BGXRJV3785
reporting established by the Company considering the
essential components of internal control stated in the
Place: Mumbai
Guidance Note on Audit of Internal Financial Controls
Date: 8th May, 2023
 Maxbhumi Developers Limited
ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
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. As the Company does not hold any property, plant
and equipment, (Bearer plants, capital work-in-
progress, investment properties and relevant details
of right-of-use assets), intangible assets, reporting
under clause 3(i) of the Order is not applicable.
ii. (a) The Company does not have any inventory and
hence reporting under clause (ii)(a) of the Order
is not applicable.
(b) According to the information and explanations
given to us, at any point of time of the year,
the Company has not been sanctioned any
working capital facility from banks or financial
institutions and hence reporting under clause (ii)
(b) of the Order is not applicable.
iii. The Company has not made any investments in,
provided any guarantee or security, and granted any
loans or advances in the nature of loans, secured
or unsecured, to companies, firms, Limited Liability
Partnerships or any other parties during the year, and
hence reporting under clause (iii) of the Order is not
applicable.
iv. According to information and explanation given to
us, the Company has not granted any loans, made
investments or provided guarantees or securities that
are covered under the provisions of sections 185 or
186 of the Companies Act, 2013, and hence reporting
under clause (iv) of the Order is not applicable.
v. The Company has not accepted any deposit or
amounts which are deemed to be deposits. Hence,
reporting under clause (v) of the Order is not
applicable.
vi. The maintenance of cost records has not been
specified for the activities of the Company by the
Central Government under section 148(1) of the
Companies Act, 2013.
16
vii. (a) Undisputed statutory dues, including Goods and
Service tax, Provident Fund, Employees’ State
Insurance, Income-tax, Sales Tax, Service Tax,
duty of Custom, duty of Excise, Value Added
Tax, cess and other material statutory dues
applicable to the Company have been regularly
deposited by it with the appropriate authorities
in all cases during the year.
(b) There were no undisputed amounts payable
in respect of Service tax, Provident Fund,
Employees’ State Insurance, Income-tax, Sales
Tax, duty of Customs, duty of Excise, Value
Added Tax, cess and other material statutory
dues in arrears as at March 31, 2023 for a period
of more than six months from the date they
became payable.
(c) There are no statutory dues referred to in sub-
clause (a) above which have not been deposited
on account of disputes as on March 31, 2023.
viii. There were no transactions relating to previously
unrecorded income that were surrendered or
disclosed as income in the tax assessments under
the Income Tax Act, 1961 (43 of 1961) during the
year.
ix. (a) The Company has not taken any loans or other
borrowings from any lender. Hence reporting
under clause (ix) (a) of the Order is not
applicable to the Company.
(b) The Company has not been declared wilful
defaulter by any bank or financial institution or
government or any government authority.
(c) The Company has not taken any term loan
during the year and there are no unutilised term
loans at the beginning of the year and hence,
reporting under clause (ix)(c) of the Order is not
applicable.
(d) On an overall examination of the financial
statements of the Company, funds raised on
short-term basis have, prima facie, not been
used during the year for long-term purposes by
the Company.
(e) The Company did not have any subsidiary or
associate or joint venture and hence, reporting
under clause (ix)(e) of the Order is not
applicable.

Annexure “B” Independent Auditor’s Report (Contd.)
(f) The Company has not raised loans during the year on
the pledge of securities held in its subsidiaries
or joint ventures or associate companies.
x. (a) The Company has not raised moneys by way
of initial public offer or further public offer
(including debt instruments) or term loans
and hence reporting under clause (x) (a) of the
CARO 2016 Order is not applicable.
(b) During the year the Company has not made any
preferential allotment or private placement of
shares or convertible debenture (fully or partly
or optionally) and hence reporting under clause
(x)(b) of the Order is not applicable to Company.
xi. (a) To the best of our knowledge, no fraud by the
Company and no material fraud on the Company
has been noticed or reported during the year.
(b) To the best of our knowledge, no report
under sub-section (12) of section 143 of the
Companies Act has been filed in Form ADT-4 as
prescribed under rule 13 of Companies (Audit
and Auditors) Rules, 2014 with the Central
Government, during the year and upto the date
of this report.
(c) As represented to us by the Management, there
were no whistle blower complaints received by
the Company during the year (and upto the date
of this report).
xii. The Company is not a Nidhi Company and hence
reporting under clause (xii) of the Order is not
applicable.
xiii. In our opinion, the Company is in compliance with
Section 177 and 188 of the Companies Act, where
applicable, for all transactions with the related
parties and the details of related party transactions
have been disclosed in the financial statements etc.
as required by the applicable accounting standards.
xiv. Internal Audit is not applicable to the Company,
hence reporting under clause (xiv) of the Order is
not applicable.
xv. In our opinion during the year the Company has not
entered into any non-cash transactions with any of
its directors or directors of it’s holding Company,
subsidiary Company, associate Company or persons
connected with such directors and hence provisions
of section 192 of the Companies Act, 2013 are not
applicable to the Company.
17
Financial Statements
xvi. The Company is not required to be registered under
section 45-IA of the Reserve Bank of India Act, 1934.
Hence, reporting under clause (xvi)(a), (b), (c) and (d)
of the Order is not applicable.
xvii. The Company has not incurred any cash losses in the
financial year covered by our audit but had incurred
cash losses amounting to Rs. 3,55,508/- in the
immediately preceding financial year.
xviii. There has been no resignation of the statutory
auditors of the Company during the year.
xix. On the basis of the financial ratios, ageing and
expected dates of realization of financial assets and
payment of financial liabilities, other information
accompanying the financial statements and
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 indicating that Company is
not capable of meeting its liabilities existing at the
date of balance sheet date 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. The Company was not having net worth of rupees
five hundred crore or more, or turnover of rupees
one thousand crore or more or a net profit of rupees
five crore or more during the immediately preceding
financial year and hence, provisions of Section 135
of the Act are not applicable to the Company during
the year. Accordingly, reporting under clause 3(xx) of
the Order is not applicable for the year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)
Rupen K. Bhatt
Partner
(Membership No. 46930)
UDIN: 23046930BGXRJV3785
Place: Mumbai
Date: 8th May, 2023
 Maxbhumi Developers Limited

Balance Sheet
As at 31 March 2023

Amount in ( ₹ ‘000)
Particulars Notes As at As at
31.03.2023 31.03.2022
ASSETS
Non Current assets
Current Tax assets (net) 2 1,180 1,012
1,180 1,012
Current assets
Financial Assets
Cash and Cash Equivalents 3(A) 17,275 65,418
Other Balances with Bank 3(B) 57,508 -
Other Financial Asset 3(C) 50,981 -
Assets classified as held for sale 4 - 81,300
1,25,764 1,46,718
Total Assets 1,26,944 1,47,730
EQUITY AND LIABILITIES
Equity
Equity Share Capital 5 4,190 4,190
Other Equity 6 1,22,485 1,20,444
1,26,675 1,24,634
LIABILITIES
Current Liabilities
Financial Liabilties
Other financial liabilities 7 150 438
Other Current liabilities 8 119 22,658
269 23,096
Total Equity and Liabilities 1,26,944 1,47,730
Significant Accounting Policies and Key Accounting Estimates 1
and judgements
See accompanying notes to the financial statements 2 -18

As per our report of even date attached For and on behalf of the Board of Directors of
Maxbhumi Developers Limited
For Deloitte Haskins & Sells LLP ClN: U45400MH2007PLC175925
Chartered Accountants
Firm’s Registration Number : 117366W/W-100018
Rupen K. Bhatt R J Jeyamurugan Harish Lade
Partner Director Director
Membership No. 046930 DIN : 00010124 DIN: 03505357

Mumbai Mumbai
Date : 08 May, 2023
th
Date : 08th May, 2023

18
 19
Statement of Profit and Loss

Financial Statements
For the year ended 31 March 2023

Amount in ( ₹ ‘000)
Particulars Notes Year Year
31.03.2023 31.03.2022
I Other Income 9 4,035 104
II Total Income 4,035 104
III EXPENSES
Other expenses 10 1,073 484
Total Expenses 1,073 484
IV Profit/(Loss) before tax (II-III) 2,962 (380)
V Tax expense 11 921 -
VI Profit/(Loss) for the Year (IV-V) 2,041 (380)
VII Other Comprehensive Income - -
VIII Total Other Comprehensive Income - -
IX Total Comprehensive Income/(Loss) (VII+VIII) 2,041 (380)
X Earnings Per Share 16
Basic and Diluted 4.87 (0.91)
Significant Accounting Policies and Key Accounting Estimates 1
and judgements
See accompanying notes to the financial statements 2- 18

As per our report of even date attached For and on behalf of the Board of Directors of
Maxbhumi Developers Limited
For Deloitte Haskins & Sells LLP ClN: U45400MH2007PLC175925
Chartered Accountants
Firm’s Registration Number : 117366W/W-100018
Rupen K. Bhatt R J Jeyamurugan Harish Lade
Partner Director Director
Membership No. 046930 DIN : 00010124 DIN: 03505357

Mumbai Mumbai
Date : 08th May, 2023 Date : 08th May, 2023
 Maxbhumi Developers Limited

Cash Flows
For the year ended 31 March 2023
Amount in ( ₹ ‘000)
Year Year
2022-23 2021-22
A CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) before tax 2,962 (380)
Adjustments for:
Add:
Impairment on asset held for sale - -
Interest Income (4,035) -
Loss/(Gain) on sale of Asset held for sale 918 (104)
Sundry balance written off (Net) - 128
Operating (Loss) before working capital changes (155) (356)
Adjustments for:
(Decrease) in current assets - (129)
(Decrease)/Increase in current liabilities (327) 419
Cash (used in) from operating activities (482) (66)
Income Tax paid (Net) (1,088) (912)
Net cash (used in) operating activities (1,571) (978)
B CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of asset held for sale 58,750 78,750
Expediture in relation to sale of asset held for sale (868) (29,946)
Advance against sale of asset held for sale - 12,500
Purchase of term Deposits (1,06,881) -
Interest Received 2,427 -
Cash (used)/generated from investing activities (46,572) 61,304
C CASH FLOWS FROM FINANCING ACTIVITIES - -
Net increase in cash and cash equivalents (48,143) 60,326
Cash and cash equivalents as at 1st April 65,418 5,092
Cash and cash equivalents as at 31st March 17,275 65,418
Component of cash and cash equivalents
Cash and cash equivalents comprises of
Balance with the bank (Refer Note 3A) 17,275 65,418
Cash and Cash Equivalents in Cash Flow 17,275 65,418
Statements
Note :
The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian Accounting
Standard (Ind AS - 7) - Statement of Cash Flows.

As per our report of even date attached For and on behalf of the Board of Directors of
Maxbhumi Developers Limited
For Deloitte Haskins & Sells LLP ClN: U45400MH2007PLC175925
Chartered Accountants
Firm’s Registration Number : 117366W/W-100018
Rupen K. Bhatt R J Jeyamurugan Harish Lade
Partner Director Director
Membership No. 046930 DIN : 00010124 DIN: 03505357

Mumbai Mumbai
Date : 08th May, 2023 Date : 08th May, 2023
20
 21
Statement of Changes In Equity

Financial Statements
as at 31 March 2023

A) EQUITY SHARE CAPITAL

Amount in ( ₹ ‘000)
As at As at
31.03.2023 31.03.2022
Balance at the beginning of the year 4,190 4,190
Changes in Equity Share Capital during the year - -
Balance at the end of the reporting year 4,190 4,190

B) OTHER EQUITY

Particulars Reserves and Surplus

Retained Securities Total
earnings Premium
Balance as on 1st April 2021 (30,466) 1,51,290 1,20,824
(Loss) for the year (380) - (380)
Balance as on 31 March 2022
st
(30,846) 1,51,290 1,20,444
Profit for the year 2,041 - 2,041
Balance as on 31st March 2023 (28,805) 1,51,290 1,22,485

As per our report of even date attached For and on behalf of the Board of Directors of
Maxbhumi Developers Limited
For Deloitte Haskins & Sells LLP ClN: U45400MH2007PLC175925
Chartered Accountants
Firm’s Registration Number : 117366W/W-100018
Rupen K. Bhatt R J Jeyamurugan Harish Lade
Partner Director Director
Membership No. 046930 DIN : 00010124 DIN: 03505357

Mumbai Mumbai
Date : 08 May, 2023
th
Date : 08th May, 2023
 Maxbhumi Developers Limited

Notes to the Financial Statements

for the year ended 31 March 2023

Company Overview v. the asset is cash or cash equivalent unless it

is restricted from being exchanged or used to
Maxbhumi Developers Limited (the ‘Company’) was
settle a liability for at least twelve months after
incorporated under the Companies Act, 1956. The
the reporting date;
registered office of the Company is located at - Plot No.
5, Gaiwadi Industrial Estate, S.V. Road, Goregaon (West),
vi. in the case of a liability, the Company does not
Mumbai-400062. The Company has a land at Pune and
have an unconditional right to defer settlement
primarily engaged in development of real estate and
of the liability for at least twelve months after
infrastructural facilities.
the reporting date.

1. Significant Accounting Policies

and Key accounting estimates and
judgements
1.1 Basis of preparation of financial statements
These financial statements of the Company have
been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under section 133 of
the Companies Act 2013, read together with the
Companies (Indian Accounting Standards) Rules,
1.3 Summary of Significant accounting policies
2015(as amended).
These financial statements have been prepared and
presented under the historical cost convention, on
the accrual basis of accounting except for certain
financial assets and financial liabilities that are
measured at fair values at the end of each reporting
period, as stated in the accounting policies set out
below. The accounting policies have been applied
consistently over all the periods presented in these
financial statements.
The financial statements are presented in Indian
Rupees (which is also the functional currency of
the Company) and is rounded off to the nearest
thousands except otherwise indicated.
All other assets and liabilities are classified as non-
current.
For the purpose of current/non-current
classification of assets and liabilities, the Company
has ascertained its normal operating cycle as twelve
months. This is based on the nature of services and
the time between the acquisition of assets.
a) Fair Value
The Company measures financial instruments
at fair value in accordance with the accounting
policies mentioned above. 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. The fair value
measurement is based on the presumption that
the transaction to sell the asset or transfer the
liability takes place either:
• In the principal market for the asset or
liability, or

1.2 Current / Non-Current Classification • In the absence of a principal market, in the

most advantageous market for the asset or
Any asset or liability is classified as current if it
liability.
satisfies any of the following conditions:

All assets and liabilities for which fair value

i. the asset/liability is expected to be realized/
is measured or disclosed in the financial
settled in the Company’s normal operating cycle;
statements are categorized within the fair value
hierarchy that categorizes into three levels,
ii. the asset is intended for sale or consumption;
described as follows, the inputs to valuation
techniques used to measure value. The fair
iii. the asset/liability is held primarily for the
value hierarchy gives the highest priority to
purpose of trading;
quoted prices in active markets for identical
assets or liabilities (Level 1 inputs) and the
iv. the asset/liability is expected to be realized/
lowest priority to unobservable inputs (Level 3
settled within twelve months after the
inputs).
reporting period;

22

Notes to the Financial Statements (Contd.)
Level 1 — quoted (unadjusted) market prices in
active markets for identical assets or liabilities
Level 2 — inputs other than quoted prices
included within Level 1 that are observable for
the asset or liability, either directly or indirectly
Level 3 — inputs that are unobservable for the
asset or liability.
For assets and liabilities that are recognized
in the financial statements at fair value on
a recurring basis, the Company determines
whether transfers have occurred between
levels in the hierarchy by re-assessing
categorization at the end of each reporting
period and discloses the same.
b) Income Taxes
Tax expense is the aggregate amount included
in the determination of profit or loss for the
period in respect of current tax and deferred
tax.
Current tax:
Current tax is the amount of income taxes
payable in respect of taxable profit for a period.
Taxable profit differs from ‘profit before tax’
as reported in the Statement of Profit and Loss
because of items of income or expense that are
taxable or deductible in other years and items
that are never taxable or deductible under the
Income Tax Act, 1961.
Current tax is measured using tax rates
that have been enacted by the end of
reporting period for the amounts expected
to be recovered from or paid to the taxation
authorities.
Deferred tax:
Deferred tax is recognized on temporary
differences between the carrying amounts of
assets and liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable profit under Income tax
Act, 1961.
23
Financial Statements
Deferred tax liabilities are generally recognized
for all taxable temporary differences. However,
in case of temporary differences that arise from
initial recognition of assets or liabilities in a
transaction (other than business combination)
that affect neither the taxable profit nor the
accounting profit, deferred tax liabilities are
not recognized. Also, for temporary differences
if any that may arise from initial recognition
of goodwill, deferred tax liabilities are not
recognized.
Deferred tax assets are generally recognized
for all deductible temporary differences to the
extent it is probable that taxable profits will
be available against which those deductible
temporary difference can be utilized. In case
of temporary differences that arise from
initial recognition of assets or liabilities in a
transaction (other than business combination)
that affect neither the taxable profit nor the
accounting profit, deferred tax assets are not
recognized.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period
and reduced to the extent that it is no longer
probable that sufficient taxable profits will be
available to allow the benefits of part or all of
such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured
at the tax rates that have been enacted or
substantively enacted by the balance sheet date
and are expected to apply to taxable income in
the years in which those temporary differences
are expected to be recovered or settled.
Uncertain tax positions:
The management periodically evaluates
positions taken in the tax returns with respect
to situations in which applicable tax regulations
are subject to interpretation and considers
whether it is probable that a taxation authority
will accept an uncertain tax treatment. The
Company reflects the effect of uncertainty for
each uncertain tax treatment by using one of
two methods, the expected value method (the
sum of the probability - weighted amounts in a
 Maxbhumi Developers Limited
Notes to the Financial Statements (Contd.)
range of possible outcomes) or the most likely
amount (single most likely amount method
in a range of possible outcomes), depending
on which is expected to better predict the
resolution of the uncertainty. The Company
applies consistent judgements and estimates
if an uncertain tax treatment affects both the
current and the deferred tax.
Presentation of current and deferred tax:
Current and deferred tax are recognized as
income or an expense in the Statement of Profit
and Loss, except when they relate to items
that are recognized in Other Comprehensive
Income, in which case, the current and deferred
tax income/expense are recognized in Other
Comprehensive Income.
The Company offsets current tax assets and
current tax liabilities, where it has a legally
enforceable right to set off the recognized
amounts and where it intends either to settle
on a net basis, or to realize the asset and settle
the liability simultaneously. In case of deferred
tax assets and deferred tax liabilities, the
same are offset if the Company has a legally
enforceable right to set off corresponding
current tax assets against current tax liabilities
and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the
same tax authority on the Company.
c) Provisions and contingencies
The Company recognizes provisions when a
present obligation (legal or constructive) as a
result of a past event exists and it is probable
that an outflow of resources embodying
economic benefits will be required to settle
such obligation and the amount of such
obligation can be reliably estimated.
If the effect of time value of money is material,
provisions are discounted using a current pre-
tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting
is used, the increase in the provision due to the
passage of time is recognized as a finance cost.
24
A disclosure for a contingent liability is made
when there is a possible obligation or a present
obligation that may, but probably will not require
an outflow of resources embodying economic
benefits or the amount of such obligation cannot
be measured reliably. When there is a possible
obligation or a present obligation in respect
of which likelihood of outflow of resources
embodying economic benefits is remote, no
provision or disclosure is made.
d) Cash and Cash Equivalents
Cash and cash equivalents for the purpose
of Cash Flow Statement comprise cash and
cheques in hand, bank balances, demand
deposits with banks where the original maturity
is three months or less and other short term
highly liquid investments net of bank overdrafts
which are repayable on demand as these
form an integral part of the Company’s cash
management.
e) Borrowing Cost
Borrowing cost includes interest, amortization
of ancillary costs incurred in connection with
the arrangement of borrowings and exchange
differences arising from foreign currency
borrowings to the extent they are regarded as
an adjustment to the interest cost.
Borrowing costs, if any, directly attributable
to the acquisition, construction or production
of an asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalized, if any. All other
borrowing costs are expensed in the period in
which they occur.
f) Events after reporting date
Where events occurring after the balance
sheet date provide evidence of conditions that
existed at the end of the reporting period,
the impact of such events is adjusted within
the financial statements. Otherwise, events
after the balance sheet date of material size or
nature are only disclosed.

Notes to the Financial Statements (Contd.)
g) Non-current Assets held for sale
The Company classifies non-current assets as
held for sale if their carrying amounts will be
recovered principally through a sale rather
than through continuing use of the assets and
actions required to complete such sale indicate
that it is unlikely that significant changes to the
plan will be made or that the decision to sell will
be withdrawn. Also, such assets are classified as
held for sale only if the management expects to
complete the sale within one year from the date
of classification.
Non-current assets classified as held for sale are
measured at the lower of their carrying amount
and the fair value less cost to sell. Non-current
assets are not depreciated or amortized.
25
Financial Statements
1.4 Key accounting estimates and
judgments
The preparation of the Company’s financial
statements requires the management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
 Maxbhumi Developers Limited

Notes to the Financial Statements (Contd.)

2 CURRENT TAX ASSET (NET)

Amount in ( ₹ ‘000)
As at As at
31.03.2023 31.03.2022
TDS receivable 1,180 1,013
1,180 1,013

The Company has the following unused tax losses which arose on incurrence of business losses under the Income
Tax, 1961, for which no deferred tax asset has been recognised in the Balance Sheet.

Financial Year Business Loss Amount in (₹ ‘000) Expiry Date

2015-2016 91 31-03-2024
2016-2017 124 31-03-2025
2017-2018 117 31-03-2026
2019-2020 214 31-03-2028
2020-2021 227 31-03-2029
2021-2022* 4,204 31-03-2030
2022-2023# 1,80,711 31-03-2031

* Includes capital loss of ₹ 40,34,108

# Includes capital loss of ₹ 18,07,10,992

3(A) CASH AND CASH EQUIVALENTS

As at As at
31.03.2023 31.03.2022
Cash and cash equivalents
Balance with a bank
- Current Account 17,275 65,418
17,275 65,418

3(B) OTHER BALANCES WITH BANK

As at As at
31.03.2023 31.03.2022
(i) Term deposit with original maturity for more than 3 months but less 57,508 -
than 12 months
57,508 -

3(C) OTHER FINANCIAL ASSETS

As at As at
31.03.2023 31.03.2022
(i) Term deposit with more than 12 months of original maturity 50,981 -
50,981 -

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
4 ASSETS CLASSIFIED AS HELD FOR SALE

Amount in ( ₹ ‘000)
Net Block as on Deletion during Net Block as on
01.04.2022 the year 31.03.2023
Freehold Land (i) 80,269 80,269 -
Building 1,031 1,031 -
TOTAL 81,300 81,300 -

Net Block as on Deletion during Net Block as on

01.04.2021 the year 31.03.2022
Freehold Land 1,28,969 48,700 80,269
Building 1,031 - 1,031
TOTAL 1,30,000 48,700 81,300

(i) The company has sold off its land in current year

5 EQUITY SHARE CAPITAL

Amount in ( ₹ ‘000)
As at As at
31.03.2023 31.03.2022
AUTHORISED CAPITAL
4,50,000 (Previous year - 4,50,000) Equity shares of ₹ 10/- each 4,500 4,500
ISSUED, SUBSCRIBED AND PAID UP CAPITAL
4,19,000 Equity shares of ₹ 10/- each fully paid up 4,190 4,190
4,190 4,190

A) Reconciliation of the number of shares outstanding at the beginning and at the end of the year

As at 31.03.2023 As at 31.03.2022
No. of Shares Amount in No. of Amount in
( ₹ ‘000) Shares ( ₹ ‘000)
At the beginning of the year 4,19,000 4,190 4,19,000 4,190
Add: Issued during the year - - - -
Outstanding at the end of the year 4,19,000 4,190 4,19,000 4,190

B) Details of shareholding in the Company

All the shares are held by the holding Company, Asian Paints Limited and its nominees.
 Maxbhumi Developers Limited

Notes to the Financial Statements (Contd.)

5 EQUITY SHARE CAPITAL (Contd.)

C) Rights, preferences and restrictions attached to equity shares

The Company has one class of equity shares having at par value of ₹.10 per share. Accordingly, all equity shares
rank equally with regard to dividends and share in the Company’s residual assets. The equity shares are entitled
to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll are in
proportion to his share of the paid-up equity capital of the Company. Voting rights cannot be excercised in
respect of shares on which any call or other sums presently payable have not been paid.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining
assets of the Company after distribution of all liabilities. The distribution will be in proportion of the shares held
by each shareholder.

D) Shares held by promoters as defined in the Companies Act, 2013 at the end of the year

Promoter Name As at As at % change
31st March 2023 31st March 2022 during the year
No. of % of No. of % of total
Shares total Shares shares
shares
Asian Paints Limited (Holding Company) 4,19,000 100% 4,19,000 100% -
and its nominees

6 OTHER EQUITY

Amount in ( ₹ ‘000)
Reserves and Surplus Total
Retained earnings Securities Premium
Balance as on 1st April 2021 (30,466) 1,51,290 1,20,824
(Loss) for the year (380) - (380)
Balance as on 31 March 2022
st
(30,846) 1,51,290 1,20,444

Reserves and Surplus Total

Retained earnings Securities Premium
Balance as on 1 April 2022
st
(30,846) 1,51,290 1,20,444
Profit for the year 2,041 - 2,041
Balance as on 31 March 2023
st
(28,805) 1,51,290 1,22,485

7 OTHER FINANCIAL LIABILITES

Amount in ( ₹ ‘000)
As at As at
31.03.2023 31.03.2022
Payable towards services received 19 312
Provision for expenses 131 127
150 439

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
8 OTHER CURRENT LIABILITIES
Amount in ( ₹ ‘000)
As at As at
31.03.2023 31.03.2022
Payable towards GST 73 95
Payable towards TDS under Income tax 46 63
Advance against sale of land - 22,500
119 22,658

9 OTHER INCOME
Amount in ( ₹ ‘000)
2022-23 2021-22
Gain from sale of asset held for sale - 104
Interest Income 4,035 -
4,035 104

10 OTHER EXPENSES
Amount in ( ₹ ‘000)
2022-23 2021-22
Legal and Professional fees 52 254
Payment to auditors (Refer Note 13) 100 100
Sundry balances written off - 128
Loss from sale of asset held for sale 918 -
Miscellaneous Expenses 3 2
1,073 484

11 INCOME TAXES

As at As at
31.03.2023 31.03.2022
(A) THE MAJOR COMPONENTS OF INCOME TAX EXPENSE FOR
THE YEAR ARE AS UNDER :
(i) Income tax recognised in the statement of Profit and Loss
Current tax:
In respect of current year 921 -
Minimum Alternate Tax credit utilised - -
Deferred tax expense:
In respect of current year -
Income tax recognised in the statement of Profit and Loss 921 -
(ii) Income tax recognised in OCI
Deferred Tax: - -
Income tax (expense)/benefit on remeasurement of defined - -
benefit plans
Income tax benefit / (expense) recognised in OCI - -
 Maxbhumi Developers Limited

Notes to the Financial Statements (Contd.)

11 INCOME TAXES (Contd.)

As at As at
31.03.2023 31.03.2022
(B) RECONCILIATION OF TAX EXPENSE AND THE ACCOUNTING
PROFIT FOR THE YEAR IS AS UNDER:
Profit before tax 2,962 -
Income tax expense calculated at 25.168% 745 -
Tax expense on non-deductible expenses - -
Effect of Income which is taxed at special rates 231 -
Set off of Unabsorbed Dep of Previous year (55)
Total 921 -
Short tax provision for earlier years -
Tax expense as per Statement of Profit and Loss 921 -

12 A) CATERGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENTS

Amount in ( ₹ ‘000)
Current
As at As at
31.03.2023 31.03.2022
Financial assets carried at amortised cost (Refer Note 3)
Cash and cash equivalents 17,275 65,418
Other Balances with Bank 57,508 -
Other Financial Asset 50,981 -
1,25,764 65,418
Financial liabilities carried at amortised cost (Refer Note 7)
Payable towards services received 19 312
Advance against sale of land - -
Provision for expenses 131 127
150 439

B) FAIR VALUE MEASUREMENTS

The carrying amount of financial assets and financial liabilities recognised in the financial statements is
assumed to approximate their fair values, since the Company does not anticipate that the carrying amounts
would be significantly different from the values that would eventually be received or settled.

C) FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company’s financial liabilities comprise mainly of other payables. The Company’s financial assets
comprise mainly of cash and cash equivalents, other balances with bank and other financial assets

The Company is exposed to Liquidity risk. The following disclosures summarize the Company’s exposure to
Liquidity risk.
30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
12 C) CATERGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENTS (Contd.)
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity
risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial
assets and liabilities. The Company manages the liquidity risk by having adequate amount of Cash and cash
equivalents to ensure that there is sufficient cash to meet all its normal operating commitments in a timely
and cost-effective manner.

The table below analyses non-derivative financial liabilities of the the Company into relevant maturity
groupings based on the remaining period from the reporting date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.

Particulars Less than Between Over 5 Total Carrying

1 year 1 to 5 years value
years
As at 31st Mar 2023
Other financial liabilities (Refer note 7) 150 - - 150 150
As at 31 March 2022
Other financial liabilities (Refer note 7) 439 - - 439 439

The Company does not have any derivative finanical liabilites.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Since the Company has no borrowings, there is no exposure to
risk of changes in market interest rates.

Particulars As at 31st March, Floating rate Fixed rate Non- interest

2023 bearing
Financial assets 1,25,764 - 1,25,764 -
Financial liabilities 150 - 150 -

Particulars As at 31st March, Floating rate Fixed rate Non- interest

2022 bearing
Financial assets 65,418 - 65,418 -
Financial liabilities 439 - 439 -

13 PAYMENT TO AUDITORS

2022-23 2021-22
Statutory audit fees 100 100
100 100
 Maxbhumi Developers Limited

Notes to the Financial Statements (Contd.)

14 KEY FINANCIAL RATIOS

Sr. Ratios Numerator Denominator FY FY % Remarks

No. 2022-23 2021-22 Variance
1 Current ratio Current Current 0.86 1.09 -21%
Assets Liabilities
2 Debt-equity ratio Total Debt Total Equity NA NA
(Borrowings)
3 Debt service Earning Finance Costs NA NA
coverage ratio available for (excluding
debt service cost
pertaining
to lease
liabilities) +
Repayment of
borrowings
4 Return on Equity Profits after Average Total 1.62% -0.4% 506% Increase
tax Equity due to
Interest
Income
5 Inventory turnover Cost of goods Average NA NA
ratio sold Inventory
6 Trade receivables Revenue from Average NA NA
turnover ratio operations Trade
receivables
7 Trade payables Net Purchases Average NA NA
turnover ratio of raw Trade
material, payables
packing
material and
stock-in-trade
8 Net capital turnover Revenue from Working NA NA
ratio operations Capital
(Current
Assets -
Current
Liabilities)
9 Net profit ratio Profit after Revenue from NA NA
tax operations
10 Return on capital Profit before Average 1.62% -0.4% 506% Increase
employed interest and Capital due to
tax Employed Interest
[Total Equity Income
+ Total Debt
(Borrowings)]
11 Return on Income Time 5.94% NA
investment generated weighted
from average
investments investment

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
15 INFORMATION ON RELATED PARTY TRANSACTIONS AS REQUIRED BY IND AS- 24 - ‘RELATED
PARTY DISCLOSURES’ FOR THE YEAR ENDED 31.03.2023

A) Holding Company :

Asian Paints Limited ( Control exists)

B) Transactions and balances with Related Party during the year :

Amount in ( ₹ ‘000)
2022-23 2020-21
Name of the Nature of Transaction Outstanding Transaction Outstanding
related party transaction value amounts carried value amounts carried
and nature of in Balance Sheet in Balance Sheet
relationship
Asian Paints Reimbursement 364 14 5.23 1.53
Limited (Holding Paid
company)

16 EARNINGS PER SHARE

2022-23 2021-22
Amount in Amount in
( ₹ ‘000) ( ₹ ‘000)
a) Basic and diluted earnings per share before and after exceptional 4.87 (0.91)
items (In ₹) per share (Face value of Rs.10/- per share)
b) Profit/(Loss) after tax as per Statement of Profit and Loss (In ₹) 2,041 (380)
c) Weighted average number of equity shares outstanding 4,19,000 4,19,000

17 Additional regulatory information required by Schedule III to the Companies Act,

2013
(i) Details of benami property held
The Company does not have any benami property. No proceedings have been initiated on or are pending against
the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
Rules made thereunder.”

(ii) Cash Credit/ Working Capital Demand Loan facility secured against current assets
The Company has no Cash Credit / Working Capital Demand Loan facility from banks.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or other lender or
government or any government authority.
 Maxbhumi Developers Limited

Notes to the Financial Statements (Contd.)

(iv) Struck off

The Company has no transactions with Companies struck off under Companies Act, 2013 or Companies Act, 1956”

(v) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.”

(vi) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact in current or
previous financial year.

(vii) Utilisation of borrowed funds and share premium

I The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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 Company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

II The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company 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

viii) Undisclosed income

There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax
Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the year.

(x) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets during the year. The Company does not have investment property.

(xi) Charge to be registered with ROC

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

18 These Financial Statements are approved for issue by the Board of Directors at meeting conducted on
08th May,2023.

34
Sleek International
Private Limited
BOARD OF DIRECTORS
1. Shri Pangulury Mohan Murty Independent Director (ceased as Director due to expiry of term
on 11.10.2022)
2. Shri Parag Rane Non Executive Director
3. Shri Shyam Swamy Non Executive Director
4. Shri Ashish Rae Non Executive Director
5. Ms. Savitha Shivsankar Non Executive Additional Director (appointed w.e.f. 31.03.2023)

AUDITORS
Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration Number 117366W/W-100018)

REGISTERED OFFICE
301/302, G Wing, 3rd Floor, Lotus Corporate Park, Graham Firth Compound, W. E. Highway, Goregaon (East),
Mumbai – 400063

BANKERS
Bank of America
Express Towers, 18th Floor, Nariman Point,
Mumbai-400021

ICICI Bank Limited

ICICI Centre, 163, H.T. Parekh Marg, Reclamation,
Churchgate, Mumbai-400020

CITI Bank Limited

Ground Floor, Barrister Rajni Patel Marg,
Nariman Point, Mumbai, 400021
Contents
Board’s Report ....................................................................................................................................................................................... 4-11

Independent Auditor’s Report.......................................................................................................................................................... 12-21

Statement of Financial Position ........................................................................................................................................................22-23

Statement of Profit and Loss....................................................................................................................................................................24

Statement of Cash Flows.....................................................................................................................................................................25-26

Statement of Changes in Equity...............................................................................................................................................................27

Notes To The Financial Statements...................................................................................................................................................28-79

 Sleek International Private Limited

Board’s Report

Dear Members,
Sleek International Private Limited

Your Directors have pleasure in presenting the 31st (Thirty First) Annual Report of your Company and the Audited
financial statements for the financial year ended 31st March, 2023.

FINANCIAL RESULTS
The financial performance of your Company for the year ended 31st March, 2023 is summarized below:

(` in Lakhs)
Particulars 2022-23 2021-22
Revenue From Operations 43,982.68 40,957.16
Other Income 127.25 421.77
Total Revenue 44,109.93 41,378.93
Expenses 45,546.97 41,284.84
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) (1,437.04) 94.09
Less: Finance Costs 615.08 329.19
Less: Depreciation and Amortisation Expense 758.35 684.83
Profit / (Loss) before Tax (2,810.47) (919.93)
Tax Expenses - -
Profit / (Loss) after Tax (2,810.47) (919.92)
Other Comprehensive Income 11.64 12.13
Total Comprehensive Income (2,798.83) (907.80)

OVERVIEW OF COMPANY’S PERFORMANCE AND SHARE CAPITAL

STATE OF AFFAIRS
During the financial year 2022-23, revenue from
operations on standalone basis increased to ` 43,982.68
lakhs as against ` 40,957.16 lakhs in previous year –
growth of 7.38%. The Company incurred loss of ` 2,798.83
lakhs in FY 2022-23 as against a loss of ` 907.80 lakhs in
the previous year.
The paid up Equity Share Capital as on 31st March, 2023
was `29,01,000/- (Rupees Twenty Nine Lakhs and One
Thousand Only).
During the year under review, the Company has not
issued shares with differential voting rights nor granted
stock options or sweat equity.

There are no material changes and commitments DIVIDEND

affecting the financial position of the Company which
During the year under review, the Board of Directors has
have occurred between the end of financial year 2022-
not recommended dividend on equity shares.
23 and the date of this report. There is no change in the
nature of business in FY 2022-23.
TRANSFER TO RESERVES

INDUSTRIAL RELATIONS
The Company has always considered its workforce as its
valuable asset and continues to invest in their excellence
and development programs. The industrial relations of
the Company remained cordial and peaceful.
During the year under review, the Company has not
transferred any amount to General Reserve of the
Company.
SUBSIDIARY STATUS
The Company continues to be a Wholly Owned Subsidiary
of Asian Paints Limited. The Company doesn’t have any
Subsidiary, Associates or Joint Ventures.

4

Board’s Report (Contd.)
DIRECTORS
The Board of Directors of the Company has been validly
constituted as per Section 149 of the Companies Act,
2013 and corresponding Rules thereunder.
Change in Directorate
•  hri Pangulury Mohan Murty (DIN: 00011179) ceased
S (the Rules) stating that he had renewed his registration
to be an Independent Director of the Company due
to expiry of him term on 11th October, 2022.
• I n order to comply with the provisions of Section
149(1) of the Companies Act, 2013 read with rule 3
of the Companies (Appointment and Qualifications
of Directors) Rules, 2014 and for furtherance of
Company’s endeavor towards enhanced governance,
the Management was looking out for a professional
independent woman director even with the help
from external experts of the field. The Board of
Directors of the Company after thorough search
appointed Ms. Savitha Shivsankar [DIN:06800168] as
a Non-Executive Additional Director with effect from
31 March, 2023 by passing a resolution by circulation.
Pursuant to Section 161(1) of the Companies Act,
2013, Ms. Savitha Shivsankar shall hold office as
Additional Director only till the conclusion of the
ensuing Annual General Meeting of the Company.
Accordingly, it is proposed to appoint Ms. Savitha
Shivsankar as a Director of the Company in its
ensuing Annual General Meeting. Your directors
recommend her appointment as a Non-Executive
Director of the Company.
Retirement by Rotation
• I n accordance with Section 152 of the Companies
Act, 2013, Shri Parag Rane (DIN: 08723015), Director,
retires at the ensuing Annual General Meeting and
being eligible, offers himself for re-appointment.
Your directors recommend his re-appointment as a
Director of the Company.
Changes in Key Managerial Personnel
There have been no changes in this regard during FY
2022-23.
Statement on Declaration given by Independent
Directors
Shri Pangulury Mohan Murty (DIN: 00011179) ceased
to be an Independent Director of the Company due to
expiry of him term on 11th October, 2022. A declaration
as prescribed under Section 149(7) of the Companies
5
Statutory Reports
Act 2013 (the Act) was received from him for FY 2022-
23 stating that he met the criteria of independence as
prescribed under Section 149(6) of the Act.
Further, the Company had also received a declaration
from him for FY 2022-23 under Rule 6(3) of Companies
(Appointment and Qualification of Directors) Rules, 2014
with the Independent Director’s Databank maintained by
the Indian Institute of Corporate Affairs and that he was
in compliance with Rule 6(1) and Rule 6(2) of the Rules.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013,
the Directors confirm that:
a. in the preparation of the annual accounts for the
financial year ended 31st March, 2023, the applicable
Accounting Standards and Schedule III of the
Companies Act, 2013, have been followed and there
are no material departures from the same;
b. the Directors have selected such accounting policies
and applied them consistently and made judgments
and estimates that are reasonable and prudent so
as to give a true and fair view of the state of affairs
of the Company as on 31st March, 2023 and of the
loss of the Company for the financial year ended 31st
March, 2023;
c. proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud
and other irregularities;
d. the annual accounts have been prepared on a going
concern basis;
e. proper systems to ensure compliance with the
provisions of all applicable laws were in place and
that such systems were adequate and operating
effectively.
MEETINGS OF THE BOARD:
During the financial year ended 31st March, 2023, Five (5)
meetings of the Board of Directors were held and the
maximum time gap between two (2) meetings did not
exceed one hundred and twenty days.
 Sleek International Private Limited
Board’s Report (Contd.)
The dates of the Board meetings are as under:
Date(s) on which meeting(s) were held
1. 30th April, 2022 4. 16th January, 2023
2. 15th July, 2022 5. 20th March, 2023
3. 17th October, 2022
Management Discussion and Analysis
Industry overview, outlook
Modular Kitchen and Components business segment in
the has seen transformation from unorganized market
to an organized one, with many branded players who
have received seed funding in the recent times. Post
pandemic, modular furniture market witnessed record
sales of apartments in real estates but the same have also
been struggling to provide timely possessions resulting
into sluggish demand for makeover and renovations.
We foresee forthcoming years bullish in this regard
and will also generate lot of demand for online players
to do full homes. Knowing the market potential and
requirement for branded solutions in full home living
spaces, Asian Paints also launched “Beautiful Homes”
which is now a relative competitor to other online players
like “Livspace” and “Homelane” amongst the few. Asian
Paints through “Beautiful Homes” is able to now offer
all its products namely, modular furniture for living and
bedrooms (Wardrobes, Fitted furniture like TV unit, Shoe
racks, Beds, study units, storage units etc) along with
Kitchens from Sleek and likewise is meeting customer
requirements for its other brands as well present into
Bathroom solutions, Fabrics, Lighting solutions, Windows
etc.
Sharing about the company and its presence, “Sleek
by Asian Paints” is present in both the “Kitchen
components” as well as the “Full Modular Solutions”
segments. Under the Kitchen components business, the
company sells its own range of Kitchen Hardware, Kitchen
Accessories and Kitchen Appliances through the exclusive
dealer model. Under the “Full modular solutions”
segment, the company undertakes design to execution
of full kitchens through a strong network of Franchisee
owned showrooms across the country. The company also
has a dedicated projects channel to provide “Full modular
solutions” for new constructions especially residential
housing. The company has a strong Pan India presence.
Business performance
During the year FY 2022-23, overall growth was 7.38%.
The reasons were because of sluggish demand in
renovations market due to post pandemic and Ukraine
6
Russia conflict, which also resulted in rise in inflations
allowing the company to increase the prices. This led
to volatility in demand and skewed the presence of the
brand against competition. The Component business also
witnessed pressures of rise in prices which was treated
differently by competitors leading to increase in inputs
to cover back the market share. The business turned
around from Q2 with some course corrections done
during the year, with market benchmarking, liquidation
of inflated inventory focusing on depth and reach of
spread of dealers. The Kitchen business continued to
service via dealer showrooms which are more than 250+
across pan India which is unparalleled in the country
today. Integration with Beautiful Home solutions grew
by 4 times in this year which also allowed a complete
offering to the end customer. The new product initiatives
taken in Component business for profiles and sliding
fittings opened up new avenues for the company under
the Hardware segment. The luxury collection of Kitchens
with premium finishes launched last year, saw high
demand during the year and has grown well. This is one of
the most comprehensive collections of premium kitchens
by any company in India.
Sleek also operates in the full modular solutions business
through a dedicated project’s vertical. The company has
a strong presence in Mumbai, Pune and Delhi. During the
year, some prominent realty brands got associated with
the Company allowing its reach in large as well as small
cities. Integrating with APPS network of Asian Paints also
brought synergies to the business to convert large key
project sites.
During the year, your company also successfully
completed the setup of the new plant at Wada,
Maharashtra. The planned commissioned date is end
of Q1 FY2324. Overall spends of ` 43 Cr.+ has been
incurred so far against the sanctions of ` 48.7 Cr. With
this, your company will have inhouse manufacturing from
2 plants namely Wada and Pune, covering 4L sq. feet of
production capacity in a month.
RELATED PARTY TRANSACTIONS
During the financial year 2022-23, the Company has
entered into transactions with related parties as defined
under Section 2(76) of the Companies Act, 2013 (the
Act) read with Companies (Specification of Definitions
Details) Rules, 2014, all of which are in the ordinary
course of business and on arm’s length basis and in
accordance with the provisions of the Companies Act,
2013 read with Rules issued thereunder. All Related Party
Transactions have been sanctioned at the meeting of the
Board of Directors.

Board’s Report (Contd.)
The details of the related party transactions are set out in
Note 33 to the financial statements of the Company.
Form AOC – 2 pursuant to clause (h) of sub-section 3 of
Section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014 is set out as “Annexure [1]”.
AUDITORS AND AUDITORS’ REPORT
M/s. Deloitte Haskins & Sells LLP, Chartered Accountants,
(Firm Registration Number 117366W/W-100018) were
appointed as the Statutory Auditors at the 30th Annual
General Meeting (AGM) held on 10th June, 2022, to
hold office till the conclusion of the ensuing 35th AGM
pursuant to Section 139(1) of the Companies Act, 2013
(the Act).
The Company has received written consent and
certificate of eligibility in accordance with Sections 139,
141 and other applicable provisions of the Act and Rules
issued thereunder from M/s. Deloitte Haskins & Sells LLP.
The Auditors have issued an unmodified opinion on the
Financial Statements for the financial year ended 31st
March, 2023. The Company has not received any report
for frauds noticed or acknowledged by the Auditors
during the financial year ended 31st March, 2023. The
said Auditors’ Report(s) for the financial year ended 31st
March, 2023 on the financial statements of the Company
forms part of the Annual Report.
Secretarial Auditor
The Board of Directors of the Company have re-
appointed Shri Prashant S. Vaishampayan, Practicing
Company Secretary (Certificate of Practice No. 14045),
as the Secretarial Auditor to conduct an audit of the
secretarial records for the financial year 2022-23. The
Company has also received consent from Shri Prashant S.
Vaishampayan to act as the auditor for conducting audit
of the secretarial records for the financial year ending 31st
March, 2024.
The Secretarial Audit Report for the financial year ended
31st March, 2023 under the Act, read with Rules made
thereunder, is set out in the Annexure [2] to this report.
The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
DISCLOSURE RELATING TO REMUNERATION OF
DIRECTORS, KEY MANAGERIAL PERSONNEL AND
EMPLOYEES PURSUANT TO SECTION 197(12) OF THE
COMPANIES ACT 2013 READ WITH RULE 5 OF THE
7
Statutory Reports
COMPANIES (APPOINTMENT AND REMUNERATION
OF MANAGERIAL PERSONNEL) RULES, 2014
The Company, being an unlisted Company, is not required
to give disclosures in this regard.
PARTICULARS OF CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
(A) Conservation of energy:
(i) Steps taken or impact on conservation of energy
The manufacturing units of the company regularly
monitored the specific energy consumptions. Energy
saving measures are promoted regularly in the
plants. The new plant which will be commissioned in
Q1 of FY 23-24 has best in class energy consumption
techniques which will reduce the overall
consumption.
(ii) Steps taken by the Company for utilizing alternate
sources of energy
The Company is setting up the new plant in WADA,
which will be operational in Q1 FY 23-24, from
where these alternate sources of energy will be
used, also helping in overall reduction of costs for
manufacturing.
(iii) Capital investment on energy conservation
equipment
The company has incurred significant investment in
setting up the new plant in WADA. The state of the
art facilities will generate returns to the company
from next financial year onwards once the plant is
operational around Q1 of FY 23-24
(B) Technology absorption:
(i) Efforts made towards technology absorption
The focus in research and technology continues
to be on working towards creating new designs
and introducing new utilities/products. The nature
of activities carried out by the Company were as
follows:
a) Development of new designs introducing newer
finishes.
b) Introduction of new products/alternative
products to enhance utility/life/warranty of its
products.
 Sleek International Private Limited
Board’s Report (Contd.)
(ii) Benefits derived as a result of the above efforts
The efforts towards new product and design
developments have helped the Company to offer
multiple offerings to customers with varied value
propositions.
(iii) In case of imported technology (imported during the
last three years reckoned from the beginning of the
financial year)
Your Company has not imported any technology
and has not entered into any technology transfer
agreement.
(iv) The expenditure incurred on Research and
Development
The Company has not incurred any expenditure on
Research and Development.
(C) Foreign exchange earnings and Outgo:
The Foreign Exchange earned in terms of actual
inflows during the year was ` NIL Lakhs and the
Foreign Exchange outgo during the year in terms of
actual outflows was ` 78.71 Lakhs.
PUBLIC DEPOSITS
During the financial year 2022-23, the Company has not
accepted any deposit within the meaning of Sections 73
and 74 of the Companies Act, 2013, read together with
the Companies (Acceptance of Deposit) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS
Details of Loans, Guarantees and Investments, if any,
covered under the provisions of Section 186 of the
Companies Act, 2013 read with the Companies (Meetings
of Board and its Powers) Rules, 2014 as on 31st March,
2023, are given in the Notes to the Financial Statements.
RISK MANAGEMENT
The management of the Company reviews strategic and
operational performance on a monthly basis. Major risks
facing the Company as well as internal audit observations
are also discussed at these reviews and action plans are
framed accordingly.
Further, there are no elements of risk which in the
opinion of the Board, threaten the existence of the
Company.
8
VIGIL MECHANISM
The Company has a Vigil Mechanism through its Whistle
Blower Policy under which the employees are free to
report violations of applicable laws and regulations
and the Code of Conduct. The Whistle Blower Policy
is approved and adopted by Board of Directors of the
Company in compliance with the provisions of Section
177(10) of the Companies Act, 2013. In accordance with
the Whistle Blower Policy of the Company, an Ethics
Committee is also constituted. An “Ethics Hotline” is
also provided to report any instances of fraud, abuse,
misconduct or malpractice at workplace.
The Policy also provides protection to the employees
and business associates who report unethical practices
and irregularities. Any incidents that are reported are
investigated and suitable action is taken in line with the
Whistle Blower Policy.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
AT WORKPLACE
The Company has in place a Policy on Prevention
of Sexual Harassment at Workplace in line with the
requirements of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 and Rules framed thereunder and an Internal
Complaints Committee has also been set up to redress
complaints received regarding sexual harassment.
Complaints of sexual harassment received during the
financial year 2022-23 by the Company were investigated
in accordance with the procedures prescribed and
adequate steps were taken to resolve them. The
Company is committed to provide a safe and conducive
work environment to all its employees and associates.
INTERNAL FINANCIAL CONTROLS AND THEIR
ADEQUACY
The Company has in place adequate internal financial
controls with reference to Financial Statements. The
same is subject to review periodically by the Board of
Directors for its effectiveness. The control measures
adopted by the Company have been found to be effective
and adequate to the Company’s requirements.
MAINTENANCE OF COST RECORDS
Your Company is not required to maintain cost records as
per the Companies (Cost Records and Audit) Rules, 2014
(as amended from time to time) as it has not carried out
any production or manufacturing activity during FY 2022-
23.

Board’s Report (Contd.)
SIGNIFICANT OR MATERIAL ORDERS, IF ANY, PASSED
BY THE REGULATORS OR COURTS OR TRIBUNALS
No orders have been passed by the regulators or courts
or tribunals which would have an impact on the going
concern status of the Company and its future operations.
APPLICATION OR PROCEEDINGS PENDING UNDER
THE INSOLVENCY AND BANKRUPTCY CODE, 2016
The Company has no applications or proceedings pending
under the Insolvency and Bankruptcy Code, 2016.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF
THE VALUATION DONE AT THE TIME OF ONETIME
SETTLEMENT AND THE VALUATION DONE WHILE
TAKING LOAN FROM THE BANKS OR FINANCIAL
INSTITUTIONS ALONG WITH THE REASONS THEREOF
The Company has not made any settlement with any Bank
or Financial Institution during the year.
ANNUAL RETURN
The Annual Return of the Company as on 31st March,
2023 in Form MGT – 7 in accordance with Section 92(3)
of the Companies Act 2013 read with the Companies
(Management and Administration) Rules, 2014, is
available on the website of the Company at www.
sleekworld.com.
COMPLIANCE WITH THE SECRETARIAL STANDARDS
ISSUED BY THE INSTITUTE OF COMPANY
SECRETARIES OF INDIA
The Company has complied with the Secretarial
Standards issued by the Institute of Company Secretaries
of India on Meetings of the Board of Directors and
General Meetings.
9
Statutory Reports
GENERAL
No reporting or disclosures are required on the below
mentioned matters as the same were not applicable
to the Company during Financial Year 2022-23. The
Company does not fall within the prescribed class of
companies as specified in the relevant sections of the
Companies Act 2013 and rules made thereunder:
•  olicy on corporate social responsibility under
P
Section 135 of Companies Act, 2013 read with Rule 9
of Companies (Accounts) Rules, 2014.
•  udit Committee under Section 177 of the
A
Companies Act 2013 read with Rule 6 of Companies
(Meetings of the Board and its Powers) Rules, 2014.
•  omination and Remuneration Committee under
N
Section 178 of the Companies Act 2013 read with
Rule 6 of Companies (Meetings of the Board and its
Powers) Rules, 2014.
ACKNOWLEDGEMENTS
The Directors wish to place on record their appreciation
for the contribution and support by the employees,
bankers, vendors, customers and other stakeholders
of the Company. The Directors also acknowledge the
support and assistance received from Asian Paints
Limited, Holding Company and all its employees for their
contribution during the year.
FOR AND ON BEHALF OF THE BOARD
CHAIRMAN – Shyam Swamy
DIN: 08736211
Address: Flat no 1203, Avlon, B wing, Hiranandani
Gardens, Powai, IIT Mumbai, Maharashtra – 400 076
Date: 28th April, 2023
Place: Mumbai
 Sleek International Private Limited

Annexure [1] To Board’s Report

FORM AOC – 2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts)
Rules, 2014) Form for disclosure of particulars of contracts/arrangements entered into by the company with
related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms’
length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship

(b) Nature of contracts/arrangements/transactions
(c) Duration of the contracts / arrangements/transactions
(d) Salient terms of the contracts or arrangements or transactions including the value, if
any
(e) Justification for entering into such contracts or arrangements or transactions
NIL
(f) date(s) of approval by the Board
(g) Amount paid as advances, if any:
(h) Date on which the special resolution was passed
(i) Amount paid as advances, if any:
(j) Date on which (a) the special resolution was passed in general meeting as required
under first proviso to section 188

2. Details of material contracts or arrangement or transactions at arm’s length basis

(a) Name(s) of the Asian Paints Limited Hydra Trading Smiti Holding and
related party (APL) – Holding Company Private Limited Trading Private
and nature of – Entities where Limited – Entities
relationship directors/ close where directors/
family members of close family
directors/ directors members of
of holding company directors/ directors
having control/ of holding company
significant influence having control/
significant influence
(b) Nature of contracts/ Sales of Finished Goods, Purchase of Sales of Finished Sales of Finished
arrangements/ Raw Materials and Finished Goods, Goods Goods
transactions Reimbursement of Expenses Paid,
Capex cost paid, Services received
from APL, Services provided to APL.
(c) Duration of Full year 2022-2023 Full year 2022-2023 Full year 2022-2023
the contracts/
arrangements/
transactions

10
 11
Annexure [1] To Board’s Report (Contd.)

Statutory Reports
(d) Salient terms of Sales of Finished Goods – INR 1249.62 Sales of Finished Sales of Finished
the contracts or lakhs. Goods – INR 11.19 Goods – INR 13.81
arrangements Purchase of Raw Materials and lakhs. lakhs.
or transactions Finished Goods – INR 210.55 lakhs.
including the value,
Reimbursement of expenses paid –
if any:
INR 164.60 lakhs.
Capex cost paid – INR 18.35 lakhs
Services received from APL – INR
1,959.26 lakhs.
Services provided to APL – INR 692.07
lakhs.
(e) Date(s) of approval 19th March, 2022 19th March, 2022 19th March, 2022
by the Board, if any:
(f) Amount paid as No advances paid during the year No advances paid No advances paid
advances, if any: during the year during the year

FOR AND ON BEHALF OF THE BOARD

CHAIRMAN – Shyam Swamy

DIN: 08736211
Address: Flat no 1203, Avlon, B wing,
Hiranandani Gardens, Powai, IIT Mumbai,
Maharashtra – 400 076

Date: 28th April, 2023

Place: Mumbai
 Sleek International Private Limited
Independent Auditor’s Report
To the members of Sleek International Pvt. Ltd.
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements
of Sleek International Private Limited (“the Company”),
which comprise the Balance Sheet as at March 31, 2023,
and the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and
the Statement of Changes in Equity for the year then
ended, and 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
financial statements give the information required by
the Companies Act, 2013 (“the Act”) in the manner so
required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under
section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, (“Ind
AS”) and other accounting principles generally accepted
in India, of the state of affairs of the Company as at
March 31, 2023, and its loss, total comprehensive loss, its
cash flows and the changes in equity for the year ended
on that date.
Basis for Opinion
We conducted our audit of the financial statements
in accordance with the Standards on Auditing (SAs)
specified under section 143(10) of the Act. Our
responsibilities under those Standards are further
described in the Auditor’s Responsibility for the Audit
of the 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 (ICAI) together with the ethical
requirements that are relevant to our audit of the
financial statements under the provisions of the Act and
the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. We believe
that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our audit opinion on
the financial statements.
Information Other than the Financial Statements and
Auditor’s Report Thereon
•  he Company’s Board of Directors is responsible
T
for the other information. The other information
obtained at the date of this auditor’s report is
12
Board’s Report including the annexures to the
Board’s Report, but does not include the financial
statements and our auditor’s report thereon.
•  ur opinion on the financial statements does not
O
cover the other information and we do not express
any form of assurance conclusion thereon.
• I n connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with
the financial statements or our knowledge obtained
during the course of our 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 and Those Charged
with Governance for the 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 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 Ind AS and other accounting
principles generally accepted in India. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting
policies; making judgments and estimates that are
reasonable and prudent; and 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 financial statement
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the 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 the Board of Directors
either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.

Independent Auditor’s Report (Contd.)
The Company’s Board of Directors are also responsible
for overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance
about whether the 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 financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• I dentify and assess the risks of material
misstatement of the 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.
•  btain an understanding of internal financial
O that we identify during our audit.
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.
•  valuate the appropriateness of accounting
E 1. As required by Section 143(3) of the Act, based on
policies used and the reasonableness of accounting
estimates and related disclosures made by the
management.
•  onclude on the appropriateness of management’s
C of our knowledge and belief were necessary for
use of the going concern basis of accounting and,
13
Financial Statements
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.
•  valuate the overall presentation, structure and
E
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the
financial statements that, individually or in aggregate,
makes it probable that the economic decisions of
a reasonably knowledgeable user of the financial
statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the
scope of our audit work and in evaluating the results of
our work; and (ii) to evaluate the effect of any identified
misstatements in the financial statements.
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
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.
Report on Other Legal and Regulatory Requirements
our audit we report, that:
a) We have sought and obtained all the
information and explanations which to the best
the purposes of our audit.
 Sleek International Private Limited
Independent Auditor’s Report (Contd.)
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 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.
d) In our opinion, the aforesaid financial
statements comply with the Ind AS specified
under Section 133 of the Act.
e) On the basis of the written representations
received from the directors as on March 31,
2023 taken on record by the Board of Directors,
none of the directors is disqualified as on March
31, 2023 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 financial
statements of the Company and the operating
effectiveness of such controls, refer to our
separate Report in “Annexure A”. Our report
expresses an unmodified opinion on the
adequacy and operating effectiveness of the
Company’s internal financial controls over
financial reporting.
g) With respect to the other matters to be
included in the Auditor’s Report in accordance
with the requirements of section 197(16) of the
Act, as amended;
The Company does not pay remuneration to any
of its Directors. Consequently, this clause has
not been reported upon.
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
14
in its financial statements. Refer Note 27
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 were no amounts which were
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 it’s knowledge
and belief, as disclosed in the note
38(iv) to the 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, 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 it’s knowledge and
belief, as disclosed in the note 38(v)
to the financial statements, no funds
have been received by the Company
from any person(s) or entity(ies),
including foreign entities.
(c) Based on the audit procedures that
has been considered reasonable and
appropriate in the circumstances,
nothing has come to our notice that
has caused us to believe that the
 15
Independent Auditor’s Report (Contd.)

representations under sub-clause
(i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any
material misstatement.
v. The Company has not declared or paid
any dividend during the year and has not
proposed final dividend for the year.
vi. Proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014 for maintaining
books of account using accounting
software which has a feature of recording
audit trail (edit log) facility is applicable
to the Company w.e.f. April 1, 2023, and
accordingly, reporting under Rule 11(g)
of Companies (Audit and Auditors) Rules,
2014 is not applicable for the financial year
ended March 31, 2023.
Financial Statements
2. As required by the Companies (Auditor’s Report)
Order, 2016 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act,
we give in “Annexure B” a statement on the matters
specified in paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Rupen K. Bhatt
Partner
(Membership No. 046930)
UDIN: 23046930BGXRJR2515
Place: Mumbai
Date: 28 April, 2023
 Sleek International Private Limited
Annexure “A” To The Independent Auditor’s Report
(Referred to in paragraph 1(f) under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
Report on the Internal Financial Controls with
reference to financial statements 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 the financial statements of Sleek
International Private Limited (“the Company”) as of
March 31, 2023 in conjunction with our audit of the Ind AS
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 with reference to financial
statements 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”. 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 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 financial statements of the Company 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”) issued by
the Institute of Chartered Accountants of India and the
Standards on Auditing prescribed under Section 143(10)
of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls with reference to
financial statements. 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 financial statements was
established and maintained and if such controls operated
effectively in all material respects.
16
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls with reference to financial statements and their
operating effectiveness. Our audit of internal financial
controls with reference to financial statements included
obtaining an understanding of internal financial controls
with reference to 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 Company’s internal financial controls
system with reference to financial statements.
Meaning of Internal Financial Controls with reference
to financial statements
A company’s internal financial control with reference to
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 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.
Inherent Limitations of Internal Financial Controls
with reference to financial statements
Because of the inherent limitations of internal financial
controls with reference to 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
 17
Annexure “A” To The Independent Auditor’s Report (Contd.)

Financial Statements
of any evaluation of the internal financial controls with essential components of internal control stated in the
reference to financial statements to future periods are Guidance Note on Audit of Internal Financial Controls
subject to the risk that the internal financial control Over Financial Reporting issued by the Institute of
with reference to financial statements may become Chartered Accountants of India.
inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
For DELOITTE HASKINS & SELLS LLP
Opinion Chartered Accountants
In our opinion, to the best of our information and (Firm’s Registration No. 117366W/W-100018)
according to the explanations given to us, the Company
has, in all material respects, an adequate internal
financial controls system with reference to financial
Rupen K. Bhatt
statements and such internal financial controls with
reference to financial statements were operating Partner
effectively as at March 31, 2023, based on the criteria (Membership No. 046930)
for internal financial control with reference to financial UDIN: 23046930BGXRJR2515
statements established by the Company considering the
Place: Mumbai
Date: 28 April, 2023
 Sleek International Private Limited
Annexure “B” to the Independent Auditors’ Report
(Referred to in paragraph 2 under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
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 the
Property Plant and Equipment and capital
work-in-progress and relevant details of
right-of-use assets.
(B) The Company has maintained proper
records showing full particulars of
intangible assets.
(b) The Property, Plant and Equipment, Capital
work-in-progress and right-of-use assets were
physically verified during the year by the
Management which, in our opinion provides for
physical verification at reasonable intervals. No
material discrepancies were noticed on such
verification.
(c) Based on our examination of the registered
sale deed / transfer deed / conveyance deed
provided to us, we report that, the title deeds
of all the immovable properties, (other than
immovable properties where the Company is
the lessee and the lease agreements are duly
executed in favour of the Company) disclosed in
the financial statements included in (property,
plant and equipment and capital work-in
progress are held in the name of the Company
as at the balance sheet date.
(d) The Company has not revalued its Property,
Plant and Equipment (including Right of Use
assets) and intangible assets during the year.
(e) No proceedings have been initiated or is
pending against the Company as at March 31,
2023 for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 (as
amended in 2016) and rules made thereunder.
18
ii. (a) The inventory, except goods-in-transit and
stocks held with third parties were physically
verified during the year by the management
at reasonable intervals. In our opinion and
based on the information and explanations
given to us, the coverage and procedure
of such verification by the Management is
appropriate having regard to the size of the
Company and the nature of its operations. For
stocks held with third parties at the year end,
written confirmations have been obtained and
in respect of goods in transit, the goods have
been received subsequent to the year end. No
discrepancies of 10% or more in the aggregate
for each class of inventories were noticed on
such physical verification of inventories when
compared with the books of account.
(b) According to the information and explanations
given to us, at any point of time of the year,
the Company has not been sanctioned any
working capital facility from banks or financial
institutions on the basis of security of current
assets, and hence reporting under clause (ii)(b)
of the Order is not applicable
iii. The Company has not made any investments in,
provided any guarantee or security, and granted any
loans or advances in the nature of loans, secured
or unsecured, to companies, firms, Limited Liability
Partnerships or any other parties during the year,
and hence reporting under clause (iii) of the Order is
not applicable.
iv. The Company has not granted any loans, made
investments or provided guarantees or securities
and hence reporting under clause (iv) of the Order is
not applicable.
v. The Company has not accepted any deposit or
amounts which are deemed to be deposits. Hence,
reporting under clause (v) of the Order is not
applicable.
vi. The maintenance of cost records has been specified
by the Central Government under Section 148(1) of
the Companies Act, 2013. We have broadly reviewed
the cost records maintained by the Company

Annexure “B” to the Independent Auditors’ Report (Contd.)
pursuant to the Companies (Cost Records and Audit)
Rules, 2014, as amended prescribed by the Central
Government under sub-section (1) of Section 148 of
the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed accounts and records
have been made and maintained by the Company.
However, we have not made a detailed examination
of cost records with a view to determine whether
they are accurate or complete.
vii. (a) Undisputed statutory dues, including Goods and
Service tax, Provident Fund, Employees’ State
Insurance, Income-tax, Sales Tax, Service Tax,
duty of Custom, duty of Excise, Value Added
(c) Details of statutory dues referred to in sub clause (a) above which have not been deposited as on March 31, 2023
on account of disputes are given below:
Name of the Nature of dues Forum where
statute the dispute is
pending
Maharashtra Assessment First Appellate
Value Added Tax Dues
Act, 2002
Total
viii. There were no transactions relating to previously
unrecorded income that were surrendered or
disclosed as income in the tax assessments under
the Income Tax Act, 1961 (43 of 1961) during the
year.
ix. (a) In our opinion, the Company has not defaulted
in the repayment of loans or other borrowings
or in the payment of interest thereon to any
lender during the year.
(b) The Company has not been declared wilful
defaulter by any bank or financial institution or
government or any government authority.
(c) The Company has not taken any term loan
during the year and there are no unutilised term
19
Financial Statements
Tax, cess and other material statutory dues
applicable to the Company have been regularly
deposited by it with the appropriate authorities
in all cases during the year.
(b) There were no undisputed amounts payable
in respect of Service tax, Provident Fund,
Employees’ State Insurance, Income-tax, Sales
Tax, duty of Customs, duty of Excise, Value
Added Tax, cess and other material statutory
dues in arrears as at March 31, 2023 for a period
of more than six months from the date they
became payable.
Period to which Amount Amount unpaid
the amount involved (` in (` in lakhs)
relates lakhs)
FY 2008-09, FY 61.33 16.33
2013-14
61.33 16.33
loans at the beginning of the year and hence,
reporting under clause (ix)(c) of the Order is not
applicable.
(d) On an overall examination of the financial
statements of the Company, funds raised on
short-term basis have, prima facie, not been
used during the year for long-term purposes by
the Company.
(e) The Company did not have any subsidiary or
associate or joint venture and hence, reporting
under clause (ix)(e) of the Order is not
applicable.
(f) The Company has not raised loans during
the year on the pledge of securities held in
its subsidiaries or joint ventures or associate
companies.
 Sleek International Private Limited
Annexure “B” to the Independent Auditors’ Report (Contd.)
x. (a) The Company has not raised moneys by way
of initial public offer or further public offer
(including debt instruments) during the year
and hence reporting under clause (x)(a) of the
Order is not applicable.
(b) During the year the Company has not made any
preferential allotment or private placement of
shares or convertible debenture (fully or partly
or optionally) and hence reporting under clause
(x)(b) of the Order is not applicable to Company.
xi. (a) To the best of our knowledge, no fraud by the
Company and no material fraud on the Company
has been noticed or reported during the year.
(b) To the best of our knowledge, no report
under sub-section (12) of section 143 of the
Companies Act has been filed in Form ADT-4 as
prescribed under rule 13 of Companies (Audit
and Auditors) Rules, 2014 with the Central
Government, during the year and upto the date
of this report.
(c) As represented to us by the Management, there
were no whistle blower complaints received by
the Company during the year (and upto the date
of this report).
xii. The Company is not a Nidhi Company and hence
reporting under clause (xii) of the Order is not
applicable.
xiii. In our opinion, the Company is in compliance with
Section 177 and 188 of the Companies Act, where
applicable, for all transactions with the related
parties and the details of related party transactions
have been disclosed in the financial statements etc.
as required by the applicable accounting standards.
xiv. (a) In our opinion the Company has an adequate
internal audit system commensurate with the
size and the nature of its business.
(b) We have considered, the internal audit reports
issued to the Company during the year and
20
covering the period upto March 31, 2023 and
the draft of the internal audit reports in respect
of certain areas were issued after the balance
sheet date covering the period April 1, 2022 to
March 31, 2023 for the period under audit.
xv. In our opinion during the year the Company has not
entered into any non-cash transactions with any of
its directors or directors of it’s holding Company,
subsidiary Company, associate Company or persons
connected with such directors and hence provisions
of section 192 of the Companies Act, 2013 are not
applicable to the Company.
xvi. The Company is not required to be registered under
section 45-IA of the Reserve Bank of India Act, 1934.
Hence, reporting under clause (xvi)(a), (b), (c) and (d)
of the Order is not applicable.
xvii. The Company has incurred cash losses amounting
to `1,084.49 Lakhs during the financial year covered
by our audit and ` 168.67 Lakhs in the immediately
preceding financial year.
xviii. There has been no resignation of the statutory
auditors of the Company during the year.
xix. On the basis of the financial ratios, ageing and
expected dates of realization of financial assets and
payment of financial liabilities, other information
accompanying the financial statements and
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 indicating that Company is
not capable of meeting its liabilities existing at the
date of balance sheet date 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
 21
Annexure “B” to the Independent Auditors’ Report (Contd.)

Financial Statements
sheet date, will get discharged by the Company as
and when they fall due.

xx. The Company was not having net worth of rupees

five hundred crore or more, or turnover of rupees
one thousand crore or more or a net profit of rupees
five crore or more during the immediately preceding
financial year and hence, provisions of Section 135
of the Act are not applicable to the Company during
the year. Accordingly, reporting under clause 3(xx) of
the Order is not applicable for the year.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)

Rupen K. Bhatt
Partner
(Membership No. 046930)
UDIN: 23046930BGXRJR2515

Place: Mumbai
Date: 28 April, 2023
 Sleek International Private Limited

Statement of Financial Position

As at 31 March 2023

(` in Lakhs)
Notes As at As at
31 March 23 31 March 2022
ASSETS
Non-current assets
Property, Plant and Equipment 2A 3,939.62 3,732.03
Right of Use Assets 2B 892.59 1,148.57
Capital work-in-progress 3A 2,367.31 91.41
Goodwill 3B 1,191.11 1,191.11
Other Intangible assets 3C 3,026.55 3,018.41
Intangible assets under development - -
Financial Assets
Investments 4 0.25 0.25
Other financial assets 5 172.38 119.46
Current tax assets (net) 6 149.87 148.13
Other non-current assets 8 384.78 261.07
12,124.46 9,710.44
Current assets
Inventories 9 9,753.31 14,444.40
Financial Assets
Investments 4
Trade receivables 10 5,601.34 5,755.23
Cash and cash equivalents 11 25.17 108.85
Other financial assets 5 10.57 38.61
Other current assets 8 943.41 2,292.16
16,333.80 22,639.25
Total Assets 28,458.26 32,349.69
EQUITY AND LIABILITIES
EQUITY
Equity Share capital 12 29.01 29.01
Other Equity 13 10,437.92 13,236.75
10,466.93 13,265.76
LIABILITIES
Non-current liabilities
Financial Liabilities
Borrowings 14 - -
Lease liabilities 15 664.87 268.39
Other financial liabilities 16 12.14 11.64
Provisions 17 149.75 145.11
826.76 425.14

22
 23
Statement of Financial Position (Contd.)

Financial Statements
(` in Lakhs)
Notes As at As at
31 March 23 31 March 2022
Current liabilities
Financial Liabilities
Borrowings 14 8,896.22 9,280.51
Lease liabilities 15 268.75 890.64
Trade Payables
-Total Outstanding dues of Micro Enterprises and Small 18 166.94 437.98
Enterprises
-Total Outstanding dues of creditors other than Micro 18 1,666.67 2,454.32
Enterprises and Small Enterprises
Other Financial liabilities 16 3,624.31 3,383.29
Other current liabilities 19 2,136.29 1,888.52
Provisions 17 405.39 323.53
17,164.57 18,658.79
Total Equity and Liabilities 28,458.26 32,349.69
Significant accounting policies and key accounting estimates 1
and judgements
See accompanying notes to financial statements 2 - 39
As per our report of even date

As per our report of even date

For DELOITTE HASKINS & SELLS LLP For and on behalf of the Board of
Chartered Accountants Sleek International Private Limited
Firm’s Registration No: 117366W/W-100018 CIN : U31300MH1993PTC070859

Rupen K. Bhatt Shyam Swamy Parag Rane

Partner Director Director
Membership No: 046930 DIN No. 08736211 DIN No. 08723015

Ashish Rae Kaushal Zavery

Director Chief Financial Officer
DIN No.: 09540164
Mumbai Mumbai

Date : 28 April 2023 Date : 28 April 2023

 Sleek International Private Limited

Statement of Profit or Loss

for the year ended 31 March 2023

(` in Lakhs)
Particulars Notes 31 March 2023 31 March 2022
REVENUE FROM OPERATIONS
Revenue from sale of products 20A 40,962.17 38,844.35
Revenue from sale of services 20A 1,586.23 1,197.90
Other operating revenues 20A 1,434.28 914.91
Other Income 21 127.25 421.77
Total Income (I) 44,109.93 41,378.93
EXPENSES
Cost of materials consumed 22A 3,858.62 3,647.24
Purchases of Stock-in-trade 22B 22,384.98 30,888.76
Changes in inventories of finished goods, Stock-in-trade and 22C 4,180.46 (6,102.74)
work in progress
Employee benefits expense 23 6,859.47 5,796.30
Other expenses 25 8,263.44 7,055.28
Total expenses (II) 45,546.97 41,284.84
EARNING BEFORE INTEREST, TAX, DEPRECIATION AND (1,437.04) 94.09
AMORTISATION (I-II)
Finance costs 24 615.08 329.19
Depreciation and amortisation expense 37 758.35 684.83
(Loss) before tax (2,810.47) (919.93)
Tax expenses – –
(Loss) for the year (2,810.47) (919.93)
Other Comprehensive Income (OCI)
Items that will not be reclassified to Statement of Profit and
Loss
Remeasurement gains/(losses) on defined benefit plans 11.64 12.13
Total Other Comprehensive Income 11.64 12.13
Total Comprehensive (Loss) for the year (2,798.83) (907.80)
Earnings per share (Face value of ` 10 each) 33
(1) Basic (in `) (968.79) (348.77)
(2) Diluted (in `) (968.79) (348.77)
Significant accounting policies and key accounting estimates 1
and judgements
See accompanying notes to financial statements 2 - 39
As per our report of even date

As per our report of even date

For DELOITTE HASKINS & SELLS LLP For and on behalf of the Board of
Chartered Accountants Sleek International Private Limited
Firm’s Registration No: 117366W/W-100018 CIN : U31300MH1993PTC070859
Rupen K. Bhatt Shyam Swamy Parag Rane
Partner Director Director
Membership No: 046930 DIN No. 08736211 DIN No. 08723015

Ashish Rae Kaushal Zavery

Director Chief Financial Officer
DIN No.: 09540164
Mumbai Mumbai
Date : 28 April 2023 Date : 28 April 2023
24
 25
Statement of Cash Flows

Financial Statements
for the year ended 31 March 2023

(` in Lakhs)
Particulars Year ended
31 March 2023 31 March 2022
Audited Audited
(A) Cash Flow From Operating Activities
(Loss) Before Tax (2,810.47) (919.93)
Adjustments for :
Depreciation and Amortisation expense 758.35 684.83
Interest income (7.87) (8.37)
Dividend income – –
Finance costs 615.08 329.19
Provision for doubtful debts (net) 405.29 (77.07)
Bad debts written off – –
Sundry balances write off 4.53 –
Net unrealized foreign exchange loss (6.43) –
Excess provision written back (34.44) (155.12)
Net gain on modification/ termination of leases (4.81) (26.33)
(Gain)/Loss on disposal of property, plant and equipment (net) (3.72) 4.13
Operating (Loss) before working capital changes (1,084.49) (168.67)
Adjustments for :
Decrease/ (Increase) in inventories 4,691.09 (7,221.08)
Decrease/ (Increase) in trade and other receivables 1,074.19 (2,027.88)
(Decrease)/ Increase in trade and other payables (424.67) 1,407.08
Cash (used in) Operating activities 4,256.12 (8,010.55)
Income Tax paid (net of refund) (1.74) (48.74)
Net Cash generated from/ (used in) Operating activities 4,254.38 (8,059.29)
(B) Cash Flow from Investing Activities
Purchase of Property, plant and equipment (3,065.40) (1,005.69)
Sale of Property, plant and equipment 25.05 25.86
Profit on sale of short term investments – –
Interest received 7.87 8.37
Net Cash (used in) Investing activities (3,032.48) (971.46)
(C) Cash Flow from Financing Activities
Repayment of non current borrowings (3.88) (9.32)
Proceeds from issue of equity shares – 7,999.07
(Repayment) from current borrowings (net) (2,000.00) (4,700.00)
Repayment of principal portion of lease liabilities (306.21) (374.06)
Finance costs (including interest on lease liabilities) paid (615.08) (329.19)
Net Cash (used in)/generated from Financing activities (2,925.17) 2,586.50
(D) Net (decrease)/ increase in cash and cash equivalents: (1,703.27) (6,444.25)
Add: Cash and cash equivalents as at 1 April (7,167.78) (723.53)
Cash and cash equivalents as at 31 March (8,871.05) (7,167.78)
 Sleek International Private Limited

Statement of Cash Flows (Contd.)

Notes:
(a) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian
Accounting Standard (Ind AS-7) – Statement of Cash Flow.
31 March 2023 31 March 2022
(b) Cash and Cash equivalents comprises of
– Cash on hand 0.64 0.52
– Balances with Banks
– Current Accounts 19.97 103.93
– Deposits with original maturity of less than 3 months 4.56 4.40
– Cash credit (8,896.22) (7,276.63)
Cash and cash equivalents in Cash Flow Statement (8,871.05) (7,167.78)

As per our report of even date

For DELOITTE HASKINS & SELLS LLP For and on behalf of the Board of
Chartered Accountants Sleek International Private Limited
Firm’s Registration No: 117366W/W-100018 CIN : U31300MH1993PTC070859
Rupen K. Bhatt Shyam Swamy Parag Rane
Partner Director Director
Membership No: 046930 DIN No. 08736211 DIN No. 08723015

Ashish Rae Kaushal Zavery

Director Chief Financial Officer
DIN No.: 09540164
Mumbai Mumbai
Date : 28 April 2023 Date : 28 April 2023

26
 27
Statement of Changes In Equity

Financial Statements
for the year ended 31 March 2023

A) EQUITY SHARE CAPITAL (` in Lakhs)

As at As at
31 March 23 31 March 2022
Balance at the beginning of the reporting year 29.01 20.43
Changes in equity share capital during the year – 8.58
Balance at the end of the reporting year 29.01 29.01

B) OTHER EQUITY
Reserves and Surplus Total
Securities General Retained Remeasurement
Premium Reserve earnings of defined
benefit plans
Balance as on 1 April 2021 (A) 21,512.49 118.17 (15,459.63) (16.97) 6,154.06
Add: (Loss) for the year - - (919.93) - (919.93)
Items of Other Comprehensive
Income for the year, net of tax
Remeasurement of the defined - - - 12.13 12.13
benefit plans
Total Comprehensive Income for - - (919.93) 12.13 (907.80)
the year (B)
Premium on issue of equity 7,990.49 7,990.49
shares (C)
Balance as on 31 March 2022 (D) 29,502.98 118.17 (16,379.56) (4.84) 13,236.75
= (A+B+C)
Balance as on 1 April 2022 (E) 29,502.98 118.17 (16,379.56) (4.84) 13,236.75
Add: (Loss) for the year - - (2,810.47) - (2,810.47)
Items of Other Comprehensive
Income for the year, net of tax
Remeasurement of the defined - - - 11.64 11.64
benefit plans
Total Comprehensive Income for - - (2,810.47) 11.64 (2,798.83)
the year (F)
Balance as on 31 March 2023 (G) 29,502.98 118.17 (19,190.03) 6.80 10,437.92
= (E+F)
As per our report of even date

As per our report of even date

For DELOITTE HASKINS & SELLS LLP For and on behalf of the Board of
Chartered Accountants Sleek International Private Limited
Firm’s Registration No: 117366W/W-100018 CIN : U31300MH1993PTC070859
Rupen K. Bhatt Shyam Swamy Parag Rane
Partner Director Director
Membership No: 046930 DIN No. 08736211 DIN No. 08723015

Ashish Rae Kaushal Zavery

Director Chief Financial Officer
DIN No.: 09540164
Mumbai Mumbai
Date : 28 April 2023 Date : 28 April 2023
 Sleek International Private Limited
Notes to the financial statement
for the year ended 31 March, 2023
Company Background
Sleek International Private Limited (‘the Company’) was
incorporated as a private company on 18 February 1993
as Silverline Wire Products Private Limited. The Company
is a wholly owned subsidiary of Asian Paints Limited.
The Company is engaged in the retail and wholesale
business of modular kitchens and wardrobes, kitchen
and wardrobe components, kitchen and wardrobe
accessories, civil kitchens and providing related services
of designing and installing kitchens and wardrobes.
1. Significant Accounting Policies and Key
accounting estimates and judgements
Significant Accounting Policies: –
1.1 Basis of preparation of financial statements
These financial statements are prepared in
accordance with Indian Accounting Standards (‘Ind
AS’) notified under section 133 of the Companies
Act 2013, read together with the Companies (Indian
Accounting Standards) Rules, 2015 (as amended).
These financial statements have been prepared and
presented under the historical cost convention, on
the accrual basis of accounting except for certain
financial assets and financial liabilities that are
measured at fair values at the end of each reporting
period, as stated in the accounting policies set out
below. The accounting policies have been applied
consistently over all the periods presented in these
financial statements.
The financial statements are presented in Indian
Rupees (which is also the functional currency of the
Company) and is rounded off to the nearest lakhs
except otherwise indicated. Amounts less than
` 0.50 lakh have been presented as “0”.
1.2 Current/Non-Current Classification
Any asset or liability is classified as current if it
satisfies any of the following conditions:
i. the asset/liability it is expected to be realized/
settled in the Company’s normal operating
cycle;
ii. the asset is intended for sale or consumption;
iii. the asset/liability is held primarily for the
purpose of trading;
28
iv. the asset/liability is expected to be realized/
settled within twelve months after the
reporting period;
v. the asset 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;
vi. in the case of a liability, the Company does not
have an unconditional right to defer settlement
of the liability for at least twelve months after
the reporting date.
All other assets and liabilities are classified as non-
current.
For the purpose of current/non-current
classification of assets and liabilities, the Company
has ascertained its normal operating cycle as twelve
months. This is based on the nature of services
and the time between the acquisition of assets or
inventories for processing and their realization in
cash and cash equivalents.
1.3 Summary of Significant accounting policies
a) Goodwill
Goodwill is an asset representing the future
economic benefits arising from other assets
acquired in a business combination that are
not individually identified and separately
recognized. Goodwill is initially measured at
cost, being the excess of the consideration
transferred over the net identifiable assets
acquired and liabilities assumed, measured
in accordance with Ind AS 103, “Business
Combinations”.
Goodwill is considered to have indefinite useful
life and hence is not subject to amortization but
tested for impairment at least annually. After
initial recognition, goodwill is measured at cost
less any accumulated impairment losses.
Company has only one operating segment which
is considered as the only Cash generating unit
(CGU) of the Company. Accordingly, goodwill is
monitored for internal management purpose
only at the level of this CGU or operating
segment of the Company. For the purpose of
impairment testing, goodwill acquired in a

Notes to the Financial Statements (Contd.)
business combination, is from the acquisition
date, allocated to the Company’s only CGU or
operating segment.
Goodwill allocated to Company’s CGU is tested
for impairment annually, and whenever there
is an indication that the CGU may be impaired,
by comparing the carrying amount of the CGU,
including the goodwill, with the recoverable
amount of the CGU. If the recoverable amount
of the CGU exceeds the carrying amount of the
CGU, the CGU and the goodwill allocated to that
CGU is regarded as not impaired. If the carrying
amount of the CGU exceeds the recoverable
amount of the CGU, the Company recognizes an
impairment loss by first reducing the carrying
amount of any goodwill allocated to the CGU
and then to other assets of the CGU pro-rata
based on the carrying amount of each asset in
the CGU. Any impairment loss for goodwill is
recognized in the Statement of Profit and Loss.
An impairment loss recognized for goodwill is
not reversed in subsequent periods.
On disposal of a CGU to which goodwill is
allocated, the goodwill associated with the
disposed CGU is included in the carrying amount
of the CGU when determining the gain or loss
on disposal.
b) Property, plant and equipment
Measurement at recognition:
An item of property, plant and equipment
that qualifies as an asset is measured on
initial recognition at cost. Following initial
recognition, items of property, plant and
equipment are carried at its cost less
accumulated depreciation and accumulated
impairment losses.
The Company identifies and determines cost
of each part of an item of property, plant and
equipment separately, if the part has a cost
which is significant to the total cost of an item
of property, plant and equipment and has
useful life that is materially different from that
of the remaining item.
The cost of an item of property, plant and
equipment comprises of its purchase price,
including import duties and other non-
refundable purchase taxes or levies, directly
29
Financial Statements
attributable cost of bringing the asset to its
working condition for its intended use and the
initial estimate of decommissioning, restoration
and similar liabilities, if any. Any trade discounts
and rebates are deducted in arriving at the
purchase price. Cost includes cost of replacing a
part of a plant and equipment if the recognition
criteria are met.
Subsequent costs are included in the asset’s
carrying amount or recognized as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Company and the
cost of the item can be measured reliably. The
carrying amount of any component accounted
for as a separate asset is derecognized when
replaced.
Items such as spare parts, stand-by equipment
and servicing equipment that meet the
definition of property, plant and equipment
are capitalized at cost and depreciated over
their useful life. Costs in nature of repairs and
maintenance are recognized in the Statement of
Profit and Loss as and when incurred.
The Company had elected to consider the
carrying value of all its property, plant
and equipment appearing in the financial
statements prepared in accordance with
Accounting Standards notified under Section
133 of the Companies Act 2013, read together
with Rule 7 of the Companies (Accounts) Rules,
2014 and used the same as deemed cost in the
opening Ind AS Balance sheet prepared on 1
April 2015.
Capital work in progress and Capital advances:
Cost of assets not ready for intended use, as on
the balance sheet date, is shown as capital work
in progress. Advances given towards acquisition
of property, plant and equipment outstanding
at each balance sheet date are disclosed as
Other Non-Current Assets.
Depreciation:
Depreciation on each part of an item of
property, plant and equipment is provided
using the Straight Line Method based on the
useful life of the asset as estimated by the
management and is charged to the Statement
 Sleek International Private Limited
Notes to the Financial Statements (Contd.)
of Profit and Loss as per the requirement of
Schedule II of the Companies Act, 2013. The
estimate of the useful life of the assets has
been assessed based on the usage of the
asset, expected physical wear and tear, the
operating conditions of the asset, anticipated
technological changes, manufacturers
warranties and maintenance support, etc. The
estimated useful life of items of property, plant
and equipment is mentioned below:
Class of Assets Years
Buildings (other than factory 60
buildings)
Factory Buildings 30
Plant and Equipment
Furniture and Fixtures
Office Equipment
Computers
Display Kitchens, Wardrobes and
Vehicles
Electrical Installations
Roads
Information Technology Hardware
Freehold land is not depreciated. Leasehold
land and Leasehold improvements are
amortized over the primary period of the lease.
The Company, based on technical assessment
made by technical expert and management
estimate, depreciates certain items of property
plant and equipment (as mentioned below) over
estimated useful lives which are different from
the useful lives prescribed under Schedule II
to the Companies Act, 2013. The management
believes that these estimated useful lives are
realistic and reflect fair approximation of the
period over which the assets are likely to be
used:
•  he useful lives of certain plant and
T appearing in the financial statements prepared
equipment are estimated to be of 10 years,
this life is lower from those indicated in
Schedule II.
•  he useful lives of items falling under
T used the same as deemed cost in the opening
the category of furniture and fixtures are
estimated to be of 8 years, this life is lower
from those indicated in Schedule II.
30
•  he useful lives of items falling under the
T
category of RCC building are estimated to
be of 30 years, this life is lower from those
indicated in Schedule II.
•  isplay Kitchens and Vehicles are
D
depreciated over the estimated useful
life of 5 years, this life is lower from those
indicated in Schedule II.
The useful lives, residual values of each part
of an item of property, plant and equipment
and the depreciation methods are reviewed at
the end of each financial year. If any of these
expectations differ from previous estimates,
such change is accounted for as a change in an
10 accounting estimate.
8
Derecognition:
5
3 The carrying amount of an item of property,
plant and equipment is derecognized on
5
disposal or when no future economic benefits
are expected from its use or disposal. The
10 gain or loss arising from the Derecognition of
10 an item of property, plant and equipment is
5 measured as the difference between the net
disposal proceeds and the carrying amount of
the item and is recognized in the Statement of
Profit and Loss when the item is derecognized.
c) Intangible assets
Measurement at recognition:
Intangible assets acquired separately are
measured on initial recognition at cost.
Intangible assets arising on acquisition of
business are measured at fair value as at date
of acquisition. Following initial recognition,
intangible assets are carried at cost less
accumulated amortization and accumulated
impairment loss, if any.
The Company had elected to consider the
carrying value of all its intangible assets
in accordance with Accounting Standards
notified under the Section 133 of the
Companies Act 2013, read together with Rule
7 of the Companies (Accounts) Rules, 2014 and
Ind AS Balance sheet prepared on 1 April 2015.

Notes to the Financial Statements (Contd.)
Amortization:
An Intangible asset with an indefinite useful
life shall not be amortised. Acquired brand is
considered to have indefinite useful life and
hence is not subject to amortization but tested
for impairment at least annually.
Intangible Assets with finite lives are amortized
on a Straight Line basis over the estimated
useful economic life. The amortization
expense on intangible assets with finite lives is
recognized in the Statement of Profit and Loss.
The estimated useful life of intangible assets is
mentioned below:
Years
Purchase cost, user license fees
and consultancy fees for Computer
Software (including those used for
scientific research)
The amortization period and the amortization
method for an intangible asset with finite useful
life is reviewed at the end of each financial
year. If any of these expectations differ from
previous estimates, such change is accounted
for as a change in an accounting estimate.
Derecognition:
The carrying amount of an intangible asset is
derecognized 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 intangible asset is
measured as the difference between the net
disposal proceeds and the carrying amount of
the intangible asset and is recognized in the
Statement of Profit and Loss when the asset is
derecognized.
d) Impairment
Assets that have an indefinite useful life,
for example goodwill, are not subject to
amortization and are tested for impairment
at least annually and whenever there is an
indication that the asset may be impaired.
Assets that are subject to depreciation and
amortization are reviewed for impairment,
whenever event or changes in circumstances
31
Financial Statements
indicate that carrying amount may not be
recoverable. Such circumstances include,
though are not limited to, significant or
sustained decline in revenues or earnings and
material adverse changes in the economic
environment.
Company has only one operating segment which
is also considered as the only Cash generating
unit (CGU) of the Company.
An impairment loss is recognized whenever
the carrying amount of an asset or the cash
generating unit (CGU) exceeds its recoverable
amount. The recoverable amount of an asset
is the greater of its fair value less cost to sell
and value in use. To calculate value in use, the
4 estimated future cash flows are discounted to
their present value using a pre-tax discount
rate that reflects current market rates and the
risk specific to the asset. For an asset that does
not generate largely independent cash inflows,
the recoverable amount is determined for the
CGU to which the asset belongs. Fair value less
cost to sell is the best estimate of the amount
obtainable from the sale of an asset in an arm’s
length transaction between knowledgeable,
willing parties, less the cost of disposal.
Impairment losses, if any, are recognized in the
Statement of Profit and Loss and included in
depreciation and amortization expense.
Impairment losses on assets other than
goodwill are reversed in the Statement of Profit
and Loss only to the extent that the asset’s
carrying amount does not exceed the carrying
amount that would have been determined
if no impairment loss had previously been
recognized.
e) Revenue Recognition
Revenue from contracts with customers is
recognized on transfer of control of promised
goods or services to a customer at an amount
that reflects the consideration to which
the Company is expected to be entitled to
in exchange for those goods or services.
Revenue towards satisfaction of a performance
obligation is measured at the amount of
 Sleek International Private Limited
Notes to the Financial Statements (Contd.)
transaction price (net of returns and variable
consideration) allocated to that performance
obligation. The transaction price of goods
sold and services rendered is net of variable
consideration on account of various discounts
and schemes offered by the Company as part
of the contract. This variable consideration
is estimated based on the expected value of
outflow. Revenue (net of returns and variable
consideration) is recognized only to the extent
that it is highly probable that the amount will
not be subject to significant reversal when
uncertainty relating to its recognition is
resolved.
Sale of products:
Revenue from sale of products is recognized
when the control on the goods have been
transferred to the customer. The performance
obligation in case of sale of product is satisfied
at a point in time i.e., when the material is
shipped to the customer or on delivery to the
customer, as may be specified in the contract.
Rendering of services:
Revenue from rendering services is recognized
over time by measuring progress towards
satisfaction of performance obligation for the
services rendered. The Company uses output
method for measurement of revenue from
installation and related services as it is based on
units delivered and performance completed to
date. Input method is used for measurement of
revenue from processing and other service as it
is directly linked to the expense incurred by the
Company.
Advance from customers is recognized under
other liabilities and released to revenue on
satisfaction of performance obligation.
f) Inventory
Raw materials, work-in-progress, finished
goods, packing materials, stores, spares and
consumables and stock-in-trade are carried
at the lower of cost and net realizable value.
However, materials and other items held for
use in production of inventories are not written
down below cost if the finished goods in which
32
they will be incorporated are expected to
be sold at or above cost. The comparison of
cost and net realizable value is made on an
item-by item basis. Net realizable value is the
estimated selling price in the ordinary course of
business less estimated cost of completion and
estimated costs necessary to make the sale.
In determining the cost of raw materials,
finished goods, packing material, stock in trade,
stores, spares and consumables weighted
average cost method is used. Cost of inventory
comprises all costs of purchase, duties, taxes
(other than those subsequently recoverable
from tax authorities) and all other costs
incurred in bringing the inventory to their
present location and condition.
Cost of finished goods and work-in-progress
includes the cost of raw materials, packing
materials, an appropriate share of processing
charges as applicable and other costs incurred
in bringing the inventories to their present
location and condition.
The Company considers factors like estimated
shelf life, product discontinuances and ageing
of inventory in determining the provision for
slow moving, obsolete and other non-saleable
inventory and adjusts the inventory provisions
to reflect the recoverable value of inventory.
g) Financial Instruments
A financial instrument is any contract that
gives rise to a financial asset of one entity and
a financial liability or equity instrument of
another entity.
Financial assets
Initial recognition and measurement:
The Company recognizes a financial asset in its
balance sheet when it becomes party to the
contractual provisions of the instrument. All
financial assets are recognized initially at fair
value plus, in the case of financial assets not
recorded at fair value through profit or loss
(FVTPL), transaction costs that are attributable
to the acquisition of the financial asset.
Where the fair value of a financial asset at initial
recognition is different from its transaction
price, the difference between the fair value

Notes to the Financial Statements (Contd.)
and the transaction price is recognized as a gain
or loss in the Statement of Profit and Loss at
initial recognition if the fair value is determined
through a quoted market price in an active
market for an identical asset (i.e. level 1 input)
or through a valuation technique that uses data
from observable markets (i.e. level 2 input).
In case the fair value is not determined using
a level 1 or level 2 input as mentioned above,
the difference between the fair value and
transaction price is deferred appropriately and
recognized as a gain or loss in the Statement
of Profit and Loss only to the extent that such
gain or loss arises due to a change in factor that
market participants take into account when
pricing the financial asset.
However, trade receivables that do not contain
a significant financing component are measured
at transaction price.
Subsequent measurement:
For subsequent measurement, the Company
classifies a financial asset in accordance with
the below criteria:
i. The Company’s business model for
managing the financial asset and
ii. The contractual cash flow characteristics of
the financial asset.
Based on the above criteria, the Company
classifies its financial assets into the following
categories:
i. Financial assets measured at amortized
cost
II
ii. Financial assets measured at fair value
through other comprehensive income
(FVTOCI)
iii. Financial assets measured at fair value
through profit or loss (FVTPL)
I Financial assets measured at amortized cost:
A financial asset is measured at the amortized
cost if both the following conditions are met:
33
Financial Statements
a) The Company’s business model objective
for managing the financial asset is to
hold financial assets in order to collect
contractual cash flows, and
b) 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.
This category applies to cash and bank balances,
trade receivables and other financial assets
of the Company (refer note 26 for further
details). Such financial assets are subsequently
measured at amortized cost using the effective
interest method.
Under the effective interest method, the future
cash receipts are exactly discounted to the
initial recognition value using the effective
interest rate. The cumulative amortization using
the effective interest method of the difference
between the initial recognition amount and
the maturity amount is added to the initial
recognition value (net of principal repayments,
if any) of the financial asset over the relevant
period of the financial asset to arrive at the
amortized cost at each reporting date. The
corresponding effect of the amortization
under effective interest method is recognized
as interest income over the relevant period of
the financial asset. The same is included under
other income in the Statement of Profit and
Loss.
The amortized cost of a financial asset is also
adjusted for loss allowance, if any.
Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both
of the following conditions are met:
a) The Company’s business model objective
for managing the financial asset is achieved
both by collecting contractual cash flows
and selling the financial assets, and
b) 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.
 Sleek International Private Limited
Notes to the Financial Statements (Contd.)
This category applies to certain investments
in debt instruments. Such financial assets
are subsequently measured at fair value at
each reporting date. Fair value changes are
recognized in the Other Comprehensive Income
(OCI). However, the Company recognizes
interest income and impairment losses and its
reversals in the Statement of Profit and Loss.
On Derecognition of such financial assets,
cumulative gain or loss previously recognized in
OCI is reclassified from the equity to Statement
of Profit and Loss.
Further, the Company, through an irrevocable
election at initial recognition, has measured
certain investments in equity instruments
at FVTOCI (refer note 26 for further details).
The Company has made such election on an
instrument by instrument basis. These equity
instruments are neither held for trading nor
are contingent consideration recognized under
a business combination. Pursuant to such
irrevocable election, subsequent changes in
the fair value of such equity instruments are
recognized in OCI. However, the Company
recognizes dividend income from such
instruments in the Statement of Profit and
Loss.
On Derecognition of such financial assets,
cumulative gain or loss previously recognized
in OCI is not reclassified from the equity to
Statement of Profit and Loss. However, the
Company may transfer such cumulative gain or
loss into retained earnings within equity.
III Financial assets measured at FVTPL:
A financial asset is measured at FVTPL
unless it is measured at amortized cost or at
FVTOCI as explained above. This is a residual
category applied to all other investments
of the Company. Such financial assets are
subsequently measured at fair value at
each reporting date. Fair value changes are
recognized in the Statement of Profit and Loss.
Derecognition:
A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is derecognized (i.e. removed
34
from the Company’s balance sheet) when any of
the following occurs:
i. The contractual rights to cash flows from
the financial asset expires;
ii. The Company transfers its contractual
rights to receive cash flows of the financial
asset and has substantially transferred all
the risks and rewards of ownership of the
financial asset;
iii. The Company retains the contractual
rights to receive cash flows but assumes
a contractual obligation to pay the cash
flows without material delay to one or
more recipients under a ‘pass-through’
arrangement (thereby substantially
transferring all the risks and rewards of
ownership of the financial asset);
iv. The Company neither transfers nor
retains, substantially all risk and rewards
of ownership, and does not retain control
over the financial asset.
In cases where Company has neither transferred
nor retained substantially all of the risks and
rewards of the financial asset, but retains
control of the financial asset, the Company
continues to recognize such financial asset to
the extent of its continuing involvement in
the financial asset. In that case, the Company
also recognizes an associated liability. The
financial asset and the associated liability are
measured on a basis that reflects the rights and
obligations that the Company has retained.
On Derecognition of a financial asset (except
as mentioned in II above for financial assets
measured at FVTOCI) the difference between
the carrying amount and the consideration
received is recognized in the Statement of
Profit and Loss.
Impairment of financial assets:
The Company applies expected credit losses
(ECL) model for measurement and recognition
of loss allowance on the following:

Notes to the Financial Statements (Contd.)
i. Trade receivables
ii. Financial assets measured at amortized
cost (other than trade receivables)
iii. Financial assets measured at fair value
through other comprehensive income
(FVTOCI)
In case of trade receivables, the Company
follows a simplified approach wherein an
amount equal to lifetime ECL is measured and
recognised as loss allowance.
In case of other assets (listed as ii and iii above),
the Company determines if there has been a
significant increase in credit risk of the financial
asset since initial recognition. If the credit risk
of such assets has not increased significantly, an
amount equal to 12-month ECL is measured and
recognized as loss allowance. However, if credit
risk has increased significantly, an amount equal
to lifetime ECL is measured and recognised as
loss allowance.
Subsequently, if the credit quality of the
financial asset improves such that there is no
longer a significant increase in credit risk since
initial recognition, the Company reverts to
recognizing impairment loss allowance based
on 12-month ECL.
ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the cash
flows that the entity expects to receive (i.e.,
all cash shortfalls), discounted at the original
effective interest rate.
Lifetime ECL are the expected credit losses
resulting from all possible default events over
the expected life of a financial asset. 12-month
ECL are portion of the lifetime ECL which result
from default events that are possible within 12
months from the reporting date.
ECL are measured in a manner that they reflect
unbiased and probability weighted amounts
determined by a range of outcomes, taking
into account the time value of money and other
reasonable information available as a result of
past events, current conditions and forecasts of
future economic conditions.
35
Financial Statements
As a practical expedient, the Company uses a
provision matrix to measure lifetime ECL on its
portfolio of trade receivables. 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. At each reporting date, the
historical observed default rates and changes in
the forward-looking estimates are updated.
ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income/ expense in the Statement of Profit and
Loss.
Financial Liabilities
Initial recognition and measurement:
The Company recognizes a financial liability in
its balance sheet when it becomes party to the
contractual provisions of the instrument. All
financial liabilities are recognized initially at fair
value minus, in the case of financial liabilities
not recorded at fair value through profit or loss
(FVTPL), transaction costs that are attributable
to the acquisition of the financial liability.
Where the fair value of a financial liability
at initial recognition is different from its
transaction price, the difference between
the fair value and the transaction price is
recognized as a gain or loss in the Statement
of Profit and Loss at initial recognition if the
fair value is determined through a quoted
market price in an active market for an identical
asset (i.e. level 1 input) or through a valuation
technique that uses data from observable
markets (i.e. level 2 input).
In case the fair value is not determined using
a level 1 or level 2 input as mentioned above,
the difference between the fair value and
transaction price is deferred appropriately and
recognized as a gain or loss in the Statement
of Profit and Loss only to the extent that such
gain or loss arises due to a change in factor that
market participants take into account when
pricing the financial liability.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

Subsequent measurement: policies mentioned above. Fair value is the

price that would be received to sell an asset
All financial liabilities of the Company are
or paid to transfer a liability in an orderly
subsequently measured at amortized cost using
transaction between market participants
the effective interest method (refer note 26 for
at the measurement date. The fair value
further details).
measurement is based on the presumption that
the transaction to sell the asset or transfer the
Under the effective interest method, the future
liability takes place either:
cash payments are exactly discounted to the
initial recognition value using the effective
• I n the principal market for the asset or
interest rate. The cumulative amortization using
liability, or
the effective interest method of the difference
between the initial recognition amount and
• I n the absence of a principal market, in the
the maturity amount is added to the initial
most advantageous market for the asset or
recognition value (net of principal repayments,
liability.
if any) of the financial liability over the relevant
period of the financial liability to arrive at the
All assets and liabilities for which fair value
amortized cost at each reporting date. The
is measured or disclosed in the financial
corresponding effect of the amortization under
statements are categorized within the fair value
effective interest method is recognized as
hierarchy that categorizes into three levels,
interest expense over the relevant period of the
described as follows, the inputs to valuation
financial liability. The same is included under
techniques used to measure value. The fair
finance cost in the Statement of Profit and Loss.
value hierarchy gives the highest priority to
quoted prices in active markets for identical
Derecognition:
assets or liabilities (Level 1 inputs) and the
A financial liability is derecognized when the lowest priority to unobservable inputs (Level 3
obligation under the liability is discharged or inputs).
cancelled or expires. When an existing financial
liability is replaced by another from the same Level 1 — quoted (unadjusted) market prices in
lender on substantially different terms, or the active markets for identical assets or liabilities
terms of an existing liability are substantially
modified, such an exchange or modification is Level 2 — inputs other than quoted prices
treated as the Derecognition of the original included within Level 1 that are observable for
liability and the recognition of a new liability. the asset or liability, either directly or indirectly
The difference between the carrying amount
of the financial liability derecognized and Level 3 — inputs that are unobservable for the
the consideration paid is recognized in the asset or liability.
Statement of Profit and Loss.
For assets and liabilities that are recognized
Offsetting of financial assets and financial in the financial statements at fair value on
liabilities: a recurring basis, the Company determines
whether transfers have occurred between
Financial assets and financial liabilities are
levels in the hierarchy by re-assessing
offset and the net amount is reported in the
categorization at the end of each reporting
balance sheet if there is a currently enforceable
period, and discloses the same.
legal right to offset the recognized amounts
and there is an intention to settle on a net basis
i) Foreign Currency Translation
or to realise the asset and settle the liability
simultaneously. Initial Recognition
On initial recognition, transactions in foreign
h) Fair Value
currencies entered into by the Company are
The Company measures financial instruments recorded in the functional currency (i.e. Indian
at fair value in accordance with the accounting Rupees), by applying to the foreign currency

36

Notes to the Financial Statements (Contd.)
amount, the spot exchange rate between the
functional currency and the foreign currency
at the date of the transaction. Exchange
differences arising on foreign exchange
transactions settled during the year are
recognized in the Statement of Profit and Loss.
Measurement of foreign currency items at
reporting date:
Foreign currency monetary items of the
Company are translated at the closing exchange
rates. Non-monetary items that are measured
at historical cost in a foreign currency, are
translated using the exchange rate at the date
of the transaction. 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 is measured.
Exchange differences arising out of these
translations are recognized in the Statement of
Profit and Loss.
j) Income Taxes
Tax expense is the aggregate amount included
in the determination of profit or loss for the
period in respect of current tax and deferred
tax.
Current tax:
Current tax is the amount of income taxes
payable in respect of taxable profit for a period.
Taxable profit differs from ‘profit before tax’
as reported in the Statement of Profit and Loss
because of items of income or expense that are
taxable or deductible in other years and items
that are never taxable or deductible under the
Income Tax Act, 1961.
Current tax assets and liabilities are measured
using tax rates that have been enacted by
the end of reporting period for the amounts
expected to be recovered from or paid to the
taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary
differences between the carrying amounts of
assets and liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable profit under Income Tax
Act, 1961.
37
Financial Statements
Deferred tax liabilities are generally recognized
for all taxable temporary differences. However,
in case of temporary differences that arise from
initial recognition of assets or liabilities in a
transaction (other than business combination)
that affect neither the taxable profit nor the
accounting profit, deferred tax liabilities are
not recognized. Also, for temporary differences
if any that may arise from initial recognition
of goodwill, deferred tax liabilities are not
recognized.
Deferred tax assets are generally recognized
for all deductible temporary differences to the
extent it is probable that taxable profits will
be available against which those deductible
temporary difference can be utilized. In case
of temporary differences that arise from
initial recognition of assets or liabilities in a
transaction (other than business combination)
that affect neither the taxable profits nor the
accounting profit, deferred tax assets are not
recognized.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period
and reduced to the extent that it is no longer
probable that sufficient taxable profits will be
available to allow the benefits of part or all of
such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured
at the tax rates that have been enacted or
substantively enacted by the balance sheet date
and are expected to apply to taxable income in
the years in which those temporary differences
are expected to be recovered or settled.
Presentation of current and deferred tax:
Current and deferred tax are recognized as
income or an expense in the Statement of Profit
and Loss, except when they relate to items
that are recognized in Other Comprehensive
Income, in which case, the current and deferred
tax income/expense are recognized in Other
Comprehensive Income.
The Company offsets current tax assets and
current tax liabilities, where it has a legally
enforceable right to set off the recognized
amounts and where it intends either to settle
on a net basis, or to realize the asset and settle
 Sleek International Private Limited
Notes to the Financial Statements (Contd.)
the liability simultaneously. In case of deferred
tax assets and deferred tax liabilities, the
same are offset if the Company has a legally
enforceable right to set off corresponding
current tax assets against current tax liabilities
and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the
same tax authority on the Company.
k) Provisions and Contingencies
The Company recognizes provisions when a
present obligation (legal or constructive) as a
result of a past event exists and it is probable
that an outflow of resources embodying
economic benefits will be required to settle
such obligation and the amount of such
obligation can be reliably estimated.
If the effect of time value of money is material,
provisions are discounted using a current pre-
tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting
is used, the increase in the provision due to the
passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made
when there is a possible obligation or a present
obligation that may, but probably will not
require an outflow of resources embodying
economic benefits or the amount of such
obligation cannot be measured reliably. When
there is a possible obligation or a present
obligation in respect of which likelihood of
outflow of resources embodying economic
benefits is remote, no provision or disclosure is
made.
l) Measurement of EBITDA
The Company has opted to present earnings
before interest (finance cost), tax, depreciation
and amortization (EBITDA) as a separate line
item on the face of the Statement of Profit
and Loss for the year. The Company measures
EBITDA based on profit/(loss) from continuing
operations.
m) Cash and Cash Equivalents
Cash and cash equivalents for the purpose
of Cash Flow Statement comprise cash and
cheques in hand, bank balances, demand
deposits with banks where the original maturity
38
is three months or less and other short term
highly liquid investments net of overdrafts
which are repayable on demand as this
form an integral part of the Company’s cash
management.
n) Employee Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within
twelve months of rendering the service are
classified as short term employee benefits
and they are recognized in the period in which
the employee renders the related service. The
Company recognizes the undiscounted amount
of short term employee benefits expected to
be paid in exchange for services rendered as a
liability (accrued expense) after deducting any
amount already paid.
Post-Employment Benefits:
Defined contribution plans:
Defined contribution plans are employee
state insurance scheme and Government
administered Provident fund scheme for all
applicable employees.
Recognition and measurement of defined
contribution plans:
The Company recognizes contribution payable
to a defined contribution plan as an expense
in the Statement of Profit and Loss when the
employees render services to the Company
during the reporting period. If the contribution
payable for services received from employees
before the reporting date exceeds the
contribution already paid, the deficit payable
is recognized as a liability after deducting the
contribution already paid. If the contribution
already paid exceeds the contribution due for
services received before the reporting date, the
excess is recognized as an asset to the extent
that the prepayment will lead to, for example, a
reduction in future payments or a cash refund.
Defined benefit plans:
Gratuity scheme:
The Company provides a defined benefit
gratuity plan for employees as per the
requirements of the Payment of Gratuity Act,

Notes to the Financial Statements (Contd.)
1972 wherein the funds are managed by LIC of
India towards meeting the Gratuity Obligation.
Besides the contribution made on the LIC’s
demand which specifies the contribution to
be made on an annual basis, the deference
between liability determined on the basis of
actuarial valuation done at the year-end by an
independent actuary and balance available with
the LIC has also been accrued.
Recognition and measurement of defined
benefit plans:
The cost of providing defined benefits is
determined using the Projected Unit Credit
method with actuarial valuations being carried
out at each reporting date. The defined benefit
obligations recognized in the Balance Sheet
represent the present value of the defined
benefit obligations as reduced by the fair value
of plan assets, if applicable. Any defined benefit
asset (negative defined benefit obligations
resulting from this calculation) is recognized
representing the present value of available
refunds and reductions in future contributions
to the plan.
All expenses represented by current service
cost, past service cost if any and net interest
on the defined benefit liability (asset) are
recognized in the Statement of Profit and Loss.
Re-measurements of the net defined benefit
liability (asset) comprising actuarial gains
and losses and the return on the plan assets
(excluding amounts included in net interest
on the net defined benefit liability/asset), are
recognized in Other Comprehensive Income.
Such re-measurements are not reclassified
to the Statement of Profit and Loss in the
subsequent periods.
The Company presents the above liability/
(asset) as current and non-current in the
balance sheet as per actuarial valuation by
the independent actuary; However, the entire
liability towards gratuity is considered as
current as the company will contribute this
amount to the gratuity fund within the next
twelve months.
Other long term employee benefits:
Entitlements to annual leave are recognised
when they accrue to employees. Annual leave
39
Financial Statements
can either be availed or encashed subject
to a restriction on the maximum number
of accumulations of leave. The Company
determines the liability for such accumulated
leaves using the Projected Accrued Benefit
method with actuarial valuations being carried
out at each Balance Sheet date. Expenses
related to other long term employee benefits
are recognized in the Statement of Profit and
loss (including actuarial gain and loss).
The Company presents this liability as current
and non-current in the Balance Sheet as per
actuarial valuation by the independent actuary.
Share based Payments:
The Company’s Parent company (Asian Paints
Limited) operates equity settled share-
based plan for the employees (Referred to as
employee stock option plan (ESOP)). ESOP
granted to the employees are measured at fair
value of the stock options at the grant date
using Black-Scholes model. Such fair value of
the equity settled share based payments are
amortized on a straight line basis over the
vesting period, based on the Parent Company’s
estimate of equity shares that will eventually
vest.
The Parent Company recovers the expenses for
the stock options granted to the employees of
the Company. The said recovery is shown under
Employee benefits expenses (employee stock
option expense) of the company.
o) Lease accounting
Assets taken on lease (As a Lessee):
The Company mainly has various lease
arrangements for land and building for its
offices, warehouse spaces, retail stores and
vehicles.
The Company assesses whether a contract
is or contains a lease at inception of the
contract. The assessment involves the exercise
of judgement about whether (i) the contract
involves the use of an identified asset, (ii) the
Company has substantially all of the economic
benefits from the use of the asset through the
period of the lease, and (iii) the Company has
the right to direct the use of the asset.
 Sleek International Private Limited
Notes to the Financial Statements (Contd.)
The Company recognises a right-of-use asset
(“ROU”) and a corresponding lease liability at
the lease commencement date. The ROU asset
is initially measured at cost, which comprises
the initial amount of the lease liability adjusted
for any lease payments made at or before the
commencement date, plus any initial direct
costs incurred and an estimate of costs to
dismantle and remove the underlying asset or
to restore the underlying asset or the site on
which it is located, less any lease incentives.
They are subsequently measured at cost less
accumulated depreciation and impairment
losses.
The ROU asset is depreciated using the straight-
line method from the commencement date
to the earlier of, the end of the useful life of
the ROU asset or the end of the lease term. If
a lease transfers ownership of the underlying
asset or the cost of the ROU asset reflects that
the Company expects to exercise a purchase
option, the related ROU asset is depreciated
over the useful life of the underlying asset.
The estimated useful lives of ROU assets are
determined on the same basis as those of
property and equipment. In addition, the ROU
asset is periodically reduced by impairment
losses, if any, and adjusted for certain re-
measurements of the lease liability.
The lease liability is initially measured at the
present value of the lease payments that
are not paid at the commencement date,
discounted using the interest rate implicit
in the lease or, if that rate cannot be readily
determined, the Company uses an incremental
borrowing rate specific to the country, term
and currency of the contract. Generally, the
company uses its incremental borrowing rate as
the discount rate.
Lease payments included in the measurement
of the lease liability include Fixed payments,
Variable lease payments that depend on an
index or a rate known at the commencement
date; and extension option payments or
purchase options which the Company is
reasonable certain to exercise.
Variable lease payments that do not depend
on an index or rate are not included in the
measurement the lease liability and the ROU
40
asset. The related payments are recognised as
an expense in the period in which the event or
condition that triggers those payments occurs
and are included in the line “other expenses” in
the statement of profit or loss.
After the commencement date, the amount
of lease liabilities is increased to reflect the
accretion of interest and reduced for the
lease payments made and remeasured (with a
corresponding adjustment to the related ROU
asset) when there is a change in future lease
payments in case of renegotiation, changes of
an index or rate or in case of reassessment of
options.
Short-term leases and leases of low-value
assets
The company has elected not to recognize
right-of-use assets and lease liabilities for short
term leases as well as low value assets and
recognizes the lease payments associated with
these leases as an expense on a straight-line
basis over the lease term.
Assets given on lease:
The Company has a lease arrangement for a
retail store.
Leases for which the Company is a lessor
are classified as finance or operating leases.
Whenever the terms of the lease transfer
substantially all the risks and rewards of
ownership to the lessee, the contract is
classified as a finance lease. All other leases are
classified as operating leases.
When the Company is an intermediate lessor,
it accounts for the head lease and the sublease
as two separate contracts. The sublease is
classified as a finance or operating lease by
reference to the right-of-use asset arising from
the head lease.
In respect of assets provided on finance leases,
amounts due from lessees are recorded as
receivables at the amount of the Company’s
net investment in the leases. Finance lease
income is allocated to accounting periods to
reflect a constant periodic rate of return on
the Company’s net investment outstanding in
respect of the leases. In respect of assets given

Notes to the Financial Statements (Contd.)
on operating lease, lease rentals are accounted
in the Statement of Profit and Loss, on accrual
basis in accordance with the respective lease
agreements.
p) Borrowing Cost
Borrowing cost includes Interest, amortization
of ancillary costs incurred in connection with
the arrangement of borrowings and exchange
differences arising from foreign currency
borrowings to the extent they are regarded as
an adjustment to the interest cost.
Borrowing costs, if any, directly attributable
to the acquisition, construction or production
of an asset that necessarily takes a substantial
period of time to get ready for its intended
use or sale are capitalized, if any. All other
borrowing costs are expensed in the period
they occur.
q) Segment Reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the Chief Operating Decision Maker (CODM)
of the Company. The CODM is responsible for
allocating resources and assessing performance
of the operating segments of the Company.
r) Events after Reporting date
Where events occurring after the balance
sheet date provide evidence of conditions that
existed at the end of the reporting period, the
impact of these events is adjusted within the
financial statements. Otherwise, events after
the balance sheet date of a material size or
nature are disclosed.
s) Derivative financial instruments
The Company enters into derivative financial
contracts in the nature of forward currency
contracts with external parties to hedge its
foreign currency risks relating to foreign
currency denominated financial liabilities
measured at amortized cost.
t) Recent accounting pronouncements:
Standards issued but not yet effective:
In March 2023, the Ministry of Corporate Affairs
issued the Companies (Indian Accounting
41
Financial Statements
Standards) Amendment Rules, 2023 which
amended certain Ind AS. The Company has
evaluated the impact of the amendments
and has concluded that there is no impact
on the financial statements except Ind AS
1 - Presentation of Financial Statements. The
amendment to Ind AS 1 requires disclosure
of material accounting policies rather than
significant accounting polices. The impact of
the said amendment will be insignificant on the
financial statements.
The amendment is effective from annual
periods beginnign on or after April 1, 2023.
1.4 Key accounting estimates and judgements
The preparation of the Company’s financial
statements requires the management to make
judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year,
are described below:
a. Income taxes
The Company’s tax jurisdiction is India.
Significant judgments are involved in estimating
budgeted profits for the purpose of paying
advance tax, determining the provision for
income taxes, including amount expected to
be paid/recovered for uncertain tax positions.
(Refer note 7).
b. Property, plant and equipment
Property, plant and equipment represent a
significant proportion of the asset base of the
company. The charge in respect of periodic
depreciation is derived after determining an
estimate of an asset’s expected useful life
and the expected residual value at the end
 Sleek International Private Limited
Notes to the Financial Statements (Contd.)
of its life. The useful lives and residual values
of Company’s assets are determined by the
management at the time the asset is acquired
and reviewed periodically, including at each
financial year end. The lives are based on
historical experience with similar assets as well
as anticipation of future events, which may
impact their life, such as changes in technical
or commercial obsolescence arising from
changes or improvements in production or from
a change in market demand of the product or
service output of the asset.
c. Impairment of Goodwill and acquired brand
with indefinite life
Goodwill and Brand are 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 unit is determined
based on higher of value-in-use and fair
value less cost to sell. The impairment test is
performed at the level of the Cash generating
unit of the Company which is benefitted 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.
d. Defined Benefit Obligation
The costs of post-employment benefits are
charged to the Statement of Profit and Loss in
accordance with Ind AS 19 ‘Employee benefits’
over the period during which benefit is derived
from the employees’ services. The costs are
assessed on the basis of assumptions selected
42
by the management. These assumptions include
salary escalation rate, discount rates, expected
rate of return on assets and mortality rates.
The same is disclosed in Note 31, ‘Employee
benefits’.
e. Fair value measurement of financial
instruments
When the fair values of financials 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.
f. Share based payment transactions:
The fair value of employee stock options is
measured using the Black-Scholes model.
Measurement inputs include share price on
grant date, exercise price of the instrument,
expected volatility (based on weighted
average historical volatility), expected life of
the instrument (based on expected exercise
behaviour), expected dividends, and the risk-
free interest rate (based on government bonds).
The details of variables used are given in note
no. 23.
g. Right of use assets and lease liability
The Company has exercised judgement in
determining the lease term as the non-
cancellable term of the lease, together with the
impact of options to extend or terminate the
lease if it is reasonably certain to be exercised.
Where the rate implicit in the lease is not
readily available, an incremental borrowing
rate is applied. This incremental borrowing
rate reflects the rate of interest that the lessee
would have to pay to borrow over a similar term,
with a similar security, the funds necessary to
obtain an asset of a similar nature and value
to the right-of-use asset in a similar economic
environment. Determination of the incremental
borrowing rate requires estimation.
NOTE 2A : PROPERTY, PLANT AND EQUIPMENT

(₹ in Lakhs)
Gross Block Depreciation Net Block
As at Additions Deductions As at As at Additions Deductions As at As at
01 April during the 31 March 01 April during the 31 March 31 March
2022 year 2023 2022 year 2023 2023
Land :
Freehold 467.60 9.28 – 476.88 – – – – 476.88
Leasehold* 455.63 – – 455.63 – – – – 455.63
Buildings 2,445.88 129.00 1.30 2,573.58 465.02 70.85 0.32 535.55 2,038.03
Plant and Equipment 1,165.73 134.73 22.00 1,278.46 644.45 93.79 8.82 729.42 549.04
Furniture and Fixtures 178.31 2.07 7.12 173.27 153.79 8.78 5.35 157.22 16.05
Vehicles 11.23 – 5.51 5.72 10.06 1.14 5.51 5.69 0.03
Notes to the Financial Statements (Contd.)

Office Equipment 606.23 233.65 40.71 799.18 448.93 117.83 40.61 526.16 273.02
Leasehold Improvements 74.94 – – 74.94 61.70 6.54 – 68.24 6.70
Display Kitchen 264.73 61.10 54.73 271.11 226.80 29.66 50.69 205.77 65.34
Display Wardrobes 50.90 5.96 5.81 51.05 42.20 3.08 4.57 40.72 10.33
Electrical Installation 190.94 2.58 – 193.52 128.43 16.97 – 145.40 48.12
Road 7.16 – – 7.16 5.87 0.84 – 6.71 0.45
Total 5,919.29 578.37 137.17 6,360.50 2,187.26 349.48 115.87 2,420.88 3,939.62
The amount of contractual commitments for the acquisition of property, plant and equipment is disclosed in note no 27

*The Company has an option to convert the lease hold land into freehold by virtue of the lease agreement.

NOTE 2B : RIGHT OF USE ASSETS

Net carrying amount
As at Additions Deletions Amortisation As at
01 April 2022 31 March 2023
Building 1,148.58 81.10 14.48 335.48 879.72
Plant and Equipment – 14.18 – 1.31 12.87
Total 1,148.58 95.28 14.48 336.79 892.59
43

Financial Statements
44
NOTE 2A : PROPERTY, PLANT AND EQUIPMENT

(₹ in Lakhs)
Gross Block Depreciation Net Block
As at Additions Deductions As at As at Additions Deductions As at As at
01 April during the 31 March 01 April during the 31 March 31 March
2021 year 2022 2021 year 2022 2022
Land :
Freehold 22.82 444.78 - 467.60 - - - - 467.60
Sleek International Private Limited

Leasehold* 455.63 - - 455.63 - - - - 455.63

Buildings 2,425.29 20.59 - 2,445.88 398.47 66.56 - 465.03 1,980.85
Plant and Equipment 1,006.73 210.52 51.52 1,165.73 591.40 76.67 23.62 644.45 521.28
Furniture and Fixtures 164.22 15.64 1.55 178.31 133.64 21.31 1.16 153.79 24.52
Vehicles 11.24 - - 11.24 8.91 1.14 - 10.05 1.19
Notes to the Financial Statements (Contd.)

Office Equipment 475.26 134.56 3.59 606.23 377.11 75.25 3.43 448.93 157.30
Leasehold Improvements 92.25 9.92 27.23 74.94 82.67 6.26 27.23 61.70 13.24
Display Kitchen 258.11 11.53 4.91 264.73 203.09 27.10 3.39 226.80 37.93
Display Wardrobes 51.54 1.98 2.62 50.90 40.11 4.69 2.60 42.20 8.70
Electrical Installation 160.16 30.78 - 190.94 112.70 15.73 - 128.43 62.51
Road 7.16 - - 7.16 5.04 0.84 - 5.88 1.28
Total 5,130.41 880.30 91.42 5,919.29 1,953.14 295.55 61.43 2,187.26 3,732.03
The amount of contractual commitments for the acquisition of property, plant and equipment is disclosed in note no 27

*The Company has an option to convert the lease hold land into freehold by virtue of the lease agreement.

NOTE 2B : RIGHT OF USE ASSETS

Net carrying amount
As at Additions Deletions Amortisation As at
01 April 2021 31 March 2022
Building 462.32 1,224.12 214.20 323.66 1,148.58
Vehicle 5.05 - 5.05 - -
Total 467.37 1,224.12 219.25 323.66 1,148.58
 45
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 3A : Capital work-in-progress

a) Details as on 31 March 2023:

Particulars Amount in Capital work in progress for a period of Total

Less than 1 1-2 years 2-3 years More than 3

year years

Projects in progress 2,248.70 85.29 20.93 12.39 2,367.31

b) Project completion which are under capital work in progress exceeding cost as compared to original plan or
whose completion is overdue

Particulars To be completed in

Less than 1 1-2 years 2-3 years More than 3

year years

Projects in progress 2,304.65 – – –

Board has approved an initial capital expenditure of ` 4,606 lakhs which was revised to ` 4,890 lakhs in FY 21-22 on 19th
March 2022 towards phase 1 with revised commencement timeline of December 2022. As on date status of the Plant
is near to completion with contrstuction of building being completed, plant and machinery procured and installed and
Office furniture work been executed. First trails of production are planned around June 2023.
46
NOTE 3B & C : INTANGIBLE ASSETS (Acquired Seperately)

(` in Lakhs)

Gross Block Amortisation Net Block

As at Additions Deductions/ As at As at Additions Deductions/ As at As at

01 April during the Adjustments 31 March 01 April during the Adjustments 31 March 31 March
2022 year 2023 2022 year 2023 2023

B. Goodwill
Sleek International Private Limited

Goodwill (Refer note below) 1,191.11 – – 1,191.11 – – – – 1,191.11

Total (B) 1,191.11 – – 1,191.11 – – – – 1,191.11

C. Other Intangible Assets

Brand 2,876.46 – – 2,876.46 – – – – 2,876.46

Notes to the Financial Statements (Contd.)

Computer Software 881.72 80.24 22.51 939.45 739.76 72.08 22.48 789.36 150.09

Total (C) 3,758.18 80.24 22.51 3,815.91 739.76 72.08 22.48 789.36 3,026.55

Total Intangible Assets (B+C) 4,949.29 80.24 22.51 5,007.02 739.76 72.08 22.48 789.36 4,217.66

The amount of contractual commitments for the acquisition of intangible assets is disclosed in note no 27

The brand has indefinite useful life as the registration of brand can be renewed indefinitely and management assessed that brand will continue to
generate future cash flows for the Company indefinitely. Accordingly, the brand is not amortised.
 47
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 3A : Capital work-in-progress

a) Details as on 31 March 2022:

Particulars Amount in Capital work in progress for a period of Total

Less than 1 1-2 years 2-3 years More than 3

year years

Projects in progress 56.12 26.60 8.69 - 91.41

b) Project completion which are under capital work in progress exceeding cost as compared to original plan or
whose completion is overdue

Particulars To be completed in

Less than 1 1-2 years 2-3 years More than 3

year years

Projects in progress 86.07 - - -

Board has approved an initial capital expenditure of ` 4,606 lakhs in FY 19-20 towards phase 1 with commencement
timeline of September 2021, however the same has delayed for commissioning and execution due to pandemic outbreak
which resulted in rise in commodity costs leading to overall inflation of `200 lakhs in the project. This incremental
spends would be incurred on civil construction majorly and the revised capex of `4,890 lakhs was approved at the
Board meeting held on 19th March 2022 with the revised commencement date of December 2022.
48
NOTE 3B & C : INTANGIBLE ASSETS (Acquired Seperately)

(` in Lakhs)

Gross Block Amortisation Net Block

As at Additions Deductions / As at As at Additions Deductions / As at As at

01 April during the Adjustments 31 March 01 April during the Adjustments 31 March 31 March
2021 year 2022 2021 year 2022 2022

B. Goodwill
Sleek International Private Limited

Goodwill (Refer note below) 1,191.11 - - 1,191.11 - - - - 1,191.11

Total (B) 1,191.11 - - 1,191.11 - - - - 1,191.11

C. Other Intangible Assets

Brand 2,876.46 - - 2,876.46 - - - - 2,876.46

Notes to the Financial Statements (Contd.)

Computer Software 796.32 88.69 3.29 881.72 677.49 65.57 3.29 739.77 141.95

Total (C) 3,672.78 88.69 3.29 3,758.18 677.49 65.57 3.29 739.77 3,018.41

Total Intangible Assets (B+C) 4,863.89 88.69 3.29 4,949.29 677.49 65.57 3.29 739.77 4,209.52

The amount of contractual commitments for the acquisition of intangible assets is disclosed in note no 27

The brand has indefinite useful life as the registration of brand can be renewed indefinitely and management assessed that brand will continue to
generate future cash flows for the Company indefinitely. Accordingly, the brand is not amortised.
 49
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 3 : INTANGIBLE ASSETS (contd.)
Allocation of Goodwill and Intangible asset with Indefinite useful life (Acquired brand) to cash generating units
Goodwill and brand is acquired through business combination and has been allocated to the operating segment below,
which is also the only Cash Generating Unit (CGU) for impairment testing.
(` in Lakhs)
31 March 2023 31 March 2022
Modular kitchen, kitchen components, wardrobes and wardrobe components 4,067.57 4,067.57
The recoverable amount of this CGU for impairment testing is determined based on value-in-use calculations which
uses cash flow projections based on financial budgets approved by management covering a five year period as the
Company believes this to be the most appropriate timescale for reviewing and considering annual performance
before applying a fixed terminal value multiple to the final cash flows. Cash flows beyond the five-year period were
extrapolated using estimate rates stated below.
As at 31 March 2023 and 31 March 2022, goodwill and acquired brand was not impaired.

Key Assumptions used for value in use calculations are as follows:

Modular kitchen, kitchen components, wardrobes and wardrobe components
Compounded average growth rate for five year (Previous year: five-year) 22.42% 27.59%
period %
Growth rate used for extrapolation of cash flow projections beyond the five 5.00% 5.00%
year period (Previous year: five-year)
Discount Rate % 15.25% 12.25%

Discount rates – Management estimates discount rates using pre-tax rates that reflect current market assessments
of the risks specific to the CGU, taking into consideration the time value of money and individual risks of the underlying
assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the
specific circumstances of the Company and its operating segments and is derived from its weighted average cost of
capital (WACC).
Growth rates – The growth rates are based on industry growth forecasts. Management determines the budgeted
gross margin based on past performance and its expectations for market developments. The weighted average
growth rates used were consistent with industry reports.

NOTE 4 : INVESTMENTS
(` in Lakhs)
Non-Current
Nos. Face Value As at As at
31 March 2023 31 March 2022
NON CURRENT INVESTMENTS
Investments in Equity Instruments
Unquoted equity shares
Equity Shares of Saraswat Co-operative Bank 2,500 10 0.25 0.25
(fully paid-up)
TOTAL Non-current Investments 0.25 0.25
Aggregate amount of unquoted investments- At 0.25 0.25
cost
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 5 : OTHER FINANCIAL ASSETS

(` in Lakhs)
Non-Current Current
As at As at As at As at
31 March 31 March 2022 31 March 31 March 2022
2023 2023
Unsecured and Considered good:
Security deposits 151.23 99.28 10.57 38.61
Term Deposits held as margin money against 20.56 19.91 - -
bank guarantee and other commitments
Interest accrued on term deposits 0.59 0.27 - -
Total 172.38 119.46 10.57 38.61
a) Refer note 26(C) for information about credit risk of other financial assets.

NOTE 6 : CURRENT TAX ASSETS

(` in Lakhs)
Current
As at As at
31 March 2023 31 March 2022
Advance payment of Income Tax (Net of provision for tax - nil) 149.87 148.13
Total 149.87 148.13

NOTE 7 : INCOME TAXES

The major components of deferred tax (liabilities)/ assets arising on account of timing differences as at 31 March 2023
are as follows:
(` in Lakhs)
Balance Sheet Profit and loss ^ Balance Sheet
1 April 2022 31 March 2023 31 March 2023
Difference between Written Down Value/Capital work (1,332.23) - (1,956.76)
in progress of fixed assets as per the books of accounts
and Income Tax Act,1961.
Expense claimed for tax purpose on payment basis 48.20 - (5.11)
Provision for doubtful debts, inventory and others 174.40 - 143.14
Accumulated losses and unabsorbed depreciation 5,135.27 - 5,388.76
carried forward under Income Tax Act, 1961
Net Deferred tax assets 4,025.64 - 3,570.03
Net Deferred tax assets recognised^ - - -
^Deferred tax asset is recognised only to the extent of deferred tax liability. The remaining deferred tax asset of
` 3,549.23 lakhs (previous year ` 4,025.64 lakhs) is not recognised, as it is not considered to be probable that sufficient
future taxable income will be available.
The Company has the following unused tax losses and unabsorbed depreciation amounts which arose on incurrence of
loss from business under the Income Tax Act, 1961, for which no deferred tax asset has been recognised in the balance
sheet.
50
 51
Notes to the Financial Statements (Contd.)

Financial Statements
(` in Lakhs)
Financial Year Category 31 March 2023 Expiry Date
2015-2016 Business loss 948.38 31-Mar-24
2016-2017 Business loss 1,345.95 31-Mar-25
2017-2018 Business loss 519.70 31-Mar-26
2018-2019 Business loss 1,557.79 31-Mar-27
2019-2020 Business loss 3,077.08 31-Mar-28
2020-2021 Business loss 1,465.21 31-Mar-29
2021-2022 Business loss 686.84 31-Mar-30
2022-2023 Business loss 1,858.36 31-Mar-31
2010-2011 Depreciation 81.31 NA
2011-2012 Depreciation 127.50 NA
2012-2013 Depreciation 193.35 NA
2013-2014 Depreciation 1,563.51 NA
2014-2015 Depreciation 1,260.91 NA
2015-2016 Depreciation 1,129.70 NA
2016-2017 Depreciation 1,075.00 NA
2017-2018 Depreciation 838.08 NA
2018-2019 Depreciation 722.94 NA
2019-2020 Depreciation 644.05 NA
2020-2021 Depreciation 556.58 NA
2021-2022 Depreciation 528.64 NA
2022-2023 Depreciation 545.13 NA

NOTE 8 : OTHER ASSETS

(` in Lakhs)
Non-Current Current
As at As at As at As at
31 March 31 March 2022 31 March 31 March 2022
2023 2023
(a) Capital Advances 163.46 34.81 - -
(b) Advances other than capital advances
i) Advances to suppliers - - 828.74 1,439.70
Less : Allowance for unsecured doubtful (241.49) -
advances
Total - - 587.25 1,439.70
ii) Balance with government authorities
- Input tax credit receivable 148.28 154.59 - -
- GST credit receivable - - 276.01 738.98
- Duty / tax under protest 66.90 68.37 - -
iii) Advances to employees 1.70 - 28.99 38.29
iv) Prepaid expenses 4.44 3.30 51.16 75.19
Total 384.78 261.07 943.41 2,292.16
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 9 : INVENTORIES

(` in Lakhs)

(At lower of cost and net realisable value) Current

As at As at
31 March 31 March 2022
2023
(a) Raw materials 1,804.07 2,151.50

(b) Packing materials 117.21 269.50

(c) Work-in-progress 64.23 50.29

(d) Finished goods 276.56 453.41

(e) Stock-in-trade (acquired for trading) 6,628.32 11,084.54

Stock-in-trade (acquired for trading) in transit 853.79 415.13

(f) Stores, spares and consumables 9.13 20.03

Total 9,753.31 14,444.40

The cost of Inventories recognised as an expense during the year is disclosed in Note 22 (A) & Note 22 (B)

The cost of inventories recognised as an expense includes ₹ 81.00 lakhs (Previous year ₹ 38.92 lakhs was written back)
in respect of write back of inventory for slow moving items.

NOTE 10 : TRADE RECEIVABLES

(` in Lakhs)

Current

As at As at
31 March 31 March 2022
2023

(a) Secured, considered good - -

(b) Unsecured, considered good 5,601.34 5,755.23

(c) Unsecured, considered doubtful 386.65 218.28

5,987.99 5,973.51

Less : Allowance for unsecured doubtful debts (386.65) (218.28)

Total 5,601.34 5,755.23

52
 53
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 10 : TRADE RECEIVABLES (Contd.)

Trade receivable ageing schedule for the year ended 31 March 2023*:
Not due Outstanding for following period from due date of Total
payment
Less than 6 months 1-2 years 2-3 years More
6 months – 1 year than 3
years
i) Undisputed Trade 3,842.79 1,587.87 170.67 – – – 5,601.34
receivables – considered
good
ii) Undisputed Trade 3.26 17.26 28.67 124.01 69.99 59.88 303.08
receivables – considered
doubtful
iii) Disputed Trade – – – – – – –
receivables – considered
good
iv) Disputed Trade 7.63 – 25.38 13.21 22.94 14.40 83.57
receivables – considered
doubtful
1,605.13 224.73 137.21 92.94 74.28 5,987.99
Less : Allowance for unsecured (386.65)
doubtful debts
Total 5,601.34

Trade receivable ageing schedule for the year ended 31 March 2022:
Not due Outstanding for following period from due date of Total
payment
Less 6 months- 1-2 years 2-3 years More
than 6 1 year than 3
months years
i) Undisputed Trade 4,435.95 1,080.32 238.96 - - - 5,755.23
receivables - considered
good
ii) Undisputed Trade - - 41.54 73.93 41.56 21.36 178.39
receivables - considered
doubtful
iii) Disputed Trade - - - - - - -
receivables - considered
good
iv) Disputed Trade - - 0.04 - 29.21 10.64 39.89
receivables - considered
doubtful
1,080.32 280.54 73.93 70.77 32.00 5,973.50
Less : Allowance for unsecured (218.28)
doubtful debts
Total 5,755.22
a) Refer note 26(C) for information about policy for Trade Receivable.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 11 : CASH AND CASH EQUIVALENTS

(` in Lakhs)

Current

As at As at
31 March 31 March 2022
2023

(a) Balances with Banks

i) Current account 19.97 103.93

ii) Deposits with original maturity of less than 3 months 4.56 4.40

(b) Cash on hand 0.64 0.52

Total 25.17 108.85

NOTE 12 : EQUITY SHARE CAPITAL

(` in Lakhs)

As at As at
31 March 31 March 2022
2023

Authorised 165.00 165.00

16,50,000 (31 March 2022: 16,50,000) Equity Shares of ` 10 each 165.00 165.00

Issued, subscribed and fully paid up shares 29.01 29.01

290,100 (31 March 2022: 290100) Equity Shares of ` 10 each 29.01 29.01

a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year:
Equity Shares As at 31 March 2023 As at 31 March 2022

No. of Shares ` Lakhs No. of Shares ₹ Lakhs

At the beginning of the year 2,90,100 29.01 2,04,273 20.43
Add: Issued during the year - - 85,827 8.58
Outstanding at the end of the year 2,90,100 29.01 2,90,100 29.01

b) Details of Shareholder holding more than 5% equity shares

Equity Shares As at 31 March 2023 As at 31 March 2022

No of Equity % holding No of Equity % holding

Shares Shares
Equity shares of ` 10 each
- Asian Paints Limited (jointly with its nominees) 2,90,100 100.00 2,90,100 100.00
# As per records of the Company, including its Register of Members

As per the Companies Act 2013, the holders of equity shares of the Company will be entitled to receive remaining
assets of the Company, after distribution of all preferential amounts in the event of liquidation of the Company.
However no such preferential amounts exist currently. The distribution will be in proportion to the number of equity
shares held by the shareholders.

54
 55
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 12 : EQUITY SHARE CAPITAL (Contd.)

c) Shares held by promoters as defined in the Companies Act, 2013

As on 31 March 2023
Promoter Name As at 31 March 2022 As on 31 March 2023 % change
during the
No. of % of total No. of % of total
year
Shares shares Shares shares
Asian Paints Limited (jointly with its nominees) 2,90,100 100% 2,90,100 100% No change

As on 31 March 2022
Promoter Name As at 31 March 2022 As at 31 March 2022 % change
during the
No. of % of total No. of % of total
year
Shares shares Shares shares
Asian Paints Limited (jointly with its nominees) 2,04,273 100% 2,90,100 100% No change

c) Terms/rights attached to equity shares

The Company has only one class of shares i.e. equity. The shareholders have voting rights in the proportion of
their shareholding. The shareholders are entitled to dividend, if declared and paid by the Company. In the event
of liquidation, these shareholders are entitled to receive remaining assets of the Company after distribution of all
preferential amount, in the proportion of their shareholding.

note 13 : OTHER EQUITY

(` in Lakhs)
Reserves and Surplus Total
Securities General Retained Remea-
Premium Reserve earnings surement
of defined
benefit
plans
Balance as on 1 April 2021 (A) 21,512.49 118.17 (15,459.63) (16.97) 6,154.06
Add: (Loss) for the year – – (919.93) – (919.93)
Items of Other Comprehensive Income for the
year, net of tax
Remeasurement of the defined benefit plans – – – 12.13 12.13
Total Comprehensive Loss for the year (B) – – (919.93) 12.13 (907.80)
Premium on issue of equity shares (C) 7,990.49 7,990.49
Balance as on 31 March 2022 (D) = (A+B+C) 29,502.98 118.17 (16,379.56) (4.84) 13,236.75
Balance as on 1 April 2022 (E) 29,502.98 118.17 (16,379.56) (4.84) 13,236.75
Add: (Loss) for the year – – (2,810.47) – (2,810.47)
Items of Other Comprehensive Income for the
year, net of tax
Remeasurement of the defined benefit plans – – – 11.64 11.64
Total Comprehensive Loss for the year (F) – – (2,810.47) 11.64 (2,798.83)
Balance as on 31 March 2023 (G) = (E+F) 29,502.98 118.17 (19,190.03) 6.80 10,437.92
Description of nature and purpose of each reserve
General Reserve – General reserve is created from time to time by way of transfer profits from retained earnings
for appropriation purposes. General reserve is created by a transfer from one component of equity to another and is
not an item of other comprehensive income.
Securities Premium - Securities premium has arised on account of issue of shares at premium.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 14 : BORROWINGS
(` in Lakhs)
Non-Current Current
As at As at As at As at
31 March 31 March 2022 31 March 31 March 2022
2023 2023
Deferred payment liabilities-Unsecured
- S ales Tax deferment scheme - State of - - - 3.88
Maharashtra (Refer Note (i) below)
Loans repayable on demand-Unsecured
From banks
- Working capital (Refer Note (ii) below) - - - 2,000.00
- Cash credit (Refer Note (iii) below) - - 8,896.22 7,276.63
Total - - 8,896.22 9,280.51
Notes:
i) Sales tax deferral scheme – State of Maharashtra represents sales tax deferment availed under the sales tax
deferment scheme of Government of Maharashtra. It has a deferment period of 10 years and is repayable over
5 yearly installments as per repayment schedule starting from 2011. The accumulated sales tax deferral loan till
31 March 2023 is ₹ NIL (as at 31 March 2022: ₹ 3.88 lakhs).
ii) Unsecured working capital demand loan carrying interest as per treasury bill plus variable basis points as per
mutual contractual agreement having expiry of 1 month to 6 months from date of disbursement.
iii) Unsecured cash credit with banks carries interest ranging from @ 4.60% to 6.80% p.a. (Previous year @ 4.65 %
to 5.25% p.a).
iv) Default in terms of repayment of principal and interest – Nil

NOTE : 15 LEASE LIABILITIES

(` in Lakhs)
Non-Current Current
As at As at As at As at
31 March 31 March 2022 31 March 31 March 2022
2023 2023
Lease liabilities 664.87 268.39 268.75 890.64
Total 664.87 268.39 268.75 890.64
The maturity analysis of lease liabilities is disclosed in Note 26 (C).
The aggregate maturities of long term leases, based on contractual undiscounted cash flows are as follows:

Less than 1 Between 1 Over 5 Total Carrying

year to 5 years years Value
At 31st March, 2023
Lease Liabilities 318.18 715.50 - 1,033.68 933.62
At 31 March, 2022
st

Lease Liabilities 369.37 1,077.34 1,446.72 1,159.03

56
 57
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE : 15 LEASE LIABILITIES (Contd.)
Movement in lease liabilities

(` in Lakhs)

2022-23 2021-22
Balance as at 1st April 2022 1,159.03 528.22

Additions 93.09 1,199.10

Deletions Pune Stores, Gurgaon Stores 19.27 245.58

Finance cost 64.61 44.42

Repayment (including interest on lease liabilities) 363.84 367.12

Balance as at 31 March 2023

st
933.62 1,159.03

Amounts with respect to leases recognised in the Statement of Profit & Loss and Cash Flow Statement
(` in Lakhs)
Year 2022-23 Year 2021-22
Amounts recognised in Statement of Profit and Loss
Interest on lease liabilities 64.61 44.42
Depreciation expense 336.79 323.66
Expenses relating to short-term leases and leases of low-value assets -
Variable lease payments -
Amounts recognised in Cash Flow Statement
In Financing activity
Repayment of lease liabilities 306.21 374.06
Interest paid on lease liabilities 64.61 44.42
In Operating activity
Variable lease payments - -
Note- For additions and movement in right-of-use assets refer note 2B.

NOTE 16 : OTHER FINANCIAL LIABILITIES

(` in Lakhs)
Non-Current Current
As at As at As at As at
31 March 31 March 2022 31 March 31 March 2022
2023 2023
(b) Others
Retention monies payable - - 124.01 2.54
Trade deposits 12.14 11.64 0.50 0.50
Payable towards capital expenditure - - 15.61 17.84
Payable towards services received - - 588.06 1,130.11
Payable to employees - - 638.17 481.81
Payable towards other expenses - - 2,257.96 1,750.49
Total 12.14 11.64 3,624.31 3,383.29
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 17 : PROVISIONS
(` in Lakhs)
Non-Current Current
As at As at As at As at
31 March 31 March 2022 31 March 31 March 2022
2023 2023
(a) Provision for Employee Benefits (Refer
Note 31)
Provision for Gratuity - - 83.37 70.10
Provision for Compensated absences 149.75 145.11 35.60 35.26
(b) Others
Provision towards statutory liabilities - - 163.89 150.85
Provision for goods under warranty - - 122.53 67.32
Total 149.75 145.11 405.39 323.53

(` in Lakhs)
Goods under warranty Statutory liabilities*
2022-2023 2021- 2022 2022-2023 2021- 2022
Opening Balance 67.32 53.61 150.85 229.75
Additions during the year 81.80 52.24 70.70 103.10
Utilizations 26.59 38.53 46.96 86.91
Reversals 10.70 95.09
Closing Balance 122.53 67.32 163.89 150.85
*These provisions represent estimates made mainly for probable claims arising out of litigations/disputes pending
with authorities under various statutes (Sales tax and Goods and Service Tax (GST)). The probability and the timing
of the outflow with regard to these matters depend on the final outcome of the litigations/disputes. Hence, the
Company is not able to reasonably ascertain the timing of the outflow.

NOTE 18 : TRADE PAYABLES

(` in Lakhs)

As at As at
31 March 31 March 2022
2023

Trade Payables

Total Outstanding dues of Micro Enterprises and Small Enterprises (Refer 166.94 437.98
Note 29)
Total Outstanding dues of creditors other than Micro Enterprises and Small 1,666.67 2,454.32
Enterprises
Total 1,833.61 2,892.30

58
 59
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 18 : TRADE PAYABLES (Contd.)
Trade payables ageing schedule for the year ended as on 31 March 2023:
Particulars Not due Outstanding for following period from due date of Total
payment
Less than 1 1-2 years 2-3 years More than
year 3 years
i) Undisputed dues - MSME 166.94 - - - - 166.94
ii) Undisputed dues - Others 534.84 1,131.83 1,666.67
iii) Disputed dues - MSME - - - - - -
iv) Disputed dues - Others - - - - - -

Trade payables ageing schedule for the year ended as on 31 March 2022:
Particulars Not due Outstanding for following period from due date of Total
payment
Less than 1 1-2 years 2-3 years More than
year 3 years
i) Undisputed dues - MSME 437.98 - - - - 437.98
ii) Undisputed dues - Others 1,232.21 1,222.11 - - - 2,454.32
iii) Disputed dues - MSME - - - - - -
iv) Disputed dues - Others - - - - - -

NOTE 19 : OTHER LIABILITIES

(` in Lakhs)

As at As at
31 March 31 March 2022
2023

(a) Revenue received in advance

Advance received from customers 1,759.05 1,636.12
(b) Others
Stautory Payables -
- Payable towards TCS 1.46 2.56
- Payable towards GST 206.38 74.02
-Payable towards TDS under Income tax 127.77 138.97
-Payable towards Provident Fund, Profession Tax and Employee State 41.63 36.85
Insurance Corporation
Total 2,136.29 1,888.52

NOTE 20A : REVENUE FROM OPERATIONS

(` in Lakhs)

As at As at
31 March 31 March 2022
2023

Sale of products 40,962.17 38,844.35

Sale of services 1,586.23 1,197.90
Other operating revenue 1,434.28 914.91
Total 43,982.68 40,957.16
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 20B : REVENUE FROM CONTRACTS WITH CUSTOMERS

(` in Lakhs)

31 March 2023 31 March 2022

(I) Revenue from Contracts with Customers disaggregated based on
nature of product or services
Sale of products
Home Market (Net of Returns) 45,506.30 42,338.48
Exports 41.81 119.31
Turnover 45,548.11 42,457.79
Less: Discounts 4,585.94 3,613.44
Modular kitchen and wardrobes 40,962.17 38,844.35
Sale of services
Installation Income 1,586.23 1,197.90
Other operating revenues
Site visit charges 2.71 4.17
Maintenance and service income 1,431.57 910.74
Total 43,982.68 40,957.16
(II) Revenue from Contracts with Customers disaggregated based on
geography
Home Market 43,940.87 40,837.85
Exports 41.81 119.31
Total 43,982.68 40,957.16
(III) Amounts included in advance from customers (Refer Note 19)
Beginning for the year 1,636.12 1,647.94
Revenue recognized during the year (1,538.73) (1,198.72)
Advance received during the year (net) 1,661.66 1,186.90
Closing for the year 1,759.05 1,636.12

NOTE 20C : RECONCILIATION OF GROSS REVENUE WITH THE REVENUE FROM CONTRACTS WITH CUSTOMERS

(` in Lakhs)

31 March 2023 31 March 2022

Revenue as per contracted price 48,568.62 44,570.60
Less: Discounts 4,585.94 3,613.44
Net revenue recognized from contracts with customers 43,982.68 40,957.16

The amounts receivable from customers become due after expiry of credit period which ranges from 7 to 45 days.
There is no significant financing component in any transaction with the customers.
The Company provides agreed upon specification warranty for selected range of products. The amount of liability
towards such warranty is immaterial.
The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a
shorter duration. There are no contracts for sale of services wherein, performance obligation is unsatisfied to which
transaction price has been allocated.

60
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Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 21 : OTHER INCOME

(` in Lakhs)

31 March 2023 31 March 2022

(a) Interest Income
(i) Interest on term deposits carried at amortised cost 1.20 4.62
(iiI) Interest on Income Tax Refund 7.93 -
(iiI) Interest on security deposit 6.67 3.75
15.80 8.37
(b) Other non-operating income
(i) Excess provision written back 34.44 155.12
(ii) Other non-operating income* 59.71 40.95
94.15 196.07
(c) Other gains and losses
(i) Net gain on modification/ termination of leases 4.81 26.33
(ii) Gain on disposal of property, plant and equipments (net) 3.72 -
(ii) Write back of allowance for doubtful debts and advances (net) - 77.07
(iii) Net foreign exchange gain 8.77 113.93
17.30 217.33
Total (a+b+c) 127.25 421.77
*Majorly includes consultancy income and recoveries towards shared services.

NOTE 22 (A) : COST OF MATERIALS CONSUMED

(` in Lakhs)

31 March 2023 31 March 2022

Raw Materials Consumed
Opening Stock 2,151.50 1,081.78
Add : Purchases 2,802.44 3,791.29
4,953.94 4,873.07
Less: Closing Stock 1,804.07 2,151.50
3,149.87 2,721.57
Packing Materials Consumed
Opening Stock 269.50 221.81
Add : Purchases 556.46 973.36
825.96 1,195.17
Less : Closing Stock 117.21 269.50
708.75 925.67
Total cost of materials consumed 3,858.62 3,647.24
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 22 (B) : PURCHASES OF STOCK-IN-TRADE

(` in Lakhs)

31 March 2023 31 March 2022

Purchase of stock-in-trade 22,384.98 30,888.76
Total 22,384.98 30,888.76

NOTE 22 (C) CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-TRADE AND WORK IN PROGRESS

(` in Lakhs)

31 March 2023 31 March 2022

Stock at the beginning of the year
Finished Goods 453.41 700.88
Work-in-Progress 50.29 69.13
Stock-in-trade acquired for trading (including goods in transit) 11,499.67 5,130.62
Total 12,003.37 5,900.63
Stock at the end of the year
Finished Goods 276.56 453.41
Work-in-Progress 64.23 50.29
Stock-in-trade acquired for trading (including goods in transit) 7,482.11 11,499.67
Total 7,822.90 12,003.37
Changes in Inventories of Finished Goods, Work-In-Progress and Stock- 4,180.46 (6,102.74)
In-Trade

NOTE 23 : EMPLOYEE BENEFITS EXPENSE

(` in Lakhs)

31 March 2023 31 March 2022

Salaries and wages (including manpower charges (Refer note 33)) 6,366.39 5,352.65
Payments for deputed employees (Refer note 36)
Share based payment expenses* 23.93 21.33
Contribution to Provident and other Funds (Refer note 31) 314.33 279.66
Staff welfare expenses 154.82 142.66
Total 6,859.47 5,796.30
*Employee share based payment plans:
During the year ended 31st March, 2023, the Parent Company implemented Asian Paints Employee Stock Option Plan
2021 (“”2021 Plan””). The 2021 Plan enables grant of stock options to the eligible employees of the ultimate Parent
Company and its subsidiaries.
The options granted under 2021 Plan have a maximum vesting period of 4 years. The option granted are based on
the performance of the employees during the year of the grant and their continuing to remain in service over the
next 3 years. The exercise price for stock options granted are at a discount of 50% to the Reference Share Price of
the shares of the ultimate Parent Company as defined under 2021 Plan.
During the year, the Company has recognized an expense of ` 23.93 lacs (31st March 22 - ` 21.33 lacs).

62
 63
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 24 : FINANCE COSTS

(` in Lakhs)

31 March 2023 31 March 2022

Interest Costs
(a) Interest on short term borrowings from banks 546.22 283.94
(b) Interest on lease liabilities 64.61 44.42
(c) Other Interest expenses 4.25 0.83
Total 615.08 329.19

NOTE 25 : OTHER EXPENSES

(` in Lakhs)

31 March 2023 31 March 2022

Auditors' remuneration (Refer note 28) 16.10 16.10
Advertisement and Sales promotional expenses 526.04 534.73
Bank charges 15.67 20.28
Commission and Brokerage 69.95 80.93
Consumption of stores, spares and consumables 64.70 75.17
Contract manpower expenses 380.35 462.02
Director sitting fees 0.80 1.60
Electricity expenses 122.49 94.24
Freight and handling charges 2,483.93 2,391.57
Information technology expenses (Refer note 33) 190.01 238.33
Installation charges 1,360.25 948.23
Insurance 33.79 45.03
Legal and professional expenses (Refer note 33) 451.42 379.21
Loss on sale/discard of property, plant and equipment (net) - 4.13
Printing, stationery and communication expenses 69.74 55.23
Allowance for doubtful debts and advances (net) 405.29 -
Rates and taxes 115.12 125.58
Distribution expenses (Refer note 33) 210.11 172.37
Rent^ 137.38 118.13
Repairs and maintenance:
Buildings 22.61 17.79
Machinery 36.93 16.64
Other assets 197.28 204.15
Royalty (Refer note 33) 124.24 94.09
Warranty expenses 81.81 52.24
Sundry balances written off 4.53 -
Telephone expenses 56.46 49.59
Travelling expenses 969.45 778.76
Miscellaneous expenses 116.99 79.14
8,263.44 7,055.28
^ Expense relating to variable lease payments, short- term leases and to leases of low value assets amounts to ₹ 137.38
lacs (Previous year ₹ 118.13 lacs).
Total cash flows for leases is disclosed as financing activities in the cash flow statement. Maturity analysis of lease
payments is disclosed in note 26 (C).
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 26 (A) : CATERGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENTS

(` in Lakhs)

Refer note Non-Current Current

As at As at As at As at
31 March 31 March 31 March 31 March
2023 2022 2023 2022

Financial assets measured at fair value

through profit and loss

Unquoted investments in equity shares 4 0.25 0.25 - -

Financial assets carried at amortised cost

Sundry Deposits 5 151.23 99.28 10.57 38.61

Interest accrued on term deposit 5 0.59 0.27 - -

Term deposits held as margin money against 5 20.56 19.91 - -

bank guarantee and other commitments

Trade receivables 10 - - 5,601.34 5,755.23

Cash and cash equivalents 11 - - 25.17 108.85

172.63 119.71 5,637.08 5,902.69

Financial liabilities carried at amortised cost

Loan repayable on demand from banks 14 - - 8,896.22 9,276.63

Sales tax deferment scheme -State of 14 - - - 3.88

Maharashtra

Trade Payables 18 - - 1,833.61 2,892.30

Trade Deposits 16 12.14 11.64 0.50 0.50

Retention monies payable 16 - - 124.01 2.54

Payable towards capital expenditure 16 - - 15.61 17.84

Payable towards Services received 16 - - 588.06 1,130.11

Payable to Employees 16 - - 638.17 481.81

Payable towards other expenses 16 - - 2,257.96 1,750.49

Lease liabilities 15 664.87 268.39 268.75 890.64

677.01 280.03 14,622.88 16,446.73

64
 65
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 26 (A) : CATERGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENTS (Contd.)

Income, Expenses, Gains or Losses recognised on Financial Instruments in the Statement of Profit and Loss are
as follows:
(` in Lakhs)
Income, Expenses, Gains or losses on Financial Instruments Refer note Year 2022-23 Year 2021-22

Financial assets measured at FVTPL

Fair value gain/(loss) on quoted mutual funds - -
Fair value gain/(loss) on forward exchange contract - -
Financial assets measured at amortised cost
Interest income 21 15.80 8.37
Allowance for expected credit loss
Allowance for doubtful debts and advances (net) 8 & 10 628.14 218.28
Foreign exchange gain loss 21 8.77 113.93
Bad debts written off - -
Financial assets measured at FVTOCI
Dividend income - -
Fair value gain/(loss) on quoted equity instruments - -
Fair value gain/(loss) on debt instruments - -
Interest income on debt instrument - -
Financial liabilities measured at FVTPL
Fair valuation of contingent consideration payable - -
Derivatives - forward contract for further acquisition in - -
subsidiaries
Fair value gain/(loss) on forward exchange contract - -
Financial liabilities measured at amortised cost
Interest on lease liabilities 24 64.61 44.42
Interest expense other than on lease liabilities 24 550.47 284.77
Foreign exchange gain loss
# Investments in these equity instruments are not held for trading. Upon application of Ind AS 109 - Financial
Instruments, the Company has chosen to measure these investments in equity instruments at FVTOCI irrevocably as
the management believes that presenting fair value gains or losses relating to these investments in the Statement
of Profit and Loss may not be indicative of the performance of the Company.

NOTE 26 (B) : FAIR VALUE MEASUREMENTS

The carrying amount of financial assets and financial liabilities recognised in the financial statements is assumed
to approximate their fair values, since the Company does not anticipate that the carrying amounts would be
significantly different from the values that would eventually be received or settled.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 26 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company’s financial liabilities comprise mainly of borrowings, trade payables and other payables. The
Company’s financial assets comprise mainly of cash and cash equivalents, other financials assets and other
receivables.
The following disclosures summarize the Company’s exposure to financial risks and information regarding use of
derivatives employed to manage exposures to such risks. Quantitative sensitivity analyses have been provided to
reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial
position of the Company.
1) 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 risk comprises three types of risks: interest rate risk, currency risk and other
price risk. Financial instruments affected by market risk include borrowings, investments, trade payables, trade
receivables and loans.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. As the Company borrows from couple of banks (i.e Bank of
America and Citi Bank) and the interest rates over the two financial years have varied between 4.11% to
5.25% p.a. and less as compared to the general rates of borrowings, the exposure to risk of changes in
market interest rates is minimal. The Company has not used any interest rate derivatives.

The Exposure of Company’s financial assets and liabilities to interest rate risk is as follows :-

(` in Lakhs)

As at 31 Floating rate Fixed rate Non- interest

March, 2023 bearing

Financial assets 5,809.71 - 25.71 5,784.00

Financial liabilities 15,299.90 8,896.22 933.62 5,470.06

(` in Lakhs)

As at 31 March, Floating rate Fixed rate Non- interest

2022 bearing

Financial assets 6,022.40 - 24.58 5,997.82

Financial liabilities 16,726.77 9,276.63 1,159.03 6,291.11

b) Foreign 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. Wherever considered feasible, the Company enters into forward
exchange contracts with average maturity of one month, to hedge against its foreign currency exposures
relating to the recognised underlying liabilities and firm commitments. The Company does not enter into
any derivative instruments for trading or speculative purposes.

66
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Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 26 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES (Contd.)

The carrying amounts of the Company’s foreign currency demoninated monetary items are as follows:

(` in Lakhs)

Liabilities Assets

31 March 2023 31 March 2022 31 March 2023 31 March 2022

USD 216.84 234.42 215.38 467.42

EUR 88.59 210.05 18.13 37.30

RMB 129.53 - 77.63 -

SGD - - - 0.28

The above table represents total exposure of the Company towards foreign exchange denominated assets and
liabilities. The details of exposures unhedged are given as part of Note 30.
The Company is mainly exposed to changes in USD, RMB & EURO. The below table demonstrates the sensitivity to a
5% increase or decrease in the USD, RMB & EURO against INR, with all other variables held constant. The sensitivity
analysis is prepared on the net unhedged exposure of the Company. 5% represents management’s assessment of
the reasonably possible change in foreign exchange rate.

The carrying amounts of the Company’s foreign currency demoninated monetary items are as follows:

(` in Lakhs)

Change in USD Rate Effect on profit afer tax Effect on total equity

Year Year As at As at
2022-23 2021-22 31.03.2023 31.03.2022

0.05 (0.07) 11.65 (0.07) 11.65

(0.05) 0.07 (11.65) 0.07 (11.65)

Change in RMB Rate Effect on profit afer tax Effect on total equity

Year Year As at As at
2022-23 2021-22 31.03.2023 31.03.2022

0.05 (2.59) - (2.59) -

(0.05) 2.59 - 2.59 -

Change in EURO Rate Effect on profit afer tax Effect on total equity

Year Year As at As at
2022-23 2021-22 31.03.2023 31.03.2022

0.05 (3.52) (8.64) (3.52) (8.64)

(0.05) 3.52 0.04 3.52 0.04

 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 26 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES (Contd.)

2) Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. Credit risk arises primarily from financial assets such as trade receivables, other financials
assets and other receivables.
Credit risk arising from other balances with banks is limited and there is no collateral held against these
because the counterparties are banks with high credit ratings assigned by the international credit rating
agencies.
Credit risk arising from trade receivables is managed in accordance with the Company’s established policy(*),
procedures and control relating to customer credit risk management. Credit quality of a customer is assessed
based on internal assessment and accordingly individual credit limits are defined. The concentration of credit
risk is limited due to the fact that the customer base is large.
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. The provision matrix at the
end of the reporting period is given below.
* There was change in the policy during the year. The earlier policy mentioned provisioning for disputed,
undisputed trade receivable for overdue more than 180 days which has now been aligned with Asian Paint
group policy as stated below.

Policy as at 31 March 2023

Net Outstanding > 365 days % Collection to gross outstanding in Credit loss allowance
current year

Yes < 25% Yes, to the extent of lifetime expected credit

losses outstanding as at reporting date.

Yes > 25% Yes, to the extent of lifetime expected credit

losses pertaining to balances outstanding for
more than one year

Policy as at 31 March 2022

Net Outstanding Segments Credit loss allowance

> 365 days Projects Yes, to the extent of lifetime expected credit
losses outstanding as at reporting date.
> 180 days Component dealers

Movement in expected credit loss allowance on trade receivables

(` in Lakhs)

As at As at
31 March 2023 31 March 2022
Balance at the beginning of the year 218.28 378.13
Loss allowance measured at lifetime expected credit losses 236.02 49.15
Reversal of provision (67.65) (209.00)
Balance at the end of the year 386.65 218.28

68
 69
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 26 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES (Contd.)

3) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk
may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium
term and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk
arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the
liquidity risk by having adequate amount of credit facilities agreed with banks to ensure that there is sufficient
cash to meet all its normal operating commitments in a timely and cost-effective manner.
The table below analyses non-derivative financial liabilities of the the Company into relevant maturity
groupings based on the remaining period from the reporting date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.

(` in Lakhs)

Less than 1 Between 1 Over 5 Total Carrying

year to 5 years years value

As at 31 March 2023

Borrowings (Refer note 14) 8,896.22 - - 8,896.22 8,896.22

Trade Payables (Refer note 18) 1,833.61 - - 1,833.61 1,833.61

Other financial liabilities (Refer note 16) 3,624.31 12.14 - 3,636.45 3,636.45

Lease liabilities (Refer note 15) 318.18 715.50 - 1,033.68 933.62

As at 31 March 2022

Borrowings (Refer note 14) 9,280.51 - - 9,280.51 9,280.51

Trade Payables (Refer note 18) 2,892.30 - - 2,892.30 2,892.30

Other financial liabilities (Refer note 16) 3,383.29 11.64 - 3,394.93 3,394.93

Lease liabilities (Refer note 15) 369.37 1,077.34 - 1,446.72 1,159.03

The Company does not have any derivative finanical liabilites.

NOTE 26 (D) : CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company when managing capital is
to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in business conditions. No
changes were made in the objectives, policies, or processes during the year end. Capital comprises of equity and debt.
The Company is not exposed to any externally imposed capital requirements.
The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the
overall debt portfolio of the Company.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 26 (D) : CAPITAL MANAGEMENT (Contd.)

Movement in expected credit loss allowance on trade receivables

(` in Lakhs)

As at As at
31 March 2023 31 March 2022
Debt # 8,896.22 9,280.51
Less: Cash and cash equivalents 25.17 108.85
Net debt 8,871.04 9,171.65
Total equity 10,466.93 13,265.76
Net debt to equity ratio 0.85 0.69
# Debt is defined as long term and short term borrowings.

NOTE 27 : CONTINGENT LIABILITIES AND COMMITMENTS

(` in Lakhs)

a. Contingent liabilities As at As at
31 March 2023 31 March 2022
Claims against the Company not acknowledged as debts
i. Tax matters in dispute under appeal
- Value Added Tax, 101.43 107.03
Total 101.43 107.03

(` in Lakhs)

b. Commitments As at As at
31 March 2023 31 March 2022
1. Estimated amount of contracts remaining to be executed on capital
account and not provided for
i. Towards Property, Plant and Equipment 775.56 2,157.23
ii. Towards Intangible Assets 22.36
2. Letters of Credit and Bank guarantees issued by bankers towards 601.77 921.69
procurement of goods and services and outstanding as at year end
3. For Lease commitments (Refer note 26 (C))
* The Company is confident of successfully contesting the above disputed matters which are in appeals and does not
expect the liability to crystallise. No cash outflow is expected.

NOTE 28 : Payment to Auditors (excluding taxes)

(` in Lakhs)

2022- 2023 2021- 2022

Statutory audit fees 10.35 10.35
Limited reviews 2.30 2.30
Tax audit fees 3.45 3.45
Total 16.10 16.10

70
 71
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 29 : Micro, Small and Medium Enterprises

Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for
the year 2022-23, to the extent the Company has received intimation from the “Suppliers” regarding their
status under the Act.

(` in Lakhs)

Particulars 31 March 2023 31 March 2022

Principal Interest Principal Interest

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 166.94 - 437.98 -

- Interest due on above - - - -

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

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

The amount of interest accrued and remaining unpaid at the - - - -

end of each accounting year

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.

NOTE 30 : FOREIGN CURRENCY EXPOSURE

The Company does not enter into any derivative instruments for trading or speculative purposes. Unhedged
foregin currency exposure are as under:

Currency Payable Payable

(FC in Lakhs) (` in Lakhs)

31 March 2023 31 March 2022 31 March 2023 31 March 2022

EUR 1.01 2.82 88.59 210.05

RMB 10.60 - 129.53 -

USD 2.51 3.03 216.84 234.42

 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 30 : FOREIGN CURRENCY EXPOSURE (Contd.)

Currency Receivable Receivable

(FC in Lakhs) (` in Lakhs)

31 March 2023 31 March 2022 31 March 2023 31 March 2022

EUR 0.14 0.40 18.13 37.30

RMB 6.42 - 77.63 -

USD 7.00 7.00 215.38 467.42

SGD* 0.00 0.00 - 0.28

*0 represents SGD NIL in current year and SGD 374 in previous year

NOTE 31 : EMPLOYEE BENEFITS

1) Post-employment benefits :
The Company has the following post-employment benefit plans:

a) Defined Benefit Gratuity Plan (Funded)

The Company’s defined benefit gratuity plan is a final salary plan for its employees, which requires
contributions to be made to Life Insurance Corporation (LIC). It is governed by the Payment of Gratuity
Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit.
The level of benefits provided depends on the member’s length of service and salary at retirement age.
The fund is managed by LIC and every year the required contribution amount is paid to LIC. Aforesaid post-
employment benefit plans typically expose the Company to actuarial risks such as: investment risk, interest
rate risk, longevity risk and salary risk.

Investment Risk The present value of the defined benefit liability is calculated using a discount rate which is
determined by reference to market yields at the end of the reporting period on government
bonds.

Interest Risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially
set off by an increase in the return on the plan's investments.

Longevity Risk The present value of the defined benefit liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after their employment. An increase in the
life expectancy of the plan participants will increase the plan's liability.

Salary Risk The present value of the defined benefit liability is calculated by reference to the future salaries
of plan participants. As such, an increase in salary of the plan participants will increase the plan's
liability.

The most recent actuarial valuation of the plan assets and the present value of defined obligation were carried
out as at 31 March 2023 by Mr. Saket Singhal, Fellow of the Institute of Actuaries of India. The present value of
the defined benefit obligation and the related current service cost were measured using the projected unit credit
method.

72
 73
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 31 : EMPLOYEE BENEFITS (Contd.)

The following tables summarise the components of net benefit expense recognised in the Statement of Profit or
Loss/OCI and the funded status and amounts recognised in the balance sheet for the gratuity plan:
Gratuity (Funded Gratuity (Funded
Plan) Plan)
As at 31 March As at 31 March
2023 2022
(i) Opening defined benefit obligation 430.10 370.32
(ii) Current service cost 88.75 74.49
(iii) Interest cost 30.67 24.96
(iv) Past Service Cost - -
(v) Sub-total included in statement of profit and loss (ii+iii+iv) 119.42 99.45
(vi) Actuarial loss from changes in financial assumptions (10.76) (10.21)
(vii) Sub-total included in other comprehensive income(vi) (10.76) (10.21)
(viii) Benefits paid (35.05) (29.46)
(ix) Closing defined benefit obligation (i+v+vii+viii) 503.71 430.10
(x) Opening fair value of plan assets 360.00 303.17
(xi) Expected return on plan assets 24.41 19.37
(xii) Sub-total included in statement of profit and loss(xi) 24.41 19.37
(xiii) Actuarial gain/(Losses) 0.88 1.92
(xiv) Sub-total included in other comprehensive income(xiii) 0.88 1.92
(xv) Contributions by employer 70.10 65.00
(xvi) Benefits paid (35.05) (29.46)
(xvii) Closing fair value of plan assets(x+xii+xiv+xv+xvi) 420.34 360.00
(xviii) Net Liability (ix-xvii) 83.37 70.10
Expense recognized in:
Statement of profit and loss(v+xii) 95.01 80.08
Statement of other comprehensive income(viii-xiv) (11.64) (12.13)
(xix) Weighted average duration of defined benefit obligation 7.12 6.92
(xx) Maturity profile of defined benefit obligation
1 Within the next 12 months 53.05 45.63
2 Between 1 and 5 years 195.62 175.73
3 Between 5 and 10 years 189.96 155.39

The major categories of plan assets of the fair value of the total plan assets are as follows:
Particulars Gratuity (Funded Gratuity (Funded
Plan) Plan)
As at 31 March As at 31 March
2023 2022
Others (Including assets under scheme of insurance & Treasury bills) 100% 100%
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 31 : EMPLOYEE BENEFITS (Contd.)

The principal assumptions used in determining post-employment gratuity benefit obligations for the Company’s
plans are shown below:
Particulars Gratuity (Funded Gratuity (Funded
Plan) Plan)
As at 31 March As at 31 March
2023 2022
Discount rate 7.30% 6.78%
Salary escalation rate 9.00% 9.00%

Demographic Accumptions (` in Lakhs)

Particulars As at As at
31 March 2023 31 March 2022
Mortality IALM (2012-14) IALM (2012-14)
Ultimate Ultimate
Employee Turnover 0-2 years- 40% 0-2 years- 40%
2-8 years- 21% 2-8 years- 21%
Above 8 years- 8% Above 8 years- 8%
Leave Availment ratio 2% 2%
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and
expected salary increase. The sensitivity analyses below have been determined based on reasonably possible
changes of the respective assumptions occurring at the end of the reporting period, while holding all other
assumptions constant.

(` in Lakhs)
Particulars Gratuity (Funded Gratuity (Funded
Plan) Plan)
As at 31 March As at 31 March
2023 2022
Defined Benefit Obligation - Discount Rate + 100 basis points (35.50) (28.28)
Defined Benefit Obligation - Discount Rate - 100 basis points 40.75 31.38
Defined Benefit Obligation – Salary Escalation Rate + 100 basis points 29.97 28.98
Defined Benefit Obligation - Salary Escalation Rate - 100 basis points (29.54) (27.46)
The sensitivity analyses presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the
defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting
period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the
balance sheet.
The average duration of the defined benefit plan obligation at the end of the reporting period is 7.12 years (Previous
year 6.92 years)
The Company expects to make a contribution of ₹ 153.45 lakhs (Previous year ₹ 158.86 lakhs) to the defined benefit
plans during the next financial year.

74
 75
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 31 : EMPLOYEE BENEFITS (Contd.)

b) Defined Contribution Plan:

Provident Fund contributions are made to the Regional Provident Fund Commissioner (RPFC) which are
charged to the Statement of Profit and Loss as incurred. 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.

2) Other Long term employee benefits:

The liability towards compensated absences (annual leave) for the year ended 31 March 2023 based on actuarial
valuation carried out by using Projected Accrued Benefit Method resulted in increase in liability by ₹ 4.99 lakhs.

Financial Assumptions

Particulars As at As at
31 March 2023 31 March 2022

Discount rate 7.30% 6.78%

Salary escalation rate 9.00% 9.00%

Demographic Accumptions (` in Lakhs)

Particulars As at As at
31 March 2023 31 March 2022

Mortality IALM (2012-14) IALM (2012-14)

Ultimate Ultimate

Employee Turnover 0-2 years- 40% 0-2 years- 40%

2-8 years- 21% 2-8 years- 21%
Above 8 years- 8% Above 8 years- 8%

Leave Availment ratio 2% 2%

Note 32 : EARNINGS PER SHARE*

(` in Lakhs)

2022-23 2021-22

(a)  asic and diluted earnings per share in rupees (Face value ₹10 per
B (968.79) (348.77)
share) (In ₹)

(b) (Loss) after tax as per Statement of Profit and Loss (₹ In Lakhs) (2,810.47) (919.93)

(c) Weighted average number of equity shares outstanding during the 2,90,100 2,63,764
year

* Earnings per share is calculated by dividing the (loss) for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

NOTE 33 : RELATED PARTY DISCLOSURE

Information on related party transactions as required by Indian Accounting Standard (Ind AS) - 24 on related party
disclosures for the year ended 31 March 2023
(a) Holding Company – Asian Paints Limited (Control exists)
(b) Key Managerial Personnel (KMP):

Name of the person Designation

Mr. Shyam Swamy Non - Executive Director

Mr. Ashish Rae Non - Executive Director

Mr. Parag Rane Non - Executive Director

Mrs. Savitha Shivsankar Non - Executive Additional Director

Mr. Kaushal Zavery Chief Financial Officer

(c) 
Entities where directors/ close family members of directos/ directors of holding company having control/
significant influence
Hydra Trading Private Limited
Smiti Holding and Trading Private Limited

(` in Lakhs)
Holding Company Fellow Subsidaries Entities where
directors of holding
company having
control/ significant
influence
2022-23 2021-22 2022-23 2021-22 2022-23 2021-22
I Sales of finished goods
Asian Paints Limited 1,249.62 781.87 - - - -
Hydra Trading Private Limited - - - - 11.19 19.06
Smiti Holding and Trading - - - - 13.81 22.52
Private Limited
II Purchase of raw materials &
finished goods
Asian Paints Limited 210.55 196.63 - - - -
III Reimbursement of expenses 164.60 123.53 - - - -
paid
IV Capex cost incurred 18.35 28.48 - - - -
V Services paid # 1,959.26 1,974.37 - - - -
VI Services rendered 692.07 219.54 - - - -
# Includes recharge of remuneration relating to KMP’s of the Company.

76
 77
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 33 : RELATED PARTY DISCLOSURE (Contd.)
(` in Lakhs)
Holding Company Fellow Subsidaries Entities where
directors of holding
company having
control/ significant
influence
Balances as at Balances as at Balances as at
31 March 31 March 31 March 31 March 31 March 31 March
2023 2022 2023 2022 2023 2022
I Trade and other payables 372.30 781.40 - - - -
II Advances received 83.13 - - - - 23.96
III Trade and other receivables 78.01 114.37 - - - -
Terms and conditions of transactions with related parties
Outstanding balances at the year-end are unsecured, interest free and will be settled in cash. There have been no
guarantees received or provided for any related party receivables or payables.

Note 34 : SEGMENT REPORTING

The Company is in the business of Modular kitchen, kitchen components, wardrobes and wardrobe components,
which in terms of Ind AS 108 “Operating Segments”, consitute a single reporting segment. The Company mainly
operates in a single geographical enviornment i.e. in India.

Note 35 : FINANCIAL RATIOS

No. Ratios Numerator Denominator FY 2022-23 FY 2021-22 % Variance Reasons

1 Current ratio Current Current 0.95 1.21 -21.6% Compared to last year
Assets Liabilities the ratio has moved
favourable with
liquidation of inventory,
controlling trade
receivables, reduction
in supplier advances.
2 Debt-equity Total Debt Total Equity 0.85 0.70 21.5% Favourable, there has
ratio (Borrowings) been reduction in debt
by ` 3.86 Crs.
3 Debt service Earning Finance Costs (2.62) 0.24 Unfavourable Due to rise in interest
coverage available for (excluding rates from 4% to 6.8%
ratio debt service cost debt service cost has
# pertaining gone up twice of last
to lease year.
liabilities) +
Repayment of
borrowings
4 Return on Profit/ (loss) Average Total (96.87) (37.21) Unfavourable With increase in loss
Equity after tax Equity in the current year
return on equity was
unfavourable by 3 times
of last year.
 Sleek International Private Limited

Notes to the Financial Statements (Contd.)

Note 35 : FINANCIAL RATIOS (Contd.)

No. Ratios Numerator Denominator FY 2022-23 FY 2021-22 % Variance Reasons

5 Inventory Cost of goods Average 2.51 2.62 -4.2% Favourable , reduction
turnover ratio sold Inventory in inventory from 144.4
Crs to 97.53 Crs
6 Trade Revenue from Average 7.75 8.19 -5.4% Favourable, trade
receivables operations Trade receivables were
turnover ratio receivables controlled during the
year
7 Trade Net Average 10.89 13.52 -19.4% Unfavourable, as
payables Purchases of Trade purchase were
turnover ratio raw material, payables controlled during the
packing year on account of
material and higher inventory last
stock-in-trade year
8 Net capital Revenue from Working (52.94) 10.29 Favourable During the year
turnover ratio operations Capital company has reduced
(Current its inventory thereby
Assets – freeing up the blocked
Current working capital.
Liabilities)
9 Net profit Profit/(loss) Revenue from -6.4% -2.2% Unfavourable Loss during the year
ratio after tax operations increased compared to
previous year due to
low sales growth.
10 Return Profit/ (loss) Average -24.1% -7.0% Unfavourable With increase in
on capital before Capital loss overall capital
employed interest and Employed employed by the
tax [Total Equity company was utilised in
+ Total Debt financing the loss
(Borrowings)]
11 Return on {MV(T1) – {MV(T0) + 4.8% 4.8%
investment MV(T0) – Sum Sum [W(t) *
[C(t)]} C(t)]}
# Earning for Debt Service = Profit after tax + Depreciation and Amortisation Expense + Finance costs – Gain on sale
of property, plant and equipment (net) – Net gain on modification/ termination of leases.

NOTE 36 : RELATIONSHIP WITH STRUCK OFF COMPANIES

Name of Struck off Nature of Balance outstanding Balance outstanding Relationship with the
Company transactions with as on 31st March as on 31st March 2022 Struck off Company,
struck-off Company 2023 if any
Naveli Décor Private Sale of Goods & (2,01,234) - Dealer
Limited Services
Sarovar Portico Hotel stay for - - Vendor
employee
Renest-Unique Hotel stay for - - Vendor
Mercantile India Ltd. employee

78
 79
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 37 : DEPRECIATION AND AMORTISATION EXPENSE
(` in Lakhs)
Particulars 31 March 2023 31 March 2022
Depreciation of Property, Plant and Equipment (Refer note 2A) 349.48 295.60
Depreciation of Right-Of-Use assets (Refer note 2B) 336.79 323.66
Amortisation of Other Intangible assets (Refer note 3(B&C)) 72.08 65.57
Total 758.35 684.83

NOTE 38 : 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) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
(iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(iv) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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 company (Ultimate Beneficiaries) or
(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company 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,
(vi) The Company has not any 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).

NOTE 39 : APPROVAL & ADOPTION

The Financial statements are approved for issue by the Board of Directors at meeting conducted on 28 April 2023.

For and on behalf of the Board of

Sleek International Private Limited
CIN : U31300MH1993PTC070859
Shyam Swamy Parag Rane
Director Director
DIN No. 08736211 DIN No. 08723015

Ashish Rae Kaushal Zavery

Director Chief Financial Officer
DIN No.: 09540164
Mumbai
Date : 28 April 2023
Weatherseal Fenestration
Private Limited
Contents
Board’s Report........................................................................................................................................................................................... 4-10

Independent Auditor’s Report..............................................................................................................................................................11-19

Balance Sheet................................................................................................................................................................................................20

Statement of Profit and Loss......................................................................................................................................................................21

Cash Flow Statement.............................................................................................................................................................................. 22-23

Statement of Changes in Equity.................................................................................................................................................................24

Notes to financial statements..............................................................................................................................................................25-55

 Weatherseal Fenestration Private Limited

Board’s Report
For the year ended 31 March 2023

Dear Members,

The Board of Directors are pleased to present the First Annual Report of Weatherseal Fenestration Private Limited
along with the audited financial statements for the financial year ended 31st March, 2023.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March, 2023 is summarized as below:

(Amount in ₹ Lakhs)
Particulars 2022-23
Revenue from Operations 2,461.17
Other Operating Revenues 13.28
Other Income 2.99
Total Revenue 2,477.44
Expenses 2,614.94
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) (137.50)
Less: Finance Cost 22.47
Less: Depreciation and Amortisation Expenses 282.97
Profit/(Loss) Before Tax (442.94)
Less: Tax Expense (108.79)
Profit/(Loss) After Tax (334.15)
Other Comprehensive Income -
Total comprehensive Income/ Loss (334.15)

OVERVIEW OF THE COMPANY’S PERFORMANCE AND
STATE OF AFFAIRS
The Company was incorporated on 9th March, 2022.
During the financial year 2022-23, net revenue from
operations on standalone basis is ₹ 2,474.45 lakhs. The
Company incurred loss of ₹ 334.15 lakhs during the
financial year.
The Company’s brand ‘Weatherseal’ is one of the
leading brands in uPVC Windows and Doors space and
have established reputable presence in the retail and
project customer segment, primarily in South India. The
Company’s offerings adopt European Technology with
all the raw materials of international quality standards
ensuring aesthetic finish and durability. Weatherseal is a
consortium to the efficient and superior quality of uPVC
windows for every purpose of uPVC Windows and uPVC
Doors.
There are no material changes and commitments
affecting the financial position of the Company which
have occurred since date of incorporation of the
Company and on the date of this report. There has been
no change in the nature of business of the Company.
INDUSTRIAL RELATIONS
The Company has always considered its workforce as its
valuable asset and continues to invest in their excellence
and development programs. The industrial relations of
the Company remained peaceful and cordial.
SHARE CAPITAL
The paid-up Equity Share Capital as on 31st March, 2023
is ₹ 2,04,090. During the year under review, the Company
has not issued any shares with differential voting rights
nor granted stock options or sweat equity shares.
DIVIDEND
During the year under review, the Board of Directors
has not recommended dividend on the equity shares of
the Company. Further, the Company has not transferred
any amount to the Investor Education & Protection Fund
(IEPF) and no amount is lying in Unpaid Dividend Account
of the Company.

4

Board’s Report (Contd.)
UNPAID DIVIDEND & Investor Education and
protection fund(“IEPF”):
The Company has not transferred any amount to the IEPF
and no amount is lying in Unpaid Dividend Account of the
Company.
TRANSFER TO RESERVES
During the year under review, the Company has not
transferred any amount to General Reserves of the
Company.
SUBSIDIARY STATUS
Pursuant to the Shareholders Agreement dated 1st April,
2022, the Company had allotted 10,409 shares under
private placement basis to Asian Paints Limited, being
51% of the total paid up equity share capital of the
Company.
Pursuant to this further issue of equity shares, the
Company is a Subsidiary Company of Asian Paints Limited.
The Company does not have any Subsidiary, Associates or
Joint Ventures as on date of this report.
PUBLIC DEPOSITS
During the year under review, the Company has not
accepted any deposit within the meaning of
Section 73 and 74 of the Companies Act, 2013
(“the Act”), read together with the Companies
(Acceptance of Deposit) Rules, 2014. Hence, the
requirement for furnishing of details relating to deposits
covered under Chapter V of the Act or the details of
deposits which are not in compliance with the
Chapter V of the Act is not applicable.
PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS
Details of Loans, Guarantees and Investments, if any,
covered under the provisions of Section 186 of the Act
are given in the notes to the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Change in Directorate
The Board of Directors of the Company appointed
Mr. Parag Rane (DIN:08723015) and Mr. Shyam Swamy
(DIN:08736211) as the Additional Directors
(Non-Executive Directors) of the Company on 14th June,
2022, in terms of Section 152, 161 and other applicable
provisions, if any, of the Act, subject to approval of
shareholders.
5
Statutory Reports
Further, the Board of Directors of the Company
appointed Mr. Harish Munireddy (DIN:06876848) as the
Whole-time Director of the Company on 14th June, 2022,
in terms of Section 149, 196, 197, 198, 203, Schedule V and
other applicable provisions of the Act, subject to approval
of shareholders.
Ms. Prathiba Reddy, Director, stepped down from the
Board of Directors of the Company with effect from
14th June, 2022.
The appointment of Mr. Parag Rane and
Mr. Shyam Swamy, as Directors of the Company, liable
to retire by rotation was approved by the shareholders
at the Extra-Ordinary General Meeting (“EGM”) of the
Company held on 17th June, 2022. Further, appointment
of Mr. Harish Munireddy as Whole-time Director was
approved by shareholders at the EGM of the Company
held on 17th June, 2022.
Retirement by rotation and subsequent
re-appointment
In accordance with the provisions of Section 152 and
other applicable provisions, if any, of the Act read with
Companies (Appointment and Qualification of Directors)
Rules, 2014 (including any statutory modification(s) or
re-enactment(s) thereof for the time being in force) and
the Articles of Association of the Company, Mr. Shyam
Swamy, of the Company is liable to retire by rotation at
the ensuing Annual General Meeting (“AGM”) and being
eligible, offers himself for re-appointment.
Key Managerial Personnel
Appointment of Mr. Harish Munireddy as Chief
Executive Officer of the Company
Mr. Harish Munireddy was appointed as the Chief
Executive Officer of the Company with effect from
14th June, 2022, in terms of the provisions of Section 203
and other applicable provisions, if any, of the Act.
Appointment of Ms. Prathiba Reddy as the Chief
Operating Officer of the Company
Ms. Prathiba Reddy was appointed as the Chief Operating
Officer of the Company with effect from 14th June, 2022,
in terms of the provisions of Act read with the Companies
(Appointment and Qualification of Directors) Rules, 2014
and other applicable rules made thereunder.
 Weatherseal Fenestration Private Limited

Board’s Report (Contd.)

Performance evaluation of the Board
Provisions of Section 134(3) (p) read with Rule 8(4)
Companies (Accounts) Rules, 2014 is not applicable to the
Company.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act, the Directors
confirm that:
A. in the preparation of the annual accounts for the
financial year ended 31st March, 2023, the applicable
accounting standards and Schedule III of the
Companies Act, 2013, have been followed and there
are no material departures from the same;
are no materially significant related party transactions
made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which
may have a potential conflict with the interest of the
Company at large.
The details of the related party transactions are set out in
Notes to the financial statements of the Company.
The Form AOC- 2 pursuant to Section 134(3)(h) of the Act
and Rule 8(2) of the Companies (Accounts) Rules, 2014 is
set out as Annexure [1].
None of the Director(s) have any pecuniary relationships
or transactions vis-à-vis the Company.

B. the Directors have selected such accounting policies MEETINGS OF THE BOARD
and applied them consistently and made judgments
During the financial year 2022-23, 15 meetings of the
and estimates that are reasonable and prudent so as
Board of Directors were held on 1st April, 2022, 6th April,
to give a true and fair view of the state of affairs of
2022, 22nd April, 2022, 29th April, 2022, 4th May, 2022, 2nd
the Company as on 31st March 2023 and profit of the
June, 2022, 4th June, 2022, 10th June, 2022, 14th June,
Company as on 31st March, 2023;
2022, 14th July, 2022, 22nd July, 2022, 12th October, 2022,
C. proper and sufficient care has been taken for the 19th October, 2022, 8th December, 2022 and 17th January,
maintenance of adequate accounting records in 2023. The maximum time gap between 2 meetings did
accordance with the provisions of the Companies not exceed 120 days.
Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud Number of Board meetings attended by Directors during
and other irregularities; the financial year 2022-23, either in person or through
video conference is as follows:
D. the annual accounts have been prepared on a ‘going
Sr. Name of the Number of Number of
concern’ basis;
No. Director(s) meeting(s) meeting(s)
E. proper internal financial controls laid down by the entitled to attended
Directors were followed by the Company and that attend
such financial controls are adequate and operating 1. Mr. Harish Munireddy 15 15
effectively; and
2. Ms. Prathiba Reddy* 8 8

F. proper systems to ensure compliance with the 3. Mr. Parag Rane #

7 7
provisions of all applicable laws were in place and 4. Mr. Shyam Swamy #
7 2
that such systems were adequate and operating
Notes:
effectively.
1. #Mr. Parag Rane and Mr. Shyam Swamy were
appointed as Director of the Company with effect
RELATED PARTY TRANSACTIONS
from 14th June, 2022.
During the financial year 2022-23, the Company has
2. *Ms. Prathiba Seetarampalya Balashanker Reddy
entered into transactions with related parties as defined
stepped down as Director of the Company with
under Section 2(76) of the Act read with the Companies
effect from 14th June, 2022.
(Specification of Definitions Details) Rules, 2014 all of
which were in the ordinary course of business and on 3. The Company has complied with the applicable
arm’s length basis and in accordance with the provisions Secretarial Standards in respect of all the above
of the Act read with the Rules issued thereunder. There Board meetings.

6

Board’s Report (Contd.)
AUDITORS AND AUDITORS’ REPORT
A. John Moris & Co.; Chartered Accountant, Bangalore
(FRN: 007220S), were appointed as first Statutory
Auditors of the Company at the Board Meeting of the
Company held on 1st April, 2022 to hold office until the
conclusion of first AGM.
The Company has received written consent and
certificate of eligibility in accordance with
Sections 139, 141 and other applicable provisions of the
Act and Rules issued thereunder from A. John Moris &
Co.; Chartered Accountant. They have confirmed to hold
a valid certificate issued by the Peer Review Board of the
Institute of Chartered Accountants of India (ICAI).
The Auditors’ Report for the financial year ended
31st March, 2023 on the financial statements of the
Company is a part of this Annual Report. The Auditors’
Report for the financial year ended 31st March, 2023 does
not contain any qualifications, reservation or adverse
remark.
There were no incidences of reporting of frauds by
Statutory Auditors of the Company under Section 143(12)
of the Act read with Companies (Accounts) Rules, 2014.
There was no revision of financial statements and Board’s
Report of the Company during the year under review
DISCLOSURE RELATING TO REMUNERATION OF
DIRECTORS, KEY MANAGERIAL PERSONNEL AND
PARTICULARS OF EMPLOYEES
The details of remuneration paid to Directors and Key
Managerial Personnel of the Company is being disclosed
in the Annual Return.
The Company has not employed any individual whose
remuneration falls within the purview of the limits
prescribed under the provisions of Section 197 of
the Act, read with Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
7
Statutory Reports
PARTICULARS OF CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS & OUTGO
A) Steps taken on conservation or impact on
conservation of energy:
Energy conservation dictates how efficiently a
Company can conduct its operations. The Company
recognized the importance of energy conservation in
decreasing the deleterious effects of global warming
and climate change. The Company has undertaken
various energy efficient practices that have reduced
the growth in carbon-dioxide (CO2) emissions and
strengthened the Company’s commitment towards
becoming an environment friendly organisation.
B) Steps taken by the Company for utilizing
alternate Source of energy:
Significant measures are taken to reduce energy
consumption by using energy efficient equipments.
C) Capital investment on energy conservation
equipment
During year under review, the Company had not
made any investment on the energy conservation
equipments as the same were not warranted.
TECHNOLOGY ABSORPTION
A) Efforts made towards technology absorption
The Company is carrying out various activities to
fulfill short term and long-term business goals of
the Company which include energy savings and
development of durable products.
B) Benefits derived as a result of the above efforts
Significant cost reduction achieved as a result of use
of cost effective local and imported raw materials
have helped maintain cost competitiveness.
C) The Company has not imported any technology
and has not entered into any technology transfer
agreement.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There are no earnings in foreign currency. There is no
outflow of foreign currencies during the financial year.
 Weatherseal Fenestration Private Limited
Board’s Report (Contd.)
RISK MANAGEMENT
The Board has put in place appropriate framework and
mechanism to review the risks for the Company including
the operational and business risks. The Board reviews the
risk mitigation plans from time to time.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
AT WORKPLACE
The Company has in place a Policy on Prevention
of Sexual Harassment at Workplace in line with the
requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act,
2013 and Rules framed thereunder.
During the financial year 2022-23, no complaints were
received by the Company. The Company is committed to
provide a safe and conducive work environment to all of
its employees and associates.
INTERNAL FINANCIAL CONTROLS AND THEIR
ADEQUACY
The Company has in place adequate internal financial
controls with reference to Financials. The same is subject
to review periodically by the Board of Directors for its
effectiveness. The control measures adopted by the
Company have been found to be effective and adequate
to the Company’s requirements.
MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records
as specified by the Central Government under
sub-section (1) of section 148 of the Act.
ORDERS, IF ANY, PASSED BY REGULATORS OR
COURTS OR TRIBUNALS
No orders have been passed by the regulators or courts
or tribunals impacting the going concern status and the
Company’s operations.
DISCLOSURE UNDER SECTION 43(A)(II) OF THE Act:
The Company has not issued any shares with differential
rights and hence no information as per provisions of
Section 43(a)(ii) of the Act read with Rule 4(4) of the
Companies (Share Capital and Debenture) Rules, 2014 is
furnished.
8
DISCLOSURE UNDER SECTION 54(1)(D) OF THE ACT:
The Company has not issued any sweat equity shares
during the year under review and hence no information
as per provisions of Section 54(1)(d) of the Act read
with Rule 8(13) of the Companies (Share Capital and
Debenture) Rules, 2014 is furnished.
DISCLOSURE UNDER SECTION 62(1)(B) OF THE Act:
The Company has not issued any equity shares under
Employees Stock Option Scheme during the year under
review and hence no information as per provisions of
Section 62(1)(b) of the Act read with Rule 12(9) of the
Companies (Share Capital and Debenture) Rules, 2014 is
furnished.
DISCLOSURE UNDER SECTION 67(3) OF THE Act:
During the year under review, there were no instances
of non-exercising of voting rights in respect of shares
purchased directly by employees under a scheme
pursuant to Section 67(3) of the Act read with Rule 16(4)
of Companies (Share Capital and Debentures) Rules, 2014.
ANNUAL RETURN
The Annual Return of the Company in terms of
Section 92(3) of the Act, will be uploaded on the website
of the Company at https://weatherseal.com/.
COMPLIANCE WITH SECERTARIAL STANDARDS
The Company has complied with Secretarial Standards
issued by the Institute of Company Secretaries of India on
Meeting of Board of Directors and General Meeting.
OTHER DISCLOSURES
i. No application has been made under the Insolvency
and Bankruptcy Code; hence the requirement to
disclose the details of application made or any
proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the year
alongwith their status as at the end of the financial
year is not applicable; and
ii. The requirement to disclose the details of difference
between amount of the valuation done at the time
of onetime settlement and the valuation done while
taking loan from the Banks or Financial Institutions
along with the reasons thereof, is not applicable.
 9
Board’s Report (Contd.)

Statutory Reports
ACKNOWLEDGEMENTS Company and for the continued support and
co-operation.
Your Directors acknowledge with deep sense of
appreciation the co-operation received from various For and on behalf of the Board of Directors
other Central and State Government agencies, other
Ministries, Customers, Bankers and other stakeholders.
Your Directors express deep sense of appreciation for Harish Munireddy Parag Rane
the dedicated and sincere services rendered by the Wholetime Director Nominee Director
employees of the Company at all levels. (DIN: 06876848) (DIN: 08723015)

Your Directors also wish to express gratitude to all the Date: 3rd May, 2023
Shareholders for the confidence reposed by them in the Place: Bangalore
 Weatherseal Fenestration Private Limited

Annexure 1 to Board’s Report

FORM AOC – 2
[Pursuant to Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014]

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties
referred to in Section 188(1) of the Companies Act, 2013 including certain arms’ length transactions under fourth
proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis:

a. Name(s) of the related party and nature of relationship
b. Nature of contracts/arrangements/transactions
c. Duration of the contracts / arrangements/transactions
d. Salient terms of the contracts or arrangements or transactions including the value, if
any NIL
e. Justification for entering into such contracts or arrangements or transactions
f. Date(s) of approval by the Board
g. Amount paid as advances, if any:
h. Date on which (a) the special resolution was passed in general meeting as required
under first proviso to section 188

2. Details of material contracts or arrangements or transactions at arm’s length basis:

a. Name(s) of the related party and nature of relationship
b. Nature of contracts/arrangements/transactions
c. Duration of the contracts / arrangements/transactions
NIL
d. Salient terms of the contracts or arrangements or transactions including the value, if
any.
e. Date(s) of approval by the Board, if any
f. Amount paid as advances, if any

All related party transations are in the ordinary course of business and on arm’s length basis and are approved by the
Board of Directors of the Company.

For and on behalf of the Board of Directors

Harish Munireddy Parag Rane

Wholetime Director Nominee Director
(DIN: 06876848) (DIN: 08723015)

Date: 3rd May, 2023

Place: Bangalore

10

Independent Auditor’s Report
To The Members of
Weatherseal Fenestration Pvt Ltd
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements
of Weatherseal Fenestration Pvt Ltd (“the Company”),
which comprise the Balance Sheet as at 31st March 2023,
and the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and
the Statement of Changes in Equity for the year then
ended, and 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
financial statements give the information required by
the Companies Act, 2013 (“the Act”) in the manner so
required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under
section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, (“Ind
AS”) and other accounting principles generally accepted
in India, of the state of affairs of the Company as at 31st
March 2023, and its loss, total comprehensive loss, its
cash flows and the changes in equity for the year ended
on that date.
The Key Audit Matter
Revenue is one of the key profit drivers and is therefore
susceptible to misstatement. Cut-off is the key assertion
insofar as revenue recognition is concerned, since an
inappropriate cut-off can result in material misstatement
of results for the year
Information Other than the Financial Statements
and Auditor’s Report Thereon
• The Company’s Board of Directors is responsible
for the other information. The other information
obtained at the date of this auditor’s report is
Board’s Report including the annexures to the
Board’s Report, but does not include the financial
statements and our auditor’s report thereon.
• Our opinion on the financial statements does not
cover the other information and we do not express
any form of assurance conclusion thereon.
11
Financial Statements
Basis for Opinion
We conducted our audit of the financial statements
in accordance with the Standards on Auditing
specified under section 143(10) of the Act (SAs). Our
responsibilities under those Standards are further
described in the Auditor’s Responsibility for the Audit
of the 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 (ICAI) together with the ethical
requirements that are relevant to our audit of the
financial statements under the provisions of the Act and
the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the ICAI’s Code of Ethics. We believe
that the audit evidence obtained by us is sufficient and
appropriate to provide a basis for our audit opinion on
the 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 current period. These matters were
addressed in the context of our audit, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters. We have determined the
matter described below to be the key audit matter to be
communicated in our report:
How was the matter addressed in our audit
Our audit procedures with regard to revenue
recognition included testing of cut-offs and performing
analytical review procedures.
• In connection with our audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with
the financial statements or our knowledge obtained
during the course of our 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.
 Weatherseal Fenestration Private Limited
Independent Auditor’s Report (Contd.)
Management’s Responsibility for the 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 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 Ind AS and other accounting
principles generally accepted in India. This responsibility
also includes maintenance of adequate accounting
records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting
policies; making judgments and estimates that are
reasonable and prudent; and 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 financial statement
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the 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.
Those Board of Directors are also responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibility for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about
whether the 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 financial statements.
12
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 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 financial
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 system 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 the
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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events
in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in
the financial statements that, individually or in
aggregate, makes it probable that the economic

Independent Auditor’s Report (Contd.)
decisions of a reasonably knowledgeable user of
the financial statements may be influenced. We
consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work
and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements
in the financial statements.
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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on
our audit 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 of the aforesaid
financial statements.
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 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.
d) In our opinion, the aforesaid financial
statements comply with the Ind AS specified
under Section 133 of the Act.
e) On the basis of the written representations
received from the directors as on 31st March,
2023 taken on record by the Board of Directors,
none of the directors is disqualified as on 31st
March, 2023 from being appointed as a director
in terms of Section 164(2) of the Act.
13
Financial Statements
f) With respect to the adequacy of the internal
financial controls over financial reporting of
the Company and the operating effectiveness
of such controls, refer to our separate Report
in “Annexure A”. Our report expresses an
unmodified opinion on the adequacy and
operating effectiveness of the Company’s
internal financial controls over financial
reporting.
g) With respect to the other matters to be
included in the Auditor’s Report in accordance
with the requirements of Section 197(16) of the
Act, as amended,
In our opinion and to the best of our
information and according to the explanations
given to us, the remuneration paid by the
Company to its directors during the year is in
accordance with the provisions of Section 197
of 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 did not have any pending
litigations on its financial position in its
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 were no amounts which were
required to be transferred to the Investor
Education and Protection Fund by the
Company.
iv. 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:
a. The Management has represented
that, to the best of it’s knowledge
 Weatherseal Fenestration Private Limited
Independent Auditor’s Report (Contd.)
and belief, as disclosed in the notes to
accounts, no funds (which are material
either individually or in the aggregate)
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.
b. The Management has represented,
that, to the best of it’s knowledge
and belief, as disclosed in the notes to
accounts, no funds (which are material
either individually or in the aggregate)
have been received by the Company
from any person(s) or entity(ies),
including foreign entities.
14
c. Based on the audit procedures that
has been 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
(i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any
material misstatement.
v. The Company has not declared or paid any
dividend during the year and has not proposed
final dividend for the year
2. As required by the Companies (Auditor’s Report)
Order, 2016 (“the Order”) issued by the Central
Government in terms of Section 143(11) of the Act,
we give in “Annexure B” a statement on the matters
specified in paragraphs 3 and 4 of the Order.

Annexure “A” To The Independent Auditor’s Report
(Referred to in paragraph 1(f) under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
Report on the Internal Financial Controls Over
Financial Reporting under Clause (i) of Sub-section 3
of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over
financial reporting of Weatherseal Fenestration Pvt Ltd
(“the Company”) as of March 31, 2023 in conjunction
with our audit of the Ind AS 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”.
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 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 over financial
reporting of the Company 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”) issued by
the Institute of Chartered Accountants of India and the
Standards on Auditing prescribed under Section 143(10)
of the Companies Act, 2013, 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 was
established and maintained and if such controls operated
effectively in all material respects.
15
Financial Statements
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls system over financial reporting and their
operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining
an understanding of internal financial controls over
financial reporting, 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 Company’s internal financial controls
system over financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
A company’s internal financial control over financial
reporting 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 over financial reporting 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.
Inherent Limitations of Internal Financial Controls
Over Financial Reporting
Because of the inherent limitations of internal financial
controls over financial reporting, 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 over financial
reporting to future periods are subject to the risk that
 Weatherseal Fenestration Private Limited
Annexure “A” To The Independent Auditor’s Report (Contd.)
the internal financial control over financial reporting 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, to the best of our information and
according to the explanations given to us, the Company
has, in all material respects, an adequate internal
16
financial controls system over financial reporting and
such internal financial controls over financial reporting
were operating effectively as at March 31, 2023, based
on the criteria for internal financial control over financial
reporting 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.

Annexure “B” To The Independent Auditor’s Report
(Referred to in paragraph 2 under ‘Report on Other
Legal and Regulatory Requirements’ section of our
report of even date)
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 the Property Plant and
Equipment and relevant details of right-of-use
assets.
(B) The Company has maintained proper records
showing full particulars of intangible assets.
(b) The Property, Plant and Equipment, Capital working
progress and right-of-use assets were physically
verified during the year by the Management which,
in our opinion provides for physical verification at
reasonable intervals. No material discrepancies were
noticed on such verification.
(c) The company do not have any immovable property
and has not registered sale deed / transfer deed /
conveyance deed and hence reporting under clause
(i) (c) of the Order is not applicable.
(d) The Company has not revalued its Property, Plant
and Equipment (including Right of Use assets) and
intangible assets during the year.
(e) No proceedings have been initiated or is pending
against the Company as at March 31, 2023 for
holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (as amended in
2016) and rules made thereunder.
ii. (a) The inventory were physically verified during the
year by the management at reasonable intervals.
In our opinion and based on the information
and explanations given to us, the coverage and
procedure of such verification by the Management
is appropriate having regard to the size of the
Company and the nature of its operations. No
discrepancies of 10% or more in the aggregate
for each class of inventories were noticed on such
physical verification of inventories
17
Financial Statements
(b) According to the information and explanations given
to us, the Company has been sanctioned any working
capital facility from banks institutions on the basis
of security of current assets, the quarterly returns
or statements filed by the company with such banks
or financial institutions are in agreement with the
books of account of the Company
iii. The Company has not made any investments in,
provided any guarantee or security, or granted any
loans or advances in the nature of loans, secured
or unsecured, to companies, firms, Limited Liability
Partnerships or any other parties during the year,
and hence reporting under clause (iii) of the Order is
not applicable.
iv. The Company has not granted any loans, made
investments or provided guarantees or securities
and hence reporting under clause (iv) of the Order is
not applicable.
v. The Company has not accepted any deposit or
amounts which are deemed to be deposits. Hence,
reporting under clause (v) of the Order is not
applicable.
vi. The maintenance of cost records has not been
specified by the Central Government under Section
148(1) of the Companies Act, 2013 and hence this
clause is not applicable to the company.
vii. (a) Undisputed statutory dues, including Goods
and Service tax, Provident Fund, Employees’
State Insurance, Income-tax, Sales Tax, duty of
Customs, duty of Excise, Value Added Tax, cess
and other material statutory dues applicable to
the Company have been regularly deposited by
it with the appropriate authorities in all cases
during the year
(b) There were no undisputed amounts payable
in respect of Service tax, Provident Fund,
Employees’ State Insurance, Income-tax, Sales
Tax, duty of Customs, duty of Excise, Value
Added Tax, cess and other material statutory
dues in arrears as at March 31, 2023 for a period
of more than six months from the date they
became payable.
 Weatherseal Fenestration Private Limited
Annexure “B” To The Independent Auditor’s Report (Contd.)
viii ) There were no transactions relating to previously
unrecorded income that were surrendered or
disclosed as income in the tax assessments under
the Income Tax Act, 1961 (43 of 1961) during the year.
ix ) (a) In our opinion, the Company has not defaulted
in the repayment of loans or other borrowings
or in the payment of interest thereon to any
lender during the year.
(b) The Company has not been declared wilful
defaulter by any bank or financial institution or
government or any government authority.
(c ) The Company has not taken any term loan
during the year and there are no unutilised term
loans at the beginning of the year and hence,
reporting under clause (ix)(c) of the Order is not
applicable.
(d) On an overall examination of the financial
statements of the Company, funds raised on
short- term basis have, prima facie, not been
used during the year for long-term purposes by
the Company.
(e) The Company has not taken any funds from any
entity or person on account of or to meet the
obligations and hence, reporting under clause
(ix)(e) of the Order is not applicable
(f) The Company has not raised loans during
the year on the pledge of securities held in
its subsidiaries or joint ventures or associate
companies.
(x) (a) The Company has not raised moneys by way
of initial public offer or further public offer
(including debt instruments) during the year
and hence reporting under clause (x)(a) of the
Order is not applicable.
(b) During the year the Company has not made any
preferential allotment or private placement of
shares or convertible debenture (fully or partly
or optionally) and hence reporting under clause
(x)(b) of the Order is not applicable to Company.
(xi) (a) To the best of our knowledge, no fraud by the
Company and no material fraud on the Company
has been noticed or reported during the year.
18
(b) To the best of our knowledge, no report
under sub-section (12) of section 143 of the
Companies Act has been filed in Form ADT-4 as
prescribed under rule 13 of Companies (Audit
and Auditors) Rules, 2014 with the Central
Government, during the year and upto the date
of this report.
(c) As represented to us by the Management, there
were no whistle blower complaints received by
the Company during the year (and upto the date
of this report).
(xii) The company is not a Nidhi company and hence
reporting under clause (xii) of the Order is not
applicable
(xiii) In our opinion, the Company is in compliance with
Section 177 and 188 of the Companies Act, where
applicable, for all transactions with the related
parties and the details of related party transactions
have been disclosed in the financial statements etc.
as required by the applicable accounting standards.
(xiv) Internal Audit is not applicable to the Company ,
hence reporting under section (xiv) of the Order is
not applicable
xv) In our opinion during the year the Company has not
entered into any non-cash transactions with any
of its directors or or persons connected with such
directors and hence provisions of section 192 of
the Companies Act, 2013 are not applicable to the
Company.
xvi) The Company is not required to be registered under
section 45-IA of the Reserve Bank of India Act, 1934.
Hence, reporting under clause (xvi)(a), (b), (c) and (d)
of the Order is not applicable.
xvii) The Company has incurred cash losses amounting to
₹ 207.5 lakhs during the financial year covered by our
audit, the first year of operation of the company.
xviii) There has been no resignation of the statutory
auditors of the Company during the year
xix) On the basis of the financial ratios, ageing and
expected dates of realization of financial assets and
payment of financial liabilities, other information
accompanying the financial statements and
our knowledge of the Board of Directors and
management plans and based on our examination of
 19
Annexure “B” To The Independent Auditor’s Report (Contd.)

Financial Statements
the evidence supporting the assumptions, nothing five crore or more during the immediately preceding
has come to our attention, which causes us to financial year and hence, provisions of Section 135
believe that any material uncertainty exists as on the of the Act are not applicable to the Company during
date of the audit report indicating that Company is the year. Accordingly, reporting under clause (xx) of
not capable of meeting its liabilities existing at the the Order is not applicable for the year
date of balance sheet date 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 For A John Moris &C0
state that our reporting is based on the facts up to Chartered Accountants
the date of the audit report and we neither give any FRN 07220S
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 A G Krishnan
and when they fall due. Partner
Membership Number 021183
(xx) The Company was not having net worth of rupees UDIN 23021183BGTCPZ5902
five hundred crore or more, or turnover of rupees
one thousand crore or more or a net profit of rupees Place: Bangalore
Date : 3-May-2023
 Weatherseal Fenestration Private Limited

Balance Sheet
As at 31 March 2023
(₹ in Lakhs)
Notes As at 31 March
2023
ASSETS
Non-current assets
Property, Plant and Equipment 2A 271.29
Right of Use Assets 2B 172.69
Other Intangible assets 3 1,081.59
Financial Assets
Other financial assets 4 14.84
Deferred tax assets (net) 5 108.79
1,649.20
Current assets
Inventories 7 510.94
Financial Assets
Trade receivables 8 656.50
Cash and cash equivalents 9 127.48
Other Balances with Banks 9 5.00
Other financial assets 4 93.16
Other current assets 6 353.36
1,746.44
Total Assets 3,395.64
EQUITY AND LIABILITIES
EQUITY
Equity Share capital 10 2.04
Other Equity 11 1,548.94
1,550.98
LIABILITIES
Non-current liabilities
Financial Liabilities
Lease liabilities 13 118.02
Provisions 15 3.84
121.86
Current liabilities
Financial Liabilities
Borrowings 12 678.41
Lease liabilities 13 56.60
Trade Payables
- Total Outstanding dues of Micro Enterprises and Small Enterprises 16 519.30
- Total Outstanding dues of creditors other than Micro Enterprises and Small 16 71.15
Enterprises
Other Financial liabilities 14 189.77
Other current liabilities 17 207.56
Provisions 15 0.01
1,722.80
Total Equity and Liabilities 3,395.64
Significant accounting policies and key accounting estimates and judgements 1
See accompanying notes to financial statements 2 - 36

As per our report of even date For and on behalf of the Board of
For A John Moris & Co Weatherseal Fenestration Private Limited
Chartered Accountants
Firm’s Registration No: 007220S CIN : U36990KA2022PTC158753
Krishnan AG Shyam Swamy Harish Munireddy Parag Rane
Partner Director Director Director
Membership No: 021183 DIN No. 08736211 DIN No.: 06876848 DIN No. 08723015
Bengaluru
Date : 3 May 2023
20
 21
Statement of Profit and Loss

Financial Statements
For the period of 9 Mar 2022 to 31 Mar 2023

(₹ in Lakhs)
Particulars Notes 31 March 2023
REVENUE FROM OPERATIONS
Revenue from sale of products 18A 2,461.17
Other Operating Revenue 18A 13.28
Other Income 19 2.99
Total Income (I) 2,477.44
EXPENSES
Cost of materials consumed 20A 1,781.95
Purchases of stock in trade 20B 37.95
Changes in inventories of finished goods, Stock-in-trade and work in progress 20C (130.88)
Employee benefits expense 21 371.40
Other expenses 24 554.52
Total expenses (II) 2,614.94
EARNING BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (I-II) (137.50)
Finance costs 22 22.47
Depreciation and amortisation expense 23 282.97
Profit/ (Loss) before tax (442.94)
Tax expenses (108.79)
Current tax -
Deferred Tax 5 (108.79)
Profit/(Loss) for the year (334.15)
Other Comprehensive Income (OCI)
Items that will not be reclassified to Statement of Profit and Loss
Remeasurement gains/(losses) on defined benefit plans -
Total Other Comprehensive Income -
Total Comprehensive (Loss) for the year (334.15)
Earnings per share (Face value of ` 10 each) 30
(1) Basic (in `) (1,637.26)
(2) Diluted (in `) (1,637.26)
Significant accounting policies and key accounting estimates and judgements 1
See accompanying notes to financial statements 2 - 36

As per our report of even date For and on behalf of the Board of
For A John Moris & Co Weatherseal Fenestration Private Limited
Chartered Accountants
Firm’s Registration No: 007220S CIN : U36990KA2022PTC158753
Krishnan AG Shyam Swamy Harish Munireddy Parag Rane
Partner Director Director Director
Membership No: 021183 DIN No. 08736211 DIN No.: 06876848 DIN No. 08723015
Bengaluru
Date : 3 May 2023
 Weatherseal Fenestration Private Limited

Statement of Cash Flow

For the period of 9 Mar 2022 to 31 Mar 2023

(₹ in Lakhs)
Particulars 31 March 2023
(A) Cash Flow From Operating Activities
Profit/ (Loss) Before Tax (442.94)
Adjustments for :
Depreciation and Amortisation expense 282.97
Finance costs 22.47
Operating (Loss) before working capital changes (137.50)
Adjustments for :
(Increase) in inventories (510.94)
(Increase) in trade receivables (656.50)
(Increase) in financial assets (108.00)
(Increase) in other current assets (353.36)
Increase in trade payables 590.45
Increase in other financial liabilities 189.77
Increase in other liabilities and provisions 211.41
Cash (used in) Operating activities (774.67)
Income Tax paid (net of refund) -
Net Cash (used in) Operating activities (774.67)
(B) Cash Flow from Investing Activities
Purchase of Property, plant and equipment and other intangible assets (1,580.20)
Payment for acquiring right of use assets (7.95)
Net Cash (used in) Investing activities (1,588.15)
(C) Cash Flow from Financing Activities
Proceeds from issue of equity shares 1,885.13
(Repayment)/Proceeds from current borrowings (net) 100.40
Repayment of principal portion of lease liabilities (45.77)
Finance costs (including interest on lease liabilities) paid (22.47)
Net Cash generated from Financing activities 1,917.29
(D) Net (decrease)/ increase in cash and cash equivalents: (445.53)
Add: Cash and cash equivalents as at 1 April -
Cash and cash equivalents as at 31 March (445.53)

22
 23

Statement of Cash Flow (Contd.)

Financial Statements
For the period of 9 Mar 2022 to 31 Mar 2023
(₹ in Lakhs)

Notes:

(a) The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Indian
Accounting Standard (Ind AS-7) - Statement of Cash Flow.

31 March 2023
(b) Cash and Cash equivalents comprises of
- Cash on hand -
- Balances with Banks
- Current Accounts 20.79
- Overdraft Accounts 91.42
- Term deposits 20.27
Less: Loan repayable on demand - Cash Credit /Overdraft Accounts (578.01)
Cash and cash equivalents in Cash Flow Statement as per Note 9 and Note 12 (445.53)

As per our report of even date For and on behalf of the Board of
For A John Moris & Co Weatherseal Fenestration Private Limited
Chartered Accountants
Firm’s Registration No: 007220S CIN : U36990KA2022PTC158753
Krishnan AG Shyam Swamy Harish Munireddy Parag Rane
Partner Director Director Director
Membership No: 021183 DIN No. 08736211 DIN No.: 06876848 DIN No. 08723015
Bengaluru
Date : 3 May 2023
 Weatherseal Fenestration Private Limited

Statement of Changes In Equity

For the period of 9 Mar 2022 to 31 Mar 2023

A) EQUITY SHARE CAPITAL (₹ in Lakhs)

As at
31 March 2023
Balance at the beginning of the reporting year -
Changes in equity share capital during the year 2.04
Balance at the end of the reporting year 2.04

B) OTHER EQUITY
Reserves and Surplus Total
Securities Retained earnings
premium
Balance as on 9 March 2022 (A) - - -
Add: Profit/ (Loss) for the year 1,883.09 (334.15) 1,548.94
Total Comprehensive Income for the year (B) 1,883.09 (334.15) 1,548.94
Balance as on 31 March 2023 (C) = (A+B) 1,883.09 (334.15) 1,548.94

As per our report of even date For and on behalf of the Board of
For A John Moris & Co Weatherseal Fenestration Private Limited
Chartered Accountants
Firm’s Registration No: 007220S CIN : U36990KA2022PTC158753
Krishnan AG Shyam Swamy Harish Munireddy Parag Rane
Partner Director Director Director
Membership No: 021183 DIN No. 08736211 DIN No.: 06876848 DIN No. 08723015
Bengaluru
Date : 3 May 2023

24

Notes to financial statements
For the year ended 31st March 2023
Company Background
Weatherseal Fenestration Private Limited (‘the
Company’) was incorporated in India as a private limited
company on 9th March 2022 under the Companies Act,
1956. The registered office of the Company is located
at Plot No. 249-C, Mallur II Phase, Industrial area,
Kanachikkanahalli, Kasaba Hobli, Mallur, Karnataka
563130, India. Asian Paints Limited is the holding
company having majority stake and ultimate control.
The Company is engaged in the business of interior
decoration/furnishing, including manufacturing uPVC
Windows and door systems.
1. Significant Accounting Policies
and Key accounting estimates and
judgements
Significant Accounting Policies: -
1.1 Basis of preparation of financial statements
These financial statements are the separate financial
statements of the Company (also called standalone
financial statements) prepared in accordance with
Indian Accounting Standards (‘Ind AS’) notified
under section 133 of the Companies Act 2013, read
together with the Companies (Indian Accounting
Standards) Rules, 2015 (as amended). These financial
statements are first financial statement prepared
by the Company after incorporation and thus the
period of financial statement is from the date of
incorporation ie. 9th March 2022 to 31st March 2023
These financial statements have been prepared and
presented under the historical cost convention, on
the accrual basis of accounting except for certain
financial assets and financial liabilities that are
measured at fair values at the end of each reporting
period, as stated in the accounting policies set out
below. The accounting policies have been applied
consistently over all the periods presented in these
financial statements.
The financial statements are presented in Indian
Rupees (which is also the functional currency of the
Company) and is rounded off to the nearest lacs
except otherwise indicated.
1.2 Current / Non-Current Classification
Any asset or liability is classified as current if it
satisfies any of the following conditions:
25
Financial Statements
i. the asset/liability is expected to be realized/
settled in the Company’s normal operating
cycle.
ii. the asset is intended for sale or consumption.
iii. the asset/liability is held primarily for the
purpose of trading.
iv. the asset/liability is expected to be realized/
settled within twelve months after the
reporting period.
v. the asset 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.
vi. in the case of a liability, the Company does not
have an unconditional right to defer settlement
of the liability for at least twelve months after
the reporting date
All other assets and liabilities are classified as non-
current.
For the purpose of current/non-current
classification of assets and liabilities, the Company
has ascertained its normal operating cycle as twelve
months. This is based on the nature of services
and the time between the acquisition of assets or
inventories for processing and their realization in
cash and cash equivalents.
1.3. Summary of Significant accounting policies
a) Property, plant, and equipment
Measurement at recognition:
An item of property, plant and equipment
that qualifies as an asset is measured on initial
recognition at cost. Following initial recognition,
items of property, plant and equipment are carried
at its cost less accumulated depreciation and
accumulated impairment losses.
The Company identifies and determines cost of each
part of an item of property, plant, and equipment
separately, if the part has a cost which is significant
to the total cost of that item of property, plant and
equipment and has useful life that is materially
different from that of the remaining item.
 Weatherseal Fenestration Private Limited
Notes to the Financial Statements (Contd.)
The cost of an item of property, plant and equipment
comprises of its purchase price including import
duties and other non-refundable purchase taxes or
levies, directly attributable cost of bringing the asset
to its working condition for its intended use and the
initial estimate of decommissioning, restoration,
and similar liabilities, if any. Any trade discounts and
rebates are deducted in arriving at the purchase
price. Cost includes cost of replacing a part of a plant
and equipment if the recognition criteria are met.
Expenses directly attributable to new manufacturing
facility during its construction period are capitalized
if the recognition criteria are met. Expenditure
related to plans, designs and drawings of buildings
or plant and machinery is capitalized under relevant
heads of property, plant, and equipment if the
recognition criteria are met.
Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will
flow to the Company and the cost of the item can
be measured reliably. The carrying amount of any
component accounted for as a separate asset is
derecognized when replaced.
Items such as spare parts, stand-by equipment and
servicing equipment that meet the definition of
property, plant and equipment are capitalized at
cost and depreciated over their useful life. Costs in
nature of repairs and maintenance are recognized
in the Statement of Profit and Loss as and when
incurred.
b)
Capital work in progress and Capital advances:
Cost of assets not ready for intended use, as on
the balance sheet date, is shown as capital work in
progress. Advances given towards acquisition of
fixed assets outstanding at each balance sheet date
are disclosed as Other Non-Current Assets.
Depreciation:
Depreciation on each part of an item of property,
plant and equipment is provided using the Straight-
Line Method based on the useful life of the asset as
estimated by the management and is charged to the
Statement of Profit and Loss as per the requirement
of Schedule II of the Companies Act, 2013. The
estimate of the useful life of the assets has been
assessed based on technical advice which considers
26
the nature of the asset, the usage of the asset,
expected physical wear and tear, the operating
conditions of the asset, anticipated technological
changes, manufacturers warranties and maintenance
support, etc. The estimated useful life of items of
property, plant and equipment is mentioned below:
Class of Assets Years
Furniture and Fixtures 10
Plant and Equipment 15
Motor vehicles- lorries and cars 8
Office equipment 5
Computers (end user devices & 3
Server Networks)
The useful lives, residual values of each part of an
item of property, plant and equipment and the
depreciation methods are reviewed at the end of
each financial year. If any of these expectations
differ from previous estimates, such change is
accounted for as a change in an accounting estimate.
Derecognition:
The carrying amount of an item of property, plant
and equipment is derecognized 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 measured as the difference between
the net disposal proceeds and the carrying amount
of the item and is recognized in the Statement of
Profit and Loss when the item is derecognized.
Impairment
Assets that are subject to depreciation and
amortization are reviewed for impairment, whenever
events or changes in circumstances indicate that
carrying amount may not be recoverable. Such
circumstances include, though are not limited
to, significant or sustained decline in revenues
or earnings and material adverse changes in the
economic environment.
An impairment loss is recognized whenever the
carrying amount of an asset or the cash generating
unit of the Company (CGU) exceeds its recoverable
amount. The recoverable amount of an asset is the
greater of its fair value less cost to sell and value in
use. To calculate value in use, the estimated future
cash flows are discounted to their present value
using a pre-tax discount rate that reflects current
 27
Notes to the Financial Statements (Contd.)

Financial Statements
market rates and the risk specific to the asset. For The amortization period and the amortization
an asset that does not generate largely independent method for an intangible asset with finite useful life
cash inflows, the recoverable amount is determined is reviewed at the end of each financial year. If any of
for the CGU to which the asset belongs. Fair value these expectations differ from previous estimates,
less cost to sell is the best estimate of the amount such change is accounted for as a change in an
obtainable from the sale of an asset in an arm’s accounting estimate.
length transaction between knowledgeable, willing
parties, less the cost of disposal. Derecognition:
The carrying amount of an intangible asset is
Impairment losses, if any, are recognized in the
derecognized on disposal or when no future
Statement of Profit and Loss and included in
economic benefits are expected from its use
depreciation and amortization expense. Impairment
or disposal. The gain or loss arising from the
losses are reversed in the Statement of Profit and
derecognition of an intangible asset is measured as
Loss only to the extent that the asset’s carrying
the difference between the net disposal proceeds
amount does not exceed the carrying amount that
and the carrying amount of the intangible asset and
would have been determined if no impairment loss
is recognized in the Statement of Profit and Loss
had previously been recognized.
when the asset is derecognized.
c) Intangible assets
d) Revenue Recognition
Measurement at recognition: Revenue from contracts with customers is
recognized on transfer of control of promised goods
Intangible assets acquired separately are measured
or services to a customer at an amount that reflects
on initial recognition at cost. Intangible assets
the consideration to which the Company is expected
arising on acquisition of business are measured
to be entitled to in exchange for those goods or
at fair value as at date of acquisition. Internally
services.
generated intangibles including research cost are
not capitalized and the related expenditure is
Revenue towards satisfaction of a performance
recognized in the Statement of Profit and Loss in
obligation is measured at the amount of transaction
the period in which the expenditure is incurred.
price (net of variable consideration) allocated to that
Following initial recognition, intangible assets with
performance obligation. The transaction price of
finite useful life are carried at cost less accumulated
goods sold, and services rendered is net of variable
amortization and accumulated impairment loss, if
consideration on account of various discounts and
any. Intangible assets with indefinite useful lives,
schemes offered by the Company as part of the
that are acquired separately, are carried at cost/fair
contract. This variable consideration is estimated
value at the date of acquisition less accumulated
based on the expected value of outflow. Revenue
impairment loss, if any.
(net of variable consideration) is recognized only to
the extent that it is highly probable that the amount
Amortization:
will not be subject to significant reversal when
Intangible Assets with finite lives are amortized uncertainty relating to its recognition is resolved.
on a Straight Line basis over the estimated useful
economic life. The amortization expense on Sale of products:
intangible assets with finite lives is recognized in the
Revenue from sale of products is recognized when
statement of profit and loss. The estimated useful
the control on the goods have been transferred to
life of intangible assets is mentioned below:
the customer. The performance obligation in case
of sale of product is satisfied at a point in time i.e.,
Class of Assets Years
the performance obligations in our contracts are
Computer software 4 fulfilled at the time of dispatch .
Customer Contracts 4
Advance from customers is recognized under other
Non-Compete Fee 5 liabilities and released to revenue on satisfaction of
performance obligation.
 Weatherseal Fenestration Private Limited
Notes to the Financial Statements (Contd.)
Rendering of services:
Revenue from services is recognized when the stage
of completion can be measured reliably. Stage of
completion is measured by the services performed
till balance sheet date as a percentage of total
services contracted.
e) Inventory
Raw materials, work-in-progress, finished goods and
packing materials are carried at the lower of cost and
net realizable value. However, materials and other
items held for use in production of inventories are
not written down below cost if the finished goods
in which they will be incorporated are expected to
be sold at or above cost. The comparison of cost and
net realizable value is made on an item-by item basis.
Net realizable value is the estimated selling price in
the ordinary course of business less estimated cost
of completion and estimated costs necessary to
make the sale.
In determining the cost of raw materials and packing
materials, weighted average cost method is used.
Cost of inventory comprises all costs of purchase,
duties, taxes (other than those subsequently
recoverable from tax authorities) and all other costs
incurred in bringing the inventory to their present
location and condition.
Cost of finished goods and work-in-progress includes
the cost of raw materials and packing materials, an
appropriate share of fixed and variable production
overheads, and other costs incurred in bringing the
inventories to their present location and condition.
Fixed production overheads are allocated on the
basis of normal capacity of production facilities.
f) Financial Instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement:
The Company recognizes a financial asset in its
balance sheet when it becomes party to the
contractual provisions of the instrument. All
28
financial assets are recognized initially at fair value
plus, in the case of financial assets not recorded at
fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the
financial asset.
Where the fair value of a financial asset at initial
recognition is different from its transaction price,
the difference between the fair value and the
transaction price is recognized as a gain or loss in the
Statement of Profit and Loss at initial recognition
if the fair value is determined through a quoted
market price in an active market for an identical
asset (i.e. level 1 input) or through a valuation
technique that uses data from observable markets
(i.e. level 2 input).
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the Statement of Profit and Loss only to the
extent that such gain or loss arises due to a change
in factor that market participants take into account
when pricing the financial asset.
However, trade receivables that do not contain a
significant financing component are measured at
transaction price irrespective of the fair value on
initial recognition.
Subsequent measurement:
For subsequent measurement, the Company
classifies a financial asset in accordance with the
below criteria:
i. The Company’s business model for managing
the financial asset and
ii. The contractual cash flow characteristics of the
financial asset.
Based on the above criteria, the Company classifies
its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through
profit or loss (FVTPL)
 29
Notes to the Financial Statements (Contd.)

Financial Statements
I Financial assets measured at amortized cost: Derecognition:
A financial asset (or, where applicable, a part of a
A financial asset is measured at the amortized cost if
financial asset or part of a group of similar financial
both the following conditions are met:
assets) is derecognized (i.e., removed from the
Company’s balance sheet) when any of the following
a) The Company’s business model objective for
occurs:
managing the financial asset is to hold financial
assets in order to collect contractual cash flows,
i. The contractual rights to cash flows from the
and
financial asset expires.
b) The contractual terms of the financial asset give
ii. The Company transfers its contractual rights
rise on specified dates to cash flows that are
to receive cash flows of the financial asset and
solely payments of principal and interest on the
has substantially transferred all the risks and
principal amount outstanding.
rewards of ownership of the financial asset.
This category applies to cash and bank balances,
iii. The Company retains the contractual rights to
trade receivables, and other financial assets of
receive cash flows but assumes a contractual
the Company (refer note 25A for further details).
obligation to pay the cash flows without
Such financial assets are subsequently measured at
material delay to one or more recipients
amortized cost using the effective interest method.
under a ‘pass- through’ arrangement (thereby
substantially transferring all the risks and
Under the effective interest method, the future
rewards of ownership of the financial asset).
cash receipts are exactly discounted to the initial
recognition value using the effective interest rate.
iv. The Company neither transfers nor retains,
The cumulative amortization using the effective
substantially all risk and rewards of ownership,
interest method of the difference between the
and does not retain control over the financial
initial recognition amount and the maturity amount
asset.
is added to the initial recognition value (net of
principal repayments, if any) of the financial asset
In cases where Company has neither transferred nor
over the relevant period of the financial asset to
retained substantially all of the risks and rewards
arrive at the amortized cost at each reporting date.
of the financial asset, but retains control of the
The corresponding effect of the amortization under
financial asset, the Company continues to recognize
effective interest method is recognized as interest
such financial asset to the extent of its continuing
income over the relevant period of the financial
involvement in the financial asset. In that case, the
asset. The same is included under other income in
Company also recognizes an associated liability.
the Statement of Profit and Loss.
The financial asset and the associated liability are
The amortized cost of a financial asset is also measured on a basis that reflects the rights and
adjusted for loss allowance, if any. obligations that the Company has retained.

II Financial assets measured at FVTPL: On derecognition of a financial asset, the difference

between the carrying amount and the consideration
A financial asset is measured at FVTPL unless received is recognized in the Statement of Profit and
it is measured at amortized cost as explained Loss.
above. This is a residual category applied to all
other investments of the Company excluding Impairment of financial assets:
investments in subsidiaries. Such financial assets
The Company applies expected credit losses (ECL)
are subsequently measured at fair value at each
model for measurement and recognition of loss
reporting date. Fair value changes are recognized in
allowance on the following:
the Statement of Profit and Loss.

i. Trade receivables
ii. Financial assets measured at amortised cost
(other than trade receivables)
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

In case of trade receivables the Company follows ECL impairment loss allowance (or reversal)
a simplified approach wherein an amount equal to recognized during the period is recognized as
lifetime ECL is measured and recognised as loss income/ expense in the Statement of Profit and Loss
allowance. under the head ‘Other expenses.

In case of other assets (listed as ii above), the Financial Liabilities

Company determines if there has been a significant
increase in credit risk of the financial asset since Initial recognition and measurement:
initial recognition. If the credit risk of such assets
The Company recognizes a financial liability in
has not increased significantly, an amount equal to
its balance sheet when it becomes party to the
12-month ECL is measured and recognized as loss
contractual provisions of the instrument. All
allowance. However, if credit risk has increased
financial liabilities are recognized initially at fair
significantly, an amount equal to lifetime ECL is
value minus, in the case of financial liabilities not
measured and recognized as loss allowance.
recorded at fair value through profit or loss (FVTPL),
transaction costs that are attributable to the
Subsequently, if the credit quality of the financial
acquisition of the financial liability.
asset improves such that there is no longer a
significant increase in credit risk since initial
Where the fair value of a financial liability at initial
recognition, the Company reverts to recognizing
recognition is different from its transaction price,
impairment loss allowance based on 12-month ECL.
the difference between the fair value and the
transaction price is recognized as a gain or loss in the
ECL is the difference between all contractual cash
Statement of Profit and Loss at initial recognition
flows that are due to the Company in accordance
if the fair value is determined through a quoted
with the contract and all the cash flows that the
market price in an active market for an identical
entity expects to receive (i.e., all cash shortfalls),
asset (i.e. level 1 input) or through a valuation
discounted at the original effective interest rate.
technique that uses data from observable markets
(i.e. level 2 input).
Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected
In case the fair value is not determined using a level
life of a financial asset. 12-month ECL are a portion
1 or level 2 input as mentioned above, the difference
of the lifetime ECL which result from default
between the fair value and transaction price is
events that are possible within 12 months from the
deferred appropriately and recognized as a gain or
reporting date.
loss in the Statement of Profit and Loss only to the
extent that such gain or loss arises due to a change
ECL are measured in a manner that they reflect
in factor that market participants take into account
unbiased and probability weighted amounts
when pricing the financial liability.
determined by a range of outcomes, taking
into account the time value of money and other
Subsequent measurement:
reasonable information available as a result of past
events, current conditions and forecasts of future All financial liabilities of the Company are
economic conditions. subsequently measured at amortized cost using
the effective interest method (refer note 25(A) for
As a practical expedient, the Company uses a further details).
provision matrix to measure lifetime ECL on its
portfolio of trade receivables. The provision matrix Under the effective interest method, the future
is prepared based on historically observed default cash payments are exactly discounted to the initial
rates over the expected life of trade receivables and recognition value using the effective interest rate.
is adjusted for forward-looking estimates. At each The cumulative amortization using the effective
reporting date, the historically observed default interest method of the difference between the
rates and changes in the forward-looking estimates initial recognition amount and the maturity amount
are updated. is added to the initial recognition value (net of
principal repayments, if any) of the financial liability
over the relevant period of the financial liability to

30

Notes to the Financial Statements (Contd.)
arrive at the amortized cost at each reporting date.
The corresponding effect of the amortization under
effective interest method is recognized as interest
expense over the relevant period of the financial
liability. The same is included under finance cost in
the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same lender
on substantially different terms, or the terms of
an existing liability are substantially modified,
such an exchange or modification is treated as
the Derecognition of the original liability and
the recognition of a new liability. The difference
between the carrying amount of the financial
liability derecognized and the consideration paid is
recognized in the Statement of Profit and Loss.
Offsetting of financial assets and financial liabilities:
Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis or to realise the asset and settle
the liability simultaneously.
g) Fair Value
The Company measures financial instruments at fair
value in accordance with the accounting policies
mentioned above. 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. The fair value
measurement is based on the presumption that the
transaction to sell the asset or transfer the liability
takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most
advantageous market for the asset or liability.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized within the fair value hierarchy
that categorizes into three levels, described as
follows, the inputs to valuation techniques used to
measure value. The fair value hierarchy gives the
31
Financial Statements
highest priority to quoted prices in active markets
for identical assets or liabilities (Level 1 inputs) and
the lowest priority to unobservable inputs (Level 3
inputs).
Level 1 — quoted (unadjusted) market prices in
active markets for identical assets or liabilities
Level 2 — inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly or indirectly
Level 3 — inputs that are unobservable for the asset
or liability.
For assets and liabilities that are recognized in the
financial statements at fair value on a recurring
basis, the Company determines whether transfers
have occurred between levels in the hierarchy by
re-assessing categorization at the end of each
reporting period.
h) Foreign Currency Translation
Initial Recognition:
On initial recognition, transactions in foreign
currencies entered into by the Company are
recorded in the functional currency (i.e. Indian
Rupees), 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. Exchange differences arising on foreign
exchange transactions settled during the year are
recognized in the Statement of Profit and Loss.
Measurement of foreign currency items at reporting
date:
Foreign currency monetary items of the Company
are translated at the closing exchange rates. Non-
monetary items that are measured at historical
cost in a foreign currency, are translated using the
exchange rate at the date of the transaction. 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 is measured.
Exchange differences arising out of these
translations are recognized in the Statement of
Profit and Loss.
 Weatherseal Fenestration Private Limited
Notes to the Financial Statements (Contd.)
i) Income Taxes
Tax expense is the aggregate amount included in
the determination of profit or loss for the period in
respect of current tax and deferred tax.
Current tax:
Current tax is the amount of income taxes payable
in respect of taxable profit for a period. Taxable
profit differs from ‘profit before tax’ as reported in
the Statement of Profit and Loss because of items
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have
been enacted by the end of reporting period for the
amounts expected to be recovered from or paid to
the taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation of
taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized
for all taxable temporary differences. However, in
case of temporary differences that arise from initial
recognition of assets or liabilities in a transaction
(other than business combination) that affect
neither the taxable profit nor the accounting profit,
deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized
for all deductible temporary differences to the
extent it is probable that taxable profits will be
available against which those deductible temporary
difference can be utilized. In case of temporary
differences that arise from initial recognition of
assets or liabilities in a transaction (other than
business combination) that affect neither the
taxable profit nor the accounting profit, deferred
tax assets are not recognized.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow the benefits of part or all of such deferred tax
assets to be utilized.
32
Deferred tax assets and liabilities are measured
at the tax rates that have been enacted or
substantively enacted by the balance sheet date and
are expected to apply to taxable income in the years
in which those temporary differences are expected
to be recovered or settled.
Uncertain tax positions:
The management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and considers whether it is probable
that a taxation authority will accept an uncertain
tax treatment. The Company reflects the effect
of uncertainty for each uncertain tax treatment
by using one of two methods, the expected value
method (the sum of the probability - weighted
amounts in a range of possible outcomes) or the
most likely amount (single most likely amount
method in a range of possible outcomes), depending
on which is expected to better predict the resolution
of the uncertainty. The Company applies consistent
judgements and estimates if an uncertain tax
treatment affects both the current and the deferred
tax.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income
or an expense in the Statement of Profit and Loss,
except when they relate to items that are recognized
in Other Comprehensive Income, in which case,
the current and deferred tax income/expense are
recognized in Other Comprehensive Income.
The Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and where
it intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
In case of deferred tax assets and deferred tax
liabilities, the same are offset if the Company has a
legally enforceable right to set off corresponding
current tax assets against current tax liabilities and
the deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same tax
authority on the Company.
j) Provisions and Contingencies
The Company recognizes provisions when a present
obligation (legal or constructive) as a result of a
past event exists and it is probable that an outflow
of resources embodying economic benefits will be
 33
Notes to the Financial Statements (Contd.)

Financial Statements
required to settle such obligation and the amount of Post-Employment Benefits:
such obligation can be reliably estimated.
Defined benefit plans:
If the effect of time value of money is material,
The Company provides a defined benefit gratuity
provisions are discounted using a current pre-tax
plan for employees as per the requirements of the
rate that reflects, when appropriate, the risks
Payment of Gratuity Act, 1972.
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time
Recognition and measurement of defined benefit
is recognized as a finance cost.
plans:

A disclosure for a contingent liability is made when

The cost of providing defined benefits is determined
there is a possible obligation or a present obligation
using the Projected Unit Credit method with
that may, but probably will not require an outflow
actuarial valuations being carried out at each
of resources embodying economic benefits or the
reporting date. The defined benefit obligations
amount of such obligation cannot be measured
recognized in the Balance Sheet represent the
reliably. When there is a possible obligation or a
present value of the defined benefit obligations
present obligation in respect of which likelihood of
as reduced by the fair value of plan assets, if
outflow of resources embodying economic benefits
applicable. Any defined benefit asset (negative
is remote, no provision or disclosure is made.
defined benefit obligations resulting from this
calculation) is recognized representing the present
k) Measurement of EBITDA
value of available refunds and reductions in future
The Company has opted to present earnings before contributions to the plan.
interest (finance cost), tax, depreciation, and
amortization (EBITDA) as a separate line item on All expenses represented by current service cost,
the face of the Statement of Profit and Loss for the past service cost if any and net interest on the
period. The Company measures EBITDA based on defined benefit liability (asset) are recognized in the
profit/(loss) from continuing operations. Statement of Profit and Loss. Re-measurements of
the net defined benefit liability (asset) comprising
l) Cash and Cash Equivalents actuarial gains and losses and the return on the plan
assets (excluding amounts included in net interest
Cash and cash equivalents for the purpose of Cash
on the net defined benefit liability/asset), are
Flow Statement comprise cash and cheques in hand,
recognized in Other Comprehensive Income. Such re-
bank balances, demand deposits with banks where
measurements are not reclassified to the Statement
the original maturity is three months or less and
of Profit and Loss in the subsequent periods.
other short term highly liquid investments net of
bank overdrafts which are repayable on demand
The Company presents the above liability/ (asset) as
as this form an integral part of the Company’s cash
current and non-current in the balance sheet as per
management.
actuarial valuation by the independent actuary.
m) Employee Benefits
Defined contribution plan:
Short Term Employee Benefits:
Provident fund scheme:
All employee benefits payable wholly within twelve
The Company makes specified monthly contributions
months of rendering the service are classified
towards Employee Provident Fund scheme to the
as short-term employee benefits and they are
Employees provident fund administered by the
recognized in the period in which the employee
Government. The minimum interest payable is being
renders the related service. The Company recognizes
notified by the Government every year.
the undiscounted amount of short-term employee
benefits expected to be paid in exchange for
services rendered as a liability (accrued expense)
after deducting any amount already paid.
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

n) Lease accounting Lease payments included in the measurement of the

lease liability include fixed payments, variable lease
Assets taken on lease: payments that depend on an index or a rate known
at the commencement date; and extension option
The Company mainly has lease arrangements for
payments or purchase options payment which the
warehouse spaces and retail stores and vehicles.
Company is reasonably certain to exercise.
The Company assesses whether a contract is or
Variable lease payments that do not depend on an
contains a lease, at inception of a contract. The
index or rate are not included in the measurement
assessment involves the exercise of judgement
the lease liability and the ROU asset. The related
about whether (i) the contract involves the use of an
payments are recognised as an expense in the period
identified asset, (ii) the Company has substantially
in which the event or condition that triggers those
all of the economic benefits from the use of the
payments occurs and are included in the line “other
asset through the period of the lease, and (iii) the
expenses” in the statement of profit or loss.
Company has the right to direct the use of the asset.

After the commencement date, the amount of

The Company recognises a right-of-use asset
lease liabilities is increased to reflect the accretion
(“ROU”) and a corresponding lease liability at the
of interest and reduced for the lease payments
lease commencement date. The ROU asset is initially
made and remeasured (with a corresponding
recognised at cost, which comprises the initial
adjustment to the related ROU asset) when there
amount of the lease liability adjusted for any lease
is a change in future lease payments in case of
payments made at or before the commencement
renegotiation, changes of an index or rate or in case
date, plus any initial direct costs incurred and an
of reassessment of options.
estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset
Short-term leases and leases of low-value assets
or the site on which it is located, less any lease
incentives. They are subsequently measured at cost The Company has elected not to recognize ROU
less accumulated depreciation and impairment assets and lease liabilities for short term leases
losses. as well as low value assets and recognizes the
lease payments associated with these leases as an
The ROU asset is depreciated using the straight- expense on a straight-line basis over the lease term.
line method from the commencement date to the
earlier of, the end of the useful life of the ROU asset o) Borrowing Cost
or the end of the lease term. If a lease transfers
Borrowing cost includes Interest, amortization
ownership of the underlying asset or the cost of the
of ancillary costs incurred in connection with
ROU asset reflects that the Company expects to
the arrangement of borrowings and exchange
exercise a purchase option, the related ROU asset
differences arising from foreign currency borrowings
is depreciated over the useful life of the underlying
to the extent they are regarded as an adjustment to
asset. The estimated useful lives of ROU assets are
the interest cost.
determined on the same basis as those of property
and equipment. In addition, the right-of-use asset
Borrowing costs, if any, directly attributable to the
is periodically reduced by impairment losses, if any,
acquisition, construction or production of an asset
and adjusted for certain re-measurements of the
that necessarily takes a substantial period of time to
lease liability.
get ready for its intended use or sale are capitalized,
if any. All other borrowing costs are expensed in the
The lease liability is initially measured at the present
period in which they occur.
value of the lease payments that are not paid at
the commencement date, discounted using the
p) Segment Reporting
interest rate implicit in the lease or, if that rate
cannot be readily determined, the Company uses an Operating segments are reported in a manner
incremental borrowing rate specific to the Company, consistent with the internal reporting provided to
term and currency of the contract. Generally, the the Chief Operating Decision Maker (CODM) of the
Company uses its incremental borrowing rate as the Company. The CODM is responsible for allocating
discount rate.
34

Notes to the Financial Statements (Contd.)
resources and assessing performance of the
operating segments of the Company.
q) Events after reporting date
Where events occurring after the balance sheet
date provide evidence of conditions that existed at
the end of the reporting period, the impact of such
events is adjusted within the financial statements.
Otherwise, events after the balance sheet date of
material size or nature are only disclosed.
r) Earnings per share (EPS)
Basic earnings per share is calculated by dividing the
net profit attributable to the equity shareholders of
the Company with the weighted average number of
equity shares outstanding during the financial year,
adjusted for treasury shares.
Diluted Earnings per share is calculated by dividing
net profit attributable to the equity shareholders
of the Company with the weighted average number
of shares outstanding during the financial year,
adjusted for the effects of all dilutive potential
equity shares.
s) Recent accounting pronouncements:
Standards issued but not yet effective:
In March 2023, the Ministry of Corporate Affairs
issued the Companies (Indian Accounting Standards)
Amendment Rules, 2023 which amended certain
Ind AS. The Company has evaluated the impact of
the amendments and has concluded that there
is no impact on the financial statements except
Ind AS 1 - Presentation of Financial Statements.
The amendment to Ind AS 1 requires disclosure of
material accounting policies rather than significant
accounting policies. The impact of the said
amendment will be insignificant on the financial
statements.
The amendment is effective from annual periods
beginning on or after April 1, 2023.
1.4 Key accounting estimates and judgements
The preparation of the Company’s financial
statements requires the management to make
judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
35
Financial Statements
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and
other key sources of estimation uncertainty at
the reporting date, which have a significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year, are described below:
a. Income taxes
The Company’s tax jurisdiction is India. Significant
judgements are involved in estimating budgeted
profits for the purpose of paying advance tax,
determining the provision for income taxes,
including amount expected to be paid/recovered for
uncertain tax positions.
b. Property, plant and equipment
Property, plant and equipment represent a
significant proportion of the asset base of the
Company. The charge in respect of periodic
depreciation is derived after determining an
estimate of an asset’s expected useful life and the
expected residual value at the end of its life. The
useful lives and residual values of Company’s assets
are determined by the management at the time the
asset is acquired and reviewed periodically, including
at each financial year end. The lives are based on
historical experience with similar assets as well as
anticipation of future events, which may impact
their life, such as changes in technical or commercial
obsolescence arising from changes or improvements
in production or from a change in market demand of
the product or service output of the asset.
c. Defined Benefit Obligation
The costs of post-employment benefits are charged
to the Statement of Profit and Loss in accordance
with IND AS 19 ‘Employee benefits’ over the
period during which benefit is derived from the
employees’ services. The costs are assessed on the
basis of assumptions selected by the management.
These assumptions include salary escalation rate,
discount rates, expected rate of return on assets and
mortality rates. The same is disclosed in Note 29,
‘Employee benefits.
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

d. Fair value measurement of financial instruments
When the fair values of financials 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.
e. Right-of-use assets and lease liability
The Company has exercised judgement in
determining the lease term as the non-cancellable
term of the lease, together with the impact of
options to extend or terminate the lease if it is
reasonably certain to be exercised.
Where the rate implicit in the lease is not readily
available, an incremental borrowing rate is applied.
This incremental borrowing rate reflects the rate of
interest that the lessee would have to pay to borrow
over a similar term, with a similar security, the funds
necessary to obtain an asset of a similar nature and
value to the right-of-use asset in a similar economic
environment. Determination of the incremental
borrowing rate requires estimation.

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 2A : PROPERTY, PLANT AND EQUIPMENT
(₹ in Lakhs)
Gross Block Depreciation Net
Block
As at Additions Deductions As at As at Additions Deductions As at As at
09 during 31 09 during the 31 31
March the year March March year March March
2022 2023 2022 2023 2023
Plant and - 211.07 - 211.07 - 5.58 - 5.58 205.49
Equipment
Furniture and - 42.67 - 42.67 - 1.98 - 1.98 40.69
Fixtures
Vehicles - 5.65 - 5.65 - 0.58 - 0.58 5.07
Office - 8.61 - 8.61 - 0.44 - 0.44 8.17
Equipment
Computer - 13.88 - 13.88 - 2.01 - 2.01 11.87
TOTAL - 281.88 - 281.88 - 10.59 - 10.59 271.29

NOTE 2B : RIGHT OF USE ASSETS

Net carrying amount
As at Additions Deletions Amortisation As at
09 March 2022 31 March 2023
Leasehold Land - 174.42 - 29.81 144.61
Building - 53.92 - 25.84 28.08
TOTAL - 228.34 - 55.65 172.69
All lease agreements are duly executed in favour of the Company.

NOTE 3 : INTANGIBLE ASSETS (Acquired Separately)

(₹ in Lakhs)
Gross Block Amortisation Net Block
As at Additions Deductions/ As at As at Additions Deductions/ As at As at
09 during Adjustments 31 March 09 during the Adjustments 31 March 31 March
March the year 2023 March year 2023 2023
2022 2022
Other Intangible
Assets
Computer - 176.68 - 176.68 - 36.27 - 36.27 140.41
software
Customer - 142.96 - 142.96 - 19.58 - 19.58 123.38
Contracts
Non Compete Fee - 978.68 - 978.68 - 160.88 - 160.88 817.80
Total (A) - 1,298.32 - 1,298.32 - 216.73 - 216.73 1,081.59
Total Intangible - 1,298.32 - 1,298.32 - 216.73 - 216.73 1,081.59
Assets (A)
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

NOTE 4 : OTHER FINANCIAL ASSETS

Non-Current Current
As at As at
31 March 2023 31 March 2023
Unsecured and Considered good:
Security deposits 14.84 13.42
Retention Money - 79.74
TOTAL 14.84 93.16

NOTE 5 : INCOME TAXES
(₹ in Lakhs)
Particulars 31 March 2023
(A) THE MAJOR COMPONENTS OF INCOME TAX EXPENSE FOR THE YEAR ARE AS UNDER :
(i) Income tax recognised in the statement of Profit and Loss
Current tax:
In respect of current year -
Deferred tax expense:
In respect of current year (108.79)
Income tax recognised in the statement of Profit and Loss (108.79)
(ii) Income tax recognised in OCI
Deferred Tax: -
Income tax (expense)/benefit on remeasurement of defined benefit plans -
Income tax benefit / (expense) recognised in OCI -
(B) RECONCILIATION OF TAX EXPENSE AND THE ACCOUNTING PROFIT FOR THE YEAR IS
AS UNDER:
Profit before tax (442.94)
Income tax expense calculated at 25.168% (111.48)
Tax expense on non-deductible expenses 2.69
TOTAL (108.79)

The tax rate used for reconciliation above is the corporate tax rate of 25.168% payable by corporate entities in India on
taxable profits under Indian tax law.
The Company does not have any unused tax losses under the Income Tax Act, 1961, for which no deferred tax asset has
been recognised in the Balance Sheet.

C. The major components of Deferred Tax (Liabilities)/ Assets arising on account of timing differences are as
follows:
As at 31st March 2023
Balance Profit and OCI Balance
sheet loss 2022-23 Sheet
9 March 22 2022-23 31 March 23
Difference between written down value/capital - (32.07) - (32.07)
work in progress of fixed assets as per the books of
accounts and Income Tax Act,1961.
Carry forward of losses - 138.81 - 138.81
Difference in Right-of-use asset and lease liabilities - 2.05 2.05
Net Deferred tax asset - 108.79 108.79
38
 39
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 6 : OTHER ASSETS
(₹ in Lakhs)
Current
As at
31 March 2023
(a) Advances other than capital advances
i) Balance with government authorities 338.64
ii) Advances/claims recoverable in cash or in kind 10.63
iii) Advances to employees 4.09
TOTAL 353.36

NOTE 7 : INVENTORIES
(At lower of cost and net realisable value)
Current
As at
31 March 2023
(a) Raw materials 380.06
(b) Work-in-progress 6.16
(c) Finished goods 124.72
TOTAL 510.94
The cost of Inventories recognised as an expense during the year is disclosed in Note 20 (A) &
Note 20 (B)

NOTE 8 : TRADE RECEIVABLES

Current
As at
31 March 2023
(a) Unsecured, considered good 656.50
Less : Allowance for unsecured doubtful debts -
TOTAL 656.50

Trade receivable ageing schedule for the year ended 31 March 2023:

Outstanding for following period from due date of

payment
Unbilled Not due Less 6 1-2 2-3 More Total
than 6 months- years years than 3
months 1 year years
i) Undisputed Trade 178.10 - 454.49 23.91 - - - 656.50
receivables - considered
good
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

NOTE 9 : CASH AND BANK BALANCES

Current
As at
31 March 2023
(A) Cash and Cash Equivalents
(a) Balances with Banks
i) Current account 20.79
ii) Overdraft account 91.42
iii) Deposits with original maturity of less than 3 months 15.27
(b) Cash on hand -
Total 127.48
(B) Other Balances with Banks
Bank deposits less than 12 months maturity 5.00
Total 132.48

NOTE 10 : EQUITY SHARE CAPITAL

(₹ in Lakhs)
As at
31 March 2023
Authorised
100,000 Equity Shares of ₹ 10 each 10.00
10.00
Issued, subscribed and fully paid up shares
20,409 Equity Shares of ₹ 10 each 2.04
2.04

a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year:

Equity Shares As at 31 March 2023

No. of Shares ₹ Lakhs
At the beginning of the year - -
Add: Issued during the year 20,409 2.04
Outstanding at the end of the year 20,409 2.04

b) Details of Shareholder holding more than 5% equity shares

Name of Shareholder As at 31 March 2023
No of Equity % holding
Shares
Equity shares of ₹ 10 each
- Asian Paints Limited 10,409 51.00
- Harish Munireddy 9,000 44.10
# As per records of the Company, including its Register of Members

40
 41
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 10 : EQUITY SHARE CAPITAL (Contd.)

c) Shares held by promoters as defined in the Companies Act, 2013

As on 31st March 2023
Promoter Name As at 31 March 2023 % change during
No. of Shares * % of total shares the year
Asian Paints Limited 10,409 51% No change
Prathiba SB Balashankar Reddy 1,000 5% No change
Harish Munireddy 9,000 44% No change
* Shares have been issued during the year.

d) Terms/rights attached to equity shares

As per the Companies Act 2013, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts in the event of liquidation of the Company. However no
such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares
held by the shareholders.
The Company has only one class of shares referred to as equity shares having a par value of ₹ 10 per share. Each
holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian
Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in
the ensuing Annual General Meeting.

NOTE 11 : OTHER EQUITY

(₹ in Lakhs)
Securities Retained Total
premium earnings
Balance as on 9 March 2022 (A) - - -
Add: Profit/ (Loss) for the year - (334.15) (334.15)
Add: Premium on shares issued during the year 1,883.09 1,883.09
Total Comprehensive Income for the year (B) 1,883.09 (334.15) 1,548.94
Balance as on 31 March 2023 (C) = (A+B) 1,883.09 (334.15) 1,548.94

Description of nature and purpose of each reserve

Securities Premium - Securities premium has arised on account of issue of shares at premium

NOTE 12 : BORROWINGS
(₹ in Lakhs)
Current
As at
31 March 2023
Term Loans -Secured
- From Banks (Refer Note (i) below) 100.40
Loans repayable on demand-Unsecured
- Cash Credit / Overdraft Accounts (Refer Note (ii) below) 578.01
Total 678.41

Note on borrowing-
i) Secured against the current assets of the Company carrying interest of Repo rate plus 210 basis points. The loans
will be repaid by 19th April 23.
ii) Unsecured overdraft facility with banks carrying interest of Repo Rate plus 260 basis points.
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

NOTE 13 : LEASE LIABILITIES

Non-Current Current
As at As at
31 March 2023 31 March 2023
Lease liabilities 118.02 56.60
Total 118.02 56.60

The maturity analysis of lease liabilities is disclosed in Note 25 (C).

Movement in lease liabilities

As at
31 March 2023
Balance as at 9th March 22 -
Additions 220.40
Deletions -
Finance cost 10.92
Repayment (including interest on lease liabilities) (56.70)
Balance as at 31st March 174.62

Amounts with respect to leases recognised in the Statement of Profit & Loss and Cash Flow Statement
As at
31 March 2023
Amounts recognised in Statement of Profit and Loss
Interest on lease liabilities 10.92
Depreciation expense 55.65
Amounts recognised in Cash Flow Statement
In Financing activity
Repayment of lease liabilities (45.77)
Interest paid on lease liabilities (10.92)

Note- For additions and movement in right-of-use assets refer note 2B.

NOTE 14 : OTHER FINANCIAL LIABILITIES

Current
As at
31 March 2023
Payable towards services received 86.71
Payable towards other expenses 57.18
Payable to employees 43.89
Payable towards capital expenditure 1.99
Total 189.77

42
 43
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 15 : PROVISIONS
Non-Current Current
As at As at
31 March 2023 31 March 2023
Provision for Employee Benefits (Refer Note 29)
Provision for Gratuity 3.84 0.01
Total 3.84 0.01

NOTE 16 : TRADE PAYABLES

(₹ in Lakhs)
As at
31 March 2023
Trade Payables
Total Outstanding dues of Micro Enterprises and Small Enterprises (Refer Note 28) 519.30
Total Outstanding dues of creditors other than Micro Enterprises and Small Enterprises 71.15
Total 590.45

Trade payables ageing schedule for the year ended as on 31 March 2023:

Outstanding for following period from due date of payment

Particulars Not due Less than 1 1-2 years 2-3 years More than 3 Total
year years
i) Undisputed dues - MSME 479.70 39.60 - - - 519.30
ii) Undisputed dues - Others 3.24 67.91 - - - 71.15

NOTE 17 : OTHER LIABILITIES

(₹ in Lakhs)
As at
31 March 2023
(a) Revenue received in advance
Advance received from customers 193.74
(b) Others
Statutory Payables 13.82
Total 207.56
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

NOTE 18 : REVENUE FROM OPERATIONS

(₹ in Lakhs)
As at
31 March 2023
Revenue from sale of products and services
UPVC Windows and Gates* 2,461.17
Other operating revenues
Scrap sales 13.28
Total 2,474.45

*Revenue from operations is generated from domestic market. It also includes the revenue from installation services.
The amounts receivable becomes due after raising of tax invoices from Project customers. For other customers the
Company receives the full amount in advance before dispatch of goods. There is no significant financing component in
any transaction with the customers.
The Company provides “”agreed upon warranty”” for a range of its products. The amount of liability towards such
warranty is immaterial.
The Company does not have any material remaining performance obligation as contracts entered for sale of goods and
services are for a shorter duration.

NOTE 19 : OTHER INCOME

(₹ in Lakhs)
As at
31 March 2023
(a) Interest income
Other financial assets carried at amortised cost 2.99
Total 2.99

NOTE 20 (A) : COST OF MATERIALS CONSUMED

(₹ in Lakhs)
As at
31 March 2023
Raw Materials Consumed
Opening Stock -
Add : Purchases 2,162.01
2,162.01
Less: Closing Stock 380.06
1,781.95

NOTE 20 (B) Purchases of stock in trade

(₹ in Lakhs)
As at
31 March 2023
Purchases of stock in trade 37.95
Total 37.95

44
 45
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 20 (C) CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-TRADE AND WORK IN PROGRESS
(₹ in Lakhs)
As at
31 March 2023
Stock at the beginning of the year
Finished Goods -
Work-in-Progress -
Stock-in-trade acquired for trading (including goods in transit) -
Total -
Stock at the end of the year
Finished Goods 124.72
Work-in-Progress 6.16
Total 130.88
Changes in Inventories of Finished Goods, Work-In-Progress and Stock-In-Trade (130.88)

NOTE 21 : EMPLOYEE BENEFITS EXPENSE

(₹ in Lakhs)
As at
31 March 2023
Salaries and wages 321.11
Contribution to Provident and other Funds (Refer note 29) 22.50
Staff welfare expenses 27.79
Total 371.40

NOTE 22 : FINANCE COSTS

(₹ in Lakhs)
As at
31 March 2023
Interest Costs
(a) Interest on short term borrowings from banks 11.44
(b) Interest on lease liabilities 10.92
(c) Other Interest expenses 0.11
Total 22.47

NOTE 23 : Depreciation and amortisation

(₹ in Lakhs)
As at
31 March 2023
Depreciation of Property, Plant and Equipment (Refer note 2A) 10.59
Depreciation of Right-Of-Use assets (Refer note 2B) 55.65
Amortisation of Other Intangible assets (Refer note 3) 216.73
Total 282.97
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

NOTE 24 : OTHER EXPENSES

(₹ in Lakhs)
As at
31 March 2023
Professional Charges 120.74
Advertisement Exp 104.59
Installation charges 96.12
Freight & Forwarding Expenses 85.29
Travelling Expenses 54.80
Materials Handling Charges 21.38
Repairs & maintenance 21.16
Miscellaneous Expenses 14.77
Electricity & Water Charges 11.10
Postage & Courier 6.92
Printing & Stationery 5.34
Training expenses 5.31
Royalty 3.11
Telephone & Internet Expenses 2.04
Audit Fees 1.00
Bank Charges 0.76
Rates & taxes 0.09
Total 554.52

No donation has been made by the Company to any political party or any other organizations linked to any political
party

NOTE 25 (A) : CATERGORY-WISE CLASSIFICATION OF FINANCIAL INSTRUMENTS

(₹ in Lakhs)
Non-Current Current
Refer note As at As at
31 March 2023 31 March 2023
Financial assets carried at amortised cost
Security Deposits 4 14.84 13.42
Retention Money 4 - 79.74
Trade receivables 8 - 656.50
Cash and cash equivalents 9 - 132.48
14.84 882.14
Financial liabilities carried at amortised cost
Borrowings 12 - 678.41
Trade Payables 16 - 590.45
Payable towards services received 14 - 86.71
Payable towards other expenses 14 - 57.18
Payable to employees 14 - 43.89
Payable towards capital expenditure 14 - 1.99
Lease liabilities 13 118.02 56.60
118.02 1,515.23
46
 47
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 25 (B) : FAIR VALUE MEASUREMENTS
The carrying amount of financial assets and financial liabilities recognised in the financial statements is assumed to
approximate their fair values, since the Company does not anticipate that the carrying amounts would be significantly
different from the values that would eventually be received or settled.

NOTE 25 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES

The Company’s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company’s
financial assets comprise mainly of cash and cash equivalents, trade and other receivables and other financials
assets.
The Company is exposed to Market risk, Credit risk and Liquidity risk.

1) 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 risk comprises three types of risks: interest rate risk, currency risk and
other price risk. Financial instruments affected by market risk include borrowings, trade payables and trade
receivables.

a) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company is exposed to interest rate risk but doesn’t uses
any derivative instrument to hedge the same. The company’s debt equity ratio is 0.35 in FY23 (Refer Note-
25D).
The Exposure of Company’s financial assets and liabilities to interest rate risk is as follows :-
(₹ in Lakhs)
As at Floating rate Fixed rate Non- interest
31st March, 2023 bearing
Financial assets 896.98 91.42 20.27 785.29
Financial liabilities 1,633.25 678.41 - 954.84

b) Foreign 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 functional currency of the Company is Indian Rupee. The Company
does not enter into any derivative instruments for trading or speculative purposes. There is no amount
outstanding as payables/ receivables in foreign currency.

2) Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Company. Credit risk arises primarily from financial assets such as trade receivables and other financials
assets.

Credit risk arising from other balances with banks is limited and there is no collateral held against these because
the counterparties are banks with high credit ratings assigned by the international credit rating agencies.
Trade receivables largely includes receivables from Project customer which are prominent developers. Credit
quality of a customer is assessed based on internal assessment and accordingly individual credit limits are
defined. As at 31 March 23, customer named Brigade Group which accounts for 76% of the total receivable
balance.
For trade receivables, as a practical expedient, the Company computes credit loss allowance for amounts
outstanding for more than a year. There is no provision created in the current year. The Company believes that the
carrying value of trade receivables reflects the fair value/ recoverable values.
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

NOTE 25 (C) : FINANCIAL RISK MANAGEMENT - OBJECTIVES AND POLICIES (contd.)

3) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments
associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk
may result from an inability to sell a financial asset quickly at close to its fair value.

The Company has an established liquidity risk management framework for managing its short term, medium term
and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk arises
primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity
risk by having adequate amount of credit facilities agreed with banks to ensure that there is sufficient cash to
meet all its normal operating commitments in a timely and cost-effective manner.

The table below analyses non-derivative financial liabilities of the Company into relevant maturity groupings
based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed
in the table are the contractual undiscounted cash flows.

(₹ in Lakhs)
Particulars Less than 1 Between 1 Over 5 Total Carrying
year to 5 years years value
As at 31 March 2023
Borrowings (Refer note 12) 678.41 - - 678.41 678.41
Trade Payables (Refer note 16) 590.45 - - 590.45 590.45
Other financial liabilities (Refer note 14) 189.77 - - 189.77 189.77
Lease liabilities (Refer note 13) 67.28 131.93 - 199.20 174.62

The Company does not have any derivative financial liabilities.

NOTE 25 (D) : CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity holders of the Company. The primary objective of the Company when managing capital is
to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize
shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in business conditions. No
changes were made in the objectives, policies, or processes during the year end. Capital comprises of equity and debt.
The Company is not exposed to any externally imposed capital requirements.
The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the
overall debt portfolio of the Company.
(₹ in Lakhs)
As at
31 March 2023
Debt # 678.41
Less: Cash and cash equivalents 132.48
Net debt 545.93
Total equity 1,550.98
Net debt to equity ratio 0.35
# Debt is defined as long term and short term borrowings.
48

 49
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 26 : CONTINGENT LIABILITIES AND COMMITMENTS
(₹ in Lakhs)
As at
31 March 2023
Commitments:
Bank Guarantees issued by bankers 19.70

Note 27 : Payment to Auditors (excluding taxes)
(₹ in Lakhs)
For the year ended
31 March 23
Statutory audit fees 1.00
Total 1.00

Note 28 : Micro, Small and Medium Enterprises

Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for the year
2022-23, to the extent the Company has received intimation from the “Suppliers” regarding their status under the
Act.

Particulars 31 March 2023

Principal Interest
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 519.30 -
- Interest due on above - -
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
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
The amount of interest accrued and remaining unpaid at the end of each - -
accounting year
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
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

Note 29 : EMPLOYEEE BENEFITS

1) Post-employment benefits :
The Company has the following post-employment benefit plans:
a) Defined Benefit Gratuity Plan (Funded)
The Company’s defined benefit gratuity plan is a final salary plan for its employees. It is governed by the
Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled
to specific benefit. The level of benefits provided depends on the member’s length of service and salary at
retirement age. Aforesaid post-employment benefit plans typically expose the Company to actuarial risks
such as: investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk The present value of the defined benefit liability is calculated using a discount rate
which is determined by reference to market yields at the end of the reporting period on
government bonds.
Interest Risk A decrease in the bond interest rate will increase the plan liability; however, this will be
partially set off by an increase in the return on the plan’s investments.
Longevity Risk The present value of the defined benefit liability is calculated by reference to the best
estimate of the mortality of plan participants both during and after their employment.
An increase in the life expectancy of the plan participants will increase the plan’s
liability.
Salary Risk
The present value of the defined benefit liability is calculated by reference to the future
salaries of plan participants. As such, an increase in salary of the plan participants will
increase the plan’s liability.

The most recent actuarial valuation of the plan assets and the present value of defined obligation were
carried out as at 31 March 2023 by TransValue Consultants. The present value of the defined benefit
obligation and the related current service cost were measured using the projected unit credit method.
The following tables summarise the components of net benefit expense recognised in the Statement of
Profit or Loss/OCI and the funded status and amounts recognised in the balance sheet for the gratuity
plan:

(₹ in Lakhs)
Gratuity
(Unfunded Plan)
As at 31 March
2023
(i) Opening defined benefit obligation -
(ii) Current service cost 3.85
(iii) Sub-total included in statement of profit and loss (i+ii) 3.85
(iv) Actuarial loss from changes in financial assumptions -
(v) Sub-total included in other comprehensive income(iv) -
(vi) Benefits paid -
(vii) Closing defined benefit obligation (i+iii+v+vi) 3.85
Expense recognized in:
Statement of profit and loss(iii) 3.85
Statement of other comprehensive income(v) -
(viii) Weighted average duration of defined benefit obligation 15.69 years
(ix) Maturity profile of defined benefit obligation
Within the next 12 months 0.01
Between 1 and 5 years 0.44
Between 5 and 10 years 2.72
50
 51
Notes to the Financial Statements (Contd.)

Financial Statements
Note 29 : EMPLOYEEE BENEFITS
The principal assumptions used in determining post-employment gratuity benefit obligations for the Company’s
plans are shown below:

Particulars Gratuity (Unfunded Plan)

As at 31 March 2023
Discount rate 7.36%
Salary escalation rate 8.00%

Particulars Demographic Assumptions

As at 31 March 2023
Mortality IALM (2012-14) Ultimate
Employee Turnover 12%
Retirement Age 60 Years

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and
expected salary increase. The sensitivity analyses below have been determined based on reasonably possible
changes of the respective assumptions occurring at the end of the reporting period, while holding all other
assumptions constant.
(₹ in Lakhs)
Particulars Gratuity (Funded Plan)
As at 31 March 2023
Defined Benefit Obligation - Discount Rate + 100 basis points (0.39)
Defined Benefit Obligation - Discount Rate - 100 basis points 0.46
Defined Benefit Obligation – Salary Escalation Rate + 100 basis points 0.41
Defined Benefit Obligation - Salary Escalation Rate - 100 basis points (0.38)
Defined Benefit Obligation – Employee Turnover + 100 basis points (0.16)
Defined Benefit Obligation - Employee Turnover + 100 basis points 0.16

The sensitivity analyses presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of
the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present
value of the defined benefit obligation has been calculated using the projected unit credit method at the end
of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability
recognised in the balance sheet.

b) Defined Contribution Plan:

Provident Fund contributions are made to the Regional Provident Fund Commissioner (RPFC) which are
charged to the Statement of Profit and Loss as incurred. 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.

Note 30 : EARNINGS PER SHARE*

2022-23
a) Basic and diluted earnings per share in rupees (Face value ₹10 per share) (In ₹) (1,637.26)
b) (Loss) after tax as per Statement of Profit and Loss (₹ In Lakhs) (334.15)
c) Weighted average number of equity shares outstanding during the year 20,409
* Earnings per share is calculated by dividing the (loss) for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

Note 31 : RELATED PARTY DISCLOSURE

Disclosure on Related Party Transactions as required by Ind AS 24 - Related Party Disclosures is given
below:

(a) Holding Company – Asian Paints Limited (Control exists)

(b) Key Managerial Personnel (KMP):

Name of the person Designation
Harish Munireddy Director
Prathiba S B Director
Shyam Swamy Director
Parag Rane Director

(d) Entities where directors/ close family members of directors/ directors of holding company having
control/ significant influence
Pratan Fenestration LLP

(e) Compensation of key management personnel of the company

Particulars 2022-23
Short term employee benefits 32.86

(f) Details of transactions with and balances outstanding of associate companies:

Name of the related party Nature of transaction 2022-23
Transaction value Outstanding amount
Asian Paints Limited Reimbursement of 141.39 63.83
expenses paid
Asian Paints Limited Purchase of assets 2.44 2.44
Asian Paints Limited Royalty 3.67 3.67

(g) Details of transactions with and balances outstanding of Key Managerial Personnel (KMP) / Close Family
Member of Key Managerial Personnel :

Name of the related party Nature of transaction 2022-23

Transaction value Outstanding amount
Harish Munireddy Revenue from sale of 5.17 -
products and services
Remuneration 19.61 1.38
Reimbursement of 3.15 0
expenses paid
Prathiba S B Remuneration 13.25 1.06
Reimbursement of 0.9 0.9
expenses paid

52
 53
Notes to the Financial Statements (Contd.)

Financial Statements
Note 31 : RELATED PARTY DISCLOSURE (contd.)
(h) Details of transactions with and balances outstanding of Entities Controlled/Significantly influenced by
Directors/Close Family Members of Directors:

Name of the related party Nature of transaction 2022-23

Transaction value Outstanding amount
Pratan Fenestration LLP Revenue from sale of 15.01 14.58
products and services
Purchase of Fixed, 1,329.25 -
Intangible Assets etc.
Purchase of raw materials 210.09 -
& finished goods
Reimbursement of 50.90 -
expenses paid
Reimbursement of 31.61 -
expenses received

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured, interest free and will be settled in cash. There have been no
guarantees received or provided for any related party receivables or payables.

Note 32 : SEGMENT REPORTING

The Company is in the business of manufacturing uPVC Windows and door system components, which in terms of
Ind AS 108 “Operating Segments”, constitute a single reporting segment. The Company mainly operates in a single
geographical environment i.e. in India.

Note 33 : FINANCIAL RATIOS

No. Ratios
1 Current ratio
2 Debt-equity ratio
3 Debt service coverage ratio Earning available for debt
service #
4 Return on Equity
5 Inventory turnover ratio
6 Trade receivables turnover
ratio
7 Trade payables turnover
ratio
8 Net capital turnover ratio
9 Net profit ratio
10 Return on capital
employed
11 Return on investment
Numerator Denominator FY 2022-23
Current Assets Current Liabilities 1.01
Total Debt (Borrowings) Total Equity 0.44
Finance Costs (excluding cost -
pertaining to lease liabilities) +
Repayment of borrowings
Profit/ (loss) after tax Average Total Equity -22%
Cost of goods sold Average Inventory 3.31
Revenue from operations Average Trade receivables 3.75
Net Purchases of raw material, Average Trade payables 3.66
packing material and stock-in-
trade
Revenue from operations Working Capital (Current Assets 104.11
- Current Liabilities)
Profit/(loss) after tax Revenue from operations -13.6%
Profit/ (loss) before interest and Average Capital Employed -18.9%
tax [Total Equity + Total Debt
(Borrowings)]
{MV(T1) – MV(T0) – Sum [C(t)]} {MV(T0) + Sum [W(t) * C(t)]} 1.1%

# Earning for Debt Service = Profit after tax + Depreciation and Amortisation Expense + Finance costs - Gain on sale of
property, plant and equipment (net) - Net gain on modification/ termination of leases.
 Weatherseal Fenestration Private Limited

Notes to the Financial Statements (Contd.)

Note 34 : 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) The Company has not been declared wilful defaulter by any bank or financial institution or other lender or
government or any government authority.

(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 have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), 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 company (Ultimate Beneficiaries) or

(b) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company 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 Company have not any 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).

(ix) The Company has not entered into any transactions during the year or balances payable or receivable with struck
off companies.

Note 35 : CHANGES IN LIABILITIES ARISING FROM FINANCIAL ACTIVITIES

As at Cash Flows Non- cash changes As at

9 March 2022 (net) Current/ Deletions (net) 31 March 2023
Non-current
classification
Borrowings- Non current - - - - -
Lease liabilities - (56.69) - - (56.69)
Borrowings - Current - 100.40 - - 100.40

54
 55
Notes to the Financial Statements (Contd.)

Financial Statements
Note 36 : APPROVAL & ADOPTION

The Financial statements are approved for issue by the Board of Directors at meeting conducted on 3rd May 2023.

Signatures to notes to financial statements (Note 1 to 36)

For and on behalf of the Board of

Weatherseal Fenestration Private Limited

CIN : U36990KA2022PTC158753
Shyam Swamy Harish Munireddy Parag Rane
Director Director Director
DIN No. 08736211 DIN No.: 06876848 DIN No. 08723015
Bengaluru
Date : 3 May 2023
Asian Paints (Nepal)
Private Limited
Contents
Independent Auditor’s Report............................................................................................................................................................... 4-5

Statement of Financial Position.................................................................................................................................................................6

Statement of Cash Flows.............................................................................................................................................................................7

Statement of Profit and Loss......................................................................................................................................................................8

Statement of Changes in Equity.................................................................................................................................................................9

Notes to the financial statements.....................................................................................................................................................10-38

 Asian Paints (Nepal) Private Limited
Independent Auditor’s Report
TO THE BOARD OF DIRECTORS OF ASIAN PAINTS
(NEPAL) PRIVATE LIMITED
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Asian Paints
(Nepal) Private Limited (the “Company”), which comprise
the statement of financial position as at 14 March 2023,
the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement
of cash flows for the year then ended and notes to the
financial statements, including a summary of significant
accounting policies. These financial statements have
been prepared to enable Asian Paints Limited, India,
the ‘Parent Company’ to prepare consolidated financial
statements of the Parent Company and its subsidiaries
(“Group”).
In our opinion and to the best of our information
and according to the explanations given to us, the
accompanying financial statements present fairly, in all
material respects, statement of financial position of the
Company as at 14 March 2023, and statement of profit
or loss and other comprehensive income, statement
of changes in equity and statement of cash flows for
the year then ended in accordance with Nepal Financial
Reporting Standards (NFRSs).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent
of the Company in accordance with The Institute of
Chartered Accountants of Nepal’s code of ethics for
Professional Accountants (ICAN Code) together with
the ethical requirements that are relevant to our audit
of financial statements in Nepal, and we have fulfilled
our other ethical responsibilities in accordance with
these requirements and the ICAN Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation and fair
presentation of the financial statements in accordance
with NFRSs and for such internal control as management
determines is necessary to enable the preparation
4
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the 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 operation,
or has no realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISAs 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 financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• I dentify and assess the risks of material
misstatement of the 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.
•  btain an understanding of internal control relevant
O
to the audit in order to design audit procedures that
are appropriate in the, but not for the purpose of
expressing an opinion on the effectiveness of the
Company’s internal circumstances control

Independent Auditor’s Report (Contd.)
•  valuate the appropriateness of accounting
E Restriction on Use and Distribution
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
•  onclude on the appropriateness of management’s
C purpose financial information is not a complete set of
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.
•  valuate the overall presentation, structure and
E Partner
content of the financial statements, including the
disclosures, and whether the 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.
5
Financial Statements
This special purpose financial information has been
prepared for purposes of providing information to Asian
Paints Limited to enable it to prepare the consolidated
financial statements of the Group. As a result, the special
financial statements of Asian Paints (Nepal) Private
Limited in accordance with the applicable financial
reporting framework underlying the Group’s accounting
policies and is not intended to give a true and fair view,
in all material respects, of the state affairs of Asian
Paints (Nepal) Private Limited as of 14 March 2023, and
of its profits, changes in equity and its cash flows for the
year then ended in accordance with applicable financial
reporting framework underlying the Group’s accounting
policies. The Special purpose financial information may,
therefore, not be suitable for another purpose.
Shashi Satyal
PKF T R Upadhya & Co
Chartered Accountants
Kathmandu, Nepal
Date: 2 May 2023
UDIN: 230503CA00008EO9nU
 Asian Paints (Nepal) Private Limited

Statement of Financial Position

As at 14 March 2023 (30 Falgun, 2079)

Amount in NPR
Particulars Note As at As at
14 March 2023 14 March 2022
Assets
Non current assets
Property, plant and equipment 3(A) 955,980,680 913,486,598
Capital work In progress 3(A) 3,712,449 98,618,831
Right-of-Use assets 3(B) 310,915,238 179,542,532
Intangible assets 4 5,199,978 6,900,465
Prepayment 5 12,771,449 20,355,436
Advances & other receivable 6 16,026,609 –
Other non current assets 7 84,702,776 152,542,606
Deferred tax assets 22(B) 139,992,599 145,493,120
Total non current assets 1,529,301,778 1,516,939,588
Current assets
Inventories 8 1,526,097,737 1,315,985,122
Prepayment 5 21,478,959 20,280,182
Financial assets
Trade receivables 9 3,633,790,338 1,544,800,102
Cash and cash equivalents 10 (A) 780,281,809 742,976,512
Other balance in bank 10 (B) 1,438,112,228 2,832,312,547
Advances & other receivable 6 11,397,653 28,795,908
Other current assets 7 63,398,555 137,174,279
Total current assets 7,474,557,279 6,622,324,651
Total assets 9,003,859,057 8,139,264,239
Equity and Liabilities
Equity
Share capital 11 61,735,000 61,735,000
Capital Redemption Reserve 2,075,000 2,075,000
Other equity 6,360,532,009 5,264,152,788
Total equity 6,424,342,009 5,327,962,788
Liabilities
Non current liabilities
Financial liabilities
Lease Liabilities 14(B) 155,142,036 159,495,470
Provision 15 38,596,173 36,237,159
Deferred tax liability - -
Other non current liabilities - -
Total non current liabilities 193,738,209 195,732,629
Current liabilities
Financial liabilities
Lease Liabilities 14(B) 45,556,986 31,372,941
Trade payables 12 525,578,123 900,567,728
Accruals and other payables 13 1,293,085,783 1,113,058,697
Provisions 15 163,818,710 185,084,088
Current tax liabilities (net) 16 140,647,650 210,557,749
Other current liabilities 14(A) 217,091,587 174,927,620
Total current liabilities 2,385,778,839 2,615,568,823
Total equity and liabilities 9,003,859,057 8,139,264,239
The accompanying notes are an integral part of these financial statements

As per our report of even date

Samir Shrestha Gopalakrishnan Sireesh Rao LaxmiGopal Shrestha Shashi Satyal
Finance Manager Gowrishanker Director Chairman Partner
Director & PKF T R Upadhya & Co.
General Manager Chartered Accountants
Place: Lalitpur
Date: 2 May 2023
6
 7
Statement of Cash Flows

Financial Statements
For the year ended 14 March 2023 (30 Falgun 2079)

Amount in NPR
Particulars FY 2022-23 FY 2021-22
(A) Cash flow from operating activities
Net profit before tax 1,849,411,952 1,739,130,143
Adjustment for:
a) Depreciation & amortization 133,038,603 125,325,824
b) Interest income (203,422,081) (201,262,720)
c) Interest expenses 45,489,834 28,674,089
d) Profit on sale of property, plant & equipment – (229,459)
e) Fixed Asset written off 320,965 –
Operating cash flow before changes in operating assets/liabilities 1,824,839,273 1,691,637,877
a) Increase/(Decrease) in financial and other liabilities (225,245,467) 154,804,300
b) Increase/(Decrease) in provisions (18,906,364) 48,375,987
c) (Increase)/Decrease in prepayment 6,385,209 3,301,701
c) (Increase)/Decrease advances & other receivable 1,371,646 8,196,948
d) (Increase)/Decrease inventory (210,112,615) (424,454,394)
e) (Increase)/Decrease trade receivable (2,088,990,236) (800,154,319)
f) Interest payment (45,489,834) (21,482,975)
g) Payment of income tax (385,297,308) (277,833,687)
h) (Increase)/decrease in other assets 141,615,554 (95,214,552)
Total changes in operating assets/liablities (2,824,669,414) (1,404,460,991)
Net cash flow from operating activities (A) (999,830,141) 287,176,886
(B) Cash flow from investing activities
Purchase of property, plant & equipment (24,357,249) (129,749,340)
Sale of property, plant & equipment – 229,470
( Increase)/ Decrease in Term deposit 1,394,200,319 150,940,186
Interest income 203,422,081 201,262,720
Increase in ROU assets-IFRS 16 (186,262,238) (9,962,531)
Net cash flow from investing activities (B) 1,387,002,913 212,720,505
(C ) Cash flow from financing activities
Dividend & tax on dividend paid (359,698,084) (152,179,800)
Decrease in Share Capital – –
Payment of lease liability-IFRS16 9,830,611 (18,320,977)
Net cash flow from financing activities (C) (349,867,473) (170,500,777)
Net increase/( decrease) in cash and cash equivalents ( A + B + C) 37,305,298 329,396,613
Add: Cash and cash equivalent as at 13 March 2022 742,976,512 413,579,899
Cash and cash equivalent as at 14 March 2023 780,281,810 742,976,512
The accompanying notes are an integral part of these financial statements

As per our report of even date

Samir Shrestha Gopalakrishnan Sireesh Rao LaxmiGopal Shrestha Shashi Satyal
Finance Manager Gowrishanker Director Chairman Partner
Director & PKF T R Upadhya & Co.
General Manager Chartered Accountants
Place: Lalitpur
Date: 2 May 2023
 Asian Paints (Nepal) Private Limited

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 14 March 2023 (30 Falgun 2079)

Amount in NPR
Note Year ended Year ended
14 March 2023 14 March 2022
Revenue from operations
Revenue from sales of products 17 (A) 8,713,812,234 7,460,975,075
Other operating revenues 17 (B) 7,912,601 9,278,240
Other income 17 (C ) 290,026,673 218,641,843
Total income 9,011,751,508 7,688,895,158
Expenses
Cost of materials consumed 18 4,963,841,148 4,577,599,528
Changes in inventories of finished goods,stock in trade and 18 (69,428,141) (276,083,175)
work in progress
Employee benefit expenses 19 623,135,495 539,866,873
Other expenses 20 1,466,262,617 954,381,876
Total expenses 6,983,811,119 5,795,765,102
Profit before interest, depreciation and tax 2,027,940,389 1,893,130,056
Finance cost 21 45,489,834 28,674,089
Depreciation and amortization 3&4 133,038,603 125,325,824
Profit before tax 1,849,411,952 1,739,130,143
Tax expenses
Current tax 22(A) 315,387,209 372,228,567
Deferred tax 22(B) 5,500,522 (71,888,136)
Profit after tax (A) 1,528,524,221 1,438,789,712
Other comprehensive income (OCI)
Items that will not be reclassified to profit or loss
Actuarial gain/(loss) on remeasurement of defined benefit - -
plans
Income tax expenses on actuarial gain/(loss) - -
Other comprehensive income for the year (B) - -
Total comprehensive income for the year (A+B) 1,528,524,221 1,438,789,712
The accompanying notes are an integral part of these financial statements

As per our report of even date

Samir Shrestha Gopalakrishnan Sireesh Rao LaxmiGopal Shrestha Shashi Satyal
Finance Manager Gowrishanker Director Chairman Partner
Director & PKF T R Upadhya & Co.
General Manager Chartered Accountants
Place: Lalitpur
Date: 2 May 2023
8
 9
Statement of Changes In Equity

Financial Statements
For the year ended 14 March 2023 (30 Falgun 2079)

Amount in NPR
Particulars Share Capital Capital Accumulated Total
Redemption profit/ (loss)
Reserve
Opening balance as at 14 March 2021 61,735,000 2,075,000 4,195,773,076 4,259,583,076
Net profit /(loss) for the year - - 1,438,789,712 1,438,789,712
Total Comprehensive Income for the year - - 1,438,789,712 1,438,789,712
Transactions with equity owners
Transfer to general reserve - - - -
Dividend paid - - (351,889,500) (351,889,500)
Income tax on dividend - - (18,520,500) (18,520,500)
Total transactions with equity owners for the - - (370,410,000) (370,410,000)
year
Balance as at 14 March 2022 61,735,000 2,075,000 5,264,152,788 5,327,962,788
Net profit /(loss) for the year 1,528,524,221 1,528,524,221
Total Comprehensive Income for the year - - 1,528,524,221 1,528,524,221
Transactions with equity owners
Dividend paid - - (410,537,750) (410,537,750)
Income tax on dividend - - (21,607,250) (21,607,250)
Total transactions with equity owners for - (432,145,000) (432,145,000)
the year
Balance as at 14 March 2023 61,735,000 2,075,000 6,360,532,009 6,424,342,009

As per our report of even date

Samir Shrestha Gopalakrishnan Sireesh Rao LaxmiGopal Shrestha Shashi Satyal
Finance Manager Gowrishanker Director Chairman Partner
Director & PKF T R Upadhya & Co.
General Manager Chartered Accountants
Place: Lalitpur
Date: 2 May 2023
 Asian Paints (Nepal) Private Limited

Notes to the Financial statements

For the year ended 30 Falgun 2079 (14 March 2023)

1. COMPANY INFORMATION revision. Estimates and judgments are continuously

evaluated and are based on historical experience
Asian Paints (Nepal) Private Limited (“APN” or
and other factors, including expectations of future
the “Company”) is a private limited company
events that are believed to be reasonable.
incorporated in Nepal under the Companies Act
2063. The registered office of the Company is
2.4 Current and non-current classification
located at Hetauda Industrial Area, Hetauda
Municipality, Ward No 8, Makwanpur, Nepal. The Company presents assets and liabilities in the
statement of financial position based on current
The Company is a subsidiary of Asian Paints Limited, and non-current classification. Based on the nature
India. Its principal business is to manufacture and of products and the time between acquisition of
sale of paints products and chrome plated fittings assets for processing and their realization in cash
and sanitary wares. It has manufacturing facilities at and cash equivalents, the Company has ascertained
Hetauda Industrial Area, Hetauda, Nepal. its operating cycle as 12 months for the purpose
of current/non-current classification of assets and
2. SIGNIFICANT ACCOUNTING POLICIES AND KEY liabilities.
ACCOUNTING ESTIMATES AND JUDGMENTS
The Company classifies an asset as current when it is:
2.1 Basis of preparation of financial statements
i)  xpected to be realized or intended to be sold
E
The financial statements have been prepared
or consumed in the normal operating cycle
in accordance with applicable Nepal Financial
Reporting Standards (NFRS) as issued by the
ii) Held primarily for the purpose of trading
Institute of Chartered Accountants of Nepal
(ICAN) which is materially in conformity with the
iii)  xpected to be realized within twelve months
E
International Financial Reporting Standard (IFRS).
after the reporting period or
The Financial Statements have also been prepared
in accordance with the relevant presentational
iv) Cash or cash equivalent unless restricted from
requirements as per group accounting policies.
being exchanged or used to settle a liability
for at least twelve months after the reporting
The financial statements have been prepared on
period.
an accrual and going concern basis. The accounting
policies are applied consistently, except disclosed
All other assets are classified as non-current.
otherwise to all the periods presented in the
financial statements. All assets and liabilities
The Company classifies a liability as current when:
have been classified as current or non-current as
disclosed in note 2.4 i)  xpected to be settled in the normal operating
E
cycle
2.2 Basis of measurement
These financial statements are prepared under ii) Held primarily for the purpose of trading
the historical cost convention unless otherwise
indicated. iii) Settled within twelve months after the
reporting period or
2.3 Use of estimate
iv) No unconditional right to defer the settlement
The preparation of financial statements requires
of the liability for at least twelve months after
management to make judgments, estimates and
the reporting period.
assumptions in the application of accounting
policies that affect the reported amounts of assets,
v) All other liabilities are classified as non-current.
liabilities, income and expenses. Actual results
may differ from these estimates. Any revision in
Deferred tax assets and liabilities are classified as
accounting estimates is recognized prospectively in
non-current assets and liabilities.
the period of change and material revision, including
its impact on financial statements, is reported in
the notes to accounts in the year of incorporation of

10
 11
Notes to the Financial Statements (Contd.)

Financial Statements
2.5 Property, Plant and Equipment Depreciation
An item of property, plant and equipment Depreciation on each part of an item of property,
that qualifies as an asset is measured on initial plant and equipment is provided using the straight-
recognition at cost. Following initial recognition, line method based on the useful life of the asset
items of property, plant and equipment are carried as estimated by the management and is charged to
at its cost less accumulated depreciation and the statement of profit or loss. The estimate of the
accumulated impairment losses. useful life of the assets has been assessed based
on technical advice which considers the nature
The cost of an item of property, plant and equipment of the asset, the usage of the asset, expected
comprises its purchase price including import duties physical wear and tear, the operating conditions of
and other non-refundable purchase taxes or levies, the asset, anticipated technological changes, and
the directly attributable cost of bringing the asset manufacturers warranties and maintenance support,
to its working condition for its intended use and etc.
the initial estimate of decommissioning, restoration
and similar liabilities, if any. Such Costs also include Significant components of assets identified
borrowing costs if the recognition criteria are met. separately are depreciated separately over their
Any trade discounts and rebates are deducted in useful life. Depreciation on tinting systems leased to
arriving at the purchase price. Cost includes the dealers is provided under the Straight Line Method
cost of replacing a part of a plant and equipment if over the estimated useful life determined as per
the recognition criteria are met. Expenses directly technical evaluation.
attributable to the new manufacturing facility
during its construction period are capitalized if the The useful lives, residual values of each part of an
recognition criteria are met. item of property, plant and equipment and the
depreciation methods are reviewed at the end of
 xpenditure related to plans, designs and drawings
E each financial year. If any of these expectations
of buildings or plant and machinery is capitalized differ from previous estimates, such change is
under the relevant class of property, plant and accounted for as a change in an accounting estimate.
equipment if the recognition criteria are met. The
Company identifies and determines the cost of each The estimated useful life of items of property, plant
part of an item of property, plant and equipment and equipment is mentioned below:
separately if the part has a cost that is significant
to the total cost of that item of property, plant and Particulars Estimated Depreciation
equipment and has a useful life that is materially Useful Life Rate (%)
different from that of the remaining item. (Years)
Building 30 to 61 1.63 to 3.34
Items such as spare parts, stand-by equipment and
servicing equipment that meet the definition of Plant and 4 to 21 4.75 to 25
property, plant and equipment are capitalized at Machinery
cost and depreciated over their useful life. Costs in Vehicle 5 20
nature of repairs and maintenance are recognized in Personal 4 25
the statement of profit or loss as and when incurred. Computer
Furniture 5 to 10 10 to 20
The carrying amount of an item of property, plant
and equipment is derecognized on disposal or when Office Equipment 4 to 8 12.5 to 25
no future economic benefits are expected from its
use or disposal. The gain or loss arising from the 2.6 Intangible Assets
de-recognition of an item of property, plant and Measurement at recognition:
equipment is measured as the difference between
Intangible assets acquired separately are measured
the net disposal proceeds and the carrying amount
on initial recognition at cost. Intangible assets
of the item and is recognized in the Statement of
arising from the acquisition of a business are
Profit or Loss when the item is derecognized.
measured at fair value as at the date of acquisition.
Internally generated intangibles including research
 Asian Paints (Nepal) Private Limited
Notes to the Financial Statements (Contd.)
costs are not capitalized and the related expenditure
is recognized in the Statement of Profit or Loss in
the period in which the expenditure is incurred.
Following initial recognition, intangible assets with
finite useful life are carried at cost less accumulated
amortization and accumulated impairment loss, if
any. Intangible assets with indefinite useful lives,
that are acquired separately, are carried at cost/fair
value at the date of acquisition less accumulated
impairment loss, if any.
Amortization:
Intangible Assets with finite lives are amortized
on a Straight Line basis over the estimated useful
economic life. The amortization expense on
intangible assets with finite lives is recognized in the
statement of profit or loss. The estimated useful life
of intangible assets (Software) is 4 to 5 years.
The amortization period and the amortization
method for an intangible asset with finite useful
life are reviewed at the end of each financial year.
If any of these expectations differ from previous
estimates, such change is accounted for as a change
in an accounting estimate.
Derecognition:
The carrying amount of an intangible asset is
derecognized 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 intangible asset is measured as
the difference between the net disposal proceeds
and the carrying amount of the intangible asset and
is recognized in the Statement of profit or loss when
the asset is derecognized.
Impairment of non-financial assets:
Assets that have an indefinite useful life, for
example, goodwill, are not subject to amortization
and are tested for impairment at least annually and
whenever there is an indication that the asset may
be impaired. Assets that are subject to depreciation
and amortization are reviewed for impairment,
whenever an event or changes in circumstances
indicate that the carrying amount may not be
recoverable. Such circumstances include, though
are not limited to, significant or sustained decline in
revenues or earnings and material adverse changes
in the economic environment.
12
An impairment loss is recognized whenever the
carrying amount of an asset or its cash-generating
unit (CGU) exceeds its recoverable amount. The
recoverable amount of an asset is the greater of
its fair value less cost to sell and value in use. To
calculate the value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
rates and the risk specific to the asset. For an asset
that does not generate largely independent cash
inflows, the recoverable amount is determined
by the CGU to which the asset belongs. Fair value
less cost to sell is the best estimate of the amount
obtainable from the sale of an asset in an arm’s
length transaction between knowledgeable, willing
parties, less the cost of disposal. Impairment losses,
if any, are recognized in the statement of profit or
loss and included in depreciation and amortization
expense.
Impairment losses, on assets other than goodwill,
are reversed in the statement of profit or loss only
to the extent that the asset’s carrying amount
does not exceed the carrying amount that would
have been determined if no impairment loss had
previously been recognized.
2.7 Capital work in progress and Capital advances
Cost of assets not ready for intended use, as on the
statement of financial position date, is shown as
capital work in progress. Advances given towards
the acquisition of property, plant and equipment
outstanding at each statement of financial position
date are disclosed as other non-current assets.
2.8 Financial instrument
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement:
The Company recognizes a financial asset in its
balance sheet when it becomes a party to the
contractual provisions of the instrument. All
financial assets are recognized initially at fair value
plus, in the case of financial assets not recorded at
fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the
financial asset.

Notes to the Financial Statements (Contd.)
Where the fair value of a financial asset at initial
recognition is different from its transaction price,
the difference between the fair value and the
transaction price is recognized as a gain or loss in the
statement of profit or loss at initial recognition if the
fair value is determined through a quoted market
price in an active market for an identical asset (i.e.
level 1 input) or through a valuation technique that
uses data from observable markets (i.e. level 2
input).
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the statement of profit or loss only to the
extent that such gain or loss arises due to a change in
the factor that market participants take into account
when pricing the financial asset.
However, trade receivables that do not contain a
significant financing component are measured at
transaction price.
Subsequent measurement:
For subsequent measurement, the Company
classifies a financial asset in accordance with the
below criteria:
• The Company’s business model for managing
the financial asset, and
• The contractual cash flow characteristics of the
financial asset.
Based on the above criteria, the Company classifies
its financial assets into the following categories:
• Financial assets measured at amortized cost
• Financial assets measured at fair value through
other comprehensive income (FVTOCI)
• Financial assets measured at fair value through
profit or loss (FVTPL)
Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if
both the following conditions are met:
a) The Company’s business model objective for
managing the financial asset is to hold financial
13
Financial Statements
assets in order to collect contractual cash flows,
and
b) 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.
This category applies to cash and bank balances,
trade receivables, loans and other financial assets of
the Company. Such financial assets are subsequently
measured at amortized cost using the effective
interest method.
Under the effective interest method, the future
cash receipts are exactly discounted to the initial
recognition value using the effective interest rate.
The cumulative amortization using the effective
interest method of the difference between the
initial recognition amount and the maturity amount
is added to the initial recognition value (net of
principal repayments, if any) of the financial asset
over the relevant period of the financial asset
to arrive at the amortized cost at each reporting
date. The corresponding effect of the amortization
under the effective interest method is recognized
as interest income over the relevant period of the
financial asset. The same is included under other
income in the statement of profit or loss.
The amortized cost of a financial asset is also
adjusted for loss allowance, if any.
Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both of
the following conditions are met:
a) The Company’s business model objective for
managing the financial asset is achieved both by
collecting contractual cash flows and selling the
financial assets, and
b) 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.
This category applies to certain investments
in debt instruments. Such financial assets are
subsequently measured at fair value at each
reporting date. Fair value changes are recognized
in the Other Comprehensive Income (OCI).
 Asian Paints (Nepal) Private Limited
Notes to the Financial Statements (Contd.)
However, the Company recognizes interest income
and impairment losses and their reversals in the
statement of profit or loss.
On Derecognition of such financial assets,
cumulative gain or loss previously recognized in OCI
is reclassified from the equity to the statement of
profit or loss.
Further, the Company, through an irrevocable
election at initial recognition, has measured certain
investments in equity instruments at FVTOCI. The
Company has made such election on an instrument
by instrument basis. These equity instruments
are neither held for trading nor are contingent
considerations recognized under a business
combination. Pursuant to such irrevocable election,
subsequent changes in the fair value of such equity
instruments are recognized in OCI. However, the
Company recognizes dividend income from such
instruments in the consolidated statement of
profit or loss when the right to receive payment
is established, it is probable that the economic
benefits will flow to the Company and the amount
can be measured reliably.
On Derecognition of such financial assets,
cumulative gain or loss previously recognized in OCI
is not reclassified from the equity to the statement
of profit or loss. However, the Company may transfer
such cumulative gain or loss into retained earnings
within equity.
Financial assets measured at FVTPL:
A financial asset is measured at FVTPL unless it is
measured at amortized cost or FVTOCI as explained
above. This is a residual category applied to all other
investments of the Company excluding investments
in subsidiary and associate companies. Such financial
assets are subsequently measured at fair value
at each reporting date. Fair value changes are
recognized in the statement of profit or loss.
Derecognition:
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is derecognized (i.e. removed from the
Company’s balance sheet) when any of the following
occurs:
i. The contractual rights to cash flow from the
financial asset expire;
14
ii. The Company transfers its contractual rights
to receive cash flows of the financial asset and
has substantially transferred all the risks and
rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to
receive cash flows but assumes a contractual
obligation to pay the cash flows without
material delay to one or more recipients
under a ‘pass-through’ arrangement (thereby
substantially transferring all the risks and
rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains,
substantially all risk and rewards of ownership,
and does not retain control over the financial
asset.
In cases where the Company has neither transferred
nor retained substantially all of the risks and rewards
of the financial asset but retains control of the
financial asset, the Company continues to recognize
such financial asset to the extent of its continuing
involvement in the financial asset. In that case, the
Company also recognizes an associated liability.
The financial asset and the associated liability are
measured on a basis that reflects the rights and
obligations that the Company has retained.
On Derecognition of a financial asset, the difference
between the carrying amount and the consideration
received is recognized in the statement of profit or
loss.
Impairment of financial assets:
The Company applies the expected credit losses
(ECL) model for measurement and recognition of
loss allowance on the following:
i. Trade receivables and lease receivables,
ii. Financial assets measured at amortized
cost (other than trade receivables and lease
receivables)
iii. Financial assets measured at fair value through
other comprehensive income (FVTOCI)
In case of trade receivables and lease receivables,
the Company follows a simplified approach wherein
an amount equal to lifetime ECL is measured and
recognized as loss allowance.

Notes to the Financial Statements (Contd.)
In case of other assets (listed as ii and iii above), the
Company determines if there has been a significant
increase in the credit risk of the financial asset since
initial recognition. If the credit risk of such assets
has not increased significantly, an amount equal to
12-month ECL is measured and recognized as loss
allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is
measured and recognized as loss allowance.
Subsequently, if the credit quality of the financial
asset improves such that there is no longer a
significant increase in credit risk since initial
recognition, the Company reverts to recognizing
impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the
entity expects to receive (i.e., all cash shortfalls),
discounted at the original effective interest rate.
Lifetime ECL is the expected credit losses resulting
from all possible default events over the expected
life of a financial asset. 12-month ECL is a portion
of the lifetime ECL which result from default
events that are possible within 12 months from the
reporting date.
ECL is measured in a manner that reflects unbiased
and probability weighted amounts determined
by a range of outcomes, taking into account
the time value of money and other reasonable
information available as a result of past events,
current conditions and forecasts of future economic
conditions.
As a practical expedient, the Company uses a
provision matrix to measure lifetime ECL on its
portfolio of trade receivables. 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. At each
reporting date, the historically observed default
rates and changes in the forward-looking estimates
are updated.
ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income/ expense in the standalone statement of
profit or loss.
15
Financial Statements
Financial Liabilities
Initial recognition and measurement:
The Company recognizes a financial liability in
its balance sheet when it becomes a party to
the contractual provisions of the instrument. All
financial liabilities are recognized initially at fair
value minus, in the case of financial liabilities not
recorded at fair value through profit or loss (FVTPL),
transaction costs that are attributable to the
acquisition of the financial liability.
Where the fair value of the financial liability at
initial recognition is different from its transaction
price, the difference between the fair value and the
transaction price is recognized as a gain or loss in the
statement of profit or loss at initial recognition if the
fair value is determined through a quoted market
price in an active market for an identical asset (i.e.
level 1 input) or through a valuation technique that
uses data from observable markets (i.e. level 2
input).
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the statement of profit or loss only to the
extent that such gain or loss arises due to a change in
the factor that market participants take into account
when pricing the financial liability.
Subsequent measurement:
All financial liabilities of the Company are
subsequently measured at amortized cost using the
effective interest method.
Under the effective interest method, the future
cash payments are exactly discounted to the initial
recognition value using the effective interest rate.
The cumulative amortization using the effective
interest method of the difference between the
initial recognition amount and the maturity amount
is added to the initial recognition value (net of
principal repayments, if any) of the financial liability
over the relevant period of the financial liability
to arrive at the amortized cost at each reporting
date. The corresponding effect of the amortization
under the effective interest method is recognized
as interest expense over the relevant period of the
financial liability. The same is included under finance
cost in the statement of profit or loss.
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

Derecognition: at amortized cost. The hedging gain or loss on the

A financial liability is derecognized when the
obligation under the liability is discharged or
canceled or expires. When an existing financial
liability is replaced by another from the same lender
on substantially different terms or the terms of
an existing liability are substantially modified,
such an exchange or modification is treated as
the Derecognition of the original liability and
the recognition of a new liability. The difference
between the carrying amount of the financial
liability derecognized and the consideration paid is
recognized in the statement of profit or loss.
Derivative financial instruments and hedge
accounting
The Company enters into derivative financial
contracts in the nature of forward currency
contracts with external parties to hedge its
foreign currency risks relating to foreign currency
denominated financial liabilities measured at
amortized cost. The Company formally establishes a
hedge relationship between such forward currency
contracts (‘hedging instrument’) and recognized
financial liabilities (‘hedged item’) through formal
documentation at the inception of the hedge
relationship in line with the Company’s risk
management objective and strategy.
hedged item is adjusted to the carrying value of the
hedged item as per the effective interest method
and the corresponding effect is recognized in the
consolidated statement of profit or loss.
Derecognition:
On Derecognition of the hedged item, the
unamortized fair value of the hedging instrument is
recognized in the consolidated statement of profit
or loss.
Fair Value
The Company measures financial instruments at fair
value in accordance with the accounting policies
mentioned above. 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. The fair value
measurement is based on the presumption that the
transaction to sell the asset or transfer the liability
takes place either:
• I n the principal market for the asset or liability,
or
• I n the absence of a principal market, in the most
advantageous market for the asset or liability.

The hedging relationship so designated is accounted All assets and liabilities for which fair value
for in accordance with the accounting principles is measured or disclosed in the consolidated
prescribed for a fair value hedge under IFRS 9, financial statements are categorized within the
Financial Instruments. fair value hierarchy that categorizes into three
levels, described as follows, the inputs to valuation
Recognition and measurement of fair value hedge: techniques used to measure value. The fair value
hierarchy gives the highest priority to quoted
A hedging instrument is initially recognized at fair
prices in active markets for identical assets or
value on the date on which a derivative contract is
liabilities (Level 1 inputs) and the lowest priority to
entered into and is subsequently measured at fair
unobservable inputs (Level 3 inputs).
value at each reporting date. Gain or loss arising
from changes in the fair value of the hedging
Level 1 — quoted (unadjusted) market prices in
instrument is recognized in the consolidated
active markets for identical assets or liabilities
statement of profit or loss. A hedging instrument is
recognized as a financial asset in the balance sheet
Level 2 — inputs other than quoted prices included
if its fair value as at reporting date is positive as
within Level 1 that are observable for the asset or
compared to carrying value and as a financial liability
liability, either directly or indirectly
if its fair value as of reporting date is negative as
compared to carrying value.
Level 3 — inputs that are unobservable for the asset
or liability.
Hedged item (recognized financial liability) is initially
recognized at fair value on the date of entering into
For assets and liabilities that are recognized in the
contractual obligation and is subsequently measured
consolidated financial statements at fair value on a

16

Notes to the Financial Statements (Contd.)
recurring basis, the Company determines whether
transfers have occurred between levels in the
hierarchy by re-assessing categorization at the end
of each reporting period and discloses the same.
2.9 Cash and cash equivalents
Cash and cash equivalents for the purpose of Cash
Flow Statement comprise cash and cheques in hand,
bank balances, demand deposits with banks and
other short-term highly liquid investments where
the original maturity is three months or less net
of bank overdrafts that are readily convertible to
known amounts of cash and which are subject to an
insignificant risk of changes in value.
2.10 Inventories
Inventories contain raw materials, packing materials,
finished goods, semi-finished goods, raw materials
in transit and accessories.
Raw materials, work-in-progress, finished goods,
packing materials, stores, spares, components,
consumables and stock-in-trade are carried at a
lower of cost and net realizable value. However,
materials and other items held for use in the
production of inventories are not written down
below cost if the finished goods in which they will
be incorporated are expected to be sold at or above
cost. The comparison of cost and net realizable value
is made on an item-by-item basis. Net realizable
value is the estimated selling price in the ordinary
course of the business less the estimated cost of
completion and estimated costs necessary to make
the sale.
In determining the cost of raw materials, packing
materials, stock-in-trade, stores, spares, components
and consumables, the weighted average cost
method is used. Cost of inventory comprises all
costs of purchase, duties, taxes (other than those
subsequently recoverable from tax authorities) and
all other costs incurred in bringing the inventory to
its present location and condition.
Cost of finished goods and work-in-progress includes
the cost of raw materials, packing materials, an
appropriate share of fixed and variable production
overheads, excise duty as applicable and other costs
incurred in bringing the inventories to their present
location and condition. Fixed production overheads
are allocated on the basis of the normal capacity of
production facilities.
17
Financial Statements
2.11 Share capital
Financial Instruments issued by the Company are
classified as equity only to the extent that they
do not meet the definition of financial liability or
financial asset. The Company’s equity shares are
classified as equity instruments.
2.12 Revenue Recognition
Revenue from contracts with customers is
recognized on the transfer of control of promised
goods or services to a customer at an amount that
reflects the consideration to which the Company
is expected to be entitled in exchange for those
goods or services. Revenue towards satisfaction
of a performance obligation is measured at the
amount of transaction price (net of variable
consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered includes variable consideration
on account of various discounts and schemes
offered by the Group as part of the contract. This
variable consideration is estimated based on the
expected value of outflow. Revenue (net of variable
consideration) is recognized only to the extent that
it is highly probable that the amount will not be
subject to significant reversal when uncertainty
relating to its recognition is resolved.
Sale of goods:
Revenue from the sale of products is recognized
when the control of the goods has been transferred
to the customer. The performance obligation in case
of sale of the product is satisfied at a point in time
i.e. when the material is shipped to the customer or
on delivery to the customer, as may be specified in
the contract.
Rendering of services:
Revenue from rendering services is recognized over
time by measuring progress towards satisfaction
of performance obligation for the services
rendered. The Company uses the output method
for measurement of revenue from home solution
operations/ painting and related services and
royalty income as it is based on milestones reached
or units delivered. The input method is used for
the measurement of revenue from processing and
other services as it is directly linked to the expense
incurred by the Company.
 Asian Paints (Nepal) Private Limited
Notes to the Financial Statements (Contd.)
Interest:
Interest income is recognized on a time proportion
basis.
Other incomes:
Other incomes have been recognized on an accrual
basis in financial statements except for cash flow
information.
2.13 Retirement (Employee) Benefits
Liabilities in respect of employee benefits to
employees are provided for as follows:
Short Term Employee Benefits:
All employee benefits payable wholly within twelve
months of rendering the service are classified
as short term employee benefits and they are
expensed in the period in which the employee
renders the related service. The Company recognizes
the undiscounted amount of short term employee
benefits expected to be paid in exchange for
services rendered as a liability (accrued expense)
after deducting any amount already paid.
Long Term Employee Benefits:
(a) Defined contribution plans
Defined contribution plans are post-
employment benefit plans under which the
Company pays fixed contributions into state
managed retirement benefit schemes and
will have no legal or constructive obligation
to pay further contributions, if any, if the
state managed funds do not hold sufficient
assets to pay all employee benefits relating to
employee services in the current and preceding
financial years. The Company’s contributions to
defined contribution plans are recognized as an
employee benefit expense in the statement of
profit or loss in the financial year to which they
relate.
The Company is registered in the Social Security
Fund (SSF) and the Social Security Fund
Contribution @31% of the basic salary for all
the retirement benefits (Provident fund, Social
security tax, Gratuity and Medical Insurance to
the staff) are deposited therein effective from
Shrawan 2076 on monthly basis.
18
Contributions to the provident fund of
employees seconded from Asian Paints Limited
are paid to Asian Paints Limited and are charged
to the statement of profit or loss as incurred.
(b) Other long-term employee benefits
 ntitlements to annual leave and sick leave are
E
recognized when they accrue to employees.
Sick leave can only be availed while annual leave
can either be availed or encashed subject to
the maximum number of days of accumulation.
The Company determines the liability for such
accumulated leaves using the Projected Accrued
Benefit method with actuarial valuations
being carried out at each Balance Sheet date.
Expenses related to other long term employee
benefits are recognized in the statement of
profit or loss (including actuarial gain and loss).
2.14 Foreign Currency Transactions
Initial Recognition:
On initial recognition, transactions in foreign
currencies entered into by the Company are
recorded 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.
Exchange differences arising from foreign exchange
transactions settled during the year are recognized
in the Statement of Profit or Loss.

Measurement of foreign currency items at reporting
date:
Foreign currency monetary items of the Company
are translated at the closing exchange rates. Non-
monetary items that are measured at historical
cost in a foreign currency, are translated using the
exchange rate at the date of the transaction. 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 is measured.
2.15 Taxation
Current tax:
Current tax is determined as the amount of tax
payable in respect of taxable income for the year
as per the provisions of the Income Tax Act, 2002.
Current tax is measured using tax rates that have
been enacted by the end of the reporting period for
the amounts expected to be recovered from or paid
to the taxation authorities.

Notes to the Financial Statements (Contd.)
Income tax rates applicable to the company:
I ncome from local sale of goods: 16% (F/Y
2021/22:16 %)
I ncome from the export sale of goods: 12% (F/Y
2021/22: 12.5%)
Investment Income: 25% (F/Y 2021/22: 25%)
I ncome from service charges: 25% (F/Y 2021/22:
25%)
As per the amendment effected in section 11 of the
Income Tax Act, 2058 on promulgation of Finance
Act, 2076, the special industries providing direct
employment to 300 or more than 300 Nepali citizens
for a whole year are eligible to claim 20% concession
on normal rate of income tax. As the company
provides direct employment to more than 300
Nepali citizens throughout the year and is eligible
to claim such concession having met the criteria, the
company has applied a 16% tax rate for calculating
the tax on income from local sale of goods.
Deferred tax:
Deferred tax is provided using the balance sheet
approach on temporary differences at the reporting
date as a difference between the tax base and the
carrying amount of assets and liabilities. Deferred
tax is recognized subject to the probability that
taxable profit will be available against which the
temporary differences can be reversed. Deferred
tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the
asset is realized or the liability is settled, based on
tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognized outside
profit or loss is recognized outside profit or loss
(either in other comprehensive income or in equity).
Deferred tax assets and deferred tax liabilities are
set off if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.
Deferred tax liabilities are not recognized for
temporary differences between the carrying amount
and tax bases of investments in subsidiaries and
interest in joint arrangements where the Company
19
Financial Statements
is able to control the timing of the reversal of the
temporary differences and it is probable that the
differences will not reverse in the foreseeable
future.
2.16 Provisions and Contingencies
The Company creates a provision when there exists a
present obligation (legal or constructive) as a result
of a past event that probably requires an outflow
of resources representing economic benefits and
a reliable estimate can be made of the amount of
the obligation. Provisions are measured at the best
estimate of the expenditure required to settle
the present obligation at the balance sheet date
and discounted at a pre-tax rate reflecting current
market assessments of the time value of money and
risks specific to the liability. These are reviewed at
each year end date and adjusted to reflect the best
current estimate.
Contingent liabilities are disclosed when there
is a possible obligation arising from past events,
the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events not wholly within the
control of the Company or a present obligation
that arises from past events where it is either
not probable that an outflow of resources will
be required to settle the obligation or a reliable
estimate of the amount cannot be made.
No contingent asset is recognized but disclosed by
way of notes to accounts.
2.17 Cash Flow Statement
Cash flows are reported using the indirect method,
whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature and any
deferrals or accruals of past or future cash receipts
or payments. The cash flows from regular revenue-
generating & investing activities of the company are
segregated.
2.18 Lease accounting
Assets taken on lease (As a Lessee):
The Company mainly has lease arrangements for
land and building for offices, a residential apartment
for expat employee, factory and warehouse spaces.
The Company assesses whether a contract is or
contains a lease at the inception of the contract. The
assessment involves the exercise of judgment about
 Asian Paints (Nepal) Private Limited
Notes to the Financial Statements (Contd.)
whether it depends on a specified asset, whether
the Company contains substantially all the economic
benefits from the use of that asset, and whether the
Company has the right to direct the use of the asset.
The Company recognizes a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end
of the lease term. The estimated useful lives of
right-of-use assets are determined on the same basis
as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain
re-measurements of the lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted using the
interest rate implicit in the lease or, if that rate
cannot be readily determined, the Company uses an
incremental borrowing rate specific to the company,
term and currency of the contract. Generally, the
company uses its incremental borrowing rate as the
discount rate.
Lease payments included in the measurement of the
lease liability include fixed payments, variable lease
payments that depend on an index or a rate known
at the commencement date; and extension option
payments or purchase options which the Company is
reasonably certain to exercise.
Variable lease payments that don’t depend on an
index or rate are not included in the measurement
of the lease liability and the Rou asset. The related
payments are recognized as an expense in the period
in which the event or condition that triggers those
payments occur and are included in the line “other
expense” in the statement of profit or loss.
20
After the commencement date, the amount of lease
liabilities are increased to reflect the accretion
of interest and reduced for the lease payments
made and remeasured (with a corresponding
adjustment to the related ROU asset) when there
is a change in future lease payments in case of
renegotiation, changes of an index or rate or in case
of reassessment of options.
Short-term leases and leases of low-value assets
The company has elected not to recognize right-
of-use assets and lease liabilities for short term
leases as well as low value assets and recognizes the
lease payments associated with these leases as an
expense on a straight-line basis over the lease term.
2.19 Provision for bonus
Staff Bonus has been provided at a rate of 10% of
profit before tax and bonus
2.20 Provision for Corporate Social responsibilities
(CSR)
CSR expenses are accounted for as per Industrial
Enterprises Act 2020 (2076 BS) (the “Act”) which
has been introduced with effect from February 11,
2020 replacing the Industrial Enterprises Act 2016
(2073 BS) (the “Previous Act”). Section 54 of the
Industrial Enterprises Act 2020 (2076 BS) makes it
mandatory to allocate 1% of the annual profit to
be utilized towards corporate social responsibility
(the “CSR Requirement”). The fund created for CSR
is to be utilized on the basis of annual plans and
programs but in the sectors that are prescribed
under the Industrial Enterprise Rules 2019 (2076 BS).
The progress report of the utilization of the fund
collected for CSR is required to be submitted to the
registering authorities within six months from the
expiry of the fiscal year.
NOTE - 3(A): Property, plant and equipment
Amount in NPR
Land Building Vehicle Plant and Furniture, Total Capital Work
Machinery Fixture in Progress
and Office
Equipment
Cost
As at 14 March 2021 290,347,595 483,888,375 38,029,841 641,430,037 92,160,428 1,545,856,276 3,148,619
Addition/adjustment – 2,295,813 – 20,614,893 11,368,422 34,279,128 95,470,212
Reclassified assets group – 118,000 (17,339) 1,013,365 – 1,114,026 –
Sales/Adjustment – – (3,179,003) (11,160,198) (3,328,480) (17,667,681) –
Transfer to PPE – – – – – – –
Balance as at 14 March 2022 290,347,595 486,302,188 34,833,499 651,898,098 100,200,370 1,563,581,750 98,618,831
Addition/adjustment – 42,462,297 – 58,815,328 15,952,543 117,230,167 76,266,440
Reclassified assets group – – – – – – –
Notes to the Financial Statements (Contd.)

Sales/Adjustment – (511,979) – (11,323,268) (11,862,898) (23,698,145)

Transfer to PPE – – – – – – (171,172,822)
Balance as at 14 March 2023 290,347,595 528,252,506 34,833,499 699,390,157 104,290,015 1,657,113,772 3,712,449
Accumulated Depreciation
As at 14 March 2021 – 132,578,487 35,178,179 342,183,238 72,101,896 582,041,800 –
Addition – 15,091,176 1,625,423 58,589,343 9,453,824 84,759,766 –
Reclassified assets group – 118,000 (16,981) 624,312 (7,399,224) (6,673,894) –
Sales/Adjustment – – (3,178,993) (7,497,512) 643,984 (10,032,521) –
Balance as at 14 March 2022 – 147,787,663 33,607,628 393,899,381 74,800,479 650,095,152 –
Addition – 14,798,679 988,916 49,128,613 9,489,070 74,405,278 –
Reclassified assets group – – – – – – –
Sales/Adjustment – (341,698) – (11,270,123) (11,765,365) (23,377,187) –
Balance as at 14 March 2023 – 162,244,644 34,596,544 431,757,871 72,524,184 701,123,243 –
Net Book Value
Balance as at 14 March 2021 290,347,595 351,309,888 2,851,662 299,246,799 20,058,532 963,814,477 3,148,619
Balance as at 14 March 2022 290,347,595 338,514,525 1,225,871 257,998,716 25,399,891 913,486,598 98,618,831
Balance as at 14 March 2023 290,347,595 366,007,862 236,955 267,632,286 31,765,831 955,990,529 3,712,449
21

Financial Statements
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

NOTE - 3(B): Right of Use Assets

Amount in NPR
Building
Cost
As at 14 March 2021 289,049,167
Addition 13,619,371
Sales/Adjustment (31,683,766)
Balance as at 14 March 2022 270,984,772
Addition 206,876,305
Sales/Adjustment (27,734,017)
Balance as at 14 March 2023 450,127,060
Accumulated Depreciation
As at 14 March 2021 82,165,322
Addition 37,303,843
Sales/Adjustment (28,026,926)
Balance as at 14 March 2022 91,442,240
Addition 54,889,532
Sales/Adjustment (7,119,950)
Balance as at 14 March 2023 139,211,822
Net Book Value
Balance as at 14 March 2021 206,883,844
Balance as at 14 March 2022 179,542,532
Balance as at 14 March 2023 310,915,238

NOTE - 4: Intangible assets

Amount in NPR
Computer
Software
Cost
As at 14 March 2021 30,233,271
Addition 7,300,994
Sales/Adjustment (10,245,105)
Balance as at 14 March 2022 27,289,160
Addition /adjustment 2,033,464
Sales/Adjustment (6,037,817)
Balance as at 14 March 2023 23,284,807
Accumulated Amortization
As at 14 March 2021 19,917,822
Addition 3,262,214
Reclassified assets group (6,656,913)
Sales/Adjustment 3,865,571
Balance as at 14 March 2022 20,388,695
Addition 3,743,793
Reclassified assets group –
Sales/Adjustment (6,037,811)
Balance as at 14 March 2023 18,094,678
Net Book Value
Balance as at 14 March 2021 10,315,449
Balance as at 14 March 2022 6,900,465
Balance as at 14 March 2023 5,190,130
22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE - 5: Prepayment
Amount in NPR
As at 14 March 2023 As at 14 March 2022
Current Non Current Current Non Current
Prepayments - rent 15,065,494 12,771,449 10,245,134 20,355,436
Prepayments - insurance 1,991,044 - 6,326,641 -
Prepayment - others 4,422,421 - 3,708,407 -
Total 21,478,959 12,771,449 20,280,182 20,355,436

NOTE 6: Advances & other receivable

Amount in NPR
As at 14 March 2023 As at 14 March 2022
Current Non Current Current Non Current
Other receivables 1,842,655 - 7,529,151 -
Staff advances 9,554,998 16,026,609 21,266,757 -
Total 11,397,653 16,026,609 28,795,908 -

NOTE 7: Other assets

Amount in NPR
As at 14 March 2023 As at 14 March 2022
Current Non Current Current Non Current
Security & other deposits 2,160,775 77,184,790 - 133,553,072
Advance for capital expenditure - 7,517,986 - 6,213,503
Advance to suppliers 38,261,755 - 51,167,724 12,776,031
L/C margin & deposit 22,976,025 - 86,006,555 -
Total 63,398,555 84,702,776 137,174,279 152,542,606

NOTE 8: Inventories
Amount in NPR
As at 14 March As at 14 March
2023 2022
Raw materials* 905,132,543 765,113,292
Packing materials 29,674,184 30,926,431
Finished goods 601,384,544 528,987,589
Accessories - 2,221,957
Semi-finished goods 3,977,675 4,724,532
1,540,168,946 1,331,973,801
Less: Allowances for slow and non-moving inventories (14,071,209) (15,988,679)
Total 1,526,097,737 1,315,985,122
* Raw materials includes Raw Material in transit amounting to NPR 24,436,577 which were cleared at customs
point but pending entry inward on factory as on reporting date
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

NOTE 9: Trade Receivable

Amount in NPR

As at 14 March As at 14 March
2023 2022
Secured, considered goods - -
Unsecured, considered goods 3,633,790,338 1,544,800,102
Unsecured, considered doubtful 83,736,207 14,482,140
3,717,526,545 1,559,282,242
Less: Allowances for unsecured doubtful debts (83,736,207) (14,482,140)
Total 3,633,790,338 1,544,800,102

NOTE 10 (A): Cash and Cash Equivalents

Amount in NPR

As at 14 March As at 14 March
2023 2022
Cash in hand 2,059,490 1,896,451
Cash at bank 301,204,180 315,641,844
Call deposits 477,018,139 425,438,217
Total 780,281,809 742,976,512

NOTE 10 (B): Other balance in bank

Amount in NPR

As at 14 March As at 14 March
2023 2022
Fixed Term bank deposits 1,438,112,228 2,832,312,547
Total 1,438,112,228 2,832,312,547
Term deposits has been included under cash flow from investment activities for the purpose of statement of
cash flows

NOTE 11: Share Capital

Amount in NPR
As at 14 March As at 14 March
2023 2022
Authorised Share Capital
199,000,000 equity shares of Rs. 10 each 1,990,000,000 1,600,000,000
Note on Authorised Capital

The Company has received approval from the Office of the Company Registrar dated 16 May 2022 pertaining to
the increment in its authorised capital to Rs. 1,990,000,000 (199,000,000 shares of Rs. 10 each) from the existing
value of Rs.1,600,000,000 (160,000,000 shares of Rs. 10 each). The Capital Clause of Memorandum of Association
and relevant clause of Association of Articles of the Company have been updated accordingly and have been
approved from the Office of the Company Registrar.

24
 25
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 11: Share Capital (Contd.)

a) Reconciliation of shares outstanding at the beginning and at the end of the year

Amount in NPR

As at 14 March As at 14 March
2023 2022

Fully Paid Equity Shares:

Number of Shares 6,173,500 6,173,500

Add: Issue during the period - -

Less: Buy back of shares -

Number of shares at the end of the year 6,173,500 6,173,500

Paid up value at the end of the year 61,735,000 61,735,000

b) Terms/Rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs 10 per share. Each
holder of equity share is entitled to one vote per share.

Amount in NPR

As at 14 March As at 14 March
2023 2022

Issued Subscribed and Paid up Capital

6,173,500 equity shares of Rs. 10 each 61,735,000 61,735,000

c) Details of Shareholders

Amount in NPR

As at 14 March As at 14 March
2023 2022

Paid-up Share Capital

a. Asian Paints Limited, India: 3,254,310 equity shares of Rs. 10.00

each (includes 1,627,155 bonus shares) 32,543,100 32,543,100

b.  avi Associates: 574,290 equity share of Rs.10.00 each (includes

R
287,145 bonus shares) 5,742,900 5,742,900

c.  ocal Shareholders: 2,344,900 equity shares of Rs. 10.00 each

L
(includes 1,172,450 bonus shares) 23,449,000 23,449,000

61,735,000 61,735,000
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

NOTE 12: Trade Payables

Amount in NPR
As at 14 March 2023 As at 14 March 2022
Current Non Current Current Non Current
Trade Creditors 428,069,673 - 804,389,535 -
Trade creditors of related parties 97,508,450 - 96,178,192 -
Total 525,578,123 - 900,567,728 -

NOTE 13: Accruals and other payables

Amount in NPR

As at 14 March 2023 As at 14 March 2022

Current Non Current Current Non Current

Accrued expenses 581,194,781 595,296,934
Royalty payable (Group) 325,310,985 - 204,914,432 -
Royalty payable (Non Group) 21,933,046 - 21,933,046 -
Dividend Payable 354,782,236 - 282,335,320 -
Salary and personnel payable 9,864,735 - 8,578,965 -
Service Fee Payable (Group) - - - -
Total 1,293,085,783 - 1,113,058,697 -
Royalty payable (Group) to Asian Paints Limited, India have been accrued based on the Trademark agreement
between Asian Paints Nepal Pvt. Ltd. & Asian Paints Ltd. The necessary approval from Department of Industries
have been taken for such royalty

The Royalty Payable (Non Group) has been accrued based on the agreement between Asian Paints (Nepal) Pvt.
Ltd. and Chemours, and the same has been discontinued from 13 January 2021. The approval for the trademark
registration agreement between Asian Paints (Nepal) Pvt. Ltd. and Chemours is yet to be received from
Department of Industry.

NOTE 14(A): Other CURRENT liabilities

Amount in NPR

As at 14 March 2023 As at 14 March 2022

Current Non Current Current Non Current
Advance received from customers 22,666,248 - 11,490,424 -
Security and other deposits 676,000 - 676,000 -
VAT payable 70,257,943 - 58,718,576 -
TDS payable 50,636,271 - 38,820,089 -
Excise duty payable 72,855,125 - 65,222,531 -
Total 217,091,587 - 174,927,620 -

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 14(B): Lease Liabilities

Amount in NPR

As at 14 March 2023 As at 14 March 2022

Current Non Current Current Non Current

Lease liability 45,556,986 155,142,036 31,372,941 159,495,470

Total 45,556,986 155,142,036 31,372,941 159,495,470

NOTE 15: Provisions

Amount in NPR

As at 14 March 2023 As at 14 March 2022

Current Non Current Current Non Current

Gratuity and leave 12,634,652 38,596,173 4,185,276 36,237,159
Bonus Payable 126,334,014 - 153,985,258 -
Provision for Corporate Social
Responsibility 24,850,044 - 26,913,554 -
Total 163,818,710 38,596,173 185,084,088 36,237,159
1% of profit after tax has been provided for corporate social responsibility as per sec 54.1 of Industrial Enterprises
Act 2076. Out of the CSR provision, the company has made major contribution in educational sector.

Note 16: Current Tax Liabilities (Net)

Amount in NPR

As at 14 March As at 14 March
2023 2022

Provision of income tax 2,227,397,024 1,941,722,677

Less: Payment of income tax (2,086,749,374) (1,731,164,928)

Total 140,647,650 210,557,749

 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

NOTE 17

Amount in NPR

FY 2022-23 FY 2021-22
(A) Revenue from sales of products

Domestic sales (net of return) 10,814,329,512 9,355,084,900

Less: Discount (1,570,463,661) (1,538,755,386)

Less: Discount II ** (530,053,617) (355,354,440)

Total 8,713,812,234 7,460,975,075

(B) Other operating revenue

Scrap sales 7,912,601 9,278,240

Total 7,912,601 9,278,240

(C) Other Income

(i) Interest Income

Interest income from Call account and term deposits 203,422,081 201,262,720

203,422,081 201,262,720

(ii) Other Non Operating Income

Service Charge * 1,530,755 1,875,310

Miscellaneous Income 84,485,104 13,284,031

Insurance Claim received 403,848 469,814

86,419,707 15,629,155

(iii) Other gain and loss

Net gain / (loss) on sales of property, plant and equipment - 229,459

Modification/termination of lease 184,885 1,520,509

Foreign exchange gain - -

184,885 1,749,968

Total (i+ii+iii) 290,026,673 218,641,843

*The company has entered in to an marketing agreement with Aavik Impex Pvt. Ltd. Service charge has been
incurred from Aavik Impex against providing the logistic service.

** The discount II pertaining to gift and dealer trip directly related to sales revenue has been netted against sales
revenue as per NFRS 15.

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 18: Cost of Material Consumed
Amount in NPR
FY 2022-23 FY 2021-22
Raw materials
Opening stock 765,113,293 609,646,884
Add: Raw materials purchased 4,548,458,693 4,190,318,959
Less: Closing stock 905,132,542 765,113,293
Raw Material Consumed (A) 4,408,439,444 4,034,852,549
Packing materials
Opening stock 30,926,431 48,318,704
Add: Packing materials purchased 554,149,458 525,354,706
Less: Closing stock 29,674,184 30,926,431
Packaging Material Consumed (B) 555,401,705 542,746,979
Cost of Materials Consumed (A+B=C) 4,963,841,148 4,577,599,528

Changes in inventories of finished goods, stock-in-transit and work in progress

Amount in NPR
FY 2022-23 FY 2021-22
Inventory at the beginning of the year
Finished goods 531,209,546 256,703,003
Work in progress 4,724,532 3,147,900
Total 535,934,078 259,850,903
Inventory at the end of the year
Finished goods 601,384,544 531,209,546
Work in progress 3,977,675 4,724,532
Total 605,362,219 535,934,078
Changes in inventories of finished goods, stock in trade and work
(69,428,141) (276,083,175)
in progress (D)
Total material cost (C+D) 4,894,413,007 4,301,516,353

NOTE 19: Employee Benefit Expenses

Amount in NPR

FY 2022-23 FY 2021-22
Salary and allowances 349,095,784 302,441,870
Contribution to Social Security Fund 23,968,268 16,454,192
Leave expenses 25,804,008 9,090,331
Bonus expenses* 205,490,217 191,928,955
Other employee cost 18,777,218 19,951,525
Total 623,135,495 539,866,873
*Provision for bonus is made at the rate of 10% of profit before tax and bonus. (Refer to Note 2.19)
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

NOTE 20: Other Expenses

Amount in NPR

FY 2022-23 FY 2021-22
Stores and spares consumed 26,962,795 33,262,502
Power and fuel 23,161,728 17,816,220
Repairs and maintenance 24,462,882 22,491,570
Research and Development 1,170,201 1,573,854
Out process contract fee 72,740,279 63,393,977
Safety Expenses 3,723,007 11,745,339
Insurance expenses 41,282,888 31,068,130
Communication and office supplies 11,925,400 9,302,228
Travelling expenses 61,426,234 28,107,182
Security charges 23,484,896 22,470,447
Audit expenses 1,855,453 1,475,643
Legal and professional fees 8,692,515 6,727,143
Miscellaneous expenses 50,061,159 44,123,360
Information and technology expenses 20,740,295 10,833,806
Other financial charges 9,544,864 7,007,133
CSR contribution 15,285,242 14,387,896
Foreign exchange- Loss 18,026,294 6,467,351
Freight and handling charges 271,130,421 250,145,243
Rent - branch/ depot/ godown 1,414,206 7,933,974
Advertisement & Sales Promotion expenses 422,325,448 225,677,770
Fixed Asset written off 320,965 -
Intercompany royalty 275,311,537 134,997,560
Intercompany service charges 11,959,841 -
Provision for doubtful debt 69,254,067 3,373,552
Total 1,466,262,617 954,381,876

NOTE 21: Finance Cost

Amount in NPR

FY 2022-23 FY 2021-22

Interest Expenses -Non group 27,032,009 12,001,027

Interest Expenses- Lease IFRS 16 18,457,825 16,673,062

Total 45,489,834 28,674,089

Interest Expenses- Non group includes the interest on the Income tax of earlier years against colour world cases.

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
NOTE 22 (A): Income Taxes
Income tax expense charged to the Statement of Profit or Loss and OCI
Amount in NPR

FY 2022-23 FY 2021-22
Current tax
Current income tax charge 315,387,209 372,228,567
Deferred tax credit/(charge)
Origination and reversal of temporary differences 5,500,522 (71,888,136)
Adjustments/(credits) related to previous years - (net) - -
Income tax expense charged to the Statement of Profit or Loss 320,887,731 300,340,431

Amount in NPR
FY 2022-23 FY 2021-22
Tax expense recognised in Other Comprehensive Income
Current tax
Net gain/(loss) on remeasurement of defined benefit plans - -
Deferred tax
Origination and reversal of temporary differences - -
Changes in tax rates - -
Income tax charged to OCI (other comprehensive income) - -
Reconciliation of tax liability on book profit vis-à-vis actual tax
liability
Accounting Profit/ (Loss) before income tax 1,849,411,952 1,739,130,143
Add: Items of Other Comprehensive Income (OCI) - -
Profit before tax including OCI items 1,849,411,952 1,739,130,143
Computed tax expense
Differences due to:
Additional allowance for tax purpose (1,002,797,258) (691,836,807)
Expenses not allowed for tax purpose 1,011,766,888 1,162,230,685
Other temporary differences - -
Total taxable Income 1,858,381,582 2,209,524,020
Taxable income from export sales - -
Taxable income from domestic sales 1,657,868,746 2,006,385,990
Taxable income from Investment 203,422,081 201,262,720
Taxable income-Services charges * (2,909,245) 1,875,310
1,858,381,582 2,209,524,020
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

NOTE 22 (A): Income Taxes (Contd.)

Amount in NPR
FY 2022-23 FY 2021-22
Enacted tax rate
Export sales 12.00% 12.00%
Local sales 16.00% 16.00%
Investment 25.00% 25.00%
Service Charges 25.00% 25.00%
Income tax expenses on export sales - -
Income tax expenses on domesctic sales 265,258,999 321,021,758
Income tax expenses on investment income 50,855,520 50,315,680
Income tax expenses on service charges* (727,311) 468,828
Income tax expense charged to the Statement of Profit or Loss and
315,387,208 371,806,266
OCI
Income tax of earlier year - 422,301
Total tax expenses charges to income statements 315,387,208 372,228,567

note 22 (B): Reconciliation of deferred tax as at beginning and end of the year
Amount in NPR
Book Tax Base as Temporary Tax Rate Deferred
Carrying at end of the Difference Tax Asset/
Value as at year (Liability)
end of the
year
Temporary Difference for:
Provisions
Advertisement and sales promotion 81,392,375 - 81,392,375 16% 13,022,780
Discount 2 provision 401,493,151 - 401,493,151 16% 64,238,904
Provision for employee incentive
27,400,000 - 27,400,000 16% 4,384,000
(only provision)
Provision of interest on VAT of CW
2,839,928 - 2,839,928 16% 454,389
cases
Additional Duty provision 19,436,611 - 19,436,611 16% 3,109,858
Other expense booked on provisional
64,444,072 - 64,444,072 16% 10,311,051
basis
Provision for Inventory 14,071,209 - 14,071,209 16% 2,251,393
Provision For Pl (Privilege Leave) 42,670,989 - 42,670,989 16% 6,827,358
Provision For Sick Leave 10,136,641 - 10,136,641 16% 1,621,863
Provision For Doubtful Debts 83,736,207 - 83,736,207 16% 13,397,793
Provision For discount by credit note 272,606,202 - 272,606,202 16% 43,616,992
Provision For CSR Activities 24,850,044 - 24,850,044 16% 3,976,007
Effect of IFRS 16 Lease (110,216,216) - (110,216,216) 16% (17,634,595)
32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
note 22 (B): Reconciliation of deferred tax as at beginning and end of the year (Contd.)

Amount in NPR
Book Tax Base as Temporary Tax Rate Deferred
Carrying at end of the Difference Tax Asset/
Value as at year (Liability)
end of the
year
Total deferred tax assets - 934,861,213 934,861,213 149,577,794
temporary differences on
provisions as at end of the year
Fixed Assets
WDV of Fixed Assets 961,180,658 901,273,181
Less: WDV of Land (290,347,595) (290,347,595)
WDV of Assets included under Tax 670,833,063 610,925,586 (59,907,477) 16% (9,585,196)
Total deferred tax liabilities -
temporary difference on fixed
assets as at end of the year (9,585,196)
Net deferred tax assets /
(liabilities) as at end of the period 139,992,598
Net deferred tax assets / (liabilities)
as at beginning of the period 145,493,120
Deferred tax expense/(income)
recognized in statement of profit
or loss 5,500,522

note 23: Post Employment Benefit Plans

Refer Note 2.13 for accounting policy relating to post employment benefit plans

Post employment benefits includes leave benefits and gratuity provided to eligible employees as per Labor Act
2074. Leave benefits liability has been calculated using actuarial valuation technique in line with requirement of
NAS 19.

The following tables summarise the components of net benefit expense recognised in the statement of profit or
loss and amounts recognised in the statement of financial position for the plan:

Amount in NPR
Post retirement Leave
(Unfunded Plan)
FY 2022-23 FY 2021-22
Opening post employment benefit obligation 41,999,240 41,610,959
Service cost 12,522,477 3,812,073
Net Interest 3,716,110 3,735,732
Sub-total included in statement of profit or loss 16,238,587 7,547,805
Actuarial (gain)/loss 5,824,226 5,273,855
Sub-total included in other comprehensive income - -
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

note 23: Post Employment Benefit Plans (Contd.)

Amount in NPR
Post retirement Leave
(Unfunded Plan)
FY 2022-23 FY 2021-22
Benefits paid (11,254,424) (12,433,379)
Acquisition/Business Combination/Divestiture*
Closing post employment benefit obligation (A) 52,807,628 41,999,240
Opening fair value of plan assets - -
Expected return on plan assets -
Actuarial gain/(loss) - -
Sub-total included in other comprehensive income - -
Contribution by employer -
Benefits paid - -
Closing fair value of plan assets (B) - -
Net closing post employment benefit obligation/ (assets) (A-B) 52,807,628 41,999,240
Expense recognized in:
Statement of Profit or Loss 25,804,008 9,090,331
Statement of Other Comprehensive Income - -

note 24: FINANCIAL INSTRUMENTS ACCOUNTING CLASSIFICATIONS AND FAIR VALUES

The fair value of the assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in forced or liquidation sale. The following methods
and assumptions were used to estimate the fair values:

1. Fair Value of cash and short-term deposits, trade and other short term receivables, trade payables, other
current liabilities, short term loans from banks and other financial instruments approximate their carrying
amounts largely due to the short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the company based on parameters
such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances
are taken to the account for the expected losses of these receivables.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based
on observable market data

The carrying amounts and fair values of financial instruments by class are as follows:

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
note 24: FINANCIAL INSTRUMENTS ACCOUNTING CLASSIFICATIONS AND FAIR VALUES (Contd.)
Amount in NPR
Carrying value Fair value
Note
As at As at As at As at
14 March 2023 14 March 2022 14 March 2023 14 March 2022

FINANCIAL ASSETS
Financial assets measured at
amortised cost
Trade receivables 9 3,633,790,338 1,544,800,102 3,633,790,338 1,544,800,102
10(A) &
Cash and cash equivalents 2,218,394,037 3,575,289,059 2,218,394,037 3,575,289,059
10(B)
5,852,184,375 5,120,089,161 5,852,184,375 5,120,089,161
FINANCIAL LIABILITIES
Financial liabilities measured
at amortised cost
Trade payables 12 525,578,123 900,567,728 525,578,123 900,567,728
Lease Liability 14(B) 200,699,022 190,868,411 200,699,022 190,868,411
Total 726,277,145 1,091,436,139 726,277,145 1,091,436,139
INCOME, EXPENSES, GAINS OR LOSSES ON FINANCIAL INSTRUMENTS
Interest income and expenses, gains or losses recognised on financial assets and liabilities in the Statement of
Profit or Loss and other comprehensive income are as follows:

Amount in NPR
As at As at
14 March 2023 14 March 2022
Financial assets measured at amortised cost
Interest income 203,422,081 201,262,720
Financial liabilities measured at amortised cost
Interest expense 45,489,834 28,674,089

note 25: FINANCIAL RISK MANAGEMENT

CAPITAL MANAGEMENT
For the purpose of the Company’s capital management, capital includes issued capital and all other equity
reserves attributable to the equity holders of the company. The Company manages its capital so as to safeguard
its ability to continue as a going concern and to optimise returns to the shareholders. The capital structure of the
Company is based on management’s judgement of the appropriate balance of key elements in order to meet its
strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital
structure in light of changes in economic conditions and the risk characteristics of the underlying assets.
The Company’s aim to translate profitable growth to superior cash generation through efficient capital
management. The Company’s policy is to maintain a stable and strong capital structure with a focus on total
equity so as to maintain investor, creditor, and market confidence and to sustain future development and growth
of its business. The Company’s focus is on keeping strong total equity base to ensure independence, security, as
well as a high financial flexibility for potential future borrowings, if required, without impacting the risk profile
of the Company. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital
structure.
The management monitors the return on capital as well as the level of dividends to shareholders. The Company’s
goal is to continue to be able to return excess liquidity to shareholders by continuing to distribute dividends in
future periods.
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

note 25: FINANCIAL RISK MANAGEMENT (Contd.)

The Company’s financial risk management is an integral part of how to plan and execute its business strategies.

Market risk
Market risk is the risk of loss of future earnings, fair value or future cash flows arising out of change in the price
of a financial instrument. These include change as a result of changes in the interest rates, foreign currency
exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market
risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign
currency receivables, payables and loans and borrowings.

The Company manages market risk through a Risk Management Committee engaged in, inter alia, evaluation and
identification of risk factors with the object of governing/mitigating them according to Company’s objectives and
declared policies in specific context of impact thereof on various segments of financial instruments. The Board
provides oversight and reviews the Risk management policy on a quarterly basis.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. In order to balance the Company’s position with regards to interest income
and interest expense and to manage the interest rate risk, treasury performs a comprehensive interest rate risk
management. The Company is not exposed to significant interest rate risk as at the respective reporting dates.

Foreign currency risk

The Company is subject to the risk that changes in foreign currency values impact the Company’s imports of
raw material and property, plant and equipment. The Company is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to US Dollar and Euro.

The aim of the Group’s approach to management of currency risk is to leave the Company with no material
residual risk. This aim has been achieved in all years presented. The Company manages currency exposures within
prescribed limits, through use of forward exchange contracts. Foreign exchange transactions are fully covered
with strict limits placed on the amount of uncovered exposure, if any, at any point in time.

Credit risk
Credit risk arises from the possibility that counter party may not be able to settle their obligations as agreed.
To manage this, the Company periodically assesses the financial reliability of customers, taking into account
the financial condition, current economic trends, and analysis of historical bad debts and ageing of account
receivables. Individual risk limits are set accordingly. The Company considers the probability of default upon
initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis
throughout each reporting period. To assess whether there is a significant increase in credit risk the Company
compares the risk of default occuring on the asset as at the reporting date with the risk of default as at the date
of initial recognition. The Company considers reasonable and supportive forward-looking information. Financial
assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in a
repayment plan with the Company. The Company provides for overdue outstanding for more than 90 days other
than institutional customers which are evaluated on a case to case basis.

Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at
a reasonable price. The company treasury department is responsible for maintenance of liquidity (including quasi
liquidity), continuity of funding as well as timely settlement of debts. In addition, policies related to mitigation of
risks are overseen by senior management. Management monitors the company net liquidity position on the basis
of expected cash flows vis a vis debt service fulfillment obligation.

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
note 26: RELATED PARTY DISCLOSURES
a) Transactions and balances with the related parties

The company is controlled by M/s Asian Paints Ltd. India, a company incorporated in India under Indian company
act which owns 52.71% share of the company’s share.

The company is providing logistic service to Aavik Impex Pvt. Ltd. Aavik Impex is Single share holding company
owned by Bidya Laxmi Shrestha (spouse of the Chairman of Asian Paints Nepal Pvt. Ltd., Mr. Laxmi Gopal Shrestha)

The transactions with the related parties are tabulated as below:

Amount in NPR

Name of related parties Nature of transaction FY 2022-23 FY 2021-22

Asian Paints Limited Purchase of material 148,215,353 352,026,603

Asian Paints Limited Purchase of Trade stock 365,559,224 135,827,007

Asian Paints Limited Purchase of services/sundries 34,907,924 13,117,991

Asian Paints Limited Royalty expenses 275,311,537 134,997,560

Intercompany trade creditor (Trade/Non

Asian Paints Limited (76,620,238) (96,815,415)
trade)

Asian Paints Limited Royalty Payable (325,310,985) (204,914,432)

Asian Paints Limited Dividend Payable (216,411,615) (185,495,670)

Asian Paints Limited Intercompany trade Debtor 4,705,278 -

Asian Paints(Lanka) Limited Intercompany trade creditor (Non trade) - 733,046

Aavik Impex Service Charges against logistic service 1,530,755 1,875,310

PT Asian Paints Indonesia Purchase of Material 495,768 95,823

PT Asian Paints Indonesia Intercompany trade creditor (1,612,008) (95,823)

Asian Paints Middle East

Purchase of Material 279,806 -
SPC

b) Key Management Personnel

Name Designation
Laxmi Gopal Shrestha Chairman, Promoter
Sireesh Rao Director
Gopalakrishnan Gowrishanker Director & General Manager
(c) Transactions and balances with key management personnel
Key management personal cost includes remuneration and other benefits paid to the General Manager cum
director which were as follows:
 Asian Paints (Nepal) Private Limited

Notes to the Financial Statements (Contd.)

note 26: RELATED PARTY DISCLOSURES (Contd.)

Amount in NPR

Particulars FY 2022-23 FY 2021-22

Short-term employee benefits 27,146,620 26,232,837

Post employment benefits 640,706 665,379

Other long-term benefits - -

Termination benefits - -

note 27: CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

a) Claims against the company not acknowledge at debts

Amount in NPR

b) Contingent liabilities FY 2022-23 FY 2021-22

Income tax [For CY: (FY 2067/68 to FY 2073/74)], [ For PY: (FY 2063/64
54,879,821 75,872,889
to FY 2072/73)]

TDS (FY 2067/68-2068/69) 2,826,000 2,826,000

VAT/Excise on Customs Tariff - 15,400,186

The Company has settled all VAT cases from fiscal year 2063/64 to 2071/72 in tax amnesty scheme. The liability
based on the assessment of 2072/73 has been provided in book. The Income tax cases has been settled for the
years from 2063/64 to 2066/67. The expected tax liability including interest Rs 12,000,000 has been provided for
year 2067/68 to 2073/74 in the current year.
Amount in NPR
c) Unexpired letter of credit FY 2022-23 FY 2021-22
Contingent liabilities in respect of unexpired irrevocable Letter of
22,973,685 1,720,000,000
Credit

Amount in NPR
d) Capital commitments FY 2022-23 FY 2021-22
Estimated value of contracts in capital account remaining to be
15,343,760 9,871,936
executed and not provided for

38
Asian Paints International
Private Limited
Contents
Directors’ Statement....................................................................................................................................................................................4

Independent Auditor’s Report............................................................................................................................................................... 5-6

Statement of Financial Position.................................................................................................................................................................7

Statement of Profit and Loss......................................................................................................................................................................8

Statement of Changes in Equity........................................................................................................................................................... 9-10

Statement of Cash Flows......................................................................................................................................................................11-12

Notes to financial statements............................................................................................................................................................ 13-51

 Asian Paints International Private Limited

Directors’ Statement

The directors present their statement together with the 4 SHARE OPTIONS
audited consolidated financial statements of the Group
(a) Options to take up unissued shares
and statement of financial position and statement of
changes in equity of the Company for the financial year During the financial year, no options or rights
ended 31 March 2023. to options to take up unissued shares of the
Company or any corporation in the Group were
In the opinion of the directors, the consolidated financial granted except as follows:
statements of the Group and the statement of financial
position and statement of changes in equity of the Rights to Number
Company as set out on pages 6 to 54 are drawn up so as share of rights
to give a true and fair view of the financial position of options to share
the Group and of the Company as at 31 March 2023, and granted options
the financial performance, changes in equity and cash during the outstanding
flows of the Group and changes in equity of the Company financial at the end
for the financial year then ended and at the date of this year of financial
statement, there are reasonable grounds to believe that year
the Company will be able to pay its debts when they fall Asian Paints
due. Limited
(Rights to share
1 DIRECTORS
options)
The directors of the Company in office at the date of
Jeyamurugan 2,850 5,590
this statement are:
Ramalingam
Jeyamurugan Ramalingam Jeyapandiyan Jeyapandiyan
Gerald Loong Sie Kiong Pragyan Kumar 2,850 5,649
Rajan Menon
Kathpalia Surinder Devraj (b) Unissued shares under option and options
Pragyan Kumar exercised
2 ARRANGEMENTS TO ENABLE DIRECTORS
At the end of the financial year, there were
TO ACQUIRE BENEFITS BY MEANS OF THE
no unissued shares of the Company or any
ACQUISITION OF SHARES AND DEBENTURES
corporation in the Group under option. During
Neither at the end of the financial year nor at any the financial year, there were no shares of the
time during the financial year did there subsist any Company or any corporation in the Group issued
arrangement whose object is to enable the directors by virtue of the exercise of an option to take up
of the Company to acquire benefits by means of the unissued shares.
acquisition of shares or debentures in the Company
or any other body corporate. 5 AUDITORS
The auditors, Deloitte & Touche LLP, have expressed
3 DIRECTORS’ INTERESTS IN SHARES AND
their willingness to accept re-appointment.
DEBENTURES
The directors of the Company holding office at the
end of the financial year had no interests in the share
capital and debentures of the Company and related ON BEHALF OF THE DIRECTORS
corporations as recorded in the register of directors’
shareholdings kept by the Company under Section .........................................................
164 of the Companies Act 1967 except as follows:
Jeyamurugan Ramalingam Jeyapandiyan
Name of directors and Shareholdings registered Director
companies in name of director
in which interests are At At end
held beginning of year .........................................................
of year Pragyan Kumar
Asian Paints Limited Director
(Ordinary shares)
Pragyan Kumar 100 100 5 May 2023

4

Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements
of Asian Paints International Private Limited (the
“Company”) and its subsidiaries (the “Group”), which
comprise the consolidated statement of financial position
of the Group and the statement of financial position of
the Company as at 31 March 2023, and the consolidated
statement of profit or loss and other comprehensive
income, consolidated statement of changes in equity
and consolidated statement of cash flows of the
Group and the statement of changes in equity of the
Company for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies, as set out on pages 6 to 54.
In our opinion, the accompanying consolidated financial
statements of the Group and the statement of financial
position and statement of changes in equity of the
Company are properly drawn up in accordance with the
provisions of the Companies Act 1967 (the “Act”) and
Financial Reporting Standards in Singapore (“FRSs”) so as
to give a true and fair view of the consolidated financial
position of the Group and the financial position of the
Company as at 31 March 2023 and of the consolidated
financial performance, consolidated changes in equity
and consolidated cash flows of the Group and of the
changes in equity of the Company for the year ended on
that date.
Basis for Opinion
We conducted our audit in accordance with Singapore
Standards on Auditing (“SSAs”). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent
of the Group in accordance with the Accounting and
Corporate Regulatory Authority Code of Professional
Conduct and Ethics for Public Accountants and
Accounting Entities (“ACRA Code”) together with the
ethical requirements that are relevant to our audit of the
financial statements in Singapore, and we have fulfilled
our other ethical responsibilities in accordance with
these requirements and the ACRA Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
5
Financial Statements
Information Other than the Financial Statements and
Auditor’s Report Thereon
Management is responsible for the other information.
The other information comprises the Directors’
Statement set out on pages 1 and 2.
Our opinion on the 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 financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the 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 and Directors for the
Financial Statements
Management is responsible for the preparation of
financial statements that give a true and fair view in
accordance with the provisions of the Act and FRSs,
and for devising and maintaining a system of internal
accounting controls sufficient to provide a reasonable
assurance that assets are safeguarded against loss
from unauthorised use or disposition; and transactions
are properly authorised and that they are recorded as
necessary to permit the preparation of true and fair
financial statements and to maintain accountability of
assets.
In preparing the financial statements, management is
responsible for assessing the Group’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 Group or to cease operations, or has no
realistic alternative but to do so.
The directors’ responsibilities include overseeing the
Group’s financial reporting process.
 Asian Paints International Private Limited
Independent Auditor’s Report (Contd.)
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 SSAs 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 bases of these financial statements.
As part of our audit in accordance with SSAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:
(a) Identify and assess the risks of material
misstatement of the 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.
(b) Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
(c) Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
6
(d) 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
Group’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 Group to cease to continue as a going
concern.
(e) Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
(f) Obtain sufficient appropriate audit evidence
regarding the financial information of the entities
or business activities within the Group to express an
opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors 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.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required
by the Act to be kept by the Company have been properly
kept in accordance with the provisions of the Act.
Public Accountants and
Chartered Accountants
Singapore
5 May 2023
 7
Statement of Financial Position

Financial Statements
As at 31 March 2023

Note Group Company

2023 2022 2023 2022
$’000 $’000 $’000 $’000
ASSETS
Current assets
Cash and bank balances 7 51,734 57,044 1,720 2,599
Trade receivables 8 87,953 91,851 5,610 5,720
Other receivables 9 16,652 16,686 14,960 5,260
Inventories 10 81,350 87,739 - -
Total current assets 237,689 253,320 22,290 13,579
Non-current assets
Fixed deposits 7 874 861 874 861
Other receivables 9 135 118 6,486 3,554
Subsidiaries 11 - - 142,910 199,450
Property, plant and equipment 12 86,617 102,829 227 424
Right-of-use assets 13 13,822 15,944 300 468
Intangible assets 14 32,322 40,989 - -
Deferred tax assets 15 758 2,218 - -
Total non-current assets 134,528 162,959 150,797 204,757
Total assets 372,217 416,279 173,087 218,336
LIABILITIES AND EQUITY
Current liabilities
Bank loans and overdrafts 16 129,580 114,038 101,559 72,384
Trade payables 17 107,816 136,967 4,020 3,382
Other payables 18 3,800 3,080 1,230 855
Lease liabilities 19 3,145 3,662 166 161
Income tax payable 4,278 864 174 132
Total current liabilities 248,619 258,611 107,149 76,914
Non-current liabilities
Bank loans and overdrafts 16 4,338 5,078 - -
Lease liabilities 19 9,860 10,864 129 295
Retirement benefit liabilities 20 5,926 5,873 - -
Deferred tax liabilities 15 5,242 5,163 34 44
Total non-current liabilities 25,366 26,978 163 339
Capital, reserves and
non-controlling interests
Share capital 21 150,306 150,306 150,306 150,306
Statutory reserve 22 1,687 1,610 - -
Capital reserve 23 5,613 5,142 - -
Merger reserve 35,744 35,744 - -
Foreign currency translation reserve (107,149) (90,930) - -
Accumulated (losses) profits (6,608) 7,137 (84,531) (9,223)
Equity attributable to owner 79,593 109,009 65,775 141,083
of the Company
Non-controlling interests 18,639 21,681 - -
Net equity 98,232 130,690 65,775 141,083
Total liabilities and equity 372,217 416,279 173,087 218,336
 Asian Paints International Private Limited

Statement of Profit or Loss and Other Comprehensive Income

for the year ended 31 March 2023

Note Group
2023 2022
$’000 $’000
Revenue 24 434,600 436,749
Other operating income 25 3,918 3,189
Changes in inventories of finished goods and work in progress 1,297 3,447
Raw materials and consumables used (272,536) (306,580)
Manufacturing expenses (8,041) (8,759)
Sub-contracting costs and cost of sundry sales (2,583) (3,931)
Employee benefits expense 26 (59,321) (60,461)
Depreciation of property, plant and equipment (7,244) (6,852)
Deprecation of right-of-use assets (5,557) (6,017)
Amortisation of intangible assets (442) (720)
Other operating expenses 27 (74,380) (75,507)
Finance costs 28 (6,648) (3,501)
Impairment loss on goodwill 14 (4,220) (2,437)
Loss before income tax (1,157) (31,380)
Income tax 29 (9,141) (787)
Loss for the year 30 (10,298) (32,167)
(Loss) Profit attributable to:
Owner of the Company (12,690) (31,398)
Non-controlling interests 2,392 (769)
(10,298) (32,167)
Other comprehensive loss:
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit obligation 20 (15) 118
Income tax relating to remeasurement of defined benefit obligation 15 6 8
(9) 126
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations (19,968) (31,502)
Other comprehensive loss for the year, net of tax (19,977) (31,376)
Total comprehensive loss for the year (30,275) (63,543)
Total comprehensive loss attributable to:
Owner of the Company (28,892) (59,903)
Non-controlling interests (1,383) (3,640)
(30,275) (63,543)

8
 Share Statutory Capital Merger Foreign Accumulat- Equity Non-con- Total
capital reserve reserve reserve currency ed profits attributable trolling
translation (losses) to owner of interests
reserve the Com-
pany
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
Balance at 1 April 2021 150,306 1,579 3,962 35,744 (62,288) 41,538 170,841 38,293 209,134
Total comprehensive income for the year
Loss for the year - 31 - - - (31,429) (31,398) (769) (32,167)
Other comprehensive loss - - - - (28,642) 137 (28,505) (2,871) (31,376)
for the year ended 31 March 2023

Total - 31 - - (28,642) (31,292) (59,903) (3,640) (63,543)

Transactions with owner, recognised
directly in equity
Dividends to non-controlling - - - - - - - (3,019) (3,019)
shareholders
Effects of acquiring non-controlling
Statement of Changes In Equity

interests in subsidiaries - - - - - (1,929) (1,929) (9,953) (11,882)

Transfer from accumulated profits of a
subsidiary upon bonus issue (Note 23) - - 1,180 - - (1,180) - - -
Balance at 31 March 2022 150,306 1,610 5,142 35,744 (90,930) 7,137 109,009 21,681 130,690
Total comprehensive income for the year
Loss for the year - 77 - - - (12,767) (12,690) 2,392 (10,298)
Other comprehensive loss - - - - (16,219) 17 (16,202) (3,775) (19,977)
Total - 77 - - (16,219) (12,750) (28,892) (1,383) (30,275)
Transactions with owner,
recognised directly in equity
Dividends to non-controlling - - - - - - - (2,183) (2,183)
shareholders
Change of ownership interest in a - - - - - (524) (524) 524 -
subsidiary
Transfer from accumulated profits of a
subsidiary upon bonus issue (Note 23) - - 471 - - (471) - - -
Balance at 31 March 2023 150,306 1,687 5,613 35,744 (107,149) (6,608) 79,593 18,639 98,232
9

Financial Statements
 Asian Paints International Private Limited

Statement of Changes In Equity (Contd.)

Share Accumulated Total

capital profits (losses)
$’000 $’000 $’000
Company
Balance at 1 April 2021 150,306 42,934 193,240
Loss for the year, representing
total comprehensive loss for the year - (52,157) (52,157)
Balance at 31 March 2022 150,306 (9,223) 141,083
Loss for the year, representing
total comprehensive loss for the year - (75,308) (75,308)
Balance at 31 March 2023 150,306 (84,531) 65,775

10
 11
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

Group
2023 2022
$’000 $’000
Operating activities
Loss before income tax (1,159) (31,380)
Adjustments for:
Depreciation of property, plant and equipment 7,244 6,852
Depreciation of right-of-use assets 5,557 6,017
Impairment of goodwill 4,220 2,437
Amortisation of intangible assets 442 720
Interest income (2,154) (1,883)
Interest expense 6,648 3,501
Net foreign exchange loss 196 848
(Gain) Loss on disposal of property, plant and equipment (11) 31
Allowance for obsolete inventories 2,240 818
Allowance for credit losses 3,615 4,037
Retirement benefits 1,077 1,173
Operating cash flows before working capital changes 27,915 (6,829)
Trade receivables (8,909) (17,045)
Other receivables (2,652) (1,368)
Inventories (12,153) (27,003)
Trade payables (5,050) 43,089
Other payables 1,059 1,112
Retirement benefits (419) (607)
Cash used in operations (209) (8,651)
Interest income received 2,154 1,883
Interest paid on bank loans and overdrafts (5,950) (2,560)
Income tax paid (5,705) (6,759)
Net cash used in operating activities (9,710) (16,087)
Investing activities
Acquisition of non-controlling interests in subsidiaries - (11,882)
Proceeds from disposal of property, plant and equipment 185 5,327
Purchase of property, plant and equipment (5,502) (35,305)
(Purchase) Disposal of other financial assets (72) 7,544
Fixed deposits pledged (10) 1,121
Net cash used in investing activities (5,399) (33,195)
Financing activities
Dividends paid to non-controlling shareholders (2,183) (3,019)
Repayment of bank loans (67,387) (61,930)
Proceeds from bank loans 97,230 130,605
Repayment of lease liabilities (Note 16) (6,242) (6,534)
Net cash from financing activities 21,418 59,122
 Asian Paints International Private Limited

Statement of Cash Flows (Contd.)

Group
2023 2022
$’000 $’000
Net increase in cash and cash equivalents 6,309 9,840
Cash and cash equivalents at beginning of year 43,437 39,051
Net effect of exchange rate changes (2,647) (5,454)
Cash and cash equivalents at end of year (Note a) 47,099 43,437
Notes to consolidated statement of cash flows:
(a) Cash and cash equivalents in the consolidated statement of cash flows comprise the following statement of
financial position amounts:
Cash and bank balances (Note 7) 52,608 57,905
Bank overdrafts (Note 16) (3,409) (12,378)
Fixed deposits pledged (Note 7) (2,100) (2,090)
Cash and cash equivalents 47,099 43,437

12

Notes to financial statements
For the year ended 31 March, 2023
1 GENERAL
The Company (Registration No. 199307986G) is
incorporated in Singapore with its principal place of
business and registered office at 140 Robinson Road
#11-05, Singapore 068907. The financial statements
are expressed in Singapore dollars.
The principal activities of the Company are those of
investment holding and management.
The principal activities of the subsidiaries are
disclosed in Note 11 to the financial statements.
The consolidated financial statements of the Group
and statement of financial position and statement of
changes in equity of the Company for the financial
year ended 31 March 2023 were authorised for issue
by the Board of Directors on 5 May 2023.
2 SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
BASIS OF ACCOUNTING - The financial statements
have been prepared in accordance with the historical
cost basis, except as disclosed in the accounting
policies below, and are drawn up in accordance
with the provisions of the Companies Act 1967 and
Financial Reporting Standards in Singapore (“FRSs”).
Historical cost is generally based on the fair value of
the consideration given in exchange for goods and
services.
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, regardless of whether that price
is directly observable or estimated using another
valuation technique. In estimating the fair value of
an asset or a liability, the Group takes into account
the characteristics of the asset or liability which
market participants would take into account when
pricing the asset or liability at the measurement
date. Fair value for measurement and/or disclosure
purposes in these consolidated financial statements
is determined on such a basis, except for share-
based payment transactions that are within the
scope of FRS 102 Share-based Payment, leasing
transactions that are within the scope of FRS
116 Leases,and measurements that have some
similarities to fair value but are not fair value, such as
net realisable value in FRS 2 Inventories or value in
use in FRS 36 Impairment of Assets.
13
Financial Statements
In addition, for financial reporting purposes, fair
value measurements are categorised into Level
1, 2 or 3 based on the degree to which the inputs
to the fair value measurements are observable
and the significance of the inputs to the fair value
measurement in its entirety, which are described as
follows:
•  evel 1 inputs are quoted prices (unadjusted) in
L
active markets for identical assets or liabilities
that the entity can access at the measurement
date;
•  evel 2 inputs are inputs, other than quoted
L
prices included within Level 1, that are
observable for the asset or liability, either
directly or indirectly; and
•  evel 3 inputs are unobservable inputs for the
L
asset or liability.
ADOPTION OF NEW AND REVISED STANDARDS
- On 1 April 2022, the Group and the Company
have adopted all the new and revised FRSs and
Interpretations of FRS (“INT FRS”) that are effective
from that date and are relevant to its operations.
The adoption of these new/revised FRSs and INT
FRSs does not result in changes to the Group’s
accounting policies and has no material effect on the
amounts reported for the current or prior years.
STANDARDS ISSUED BUT NOT EFFECTIVE - At the
date of authorisation of these financial statements,
the following amendments to FRSs that are relevant
to the Group and the Company were issued but not
effective:
•  mendments to FRS 1 Classification of
A
Liabilities as Current or Non-current (1)
•  mendments to FRS 1 and FRS Practice
A
Statement 2 Disclosure of Accounting Policies
(1)
•  mendments to FRS 1 Definition of Accounting
A
Estimates (1)
•  mendments to FRS 12 Deferred Tax related
A
to Assets and Liabilities arising from a Single
Transaction (1)
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

(1) Applies to annual periods beginning on or after 1
January 2023.
Management anticipates that the adoption of the
above amendments to FRSs in future periods will not
have a material impact on the financial statements in
the period of their initial adoption.
BASIS OF CONSOLIDATION - The consolidated
financial statements incorporate the financial
statements of the Company and entities (including
structured entities) controlled by the Company
and its subsidiaries. Control is achieved when the
Company:
• Has the power over the investee;
• I s exposed, or has rights, to variable returns
from its involvement with the investee; and
•  as the ability to use its power to affect its
H their accounting policies in line with the Group’s
returns.
Consolidation of a subsidiary begins when the
Company obtains control over the subsidiary and
ceases when the Company loses control of the
subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year
are included in the consolidated statement of profit
or loss and other comprehensive income from the
date the Company gains control until the date when
the Company ceases to control the subsidiary.
Profit or loss and each component of other
comprehensive income are attributed to the owners
of the Company and to the non-controlling interests.
Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
When necessary, adjustments are made to the
financial statements of subsidiaries to bring
accounting policies.

The Company reassesses whether or not it controls Changes in the Group’s ownership interests in
an investee if facts and circumstances indicate existing subsidiaries
that there are changes to one or more of the three
Changes in the Group’s ownership interests in
elements of control listed above.
subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as
When the Company has less than a majority of the
equity transactions. The carrying amounts of the
voting rights of an investee, it has power over the
Group’s interests and the non-controlling interests
investee when the voting rights are sufficient to give
are adjusted to reflect the changes in their relative
it the practical ability to direct the relevant activities
interests in the subsidiaries. Any difference between
of the investee unilaterally. The Company considers
the amount by which the non-controlling interests
all relevant facts and circumstances in assessing
are adjusted and the fair value of the consideration
whether or not the Company’s voting rights in an
paid or received is recognised directly in equity and
investee are sufficient to give it power, including:
attributed to owners of the Company.

•  he size of the Company’s holding of voting

T
When the Group loses control of a subsidiary, a gain
rights relative to the size and dispersion of
or loss is recognised in profit or loss and is calculated
holdings of the other vote holders;
as the difference between (i) the aggregate of
the fair value of the consideration received and
•  otential voting rights held by the Company,
P
the fair value of any retained interest and (ii) the
other vote holders or other parties;
previous carrying amount of the assets (including
goodwill), and liabilities of the subsidiary and any
•  ights arising from other contractual
R
non-controlling interests. All amounts previously
arrangements; and
recognised in other comprehensive income in
relation to that subsidiary are accounted for as if the
•  ny additional facts and circumstances that
A
Group had directly disposed of the related assets or
indicate that the Company has, or does not
liabilities of the subsidiary (i.e. reclassified to profit
have, the current ability to direct the relevant
or loss or transferred to another category of equity
activities at the time that decisions need to be
as specified/permitted by applicable FRSs).
made, including voting patterns at previous
shareholders’ meetings.
14

Notes to the Financial Statements (Contd.)
The fair value of any investment retained in the
former subsidiary at the date when control is lost
is regarded as the fair value on initial recognition
for subsequent accounting under FRS 109, when
applicable, the cost on initial recognition of an
investment in an associate or a joint venture.
In the Company’s financial statements, investment
in subsidiaries is carried at cost less any impairment
in net recoverable value that has been recognised in
profit or loss.
BUSINESS COMBINATIONS - Acquisitions of
subsidiaries and businesses are accounted for using
the acquisition method. The consideration for each
acquisition is measured at the aggregate of the
acquisition date fair values of assets given, liabilities
incurred by the Group to the former owners of the
acquiree, and equity interests issued by the Group
in exchange for control of the acquiree. Acquisition-
related costs are recognised in profit or loss as
incurred.
Where applicable, the consideration for the
acquisition includes any asset or liability resulting
from a contingent consideration arrangement,
measured at its acquisition-date fair value.
Subsequent changes in such fair values are adjusted
against the cost of acquisition where they qualify as
measurement period adjustments (see below). The
subsequent accounting for changes in the fair value
of the contingent consideration that do not qualify
as measurement period adjustments depends on
how the contingent consideration is classified.
Contingent consideration that is classified as equity
is not remeasured at subsequent reporting dates and
its subsequent settlement is accounted for within
equity. Contingent consideration that is classified as
an asset or a liability is remeasured at subsequent
reporting dates at fair value, with changes in fair
value recognised in profit or loss.
Where a business combination is achieved in stages,
the Group’s previously held interests in the acquired
entity are remeasured to fair value at the acquisition
date (i.e. the date the Group attains control) and the
resulting gain or loss, if any, is recognised in profit or
loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously
been recognised in other comprehensive income are
reclassified to profit or loss, where such treatment
would be appropriate if that interest were disposed
of.
15
Financial Statements
The acquiree’s identifiable assets, liabilities and
contingent liabilities that meet the conditions for
recognition under the FRS are recognised at their
fair value at the acquisition date, except that:
•  eferred tax assets or liabilities and liabilities
d
or assets related to employee benefit
arrangements are recognised and measured in
accordance with FRS 12 Income Taxes and FRS
19 Employee Benefits respectively;
• l iabilities or equity instruments related to
share-based payment transactions of the
acquiree or the replacement of an acquiree’s
share-based payment awards transactions with
share-based payment awards transactions of
the acquirer in accordance with the method in
FRS 102 Share-based Payment at the acquisition
date; and
•  ssets (or disposal groups) that are classified as
a
held for sale in accordance with FRS 105 Non-
current Assets Held for Sale and Discontinued
Operations are measured in accordance with
that standard.
Non-controlling interests that are present
ownership interests and entitle their holders to a
proportionate share of the entity’s net assets in the
event of liquidation may be initially measured either
at fair value or at the non-controlling interests’
proportionate share of the recognised amounts of
the acquiree’s identifiable net assets. The choice
of measurement basis is made on a transaction-by-
transaction basis. Other types of non-controlling
interests are measured at fair value or, when
applicable, on the basis specified in another FRS.
If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the combination occurs, the Group reports
provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts
are adjusted during the measurement period
(see below), or additional assets or liabilities are
recognised, to reflect new information obtained
about facts and circumstances that existed as of the
acquisition date that, if known, would have affected
the amounts recognised as of that date.
The measurement period is the period from the
date of acquisition to the date the Group obtains
complete information about facts and circumstances
 Asian Paints International Private Limited
Notes to the Financial Statements (Contd.)
that existed as of the acquisition date and is subject
to a maximum of one year from acquisition date.
Business combinations under common control
Business combinations involving entities under
common control are accounted for using merger
accounting.
The net assets of the combining entities or
businesses are consolidated using the existing book
values from the date of the acquisition.
Any excess or shortfall of the consideration
paid over the net book values of the acquiree is
recognised as a component under equity as “merger
reserve”.
FINANCIAL INSTRUMENTS - Financial assets and
financial liabilities are recognised on the Group’s
statement of financial position when the Group
becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities are added
to or deducted from the fair value of the financial
assets and financial liabilities, as appropriate, on
initial recognition.
Financial assets
Classification of financial assets
Debt instruments mainly comprise cash and bank
balances and trade and other receivables that meet
the following conditions and are subsequently
measured at amortised cost:
• t he financial asset is held within a business
model whose objective is to hold financial
assets in order to collect contractual cash flows;
and
• t he 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.
Amortised cost and effective interest method
The effective interest method is a method of
calculating the amortised cost of a debt instrument
16
and of allocating interest income over the relevant
period.
For financial instruments other than purchased or
originated credit-impaired financial assets,
the effective interest rate is the rate that exactly
discounts estimated future cash receipts (including
all fees and points paid or received that form
an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
excluding expected credit losses, through the
expected life of the debt instrument, or, where
appropriate, a shorter period, to the gross carrying
amount of the debt instrument on initial recognition.
For purchased or originated credit-impaired financial
assets,
a credit-adjusted effective interest rate is calculated
by discounting the estimated future cash flows,
including expected credit losses, to the amortised
cost of the debt instrument on initial recognition.
The amortised cost of a financial asset is the amount
at which the financial asset is measured at initial
recognition minus the principal repayments, plus
the cumulative amortisation using the effective
interest method of any difference between that
initial amount and the maturity amount, adjusted
for any loss allowance. On the other hand, the gross
carrying amount of a financial asset is the amortised
cost of a financial asset before adjusting for any loss
allowance.
Interest is recognised using the effective
interest method for debt instruments measured
subsequently at amortised cost, except for short-
term balances when the effect of discounting is
immaterial.
Impairment of financial assets
The Group recognises a loss allowance for expected
credit losses (“ECL”) on trade and other receivables.
The amount of expected credit losses is updated at
each reporting date to reflect changes in credit risk
since initial recognition of the respective financial
instrument.
The Group always recognises lifetime ECL for trade
receivables. The expected credit losses on these
financial assets are estimated on a forward-looking
basis using a provision matrix based on the Group’s

Notes to the Financial Statements (Contd.)
historical credit loss experience over the past three
years.
For all other financial instruments, the Group
recognises lifetime ECL when there has been
a significant increase in credit risk since initial
recognition. If, on the other hand, the credit risk
on the financial instrument has not increased
significantly since initial recognition, the Group
measures the loss allowance for that financial
instrument at an amount equal to 12-month ECL.
The assessment of whether lifetime ECL should be
recognised is based on significant increases in the
likelihood or risk of a default occurring since initial
recognition instead of on evidence of a financial
asset being credit-impaired at the reporting date or
an actual default occurring.
Significant increase in credit risk
In assessing whether the credit risk on a financial
instrument has increased significantly since initial
recognition, the Group considers reasonable and
supportable information that is relevant and
available without undue cost or effort. This includes
both quantitative and qualitative information and
analysis, based on the Group’s historical experience
and informed credit assessment.
The Group assumes that the credit risk on a financial
instrument has not increased significantly since
initial recognition if the financial instrument is
determined to have low credit risk at the reporting
date. A financial instrument is determined to have
low credit risk if i) the financial instrument has a low
risk of default, ii) the borrower has a strong capacity
to meet its contractual cash flow obligations in the
near term and iii) adverse changes in economic and
business conditions in the longer term may,
but will not necessarily, reduce the ability of
the borrower to fulfil its contractual cash flow
obligations.
The Group regularly monitors the effectiveness of
the criteria used to identify whether there has been
a significant increase in credit risk and revises them
as appropriate to ensure that the criteria are capable
of identifying significant increase in credit risk
before the amount becomes past due.
17
Financial Statements
Definition of default
The Group considers a financial asset to be in default
when the borrower is unlikely to pay its credit
obligations to the Group in full, without recourse by
the Group to actions such as realising security (if any
is held).
Credit-impaired financial assets
A financial asset is credit-impaired when one or
more events that have a detrimental impact on the
estimated future cash flows of that financial asset
have occurred.
Write-off policy
The Group writes off a financial asset when there
is information indicating that the counterparty is in
severe financial difficulty and there is no realistic
prospect of recovery, e.g. when the counterparty has
been placed under liquidation or has entered into
bankruptcy proceedings. Financial assets written off
may still be subject to enforcement activities under
the Group’s recovery procedures, taking into account
legal advice where appropriate. Any recoveries made
are recognised in profit or loss.
Measurement and recognition of expected credit losses
For financial assets, the expected credit loss is
estimated as the difference between all contractual
cash flows that are due to the Group in accordance
with the contract and all the cash flows that the
Group expects to receive, discounted at the original
effective interest rate.
If the Group has measured the loss allowance for a
financial instrument at an amount equal to lifetime
ECL in the previous reporting period, but determines
at the current reporting date that the conditions for
lifetime ECL are no longer met, the Group measures
the loss allowance at an amount equal to 12-month
ECL at the current reporting date.
Derecognition of financial assets
The Group derecognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Group
neither transfers nor retains substantially all the
risks and rewards of ownership and continues to
control the transferred asset, the Group recognises
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

its retained interest in the asset and an associated Offsetting arrangements

liability for amounts it may have to pay. If the Group
Financial assets and financial liabilities are offset
retains substantially all the risks and rewards of
and the net amount presented in the statement of
ownership of a transferred financial asset,
financial position when the Group and the Company
have a legally enforceable right to set off the
the Group continues to recognise the financial asset
recognised amounts; and intends either to settle
and also recognises a collateralised borrowing for
on a net basis, or to realise the asset and settle the
the proceeds received.
liability simultaneously. A right to set-off must be
available today rather than being contingent on
Financial liabilities and equity instruments
a future event and must be exercisable by any of
Classification as debt or equity the counterparties, both in the normal course of
business and in the event of default, insolvency or
Financial liabilities and equity instruments issued by
bankruptcy.
the Group are classified according to the substance
of the contractual arrangements entered into and
LEASES
the definitions of a financial liability and an equity
instrument. The Group as lessee
The Group assesses whether a contract is or contains
Equity instruments
a lease, at inception of the contract. The Group
An equity instrument is any contract that evidences recognises a right-of-use asset and a corresponding
a residual interest in the assets of the Group after lease liability with respect to all lease arrangements
deducting all of its liabilities. Equity instruments in which it is the lessee, except for short-term leases
are recorded at the proceeds received, net of direct (defined as leases with a lease term of 12 months
issue costs. or less) and leases of low value assets. For these
leases, the Group recognises the lease payments as
Financial liabilities an operating expense on a straight-line basis over
the term of the lease unless another systematic
Trade and other payables are initially measured
basis is more representative of the time pattern in
at fair value, net of transaction costs, and are
which economic benefits from the leased assets are
subsequently measured at amortised cost, using the
consumed.
effective interest method, with interest expense
recognised on an effective yield basis, except for
The lease liability is initially measured at the present
short-term payable when the recognition of interest
value of the lease payments that are not paid at
would be immaterial.
the commencement date, discounted by using
the rate implicit in the lease. If this rate cannot be
Interest-bearing bank loans and overdrafts
readily determined, the Group uses the incremental
are initially measured at fair value, and are
borrowing rate specific to the lessee.
subsequently measured at amortised cost, using
the effective interest method. Any difference
Lease payments included in the measurement of the
between the proceeds (net of transaction costs)
lease liability comprise:
and the settlement or redemption of borrowings
is recognised over the term of the borrowings in
• f ixed lease payments (including in-substance
accordance with the Group’s accounting policy for
fixed payments), less any lease incentives;
borrowing costs (see below).

•  ariable lease payments that depend on an

Derecognition of financial liabilities
The Group derecognises financial liabilities
when, and only when, the Group’s obligations are
discharged, cancelled or they expire.
v
index or rate, initially measured using the index
or rate at the commencement date;
• t he amount expected to be payable by the
lessee under residual value guarantees;

18

Notes to the Financial Statements (Contd.)
• t he exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and
•  ayments of penalties for terminating the
p conditions of the lease, a provision is recognised and
lease, if the lease term reflects the exercise of
an option to terminate the lease.
The lease liability is presented as a separate line in
the statement of financial position.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and by reducing the carrying amount to
reflect the lease payments made.
The Group remeasures the lease liability (and makes
a corresponding adjustment to the related right-of-
use asset) whenever:
• t he lease term has changed or there is a
significant event or change in circumstances
resulting in a change in the assessment of
exercise of a purchase option, in which case the
lease liability is remeasured by discounting the
revised lease payments using a revised discount
rate;
• t he lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual value,
in which cases the lease liability is remeasured
by discounting the revised lease payments
using the initial discount rate (unless the
lease payments change is due to a change in a
floating interest rate, in which case a revised
discount rate is used); or
•  lease contract is modified and the lease
a not to separate non-lease components, and instead
modification is not accounted for as a separate
lease, in which case the lease liability is
remeasured by discounting the revised lease
payments using a revised discount rate at the
effective date of the modification.
The right-of-use assets comprise the initial
measurement of the corresponding lease
liability, lease payments made at or before the
commencement day, less any lease incentives
received and any initial direct costs. They are
subsequently measured at cost less accumulated
depreciation and impairment losses.
19
Financial Statements
Whenever the Group incurs an obligation for costs
to dismantle and remove a leased asset, restore the
site on which it is located or restore the underlying
asset to the condition required by the terms and
measured under FRS 37. To the extent that the costs
relate to a right-of-use asset, the costs are included
in the related right-of-use asset, unless those costs
are incurred to produce inventories.
Right-of-use assets are depreciated over the
shorter period of lease term and useful life of the
underlying asset. If a lease transfers ownership of
the underlying asset or the cost of the right-of-use
asset reflects that the Group expects to exercise
a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying
asset. The depreciation starts at the commencement
date of the lease.
The right-of-use assets are presented as a separate
line in the statement of financial position.
The Group applies FRS 36 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in
‘Impairment of tangible and intangible assets
excluding goodwill’ policy.
Variable rents that do not depend on an index or
rate are not included in the measurement of the
lease liability and the right-of-use asset. The related
payments are recognised as an expense in the period
in which the event or condition that triggers those
payments occurs and are included in the line ‘Other
operating expenses’ in the statement of profit or
loss.
As a practical expedient, FRS 116 permits a lessee
account for any lease and associated non-lease
components as a single arrangement. The Group has
not used this practical expedient. For a contracts
that contain a lease component and one or more
additional lease or non-lease components, the
Group allocates the consideration in the contract to
each lease component on the basis of the relative
stand-alone price of the lease component and
the aggregate stand-alone price of the non-lease
components.
INVENTORIES - Inventories are measured at the
lower of cost (weighted average method) and net
 Asian Paints International Private Limited
Notes to the Financial Statements (Contd.)
realisable value. Cost includes all costs of purchase,
cost of conversion and other costs incurred in
bringing the inventories to their present location
and condition. Net realisable value represents the
estimated selling price less all estimated costs of
completion and costs to be incurred in marketing,
selling and distribution.
PROPERTY, PLANT AND EQUIPMENT - Property,
plant and equipment are stated at cost or valuation
less accumulated depreciation and any accumulated
impairment losses.
Depreciation is charged so as to write-off the cost or
valuation of assets, other than freehold land, over
their estimated useful lives using the straight-line
method. The annual rates of depreciation are as
follows:
Freehold buildings - 2%
Buildings - over terms of lease
which are 2% to 20%
Plant and equipment - 8% to 25%
Motor vehicles - 20% to 25%
Land is not depreciated because the land is deemed
to have unlimited useful life.
The estimated useful lives, residual values and
depreciation method are reviewed at each year end,
with the effect of any changes in estimate accounted
for on a prospective basis.
The gain or loss arising on disposal or retirement
of an item of property, plant and equipment is
determined as the difference between the sales
proceeds and the carrying amounts of the asset and
is recognised in profit or loss.
Fully depreciated assets still in use are retained in
the financial statements.
GOODWILL - Goodwill arising in a business
combination is recognised as an asset at the date
that control is acquired (the acquisition date).
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-
controlling interest in the acquiree and the fair value
of the acquirer’s previously held equity interest (if
any) in the entity over net of the acquisition-date
amounts of the identifiable assets acquired and the
liabilities assumed.
20
If, after reassessment, the Group’s interest in the
fair value of the acquiree’s identifiable net assets
exceeds the sum of the consideration transferred,
the amount of any non-controlling interest in
the acquiree and the fair value of the acquirer’s
previously held equity interest in the acquiree (if
any), the excess is recognised immediately in profit
or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for
impairment at least annually. For the purpose of
impairment testing, goodwill is allocated to each
of the Group’s cash-generating units expected to
benefit from the synergies of the combination.
Cash-generating units to which goodwill has been
allocated are tested for impairment annually,
or more frequently when there is an indication
that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its
carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets
of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. An impairment
loss recognised for goodwill is not reversed in a
subsequent period.
On disposal of a subsidiary or the relevant cash-
generating unit, the attributable amount of goodwill
is included in the determination of the profit or loss
on disposal.
INTANGIBLE ASSETS
Intangible assets acquired separately
Intangible assets acquired separately are reported
at cost less accumulated amortisation (where they
have finite useful lives) and accumulated impairment
losses. Intangible assets with finite useful lives
are amortised on a straight-line basis over their
estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end
of each annual reporting period, with the effect of
any changes in estimate being accounted for on a
prospective basis. Intangible assets with indefinite
useful lives are not amortised. Each period, the
useful lives of such assets are reviewed to determine
whether events and circumstances continue to
support an indefinite useful life assessment for
the asset. Such assets are tested for impairment in
accordance with the policy below.
 21
Notes to the Financial Statements (Contd.)

Financial Statements
Intangible assets acquired in a business combination the relevant asset is carried at a revalued amount,
in which case the impairment loss is treated as a
Intangible assets acquired in a business combination
revaluation decrease.
are identified and recognised separately from
goodwill. The cost of such intangible assets is their
Where an impairment loss subsequently reverses,
fair value at the acquisition date.
the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimate of its
Subsequent to initial recognition, intangible assets
recoverable amount, but so that the increased
acquired in a business combination are reported at
carrying amount does not exceed the carrying
cost less accumulated amortisation and accumulated
amount that would have been determined had no
impairment losses, on the same basis as intangible
impairment loss been recognised for the asset (or
assets acquired separately.
cash-generating unit) in prior years.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE
A reversal of an impairment loss is recognised
ASSETS EXCLUDING GOODWILL - At the end of each
immediately in profit or loss, unless the relevant
reporting period, the Group reviews the carrying
asset is carried at a revalued amount, in which case
amounts of its tangible and intangible assets to
the reversal of the impairment loss is treated as a
determine whether there is any indication that
revaluation increase.
those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount
PROVISIONS - Provisions are recognised when
of the asset is estimated in order to determine the
the Group has a present obligation (legal or
extent of the impairment loss (if any). Where it is
constructive) as a result of a past event, it is
not possible to estimate the recoverable amount
probable that the Group will be required to settle
of an individual asset, the Group estimates the
the obligation, and a reliable estimate can be made
recoverable amount of the cash-generating unit to
of the amount of the obligation.
which the asset belongs. Where a reasonable and
consistent basis of allocation can be identified,
The amount recognised as a provision is the
corporate assets are also allocated to individual
best estimate of the consideration required to
cash-generating units, or otherwise they are
settle the present obligation at the end of the
allocated to the smallest group of cash-generating
reporting period, taking into account the risks and
units for which a reasonable and consistent
uncertainties surrounding the obligation. Where a
allocation basis can be identified.
provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount
Intangible assets with indefinite useful lives and
is the present value of those cash flows.
intangible assets not yet available for use are tested
for impairment annually, and whenever there is an
When some or all of the economic benefits required
indication that the asset may be impaired.
to settle a provision are expected to be recovered
from a third party, the receivable is recognised as an
Recoverable amount is the higher of fair value less
asset if it is virtually certain that reimbursement will
costs to sell and value in use. In assessing value in
be received and the amount of the receivable can be
use, the estimated future cash flows are discounted
measured reliably.
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
REVENUE RECOGNITION - The Group recognises
value of money and the risks specific to the asset for
revenue from paint and adhesive sales. Revenue is
which the estimates of future cash flows have not
measured based on the consideration specified in
been adjusted.
a contract with a customer and excludes amounts
collected on behalf of third parties. The Group
If the recoverable amount of an asset (or cash-
recognises revenue when it transfers control of
generating unit) is estimated to be less than its
a product to a customer. The Group has generally
carrying amount, the carrying amount of the
concluded that it is the principal in its revenue
asset (or cash-generating unit) is reduced to
arrangements and records revenue on a gross basis
its recoverable amount. An impairment loss is
because it typically controls the goods before
recognised immediately in profit or loss, unless
transferring them to the customer.
 Asian Paints International Private Limited
Notes to the Financial Statements (Contd.)
Revenue from the sale of goods is recognised at the
point in time when the Group has transferred to the
buyer control of the asset, generally on delivery of
the goods.
The Group considers whether there are other
promises in the contract that are separate
performance obligations to which a portion of
the transaction price needs to be allocated (e.g.,
warranties, customer loyalty points, shipping and
handling).
Certain contracts provide a customer with a promise
of non-cash consideration (e.g. volume rebates,
incentive trips and gifts) if certain criteria are met.
The Group estimates the most-likely amount of non-
cash consideration to be given and recognises this as
a reduction to revenue.
Contracting revenue is recognised over time
by measuring the progress towards complete
satisfaction of performance obligation for the
services rendered. The Group uses output method
based on the nature of service offered to the
customers when performance obligation is satisfied
over a period of time as and when the services are
delivered.
Interest income is accrued on a time basis, by
reference to the principal outstanding and at the
effective interest rate applicable.
Dividend income from investments is recognised
when the shareholders’ rights to receive payment
have been established.
Royalty income is recognised on an accrual basis
in accordance with the substance of the relevant
agreement. Royalties determined on a time basis are
recognised on a straight-line basis over the period
of the agreement. Royalty arrangements that are
based on production, sales and other measures
are recognised by reference to the underlying
arrangement.
GOVERNMENT GRANTS - Government grants are not
recognised until there is reasonable assurance that
the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in profit or 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.
22
BORROWING COSTS - All other borrowing costs are
recognised in profit or loss in the period in which
they are incurred.
RETIREMENT BENEFIT COSTS - Payments to defined
contribution plans are charged as an expense when
employees have rendered the services entitling
them to the contributions. Payments made to state-
managed retirement benefit schemes are dealt with
as payments to defined contribution plans where the
Group’s obligations under the plans are equivalent
to those arising in a defined contribution plan.
For defined benefit plans, the cost of providing
benefits is determined using the Projected
Unit Credit Method, with actuarial valuations
being carried out as at each reporting date.
Remeasurement, comprising actuarial gains and
losses, the effect of the changes to the asset
ceiling (if applicable) and the return on plan assets
(excluding interest), is reflected immediately in the
statement of financial position with a charge or
credit recognised in other comprehensive income
in the period in which they occur. Remeasurement
recognised in other comprehensive income is
reflected immediately in retained earnings and will
not be reclassified to profit or loss. Past service cost
is recognised in profit or loss in the period of a plan
amendment. Net interest is calculated by applying
the discount rate at the beginning of the period to
the net defined benefit liability or asset. Defined
benefit costs are categorised as follows:
•  ervice cost (including current service cost,
S
past service cost, as well as gains and losses on
curtailments and settlements);
• Net interest expense or income; and
• Remeasurement.
The Group presents the first two components of
defined benefit costs in profit or loss in the line item
employee benefits expense. Curtailment gains and
losses are accounted for as past service costs.
The retirement benefit obligation recognised in the
statement of financial position represents the actual
deficit or surplus in the Group’s defined benefit
plans. Any surplus resulting from this calculation
is limited to the present value of any economic
benefits available in the form of refunds from the

Notes to the Financial Statements (Contd.)
plans or reductions in future contributions to the
plan.
A liability for a termination benefit is recognised
at the earlier of when the entity can no longer
withdraw the offer of the termination benefit and
when the entity recognises any related restructuring
costs.
EMPLOYEE LEAVE ENTITLEMENT - Employee
entitlements to annual leave and long service leave
are recognised when they accrue to employees.
An accrual is made for the estimated liability for
annual leave and long service leave as a result of
services rendered by employees up to the end of the
reporting period.
INCOME TAX - Income tax expense represents the
sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit
for the year. Taxable profit differs from profit as
reported in the statement of profit or loss and other
comprehensive income because it excludes items of
income or expense that are taxable or deductible in
other years and it further excludes items that are not
taxable or tax deductible. The Group’s liability for
current tax is calculated using tax rates
(and tax laws) that have been enacted or
substantively enacted, in countries where the
Company and the subsidiaries operate, by the end of
the reporting period.
Deferred tax is recognised on differences between
the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax
bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred
tax assets are recognised to the extent that it
is probable that taxable profits will be available
against which deductible temporary differences
can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from
goodwill or from the initial recognition (other than
in a business combination) of other assets and
liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable
temporary differences arising on investments in
23
Financial Statements
subsidiaries, except where the Group is able to
control the reversal of the temporary difference
and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred
tax assets arising from deductible temporary
differences associated with such investments and
interests are only recognised to the extent that
it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the
temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability
is settled or the asset is realised based on the tax
rates (and tax laws) that have been enacted or
substantially enacted by the end of the reporting
period. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would
follow from the manner in which the Group expects,
at the end of the reporting period, to recover
or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when
they relate to income taxes levied by the same
taxation authority and the Group intends to settle
its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an
expense or income in profit or loss, except when
they relate to items credited or debited outside
profit or loss (either in other comprehensive
income or directly in equity), in which case the tax
is also recognised outside profit or loss (either in
other comprehensive income or directly in equity,
respectively), or where they arise from the initial
accounting for a business combination. In the case of
a business combination, the tax effect is taken into
account in calculating goodwill or determining the
excess of the acquirer’s interest in the net fair value
of the acquiree’s identifiable assets, liabilities and
contingent liabilities over cost.
 Asian Paints International Private Limited
Notes to the Financial Statements (Contd.)
FOREIGN CURRENCY TRANSACTIONS AND
TRANSLATION - The individual financial statements
of each group entity are measured and presented in
the currency of the primary economic environment
in which the entity operates (its functional currency).
The consolidated financial statements of the
Group and the statement of financial position and
statement of changes in equity of the Company
are presented in Singapore dollars, which is the
functional currency of the Company, and the
presentation currency for the consolidated financial
statements.
In preparing the financial statements of the
individual entities, transactions in currencies other
than the entity’s functional currency are recorded
at the rates of exchange prevailing on the date of
the transaction. At the end of each reporting period,
monetary items denominated in foreign currencies
are retranslated at the rates prevailing on the end
of the reporting period. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences arising on the settlement of
monetary items, and on retranslation of monetary
items are included in profit or loss for the period.
Exchange differences arising on the retranslation
of non-monetary items carried at fair value are
included in profit or loss for the period except for
differences arising on the retranslation of non-
monetary items in respect of which gains and losses
are recognised directly in other comprehensive
income. For such non-monetary items, any exchange
component of that gain or loss is also recognised
directly in other comprehensive income.
For the purpose of presenting consolidated financial
statements, the assets and liabilities of the Group’s
foreign operations (including comparatives) are
expressed in Singapore dollars using exchange
rates prevailing at the end of the reporting period.
Income and expense items (including comparatives)
are translated at the average exchange rates
for the period, unless exchange rates fluctuated
significantly during that period, in which case the
exchange rates at the dates of the transactions
are used. Exchange differences arising, if any,
are recognised in other comprehensive income
and accumulated in the Group’s foreign currency
translation reserve.
24
On consolidation, exchange differences arising
from the translation of the net investment in
foreign entities (including monetary items that,
in substance, form part of the net investment in
foreign entities), and of borrowings and other
currency instruments designated as hedges of such
investments, are recognised in other comprehensive
income and accumulated in a separate component
of equity under the header of foreign currency
translation reserve.
Goodwill and fair value adjustments arising on the
acquisition of a foreign operation are treated as
assets and liabilities of the foreign operation and
translated at the closing rate. Exchange differences
arising are recognised in other comprehensive
income.
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY
SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies,
which are described in Note 2, management is
required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from
other sources. 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.
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.
Critical judgements in applying the Group’s
accounting policies
Management is of the opinion that any instances of
application of judgements are not expected to have
a significant effect on the amounts recognised in
the financial statements (apart from those involving
estimations, which are dealt with below).
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

Notes to the Financial Statements (Contd.)
amounts of assets and liabilities within the next
financial year are discussed below:
Impairment of goodwill and other intangible assets
(Note 14)
The Group made an assessment of recoverable
amounts of based on value in use calculations, or fair
value less costs to sell (for certain subsidiaries) which
require the use of certain assumptions.
The value in use calculations use cashflow
projections based on the financial budgets approved
by the management covering a five-year period
(2022 : five-year period), as the Group believes this
to be the most appropriate timescale for reviewing
and considering annual performance before applying
a fixed terminal value multiple to the final cash
flows. Fair value is computed by comparing the price
at which comparable companies engaged in similar
business are traded at the capital market.
For Causeway Paints Lanka (Private) Limited,
the recoverable amount as at 31 March 2023 was
determined based on the CGU’s fair value less costs
of disposal. Further details are disclosed in Note
14. For the financial year ended 31 March 2023,
impairment loss of $4,220,000 (2022 : $2,437,000)
was recognised on goodwill allocated to the
Causeway Paints Lanka (Private) Limited CGU.
Impairment of investments in subsidiaries (Note 11)
In determining whether investments in subsidiaries
are impaired, the Company evaluates the market
and economic environment in which each subsidiary
operates and its economic performance to
determine if indicators of impairment exist. Based
on the value in use or fair value less costs to sell
calculations referred to above, an impairment loss
of $75,138,000 (2022 : $52,997,000) was recorded
against the investments in subsidiaries for the year
ended 31 March 2023.
Calculation of credit loss allowances on trade
receivables (Note 8)
The Group uses a provision matrix to measure
lifetime ECL on its portfolio of trade receivables.
The provision matrix is prepared on a forward-
looking basis and includes actual credit loss
experience over the past three years. At each
reporting date, the historical observed default rates
25
Financial Statements
are updated. Where the expectation is different
from the original estimate, such difference will
impact the carrying value of the trade and other
receivables and credit loss allowances in the period
in which such estimate has been changed.
Allowances for inventories (Note 10)
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 realisable 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. In addition, the
Group conducts physical counts on its inventories
on a periodic basis in order to determine whether
an allowance is required to be made. Management
is satisfied that adequate allowance for obsolete
and slow-moving inventories has been made in the
financial statements.
Taxes (Notes 15 and 29)
In determining the provision for income taxes,
management is required to estimate the amount
of tax payable at each jurisdiction. There are
certain transactions and computations for which
the ultimate tax determination is uncertain
during the ordinary course of business. Where the
final tax outcome of these matters is different
from the amounts that were initially recognised,
such differences will impact the income tax and
deferred tax provisions in the year in which such
determination is made.
The carrying amounts of the Group’s and the
Company’s current tax and deferred tax provision
are disclosed in the statement of financial position
with notes where relevant.
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories of financial instruments
The following table sets out the financial instruments as at the end of the reporting period:

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Financial assets
At amortised cost
(including cash and bank balances) 148,682 159,006 29,644 17,987
Financial liabilities
At amortised cost 258,538 273,689 107,104 77,077

(b) Financial risk management policies and objectives

The Group’s activities expose it to a variety of financial risks. There has been no change to the Group’s
exposure to these financial risks or the manner in which it manages and measures the risks. Market risk
exposures are measured using sensitivity analysis indicated below.

(i) Foreign exchange risk management

At the end of the reporting period, the carrying amounts of significant monetary assets and monetary
liabilities denominated in currencies other than the respective group entities’ functional currencies are as
follows:

Assets Liabilities
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Group
US dollar 29,363 13,215 52,800 60,262
UAE dirham 8,347 12,679 566 2,977
Company
US dollar 22,113 8,643 20,484 6,330
UAE dirham 8,347 6,194 - -

The Company has a number of investments in overseas subsidiaries, whose net assets are exposed to
currency translation risk. The Company does not hedge this exposure.

Foreign currency sensitivity

The following table details the sensitivity to a 5% increase and decrease in the relevant foreign currencies
against the functional currency of each group entity. 5% represents management’s assessment of the
possible change in foreign exchange rates.

The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts
their translation at the end of the reporting period for a 5% change in foreign currency rates. The sensitivity
analysis includes loans to foreign operations within the Group where they gave rise to an impact on the
Group’s profit or loss before tax.

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (Contd.)

If the relevant foreign currency strengthens by 5% (2022 : 5%) against the functional currency of each group
entity with all other variables being held constant, the loss before tax will increase (decrease) by:

US dollar impact UAE dirham impact

2023 2022 2023 2022
$’000 $’000 $’000 $’000
Group
Profit or loss 1,172 2,352 (389) (485)
Company
Profit or loss (81) (116) (417) (310)

If the relevant foreign currency weakens by 5% (2022 : 5%) against the functional currency of each group
entity with other variables being held constant, the loss before tax will decrease (increase) by the same
amount.

(ii) Interest rate risk management

The Group and the Company are exposed to interest rate risk through the impact of rate changes on interest-
bearing liabilities and assets. The Group manages its interest rate risk by monitoring the movements in the
market interest rates closely.

Interest rate sensitivity

A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management
personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher or lower and all other variables were held constant, the
Group’s and Company’s loss before tax for the year ended 31 March 2023 would increase/decrease by
$453,000 and $410,000 (2022 : $430,000 and $329,000) respectively. This is mainly attributable to the
Group’s and Company’s exposures to interest rates on the variable rate borrowings.

(iii) Credit risk management

Financial assets that potentially subject the Group to credit risk consist principally of cash and bank balances
and trade and other receivables.

The Group places its cash and bank balances with reputable financial institutions.

The Group performs on-going credit evaluation of its debtors’ financial condition and maintains an allowance
for doubtful accounts receivable based upon the expected collectability of all accounts receivables. There
is no significant concentration of credit risk as the exposure is spread over a large number of counterparties
and customers.

Further details of credit risks on trade and other receivables are disclosed in Notes 8 and 9 respectively.

(iv) Liquidity risk management

The liquidity risk is mitigated by optimum cash levels being maintained and availability of funding through
an adequate quantum of credit facilities. The directors are of the view that the Group and the Company
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (Contd.)

will be able to meet their obligations when they fall due for at least one year from the date of the financial
statements taking into consideration unutilised banking facilities as disclosed in Note 16.
Liquidity and interest risk analysis
Non-derivative financial liabilities

 he following tables detail the remaining contractual maturity for non-derivative financial liabilities. The
T
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group and Company can be required to pay. The table includes both interest and principal
cash flows. The adjustment column represents the possible future cash flows attributable to the instrument
included in the maturity analysis which is not included in the carrying amount of the financial liability on the
statement of financial position.

Weighted On demand Within 2 to After Adjustment Total

average or within 5 years 5 years
effective 1 year
interest
rate
% $’000 $’000 $’000 $’000 $’000
Group - 2023
Non-interest-bearing - 111,617 - - - 111,617
Variable interest rate 3.65 90,017 1,698 - (1,017) 90,698
instruments
Fixed interest rate 5.49 41,367 3,011 - (1,160) 43,218
instruments
Lease liabilities 5.97 3,664 5,080 9,930 (5,669) 13,005
(fixed rate)
246,665 9,789 9,930 (7,846) 258,538
Group - 2022
Non-interest-bearing - 140,047 - - - 140,047
Variable interest rate 1.72 81,167 5,256 - (341) 86,082
instruments
Fixed interest rate 4.38 33,470 - - (436) 33,034
instruments
Lease liabilities
(fixed rate) 5.89 4,129 5,377 10,729 (5,709) 14,526
258,813 10,633 10,729 (6,486) 273,689
Company – 2023
Non-interest-bearing - 5,250 - - - 5,250
Variable interest rate 3.44 102,056 - - (497) 101,559
instruments
Lease liabilities 2.96 172 130 - (7) 295
(fixed rate)
107,478 130 - (504) 107,104
Company – 2022
Non-interest-bearing - 4,237 - - - 4,237
Variable interest rate 0.70 72,476 - - (92) 72,384
instruments
Lease liabilities 2.97 172 302 - (18) 456
(fixed rate)
76,885 302 - (110) 77,077
28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (Contd.)

Non-derivative financial assets

The following table details the expected maturity for non-derivative financial assets.
 he tables below have been drawn up based on the undiscounted contractual maturities of the financial
T
assets including interest that will be earned on those assets except where the Group and the Company
anticipate that the cash flow will occur in a different period. The adjustment column represents the possible
future cash flows attributable to the instrument included in the maturity analysis which are not included in
the carrying amount of the financial asset on the statement of financial position.

Weighted On demand Within 2 to After Adjustment Total

average or within 5 years 5 years
effective 1 year
interest
rate
% $’000 $’000 $’000 $’000 $’000
Group - 2023
Non-interest-bearing - 139,535 - - - 139,535
Fixed interest rate 7.03 8,355 1,100 - (308) 9,147
instruments
147,890 1,100 - (308) 148,682
Group - 2022
Non-interest-bearing - 141,491 - - - 141,491
Fixed interest rate 3.65 16,674 1,063 - (222) 17,515
instruments
158,165 1,063 - (222) 159,006
Company – 2023
Non-interest-bearing - 8,594 - - - 8,594
Variable interest rate 5.46 13,892 6,641 - (875) 19,658
instruments
Fixed interest rate 1.85 524 912 - (44) 1,392
instruments
23,010 7,553 - (919) 29,644
Company – 2022
Non-interest-bearing - 9,262 - - - 9,262
Variable interest rate 2.19 3,207 3,623 - (195) 6,635
instruments
Fixed interest rate 0.77 1,231 912 - (53) 2,090
instruments
13,700 4,535 - (248) 17,987

Please also see Note 16.

(v) Fair value of financial assets and financial liabilities

The carrying amounts of cash and bank balances, trade receivables, other current financial assets, short-term
borrowings, trade payables and other current financial liabilities approximate their respective fair values due
to the short-term maturity of these financial assets and liabilities. For other classes of financial assets and
liabilities, management considers that the carrying amounts approximate their fair values.
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT (Contd.)

(c) Capital risk management policies and objectives

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to stakeholders through the optimisation of the debt and equity balance and to
ensure that all externally imposed covenants are complied with.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in Note 16 and
equity attributable to owners of the Company, comprising issued capital, reserves and accumulated profits
as presented in the statements of changes in equity. The Group is in compliance with externally imposed
capital requirements for the financial years ended 31 March 2023 and 2022.

The Group’s directors review the capital structure on a yearly basis and balance the Group’s overall capital
structure through the approval of funding requirements.

The Group’s overall strategy remains unchanged from prior year.

5 HOLDING COMPANIES AND RELATED COMPANY TRANSACTIONS

The Company’s immediate and ultimate holding company is Asian Paints Limited, incorporated in India. Related
companies in these financial statements refer to members of the holding company’s group of companies.

Some of the Company’s transactions and arrangements are between members of the Group and related
companies and the effect of these, on the basis determined between the parties, is reflected in these financial
statements. The intercompany balances are unsecured, interest-free and repayable on demand except for the
loans to subsidiaries of $19,658,000 (2022 : $6,635,000), which bear interest at average effective rates ranging
from 2.1% to 7.3% (2022 : 1.5% to 3.4%) per annum (Note 9).

Transactions between the Company and its subsidiaries, which are related companies of the Company, have been
eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and
other related companies are disclosed below.

During the year, group entities entered into the following transactions with the holding company:

Group

2023 2022

$’000 $’000

Purchases of goods 3,980 4,515

Royalty expense 9,673 9,417

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
6 OTHER RELATED PARTY TRANSACTIONS
Some of the Group’s transactions and arrangements are with related parties and the effect of these, on the basis
determined between the parties, is reflected in these financial statements. The balances are unsecured, interest-
free and repayable on demand.

During the year, group entities entered into the following transactions with related parties:

Relatives of Entities controlled Entities controlled Promoter of a

directors of by directors of by employee of a subsidiary
subsidiaries subsidiaries subsidiary

2023 2022 2023 2022 2023 2022 2023 2022

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Sales of goods 4,386 3,097 10,073 10,379 839 570 - -

Purchases of goods 374 323 176 1,310 - - - -

Rental expense - - - - - - 209 197

Management fee - - - - - - 138 136

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

Group

2023 2022

$’000 $’000

Short-term benefits 4,709 5,295

Post-employment benefits 237 381

4,946 5,676

7 CASH AND BANK BALANCES

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Cash at bank and on hand 43,702 40,573 1,202 1,370
Fixed deposits 8,906 17,332 1,392 2,090
52,608 57,905 2,594 3,460
Analysed as:
Current 51,734 57,044 1,720 2,599
Non-current 874 861 874 861
52,608 57,905 2,594 3,460

Fixed deposits bear average effective interest rate of 7.0% (2022 : 3.3%) per annum and for a tenure of
approximately 12 months (2022 : 12 months).
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

7 CASH AND BANK BALANCES (Contd.)

Fixed deposits of the Company amounting to $1,392,000 (2022 : $2,090,000) have been pledged as per the terms
of underlying guarantees given by the banks on behalf of a former subsidiary, to various project customers
in Singapore. Fixed deposits of a subsidiary amounting to $708,000 (2022 : $Nil) have been pledged for
banking facilities.

8 TRADE RECEIVABLES

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Outside parties 111,808 113,989 20 43
Loss allowance (23,924) (22,139) - -
87,884 91,850 20 43
Related companies (Note 5) 69 1 5,590 5,677
87,953 91,851 5,610 5,720

Trade receivables
The credit period on sale of goods typically ranges from 30 to 210 days (2022 : 30 to 210 days).
No interest is charged on the outstanding balance. Trade receivables amounting to $25,263,000
(2022 : $26,547,000) have been pledged as security for bank loans (Note 16).

The following table details the risk profile of trade receivables from contracts with customers based on the
Group’s consolidated provision matrix. As the Group’s historical credit loss experience does not show significantly
different loss patterns for different customer segments, the provision for loss allowance based on past due
status is not further distinguished between the Group’s different customer base.

Group
Trade receivables – days past due
Not past <3 4–6 7–9 10 – 12 > 12 Total
due months months months months months
$’000 $’000 $’000 $’000 $’000 $’000 $’000
2023
Expected credit loss rate < 2% 2 – 11% 11 – 16% 16 – 40% 40 – 90% 90 – 100%
Estimated total gross carrying 65,339 14,419 4,826 3,874 2,388 20,962 111,808
amount at default
Lifetime ECL (789) (767) (690) (797) (1,690) (19,191) (23,924)
87,884
2022
Expected credit loss rate < 2% 2 – 10% 10 – 15% 15 – 40% 40 – 70% 90 – 100%
Estimated total gross carrying 68,139 15,493 6,153 2,843 1,904 19,457 113,989
amount at default
Lifetime ECL (760) (828) (785) (954) (1,056) (17,756) (22,139)
91,850

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
8 TRADE RECEIVABLES (Contd.)
The movements in credit loss allowance are as follows:

2023 2022

$’000 $’000

Balance at beginning of year 22,139 19,421

Allowance made during the year 3,615 4,037

Translation differences (1,479) (925)

Receivables written off as uncollectible (351) (394)

Balance at end of year 23,924 22,139

9 OTHER RECEIVABLES

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Loan to subsidiaries (Note 5) - - 19,658 6,635
Other financial assets 239 184 - -
Recoverables from units - - 24 20
Holding company (Note 5) 386 319 18 -
Subsidiaries (Notes 5 and 11) - - 1,693 2,023
Deposits 915 823 47 74
Prepayments 1,626 1,978 6 7
Advances to staff 641 839 - 55
Advances to suppliers 6,164 5,576 - -
Outside parties 6,816 7,085 - -
16,787 16,804 21,446 8,814
Analysed as:
Current 16,652 16,686 14,960 5,260
Non-current 135 118 6,486 3,554
16,787 16,804 21,446 8,814

For purpose of impairment assessment, other receivables are considered to have low credit risk as they are
not due for payment at the end of the reporting period and there has been no significant increase in the risk of
default on the receivables since initial recognition. Accordingly, for the purpose of impairment assessment for
these receivables, the loss allowance is measured at an amount equal to 12-month expected credit losses (ECL).

In determining the ECL, management has taken into account the historical default experience and the financial
position of the counterparties, adjusted for factors that are specific to the debtors and general economic
conditions of the industry in which the debtors operate, in estimating the probability of default of each of these
financial assets occurring within their respective loss assessment time horizon, as well as the loss upon default in
each case. Management is of the view that no significant credit allowances are required.
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

10 INVENTORIES

Group

2023 2022

$’000 $’000

Raw materials 50,134 57,732

Work-in-progress 1,990 1,627

Finished goods 29,226 28,380

81,350 87,739

The cost of inventories recognised as an expense includes $2,240,000 (2022 : $818,000) in respect of allowance
made for inventory obsolescence (Note 30). Inventories amounting to $20,647,000 (2022 : $26,860,000) have been
pledged as security for bank loans (Note 16).

11 SUBSIDIARIES

Company

2023 2022

$’000 $’000

Unquoted equity shares, at cost 264,958 246,253

Accumulated impairment loss (128,135) (52,997)

Loan to a subsidiary 6,087 6,194

142,910 199,450

Based on the value in use and fair value less costs to sell calculations referred to in Note 14, an impairment loss
of $75,138,000 was recorded against the investments in subsidiaries for the year ended 31 March 2023 (2022 :
$52,997,000).

Management is of the view that the loan to a subsidiary represents deemed capital investment in the subsidiary,
as there is no contractual obligation for repayment by the subsidiary except in the event of liquidation.

Details of the subsidiaries as at the end of the reporting period are as follows:

Name of subsidiary, Principal activities Proportion of ownership Proportion of voting

country of incorporation interest power held
and place of operations 2023 2022 2023 2022
% % % %
Kadisco Paint and Adhesive Manufacture, sale and 51 51 51 51
Industry S.C. (Ethiopia) distribution of paint and
related products.
Asian Paints (Bangladesh) Manufacture, sale and 95.09 89.78 95.09 89.78
Limited (Bangladesh) distribution of paint and
related products.

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
11 SUBSIDIARIES (Contd.)
Name of subsidiary, Principal activities Proportion of ownership Proportion of voting
country of incorporation interest power held
and place of operations 2023 2022 2023 2022
% % % %
Asian Paints (Middle East) Manufacture, sale and 100 100 100 100
SPC (Sultanate of Oman) distribution of paint and
related products.
Samoa Paints Limited Manufacture, sale and 80 80 80 80
(Samoa) distribution of paint and
related products.
Asian Paints (S.I.) Limited Sale and distribution of 75 75 75 75
(Solomon Islands) paint and related products.
Asian Paints (Vanuatu) Sale and distribution of 60 60 60 60
Limited (Republic of paint and related products.
Vanuatu)
Asian Paints (South Pacific) Manufacture, sale and 54.07 54.07 54.07 54.07
Limited (Fiji Islands) distribution of paint and
related products.
SCIB Chemicals, S.A.E. Manufacture, sale and 61.31 61.31 61.31 61.31
(Eqypt) distribution of paint and
related products.
Enterprise Paints Limited Investment holding. 100 100 100 100
(Isle of Man, United
Kingdom)
Universal Paints Limited Investment holding. 100 100 100 100
(Isle of Man, United
Kingdom)
PT Asian Paints Indonesia Manufacture, sale and 100 100 100 100
(Indonesia) distribution of paint and
related products.
PT Asian Paints Colour Dormant. 100 100 100 100
Indonesia (Indonesia)
Causeway Paints Lanka Manufacture, sale and 99.98 99.98 99.98 99.98
(Private) Limited (Sri Lanka) distribution of paint and
related products.
Subsidiary of Enterprise
Paints Limited
Nirvana Investments Investment holding. 100 100 100 100
Limited (Isle of Man, United
Kingdom)
Subsidiary of Nirvana
Investments Limited
Berger Paints Emirates LLC Manufacture, sale and 100 100 100 100
(United Arab Emirates) distribution of paint and
related products.
Subsidiary of Universal
Paints Limited
Berger Paints Bahrain Manufacture, sale and 100 100 100 100
W.L.L. (Bahrain) distribution of paint and
related products.
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

11 SUBSIDIARIES (Contd.)
Details of non-wholly owned subsidiaries that currently have material non-controlling interests:

Name of subsidiary, Proportion of ownership Profit (Loss) allocated to Accumulated

country of incorporation interest and voting rights non-controlling interests non-controlling interests
and place of operations held by non-controlling
interests
2023 2022 2023 2022 2023 2022
% % % % % %
Kadisco Paint and Adhesive 49 49 1,381 415 8,645 8,018
Industry S.C. (Ethiopia)
SCIB Chemicals, S.A.E. 38.69 38.69 298 (2,836) 3,409 5,500
(Egypt)
Others 713 1,652 6,585 8,163
Total 2,392 (769) 18,639 21,681

Summarised financial information in respect of each of the Group’s subsidiaries that have material non-
controlling interests is set out below. The summarised financial information below represents amounts before
intragroup eliminations.

Kadisco Paint and Adhesive SCIB Chemicals, S.A.E.

Industry S.C.
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Current assets 29,973 19,471 27,161 24,277
Non-current assets 8,661 9,529 5,807 9,553
Current liabilities (19,226) (8,134) (24,159) (19,617)
Non-current liabilities (1,767) (2,140) - -
Equity attributable to owner of the 8,996 10,708 5,400 8,714
Company
Non-controlling interests 8,645 8,018 3,409 5,500
Revenue 31,301 20,204 85,802 80,787
Expenses (28,482) (19,357) (85,034) (88,082)
Profit (Loss) for the year 2,819 847 768 (7,295)
Profit (Loss) attributable to owner of the 1,438 432 470 (4,459)
Company
Profit (Loss) attributable to the non- 1,381 415 298 (2,836)
controlling interests
Profit (Loss) for the year 2,819 847 768 (7,295)
Other comprehensive loss attributable to (785) (2,044) (3,784) (1,355)
owner of the Company
Other comprehensive loss attributable to (754) (1,964) (2,388) (863)
the non-controlling interests

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
11 SUBSIDIARIES (Contd.)
Kadisco Paint and Adhesive SCIB Chemicals, S.A.E.
Industry S.C.
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Other comprehensive loss for the year (1,539) (4,008) (6,172) (2,218)
Total comprehensive income (loss) 653 (1,612) (3,314) (5,814)
attributable to owner of the Company
Total comprehensive income (loss) 627 (1,549) (2,090) (3,699)
attributable to the non-controlling
interests
Total comprehensive income (loss) for the 1,280 (3,161) (5,404) (9,513)
year
Dividends paid to non-controlling interests - (999) - (895)
Net cash inflow (outflow) from operating 2,903 (1,878) 4,683 1,271
activities
Net cash outflow from investing activities (191) (113) (555) (214)
Net cash inflow (outflow) from financing 6,592 1,267 (45) (2,690)
activities
Net cash inflow (outflow) 9,304 (724) 4,083 (1,633)

12 PROPERTY, PLANT AND EQUIPMENT

Land Buildings Plant and Motor Total

equipment vehicles
$’000 $’000 $’000 $’000 $’000
Group
Cost:
At 1 April 2021 12,838 42,185 80,262 5,092 140,377
Translation differences 24 (2,101) (6,477) (942) (9,496)
Additions - 311 34,945 49 35,305
Disposals/Write offs - (6) (6,936) (296) (7,238)
At 31 March 2022 12,862 40,389 101,794 3,903 158,948
Translation differences (1,084) (6,598) (12,559) (375) (20,616)
Additions - - 5,335 167 5,502
Reclassification - 20,473 (20,473) - -
Disposals/Write offs - (31) (303) (250) (584)
At 31 March 2023 11,778 54,233 73,794 3,445 143,250
Accumulated depreciation:
At 1 April 2021 - 11,691 39,835 3,811 55,337
Translation differences - (619) (2,871) (778) (4,268)
Depreciation for the year - 1,089 5,482 281 6,852
Disposals/Write offs - (2) (1,743) (135) (1,880)
At 31 March 2022 - 12,159 40,703 3,179 56,041
Translation differences - (1,133) (4,856) (328) (6,317)
Depreciation for the year - 1,409 5,648 187 7,244
Disposals/Write offs - (5) (283) (122) (410)
At 31 March 2023 - 12,430 41,212 2,916 56,558
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

12 PROPERTY, PLANT AND EQUIPMENT (Contd.)

Land Buildings Plant and Motor Total
equipment vehicles
$’000 $’000 $’000 $’000 $’000
Accumulated impairment:
At 1 April 2021 - - 80 - 80
Translation differences - - (2) - (2)
At 31 March 2022 - - 78 - 78
Translation differences - - (3) - (3)
At 31 March 2023 - - 75 - 75
Carrying amount:
At 31 March 2023 11,778 41,803 32,507 529 86,617
At 31 March 2022 12,862 28,230 61,013 724 102,829

Property, plant and equipment of certain subsidiaries amounting to $5.1 million (2022 : $39.4 million) have been
pledged to secure banking facilities granted (Note 16).

Company
The Company’s property, plant and equipment had cost of $490,000 (2022 : $627,000) and accumulated
depreciation of $263,000 (2022 : $203,000). Additions for the year amounted to $39,000 (2022 : $2,000), disposals
for the year amounted to $176,000 (2022 : $255,000) and depreciation for the year amounted to $108,000 (2022 :
$143,000).

13 RIGHT-OF-USE ASSETS

Land Buildings Plant and Motor Employee Total

equipment vehicles accomoda-
tion
$’000 $’000 $’000 $’000 $’000 $’000
Group
Cost:
At 1 April 2021 13,606 10,942 10 3,172 2,026 29,756
Translation differences (862) (399) - (43) (33) (1,337)
Additions - 1,580 - 1,098 1,496 4,174
Expiry (759) (1,551) - (1,537) (2,238) (6,085)
At 31 March 2022 11,985 10,572 10 2,690 1,251 26,508
Translation differences (1,435) (1,449) - (122) (149) (3,155)
Additions 1,070 2,355 - 502 1,585 5,512
Expiry - (2,054) - (902) (1,600) (4,556)
At 31 March 2023 11,620 9,424 10 2,168 1,087 24,309
Accumulated depreciation:
At 1 April 2021 2,095 5,011 1 1,967 1,075 10,149
Translation differences (146) (260) - (1) (41) (448)
Depreciation for the year 461 3,135 2 872 1,547 6,017
Expiry (144) (1,498) - (1,510) (2,002) (5,154)
At 31 March 2022 2,266 6,388 3 1,328 579 10,564
Translation differences (241) (844) - (58) (91) (1,234)
Depreciation for the year 500 2,621 2 781 1,653 5,557
Expiry - (1,966) - (892) (1,542) (4,400)
At 31 March 2023 2,525 6,199 5 1,159 599 10,487

38
 39
Notes to the Financial Statements (Contd.)

Financial Statements
13 RIGHT-OF-USE ASSETS (Contd.)
Land Buildings Plant and Motor Employee Total
equipment vehicles accomoda-
tion
$’000 $’000 $’000 $’000 $’000 $’000
Carrying amount:
At 31 March 2023 9,095 3,225 5 1,009 488 13,822
At 31 March 2022 9,719 4,184 7 1,362 672 15,944

Buildings Employee Total

accommodation
$’000 $’000 $’000
Company
Cost:
At 1 April 2021 866 511 1,377
Expiry - (511) (511)
At 31 March 2022 and 31 March 2023 866 - 866
Accumulated depreciation:
At 1 April 2021 230 142 372
Depreciation for the year 168 216 384
Expiry - (358) (358)
At 31 March 2022 398 - 398
Depreciation for the year 168 - 168
At 31 March 2023 566 - 566
Carrying amount:
At 31 March 2023 300 - 300
At 31 March 2022 468 - 468

14 INTANGIBLE ASSETS

Group

2023 2022

$’000 $’000

Goodwill 15,266 21,429

Other intangible assets 17,056 19,560

32,322 40,989

Goodwill Group
2023 2022
$’000 $’000
At beginning of year 21,429 32,922
Translation differences (1,943) (9,056)
Impairment loss (4,220) (2,437)
At end of year 15,266 21,429
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

14 INTANGIBLE ASSETS (Contd.)

Goodwill acquired in business combination is allocated to the cash-generating units (CGUs) that are expected to
benefit from that business combination, as follows:

Group

2023 2022

$’000 $’000

Arising on acquisition of subsidiaries:

Berger Paints Emirates LLC 505 505

Kadisco Paint and Adhesive Industry S.C. 4,753 5,116

Causeway Paints Lanka (Private) Limited 7,262 13,015

Arising on acquisition of subsidiaries under common control:

Asian Paints (Vanuatu) Limited 171 173

Asian Paints (South Pacific) Limited 347 353

SCIB Chemicals, S.A.E. 2,228 2,267

15,266 21,429

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might
be impaired.

The Group made an assessment of recoverable amounts based on value in use calculations or fair value less costs
to sell (for certain subsidiaries) which require the use of certain assumptions.

The value in use calculations use cash flow projections based on the financial budgets approved by the
management covering a five-year period (2022 : five-year period), as the Group believes this to be the most
appropriate timescale for reviewing and considering annual performance before applying a fixed terminal value
multiple to the final cash flows. Fair value is computed by comparing the price at which comparable companies
engaged in similar business are traded at the capital market.

The table below shows the key assumptions used:

Group

2023 2022

Period considered for discrete cash flow projections by management under 5 years 5 years
value in use method
Projected revenue growth rate 8% to 70% 0% to 56%

Terminal growth rate 2% to 14% 2% to 10%

Discount rate 12% to 40% 8% to 29%

EV/EBITDA multiple (in case of Causeway Paints Lanka (Private) Limited) 5.9 Not applicable

40
 41
Notes to the Financial Statements (Contd.)

Financial Statements
14 INTANGIBLE ASSETS (Contd.)

Management believes that any reasonable possible change in any of the key assumptions would not cause the
carrying amounts of the CGUs to exceed their recoverable amounts, other than as disclosed below.

Causeway Paints Lanka (Private) Limited (“Causeway”) CGU

The Group has recognised an impairment loss of $4.2 million during the year (2022 : $2.4 million) in respect of
goodwill on consolidation recognised on acquisition of Causeway. The recoverable amount of the CGU is $41.8
million determined based on an estimate of fair value less cost to sell derived using Comparable Companies
Multiples (“CCM”) method which considers enterprise value over earnings before interest, tax, depreciation and
amortisation (“EV/EBITDA”) multiple of comparable companies.

EV/EBITDA multiples – EV is market capitalisation of comparable company adjusted for net debt position.
Normalised EBIDTA of trailing twelve months has been used for the purpose of computing fair value of asset.
Cost to sell has been estimated as per industry standards.

The crisis in Sri Lanka is still ongoing and has impacted the overall economic condition in the country.
Management is of the view that considering the economic condition of Sri Lanka economy, the use of CCM is
more objective as well as reduces subjectivity and hence is more appropriate than value in use. The fair value
measurement is categorised as a Level 2 fair value based on the inputs in the valuation techniques used.

Sensitivity analysis
A 0.2 change in the EV/EBITDA multiple would result in a change in impairment loss of approximately $1.5 million.

Other intangible assets Brands Distribution Total

network
$’000 $’000 $’000
Group
Cost:
At 1 April 2021 16,735 15,291 32,026
Translation differences (4,824) (4,905) (9,729)
At 31 March 2022 11,911 10,386 22,297
Translation differences (1,182) (1,162) (2,344)
At 31 March 2023 10,729 9,224 19,953
Amortisation:
At 1 April 2021 - 3,235 3,235
Translation differences - (1,218) (1,218)
Amortisation for the year - 720 720
At 31 March 2022 - 2,737 2,737
Translation differences - (282) (282)
Amortisation for the year - 442 442
At 31 March 2023 - 2,897 2,897
Carrying amount:
At 31 March 2023 10,729 6,327 17,056
At 31 March 2022 11,911 7,649 19,560

The brands have indefinite useful life as their registrations can be renewed indefinitely. Accordingly, the brands
are not amortised. The distribution network has finite useful life of 20 years, over which the asset is amortised on
a straight-line basis. The amortisation expenses have been included as a separate line item in profit or loss.

Other intangible assets are allocated to their respective CGUs for impairment testing purposes.
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

15 DEFERRED TAX ASSETS (LIABILITIES)

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Deferred tax liabilities (5,242) (5,163) (34) (44)
Deferred tax assets 758 2,218 - -
(4,484) (2,945) (34) (44)

42
15 DEFERRED TAX ASSETS (LIABILITIES) (Contd.)

The following are the major deferred tax liabilities and assets recognised by the Group and Company and movements thereon during the year:

Excess Retirement Tax losses Intangible Property, Lease liabil- Undistribut- Others Total
allowances benefits assets plant and ities ed earnings
over depre- liabilities equipment
ciation
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
At 1 April 2021 (3,164) 765 - (6,157) (943) 247 (478) 2,454 (7,276)
Translation differences 313 (110) (272) 1,743 208 9 - (300) 1,591
(Charge) Credit to profit or 174 30 2,131 143 82 (40) 190 22 2,732
loss (Note 29)
Charge to other - 8 - - - - - - 8
comprehensive income
Notes to the Financial Statements (Contd.)

At 31 March 2022 (2,677) 693 1,859 (4,271) (653) 216 (288) 2,176 (2,945)
Translation differences 478 (65) (268) 352 47 (23) - (688) (167)
(Charge) Credit to profit or 803 (304) (1,591) 111 60 (190) (25) 977 (159)
loss (Note 29)
Charge to other - 6 - - - - - - 6
comprehensive income
Effect of change in tax rate (166) 88 - (1,310) (64) (22) - 255 (1,219)
At 31 March 2023 (1,562) 418 - (5,118) (610) (19) (313) 2,720 (4,484)

Deferred tax liabilities not recognised

At the end of the reporting period, the aggregate amount of temporary differences associated with undistributed earnings of the subsidiaries for
which deferred tax liabilities have not been recognised is $3,727,000 (2022 : $1,457,000). No liability has been recognised in respect of these differences
because management controls the distributions of the earnings of the subsidiaries to the holding company and it has no intention to distribute the
earnings of the subsidiaries. Other losses may be carried forward indefinitely, subject to the conditions imposed by the law.
43

Financial Statements
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

15 DEFERRED TAX ASSETS (LIABILITIES) (Contd.)

Deferred tax assets not recognised

Subject to the agreement by the tax authorities, at the end of the reporting period, the Group has unutilised tax
losses of $49,491,000 (2022 : $37,454,000) available for offset against future profits. No deferred tax asset has
been recognised due to the unpredictability of future profit streams. Included in unrecognised tax losses are
$6,642,000, $6,663,000, $9,452,000, $11,449,000, $9,201,000 and $6,086,000 that will expire in 2023, 2024, 2025,
2026, 2027 and 2028 respectively.

16 BANK LOANS AND OVERDRAFTS

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Unsecured
Bank loans 112,760 82,213 101,559 72,384
Bank overdrafts - 2,363 - -
112,760 84,576 101,559 72,384
Secured
Bank loans 17,749 24,525 - -
Bank overdrafts 3,409 10,015 - -
21,158 34,540 - -
Total bank loans and overdrafts 133,918 119,116 101,559 72,384
Less: Amount due for settlement (129,580) (114,038) (101,559) (72,384)
within 12 months (shown under
current liabilities)
Amount due for settlement after 12 4,338 5,078 - -
months

Unsecured bank loans bear interest at rates ranging from 4.3% to 7.1% (2022 : 0.7% to 4.0%) per annum and are
repayable within 12 months. Secured bank loans bear interest at rates 6.9% (2022 : 5.3%) per annum.

The average effective interest rate on bank overdrafts is 6.6% (2022 : 5.7%) per annum.

The security for bank loans and overdrafts relate to bank fixed deposits (Note 7), trade receivables (Note 8),
inventories (Note 10), and property, plant and equipment (Note 12) of certain subsidiaries.

The Group has unutilised banking facilities of $87.7 million (2022 : $112.1 million) at the end of the reporting
period.

The table below details changes in the Group’s liabilities arising from financing activities, including both cash
and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future
cash flows will be, classified in the Group’s consolidated statement of cash flows as cash flows from financing
activities.

44
 45
Notes to the Financial Statements (Contd.)

Financial Statements
16 BANK LOANS AND OVERDRAFTS (Contd.)

Non-cash changes
1 April Financing New lease Currency 31 March
2022 cash flows liabilities translation 2023
(i) differences
$’000 $’000 $’000 $’000 $’000
Bank loans (Note 16) 106,738 29,843 - (6,072) 130,509
Lease liabilities (Note 19) 14,526 (6,242) 5,512 (791) 13,005

Non-cash changes
1 April Financing New lease Currency 31 March
2021 cash flows liabilities translation 2022
(i) differences
$’000 $’000 $’000 $’000 $’000
Bank loans (Note 16) 41,416 68,675 - (3,353) 106,738
Lease liabilities (Note 19) 17,101 (6,534) 4,174 (215) 14,526

(i) The cash flows make up the net amount of proceeds from borrowings and repayments of borrowings in the
statement of cash flows.

17 TRADE PAYABLES

Group Company

2023 2022 2023 2022

$’000 $’000 $’000 $’000

Outside parties 95,356 122,796 2,450 1,960

Holding company (Note 5) 12,460 14,171 1,570 1,422

107,816 136,967 4,020 3,382

The credit period on purchases of goods ranges from 30 to 150 days (2022 : 30 to 150 days).

18 OTHER PAYABLES

Group Company
2023 2022 2023 2022
$’000 $’000 $’000 $’000
Holding company (Note 5) 2,727 1,784 862 812
Subsidiaries (Notes 5 and 11) - - 362 36
Outside parties 1,073 1,296 - -
Loans from subsidiaries - - 6 7
3,800 3,080 1,230 855
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

19 LEASE LIABILITIES

Group Company

2023 2022 2023 2022

$’000 $’000 $’000 $’000

Maturity analysis:

Within 1 year 3,664 4,129 172 172

Within 2 to 5 years 5,080 5,377 130 302

More than 5 years 9,930 10,729 - -

18,674 20,235 302 474

Less: Unearned interest (5,669) (5,709) (7) (18)

13,005 14,526 295 456

Analysed as:

Current 3,145 3,662 166 161

Non-current 9,860 10,864 129 295

13,005 14,526 295 456

20 RETIREMENT BENEFIT LIABILITIES

Certain overseas subsidiaries provide retirement benefits based on last drawn basic salary at the time of
separation in accordance with the local labour laws. These defined benefit plans are unfunded.

Actuarial valuations
The above mentioned plans are valued by independent actuaries using the projected unit credit method. The
information that follows is extracted from the actuarial reports of the subsidiaries, prepared by independent
actuaries.

The principal actuarial assumptions used for the actuarial valuations were as follows:

Group

2023 2022

Discount rate at end of year 5.0% to 16.0% 3.5% to 14.7%

Future salary increases 5.0% to 15.0% 0% to 13.0%

46
 47
Notes to the Financial Statements (Contd.)

Financial Statements
20 RETIREMENT BENEFIT LIABILITIES (Contd.)

Changes in the present value of the defined benefit obligation are as follows:

Group
2023 2022
$’000 $’000
Opening defined benefit obligation 5,873 5,878
Amounts included in employee benefits expense
- Service costs 723 762
- Interest cost 354 411
Actuarial gains recognised in other comprehensive income 15 (118)
Exchange differences (419) (453)
Benefits paid (620) (607)
Closing defined benefit obligation 5,926 5,873

Actuarial gains or losses arise from changes in financial and demographic assumptions.

Sensitivity analysis

Management is of the view that reasonably possible changes of the respective assumptions occurring at the end
of the reporting period will not have a material impact on the financial statements. As such, no further analysis
has been performed.

Group and Company

2023 2022 2023 2022
Number of ordinary shares $’000 $’000
Issued and paid up:
At beginning and end of year 427,875,387 427,875,387 150,306 150,306

Fully paid ordinary shares which have no par value, carry one vote per share and a right to dividends as and when
declared by the Company.

22 STATUTORY RESERVE
Certain subsidiaries of the Group are required to set aside a minimum amount of specified percentage of profits
annually in accordance with the local regulations. No further transfer is required when the reserve reaches
certain percentage of the issued capital of the subsidiary. The statutory reserves may only be distributed to
shareholders upon liquidation of the subsidiary or in the circumstances stipulated in the regulations.

23 CAPITAL RESERVE
The capital reserve represents transfers from unappropriated profit upon bonus shares issued by certain
subsidiaries in prior years. The capital reserve is not available for distribution.
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

24 REVENUE
A disaggregation of the Company’s revenue for the year is as follows:

Group
2023 2022
$’000 $’000
Type of goods or services
Paint and adhesive sales 433,355 435,057
Contracting revenue 1,245 1,692
434,600 436,749
Geographical markets
Africa 141,135 109,320
Middle East 127,908 124,797
South Asia 131,557 168,430
Southeast Asia & Pacific Islands 34,000 34,202
434,600 436,749
Timing of revenue recognition
At a point in time 433,355 435,057
Over time 1,245 1,692
434,600 436,749

25 OTHER OPERATING INCOME

Group
2023 2022
$’000 $’000
Royalty income 55 52
Interest income 2,154 1,883
Other income 1,709 1,254
3,918 3,189

26 EMPLOYEE BENEFITS EXPENSE

Group
2023 2022
$’000 $’000
Staff costs (including directors’ remuneration) 56,294 57,216
Amounts recognised in respect of defined benefit obligations 1,077 1,172
Contributions to defined contribution plans 1,950 2,073
59,321 60,461

48
 49
Notes to the Financial Statements (Contd.)

Financial Statements
27 OTHER OPERATING EXPENSES

Group

2023 2022

$’000 $’000

Power and fuel 1,967 1,625

Freight and handling charges 11,709 13,415

Sales promotion expenses & advertisements 18,337 21,457

Insurance 725 872

Repairs and maintenance 2,035 2,184

Royalty expense 12,709 9,417

Printing, stationery, postage and telephone 1,196 1,354

Travelling expenses 4,155 3,304

Foreign exchange loss 12,177 9,880

Allowance for credit losses (Note 8) 3,615 4,037

Allowance for obsolete inventories (Note 10) 2,240 818

Legal and professional expenses 1,537 2,393

Others 1,978 4,751

74,380 75,507

28 FINANCE COSTS

Group
2023 2022
$’000 $’000
Interest expense on lease liabilities 698 941
Interest expense on bank loans and overdrafts 5,950 2,560
6,648 3,501

29 INCOME TAX

Group
2023 2022
$’000 $’000
Current year 7,643 3,636
Under (Over) provision of current tax in prior years 120 (117)
Deferred tax (Note 15) 1,378 (2,732)
9,141 787
 Asian Paints International Private Limited

Notes to the Financial Statements (Contd.)

29 INCOME TAX (Contd.)

The income tax expense varies from the amount of income tax expense determined by applying the Singapore
income tax rate of 17% (2022 : 17%) to loss before income tax as a result of the following differences:

Group

2023 2022

$’000 $’000

Loss before income tax (1,157) (31,380)

Income tax credit at statutory tax rate (197) (5,335)

Non-deductible items 2,697 1,748

Tax concessions (67) (68)

Withholding tax 567 725

Effects of different tax rates in different countries 598 (39)

Effects of change in tax rate 1,219 -

Deferred tax assets not recognised 4,139 3,321

Under (Over) provision of current tax in prior years 120 (117)

Others 65 552

9,141 787

30 LOSS FOR THE YEAR

Loss for the year is stated after (crediting) charging:

Group

2023 2022

$’000 $’000

(Gain) Loss on disposal of plant and equipment (11) 31

Directors’ remuneration:

Director fees of the Company 299 364

Director remuneration of the Company 663 -

Directors of subsidiaries 1,563 1,755

Foreign exchange adjustment loss 12,177 9,880

Cost of inventories recognised as expense 271,239 303,133

Allowance for obsolete inventories (Note 10) 2,240 818

Allowance for credit losses (Note 8) 3,615 4,037

Impairment of goodwill (Note 14) 4,220 2,437

50
 51
Notes to the Financial Statements (Contd.)

Financial Statements
30 LOSS FOR THE YEAR (Contd.)

Amount recognised in profit or loss relating to leases

Group

2023 2022

$’000 $’000

Depreciation expense on right-of-use assets (Note 13) 5,557 6,017

Interest expense on lease liabilities (Note 28) 698 941

Expense relating to short-term leases 570 784

The total cash outflow of all lease payments is as follows:

Group

2023 2022

$’000 $’000

Fixed payments 6,242 6,534

Variable payments 92 167

Total payments 6,334 6,701

31 CONTINGENT LIABILITIES
(a) At the end of the reporting period, the Group has provided performance guarantees and guarantees to
banks as follows:

Group

2023 2022

$’000 $’000

Performance guarantees 3,160 25,300

(b) There are disputed tax assessments and import duties and taxes in respect of certain subsidiaries which are
not acknowledged as debt and hence not provided for amounting to $1,885,000

(2022 : $2,155,000). Management believes that no liability will arise from the tax assessments as the Group is
expecting a favourable outcome for this case.

32 COMMITMENTS

As at 31 March 2023, the Group is committed to $11,000 (2022 : $Nil) for short-term leases.

As at 31 March 2023, the Group is committed to $1,040,000 (2022 : $1,903,000) for future capital expenditure.
Samoa Paints Limited
Contents
Directors’ Report....................................................................................................................................................................................... 4-5

Directors Statement.....................................................................................................................................................................................6

Independent Auditor’s Report............................................................................................................................................................... 7-8

Statement of Profit or Loss and Other Comprehensive Income.........................................................................................................9

Statement of Financial Position...............................................................................................................................................................10

Statement of Changes in Equity...............................................................................................................................................................11

Statement of Cash Flows...........................................................................................................................................................................12

Notes to and forming part of the financial statements................................................................................................................ 13-30

 Samoa Paints Limited
Directors’ Report
For the year ended 31 March 2023
In accordance with a resolution of the Board of Directors,
the Directors herewith submit the statement of financial
position of Samoa Paints Limited (“the Company”) as at
31 March 2023, the related statement of profit or loss
and other comprehensive income, statement of changes
in equity and statement of cash flows for the year ended
on that date and report as follows:
Directors
The names of the Directors in office at the date of this
report are:
• Vaatuitui Apete Meredith
• Sireesh Rao Talluri
• Keeleri Raj Puthiyedath (resigned on 26 April 2022)
• Amit Bose (appointed on 26 April 2022)
Principal activities The Directors believe that the basis of the preparation of
The principal activities of the Company in the course
of the year were the manufacturing and distribution of
paints and paint related products and there has been no
significant change in these activities during the year.
Results
The operating profit for the Company for the year was
WST 314,633 (2022: WST 337,029) after an income tax
expense of WST 117,519 (2022: WST 125,816).
Dividends
The Directors declared and paid dividends amounting to
WST 585,000 (2022: WST nil) for the year.
Reserves Company in the current financial year, other than those
The Directors propose that no transfer be made to
reserves.
Bad and doubtful debts No matter or circumstance have arisen since the end of
Prior to the completion of the Company’s financial
statements, the Directors took reasonable steps to
ascertain that action had been taken in relation to writing
off of bad debts and the provision for doubtful debts.
In the opinion of Directors, adequate provision has been
made for doubtful debts.
As at the date of this report, the Directors are not aware
of any circumstances, which would render the amount
written for bad debts or the provision for doubtful debts
in the Company inadequate to any substantial extent.
4
Non current assets
Prior to the completion of the financial statements of
the Company, the Directors took reasonable steps to
ascertain whether any non current assets were unlikely to
be realised in the ordinary course of business compared
to their values as shown in the accounting records of
the Company. Where necessary these assets have been
written down or adequate provision has been made to
bring the values of such assets to an amount that might
be expected to realise.
As at the date of this report, the Directors are not aware
of any circumstances, which would render the values
attributed to non current assets in the Company’s
financial statements misleading.
Basis of accounting
the financial statements is appropriate and the Company
will be able to continue its operation for at least twelve
months from the date of this statement. Accordingly, the
Directors believe the classification and carrying amounts
of assets and liabilities as stated in these financial
statements are appropriate.
Unusual transactions
Apart from these matters and other matters specifically
referred to in the financial statements, in the opinion
of the Directors, the results of the operations of the
Company during the financial year were not substantially
affected by any item, transaction or event of a material
and unusual nature likely, in the opinion of the Directors,
to affect substantially the results of the operations of the
reflected in the financial statements.
Events subsequent to balance date
the financial year which significantly affected or may
significantly affect the operations of the Company, the
results of those operations, or the state of affairs of the
Company in future financial years.
Other circumstances
As at the date of this report :
(i) no charge on the assets of the Company has been
given since the end of the financial year to secure
the liabilities of any other person;
 5
Directors’ Report (Contd.)

Statutory Reports
(ii) no contingent liabilities have arisen since the end Director’s benefits
of the financial year for which the Company could
Since the end of the previous financial period, no Director
become liable; and
has received or become entitled to receive a benefit
(other than those included in the aggregate amount of
(iii) no contingent liabilities or other liabilities of
emoluments received or due and receivable by Directors
the Company has become or is likely to become
shown in the financial statements or received as the fixed
enforceable within the year of twelve months after
salary of a full-time employee of the Company or of a
the end of the financial year which, in the opinion
related corporation) by reason of a contract made by the
of the Directors, will or may substantially affect the
Company or by a related corporation with the Director or
ability of the Company to meet its obligations as and
with a firm of which he is a member, or with a company in
when they fall due.
which he has a substantial financial interest.
As at the date of this report, the Directors are not aware
of any circumstances that have arisen, not otherwise Signed on behalf of the Board of Directors in accordance
dealt with in this report or the Company’s financial with a resolution of the Directors.
statements, which would make adherence to the existing
method of valuation of assets or liabilities of the
Company misleading or inappropriate.
Dated this 5th day of May 2023.

Amit Bose Sireesh Rao
Director Director
 Samoa Paints Limited

Directors Statement
For the year ended 31 March 2023

In accordance with a resolution of the Board of Directors
of Samoa Paints Limited, we state that in the opinion of
the Directors:
(i) the accompanying statement of profit or loss and
other comprehensive income of the Company is
drawn up so as to give a true and fair view of the
results of the Company for the year ended 31 March
2023;
(ii) the accompanying statement of changes in equity of
the company is drawn up so as to give a true and fair
view of the changes in equity of the Company for the
year ended 31 March 2023;
(iv) the accompanying cash flow statement of the
Company is drawn up so as to give a true and fair
view of the cash flows of the Company for the year
ended 31 March 2023;
(v) at the date of this statement there are reasonable
grounds to believe the Company will be able to pay
its debts as and when they fall due; and
(vi) all related party transactions have been adequately
recorded in the books of the Company.
Signed on behalf of the Board of Directors in accordance
with a resolution of the Directors.

(iii) the accompanying statement of financial position of Dated this 5th day of May 2023.
the Company is drawn up so as to give a true and fair
view of the state of affairs of the Company as at 31
March 2023;

Amit Bose Sireesh Rao

Director Director

6

Independent Auditor’s Report
To the Shareholders of Samoa Paints Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Samoa
Paints Limited (“the Company”), which comprise the
statement of financial position as at 31 March 2023, and
the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement
of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of
the Company as at 31 March 2023, and its financial
performance and its cash flows for the year then ended
in accordance with International Financial Reporting
Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISA). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the financial
statements section of our report. We are independent
of the Company in accordance with the International
Ethics Standards Board for Accountant’s Code of Ethics
for Professional Accountants (including International
Independence Standards) (IESBA Code) together with
the ethical requirements that are relevant to our audit of
the financial statements in Samoa and we have fulfilled
our other ethical responsibilities in accordance with
these requirements and the IESBA Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other information
The Directors are responsible for the other information.
The other information comprises the Director’s report
but does not include the financial statements and the
auditor’s report thereon.
Our opinion on the financial statements does not cover
the other information and we do not express any form of
assurance conclusion thereon.
7
Financial Statements
In connection with our audit of the financial statements,
our responsibility is to read the other information
identified above and, in doing so, consider whether
the other information is materially inconsistent with
the financial statements or our knowledge obtained
during the audit, or otherwise appears to be materially
misstated. If, based upon 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 the management and those
charged with governance for the Financial Statements
The management and Directors are responsible for
the preparation and fair presentation of the financial
statements in accordance with IFRS, and for such internal
control as the management and Directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management
and Directors are 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 the management and Directors either intend to
liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISA will always detect a material
misstatement when it exists. Misstatements can arise
from fraud and 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 the financial statements.
 Samoa Paints Limited
Independent Auditor’s Report (Contd.)
As part of an audit in accordance with ISA, we exercise
professional judgement and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• 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 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.
8
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charge 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 the those charge 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.
Report on Other Legal and Regulatory Requirements
In our opinion, the financial statements have been
prepared in accordance with the requirements of the
Samoa Companies Act 2001 in all material respects, and;
a) we have been given all information, explanations
and assistance necessary for the conduct of the
audit; and
b) the Company has kept financial records sufficient to
enable the financial statements to be prepared and
audited.
Ernst & Young
Chartered Accountants
Steven Pickering
Partner
Suva, Fiji
5 May 2023
 9
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 March 2023

Financial Statements

Notes 2023 2022

WST WST
Revenue
Revenue from contracts with customers 2(a) 2,810,483 2,284,896
Other operating income 2(b) 10,761 152,611
2,821,244 2,437,507
Cost and expenses
Cost of sales (1,920,746) (1,522,537)
Depreciation and amortisation (28,937) (35,333)
Salaries and employee benefits 2(c) (183,218) (145,092)
Operating expenses 2(d) (256,191) (271,700)
(2,389,092) (1,974,662)
Profit before income tax 432,152 462,845
Income tax expense 4 (117,519) (125,816)
Profit for the year 314,633 337,029
Other comprehensive income for the year, net of tax - -
Total comprehensive income for the year, net of tax 314,633 337,029

The accompanying notes form an integral part of the statement of profit or loss and other comprehensive income.

 Samoa Paints Limited

Statement of Financial Position

As at 31 March 2023

Notes 2023 2022

WST WST
Assets
Non-current assets
Property, plant and equipment 5 410,933 434,445
Intangible assets 6 2 2
Deferred income tax asset 4(c) 37,174 6,867
448,109 441,314
Current assets
Cash and short term deposits 10 303,712 583,514
Inventories 7 575,513 663,752
Trade receivables 8 531,286 354,585
Prepayments and other assets 9 14,849 11,403
Income tax receivable - 20,407
1,425,360 1,633,661
Total assets 1,873,469 2,074,975

Equity and liabilities

Equity attributable to equity holders
Issued capital 11 90,000 90,000
Asset revaluation reserve 11 287,934 287,934
Retained earnings 1,076,515 1,346,882
Total equity 1,454,449 1,724,816
Current liabilities
Trade and other payables 12 350,793 350,159
Income tax payable 68,227 -
419,020 350,159
Total liabilities 419,020 350,159
Total equity and liabilities 1,873,469 2,074,975

For and on behalf of the Board and in accordance with a resolution of the Directors.

Amit Bose Sireesh Rao

Director Director

The accompanying notes form an integral part of the statement of financial position.

10
 11
Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

WST WST
Retained earnings
Balance at the beginning of the year 1,346,882 1,009,853
Net profit for the year 314,633 337,029
1,661,515 1,346,882
Dividend proposed and paid 3 (585,000) -
Balance at the end of the year 1,076,515 1,346,882
Issued capital
Balance at the beginning of the year 11 90,000 90,000
Balance at the end of the year 90,000 90,000
Asset revaluation reserve
Balance at the beginning of the year 11 287,934 287,934
Balance at the end of the year 287,934 287,934
Total equity and shares 1,454,449 1,724,816

The accompanying notes form an integral part of this statement of changes in equity.
 Samoa Paints Limited

Statement of Cash Flows

For the year ended 31 March 2023

Notes 2023 2022

WST WST
Operating activities
Operating profit before income tax 432,152 462,845
Non-cash adjustments
Depreciation and amortisation 28,937 35,333
Loss on disposal of assets - 20,365
Unrealised exchange loss/(gain) 15,136 (6,958)
Working capital adjustments:
Increase in trade receivables (176,701) (140,517)
(Increase)/decrease in prepayments and other assets (3,446) 20,655
Decrease/(increase) in inventories 88,239 (342,765)
(Decrease)/increase in trade and other payables (14,502) 229,348
Income tax paid (59,192) (123,048)
Net cash flows from operating activities 310,623 155,258
Investing activities
Acquisition of plant and equipment (5,425) (8,145)
Proceeds from disposal of property, plant and equipment - 26,844
Net cash flows (used in)/from investing activities (5,425) 18,699
Financing activities
Dividends paid (585,000) (72,000)
Net cash flows (used in) financing activities (585,000) (72,000)
Net (decrease)/increase in cash and cash equivalents (279,802) 101,957
Cash and cash equivalents at beginning of year 583,514 481,557
Cash and cash equivalents at end of year 10 303,712 583,514

The accompanying notes form an integral part of the statement of cash flows.

12
 13
Notes to and forming part of the Financial Statements

Financial Statements
for the year ended 31 March 2023

1.0 Corporate information Non-monetary items that are measured in terms of

historical cost in a foreign currency are translated
The financial statements of Samoa Paints Limited (“the
using the exchange rates at the dates of the initial
Company”) for the year ended 31 March 2023 were
transactions. Non-monetary items measured at fair
authorised for issue in accordance with a resolution of
value in a foreign currency are translated using the
the Directors dated 5th May 2023. Samoa Paints Limited is
exchange rates at the date when the fair value is
a limited liability company incorporated and domiciled in
determined. The gain or loss arising on translation
Samoa.
of non-monetary items measured at fair value is
treated in line with the recognition of gain or loss
The principal activities of the company are described in
on change in fair value of the item (i.e., translation
Note 20.
differences on items whose fair value gain or loss is
recognised in other comprehensive income or profit
Significant policies which have been adopted in the
or loss, respectively).
preparation of these financial statements are:
Any goodwill arising on acquisition of foreign
1.1 Basis of preparation of the Financial Statements
operation and any fair value adjustments to the
carrying amounts of assets and liabilities arising on
The financial statements have been prepared on a
the acquisition are treated as assets and liabilities of
historical cost basis. The financial statements are
the foreign operation and translated at the spot rate
presented in Samoan Tala (WST) and all values are
of exchange at the reporting date.
rounded to the nearest WST except when otherwise
indicated.
b) Revenue recognition

Statement of compliance Revenue is measured based on the consideration

specified in a contract with a customer and excludes
The financial statements of Samoa Paints Limited
amounts collected on behalf of third parties. The
have been prepared in accordance with International
Company recognises revenue when it transfers
Financial Reporting Standards (IFRS) as issued
control over a product or service to a customer.
by the International Accounting Standard Board
(IASB).
Revenue is recognised when the significant risks
and rewards of ownership of the goods have passed
1.2 Summary of significant accounting policies
to the buyer, usually on delivery of the goods. Sales
revenue represents revenue earned from the sale of
a) Foreign currencies
the Company’s products and is stated net of returns,
The financial statements are presented in Samoan trade allowances and Goods and Services Tax.
Tala, which is also the Company’s functional
currency. Transactions in foreign currencies are c) Income tax
initially recorded at the functional currency spot
rates at the date of the transaction first qualifies Current income tax
for recognition. Monetary assets and liabilities
Current income tax assets and liabilities are
denominated in foreign currencies are translated at
measured at the amount expected to be recovered
the functional currency spot rates of exchange at the
from or paid to the taxation authorities. The tax
reporting date. Differences arising on settlement
rates and tax laws used to compute the amount are
or translation of monetary items are recognised in
those that are enacted or substantively enacted
profit or loss with the exception of monetary items
at the reporting date in the countries where
that are designated as part of the hedge of the
the Company operates and generates taxable
Company’s net investment of a foreign operation.
income.
These are recognised in other comprehensive
income until the net investment is disposed of, at Current income tax relating to items recognised
which time, the cumulative amount is reclassified to directly in equity is recognised in equity and not
profit or loss. Tax charges and credits attributable to in the statement of profit or loss. Management
exchange differences on those monetary items are periodically evaluates positions taken in the tax
also recorded in other comprehensive income. returns with respect to situations in which applicable
 Samoa Paints Limited

Notes to and forming part of the Financial Statements (Contd.)

tax regulations are subject to interpretation and The carrying amount of deferred tax assets is
establishes provisions where appropriate. reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
Deferred tax taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised
Deferred tax is provided using the liability method
deferred tax assets are re-assessed at each
on temporary differences between the tax bases of
reporting date and are recognised to the extent that
assets and liabilities and their carrying amounts for
it has become probable that future taxable profits
financial reporting purposes at the reporting date.
will allow the deferred tax asset to be recovered.
Deferred tax liabilities are recognised for all taxable
temporary differences, except:
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
• When the deferred tax liability arises from the
the asset is realised or the liability is settled, based
initial recognition of goodwill or an asset or
on tax rates (and tax laws) that have been enacted or
liability in a transaction that is not a business
substantively enacted at the reporting date. Deferred
combination and, at the time of the transaction,
tax relating to items recognised outside profit or
affects neither the accounting profit nor
loss is recognised outside profit or loss. Deferred tax
taxable profit or loss; and
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
• In respect of taxable temporary differences
associated with investments in subsidiaries,
Deferred tax assets and deferred tax liabilities are
associates and interests in joint arrangements,
offset if a legally enforceable right exists to set off
when the timing of the reversal of the
current tax assets against current tax liabilities and
temporary differences can be controlled and it
the deferred taxes relate to the same taxable entity
is probable that the temporary differences will
and the same taxation authority.
not reverse in the foreseeable future.
Tax benefits acquired as part of a business
Deferred tax assets are recognised for all deductible
combination, but not satisfying the criteria for
temporary differences, the carry forward of unused
separate recognition at that date, are recognised
tax credits and any unused tax losses. Deferred
subsequently if new information about facts and
tax assets are recognised to the extent that it is
circumstances change. The adjustment is either
probable that taxable profit will be available against
treated as a reduction in goodwill (as long as it does
which the deductible temporary differences, and the
not exceed goodwill) if it was incurred during the
carry forward of unused tax credits and unused tax
measurement period or recognised in profit or loss.
losses can be utilised, except:
The Company offsets tax assets and liabilities if and
• When the deferred tax asset relating to the
only if it has a legally enforceable right to set off
deductible temporary difference arises from
current tax assets and current tax liabilities and the
the initial recognition of an asset or liability in a
deferred tax assets and deferred tax liabilities relate
transaction that is not a business combination
to income taxes levied by the same tax authority.
and, at the time of the transaction, affects
neither the accounting profit nor taxable profit
or loss; and
d) Value Added Good and Services Tax (VAGST)

• In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable
future and taxable profit will be available
against which the temporary differences can be
utilised.
Revenues, expenses and assets are recognised net of
the amount of VAGST except:
- where the VAGST incurred on the purchase
of assets or services is not recoverable from
the taxation authority, in which case the value
added tax is recognised as part of the cost
of acquisition of the asset or as part of the
expense item as applicable; and

14

Notes to and forming part of the Financial Statements (Contd.)
- receivables and payables that are stated with
the amount of VAGST included.
The net amount of VAGST recoverable or payable
to the tax authority is included as part of the
receivables or payables in the statement of financial
position.
e) Property, plant and equipment
Construction in progress, plant and equipment are
stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. Such
cost includes the cost of replacing part of the plant
and equipment and borrowing costs for long-term
construction projects if the recognition criteria
are met. When significant parts of plant and
equipment are required to be replaced at intervals,
the Company depreciates them separately based on
their specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred. The present
value of the expected cost for the decommissioning
of an asset after its use is included in the cost of
the respective asset if the recognition criteria for a
provision are met.
Depreciation is calculated on a straight-line basis
over the useful lives of the assets as follows:
Land Freehold
Buildings 2%
Motor vehicles 20%
Furniture, fittings and office 10% - 33%
equipment
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds
and the carrying amount of the asset) is included
in income statement in the year the asset is
derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
15
Financial Statements
f) Leases
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.
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 and is
included in revenue in the statement of profit or
loss due to its operating nature. 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.
g) Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles,
excluding capitalised development costs, are
not capitalised and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an
intangible asset with a finite useful life are reviewed
at least at the end of each reporting period. The
 Samoa Paints Limited
Notes to and forming part of the Financial Statements (Contd.)
amortisation expense on intangible assets with
finite lives is recognised in the statement of profit or
loss in the expense category that is consistent with
the function of the intangible assets.
Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit
level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life
continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit or loss when the asset is
derecognised.
Financial assets: Business model assessment
h) Financial instruments
(i) Recognition and measurement
Trade receivables 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 provisions of the instrument.
A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair
value plus, for an item not at FVTPL, transaction
costs that are directly attributable to its
acquisition or issue. A trade receivable without
a significant financing component is initially
measured at the transaction price.
(ii) Classification and measurement
On initial recognition, a financial asset is classified
as measured at amortised cost, FVOCI or FVTPL.
Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing
financial assets, in which case all affected
financial assets are reclassified on the first
day of the first reporting period following the
change in the business.
A financial asset is measured at amortised cost
if it meets both of the following conditions and
is not designated as at FVTPL:
16
• it is held within a business model whose
objective is to hold assets to collect
contractual cash flows; and
• its contractual terms give rise on specified
dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
All financial assets not classified as measured
at amortised cost as described above are
measured at FVTPL. On initial recognition, the
Company may irrevocably designate a financial
asset that otherwise meets the requirements
to be measured at amortised cost as at FVTPL
if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise
arise.
The Company makes an assessment of the
objective of the business model in which
a financial asset is held at a portfolio level
because this best reflects the way the business
is managed and information is provided to
management. The information considered
includes:
• the stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management’s strategy focuses on earning
contractual interest income, maintaining
a particular interest rate profile, matching
the duration of the financial assets to
the duration of any related liabilities or
expected cash outflows or realising cash
flows through the sale of the assets;
• how the performance of the portfolio is
evaluated and reported to the Company’s
management;
• the risks that affect the performance
of the business model (and the financial
assets held within that business model)
and how those risks are managed;
• how directors of the business are
compensated – e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and

Notes to and forming part of the Financial Statements (Contd.)
• “the frequency, volume and timing of sales
of financial assets in prior periods, the
reasons for such sales and demonstrate
why those sales do not reflect a change in
the entity’s business model.
Transfers of financial assets to third parties
in transactions that do not qualify for
derecognition are not considered sales for
this purpose, consistent with the Company’s
continuing recognition of the assets.
Financial assets: Assessment whether
contractual cash flows are solely payments of
principal and interest
For the purposes of this assessment, ‘principal’
is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and
for the credit risk associated with the principal
amount outstanding during a particular period
of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows
are solely payments of principal and interest,
the Company considers the contractual terms of
the instrument. This includes assessing whether
the financial asset contains a contractual term
that could change the timing or amount of
contractual cash flows such that it would not
meet this condition. In making this assessment,
the Company considers:
• contingent events that would change the
amount or timing of cash flows;
• terms that may adjust the contractual
coupon rate, including variable rate
features;
• prepayment and extension features; and
• terms that limit the Company’s claim to
cash flows from specified assets (e.g.
non‑recourse features).
A prepayment feature is consistent with
the solely payments of principal and
17
Financial Statements
interest criterion if the prepayment amount
substantially represents unpaid amounts of
principal and interest on the principal amount
outstanding, which may include reasonable
additional compensation for early termination
of the contract.
Financial assets: Subsequent measurement
and gains and loss
Financial assets that are measured at amortised
costs 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 profit
or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Financial assets
The Company classified its financial assets as
loans and receivable.
Financial assets: Subsequent measurement and
gains and loss
Loans and receivables - measured at amortised
cost using the effective interest method.
Financial liabilities – Classification, subsequent
measurement and gains and losses
Financial liabilities are classified and measured
at amortised cost or FVTPL. A financial liability
is classified at FVTPL if it is classified as held-for
trading, 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 profit or 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 profit and
loss. Any gains or loss on derecognition is also
recognised in profit or loss.
 Samoa Paints Limited
Notes to and forming part of the Financial Statements (Contd.)
(iii) 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 it does
not retain control of the financial asset.
The Company enters into transactions whereby
it transfers assets recognised in its statement
of financial position, but retains either all
or substantially all of the risks and rewards
of the transferred assets in these cases 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 of the modified
liability are substantially different, in which case
a new financial liability based on the modified
terms is recognised at fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid
(including any non‑cash assets transferred or
liabilities assumed) is recognised in profit or
loss.
(iv) Offsetting
Financial assets and financial liabilities are
offset and the net amount presented in the
statement of financial position 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.
i) Inventories
Inventories are valued at the lower of cost and net
realisable value.
18
Raw materials - purchase cost; and
Finished goods and work in progress - cost of direct
materials and labour and an appropriate portion
of fixed and variable overheads but excluding
borrowing costs;
Initial cost of inventories includes the transfer of
gains and losses on qualifying cash flow hedges,
recognised in OCI, in respect of the purchases of raw
materials.
Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to
make the sale.
j) Impairment
(i) Non-derivative financial assets
The Company recognises loss allowances for
ECLs on financial assets measured at amortised
cost.
The Company measures loss allowances at an
amount equal to lifetime ECL, except for the
following, which are measured as 12‑month
ECL:
• other receivables and cash at bank
balances for which credit risk (i.e. the risk
of default occurring over the expected
life of the financial instrument) has
not increased significantly since initial
recognition.
When determining whether the credit
risk of a financial asset has increased
significantly since initial recognition
and when estimating ECL, the Company
considers reasonable and supportable
information that is relevant and available
without undue cost or effort. This
includes both quantitative and qualitative
information and analysis, based on the
Company’s historical experience and
informed credit assessment and including
forward‑looking information.
The Company assumes that the credit
risk on a financial asset has increased
significantly if it is more than 30 days past
due.
 19
Notes to and forming part of the Financial Statements (Contd.)

Financial Statements
The Company considers a financial asset to be in Credit-impaired financial assets
default when:
Evidence that a financial asset is credit‑impaired
includes the following observable data:
• the borrower is unlikely to pay its credit
obligations to the Company in full, without
• significant financial difficulty of the
recourse by the Company to actions such as
borrower or issuer;
realising security (if any is held); or
• a breach of contract such as a default or
• the financial asset is more than 90 days
being more than 90 days past due;
past due.
• the restructuring of a loan or advance by
The Company considers another receivable or
the Company on terms that the Company
cash balance to have low credit risk when its
would not consider otherwise;
credit risk rating is equivalent to the globally
understood definition of “investment grade”.
• it is probable that the borrower will
The Company considers this to be B1 or a higher
enter bankruptcy or other financial
rating per Moody’s.
reorganisation; and

Lifetime ECLs are the ECLs that result from all

• the disappearance of an active market
possible default events over the expected life
for a security because of financial
of a financial instrument.
difficulties.

12‑month ECLs are the portion of ECLs that

Presentation of allowance for ECL in the
result from default events that are possible
statement of financial position
within the 12 months after the reporting date
(or a shorter period if the expected life of the
Loss allowances for financial assets measured
instrument is less than 12 months).
at amortised cost are deducted from the gross
carrying amount of the assets.
The maximum period considered when
estimating ECLs is the maximum contractual
Write-off
period over which the Company is exposed to
credit risk. The gross carrying amount of a financial asset
is written off (either partially or in full) to the
Measurement of ECLs extent that there is no realistic prospect of
recovery. This is generally the case when the
ECLs are a probability‑weighted estimate of
Company determines that the debtor does not
credit losses. Credit losses are measured as
have assets or sources of income that could
the present value of all cash shortfalls (i.e.
generate sufficient cash flows to repay the
the difference between the cash flow due to
amounts subject to the write‑off. However,
the entity in accordance with the contract and
financial assets that are written off could still
the cash flows that the Company expects to
be subject to enforcement activities in order
receive).
to comply with the Company’s procedures for
recovery of amounts due.
ECLs are discounted at the effective interest
rate of the financial asset.
(ii) Non-financial assets

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.
The carrying amounts of the Company’s non-
financial assets, other than inventories are
reviewed at each reporting date to determine
whether there is any indication of impairment.
If any such indication exists, then the asset’s
recoverable amount is estimated.
 Samoa Paints Limited
Notes to and forming part of the Financial Statements (Contd.)
The recoverable amount of an asset or cash-
generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset.
For the purpose of impairment testing, assets
that cannot be tested individually are grouped
together into the smallest group of assets that
generates cash inflows from continuing use
that are largely independent of the cash inflows
of other assets or groups of assets (the “cash-
generating unit”).
An impairment loss is recognised if the carrying
amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment
losses are recognised in profit or loss.
An impairment loss is reversed only to the
extent that the asset’s carrying amount cannot
exceed the carrying amount that would have
been determined, net of depreciation or
amortisation, if no impairment loss has been
recognised.
k) Cash and short term deposits
Cash and short-term deposits in the statement of
financial position comprise of cash at banks, on hand
and short-term deposits with a maturity of three
months or less, which are subject to an insignificant
risk of changes in value. For the purpose of the
consolidated statement of cash flows, cash and
cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of
the Company’s cash management.
l) Provisions
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. When the Company expects some or
all of a provision to be reimbursed, for example,
20
under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense
relating to a provision is presented in the statement
of profit or loss net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time
is recognised as a finance cost.
m) Employee entitlements
Provisions are made for wages and salaries, incentive
payments and annual leave estimated to be payable
to employees at reporting date on the basis of
statutory and contractual requirements.
n) Trade and other payables
Liabilities for trade creditors and other amounts
are carried at cost (inclusive of Consumption Tax
where applicable) which is the fair value of the
consideration to be paid in the future for goods
and services received whether or not billed to
the Company. Amounts payable that have been
denominated in foreign currencies have been
translated to local currency using the rates
of exchange ruling at the end of the financial
year.
o) Comparative figures
Comparative figures have been amended where
necessary, for changes in presentation in the current
period.
p) Earnings per share
Basic earnings per share is determined by dividing
net profit after income tax attributable to
shareholders of the Company, excluding any costs
of servicing equity other than ordinary shares, by
the weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares issued during the
year.
q) Dividends
Dividends are recorded in the Company’s financial
statements in the period in which the Directors
approve them.

Notes to and forming part of the Financial Statements (Contd.)
1.3 Standards issued but not yet effective
The new and amended standards and interpretations
that are issued, but not yet effective, up to the date
of issuance of the company’s financial statements
are disclosed below. The company intends to
adopt these new and amended standards and
interpretations, if applicable, when they become
effective.
Amendments to IAS 1: Classification of Liabilities as
Current or Non-current
In January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of
the reporting period
• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
• That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
must be applied retrospectively. The Company is
currently assessing the impact the amendments will
have on current practice.
Definition of Accounting Estimates - Amendments to
IAS 8
In February 2021, the IASB issued amendments
to IAS 8, in which it introduces a definition of
‘accounting estimates’. The amendments clarify
the distinction between changes in accounting
estimates and changes in accounting policies and the
correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
apply to changes in accounting policies and changes
in accounting estimates that occur on or after the
start of that period. Earlier application is permitted
as long as this fact is disclosed.
21
Financial Statements
The amendments are not expected to have a
material impact on the Company.
Disclosure of Accounting Policies - Amendments to IAS
1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments
to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements, in which it provides
guidance and examples to help entities apply
materiality judgements to accounting policy
disclosures. The amendments aim to help entities
provide accounting policy disclosures that are more
useful by replacing the requirement for entities to
disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting
policies and adding guidance on how entities apply
the concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual
periods beginning on or after 1 January 2023 with
earlier application permitted. Since the amendments
to the Practice Statement 2 provide non-mandatory
guidance on the application of the definition
of material to accounting policy information,
an effective date for these amendments is not
necessary.
The Company is currently assessing the impact of the
amendments to determine the impact they will have
on the Company’s accounting policy disclosures.
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction - Amendments to IAS 12
In May 2021, the Board issued amendments to IAS
12, which narrow the scope of the initial recognition
exception under IAS 12, so that it no longer applies
to transactions that give rise to equal taxable and
deductible temporary differences.
The amendments should be applied to transactions
that occur on or after the beginning of the earliest
comparative period presented. In addition, at
the beginning of the earliest comparative period
presented, a deferred tax asset (provided that
sufficient taxable profit is available) and a deferred
tax liability should also be recognised for all
deductible and taxable temporary differences
associated with leases and decommissioning
obligations.
The Company is currently assessing the impact of the
amendments.
 Samoa Paints Limited

Notes to and forming part of the Financial Statements (Contd.)

1.4 Significant accounting judgments, estimates and Judgements

assumptions
In the process of applying the company’s accounting
The preparation of the company’s financial policies, management has made the following
statements requires management to make judgements, which have the most significant effect
judgements, estimates and assumptions that affect on the amounts recognised in the consolidated
the reported amounts of revenues, expenses, assets financial statements:
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Going concern
Uncertainty about these assumptions and estimates
The Directors have made an assessment of the
could result in outcomes that require a material
Company’s ability to continue as a going concern and
adjustment to the carrying amount of assets or
are satisfied that it has the resources to continue in
liabilities affected in future periods.
business for the foreseeable future. Furthermore,
the Directors are not aware of any material
In the process of applying the company’s accounting
uncertainties that may cast significant doubt on the
policies, management has made various judgements.
Company’s ability to continue as a going concern.
Those which management has assessed to have the
Therefore, the financial statements continue to be
most significant effect on the amounts recognised in
prepared on the going concern basis.
the financial statements have been discussed in the

individual notes of the related financial statement
line items.

The key assumptions concerning the future and

other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year,
are also described in the individual notes of the
related financial statement line items below. The
company based its assumptions and estimates on
parameters available when the financial statements
were prepared. Existing circumstances and
assumptions about future developments, however,
may change due to market changes or circumstances
arising that are beyond the control of the company.
Such changes are reflected in the assumptions when
they occur.

22
 23
Notes to and forming part of the Financial Statements (Contd.)

Financial Statements
2. Revenue and expenses

2023 2022

WST WST
(a) Revenue from contracts with customers
Sales 2,810,483 2,284,896
(b) Other operating income
Net exchange gain - 22,781
Insurance claims 8,467 123,155
Interest received 2,294 6,675
10,761 152,611
(c) Salaries and employee benefits
Salaries 172,938 132,533
Superannuation expenses 10,280 12,559
183,218 145,092
(d) Operating expenses
Auditors remuneration 12,550 10,053
Unrealised exchange loss 42,212 -
Other operating expenses 201,429 261,647
256,191 271,700

3. Dividends paid and proposed

2023 2022

WST WST
Declared and paid during the year: 585,000 540,000

4. Income tax

2023 2022

WST WST
The major components of income tax expense are:
(a) A reconciliation between tax expense and the product of accounting
profit multiplied by the tax rate for the year ended 31 March 2023 is as
follows:
Accounting profit before income tax 432,152 462,845
At the Samoan rate of 27% 116,681 124,968
Tax effect of non deductible expense 838 848
Income tax attributable to operating profit 117,519 125,816
(b) Current income tax:
Current income tax charge 147,826 80,664
Origination and reversal of temporary differences (30,307) 45,152
Income tax attributable to operating profit 117,519 125,816
 Samoa Paints Limited

Notes to and forming part of the Financial Statements (Contd.)

4. Income tax (contd.)

2023 2022

WST WST
(c) Deferred income tax at 31 March 2023 and 31 March 2022 relates to the
following:
Accelerated depreciation for book purposes (7,672) (7,736)
Provisions for inventory obsolescence 15,104 4,455
Provision for other expenses 25,655 12,006
Unrealised exchange loss/(gain) 4,087 (1,858)
37,174 6,867
Represented on the balance sheet as follows:
Deferred income tax assets 37,174 6,867

5. Property, plant and equipment

Land and Plant and Total
buildings equipment,
Furniture &
Motor vehicle
WST WST WST
Cost
At 31 March 2021 661,645 699,007 1,360,652
Additions - 8,145 8,145
Disposal - (93,198) (93,198)
At 31 March 2022 661,645 613,954 1,275,599
Additions - 5,425 5,425
At 31 March 2023 661,645 619,379 1,281,024
Depreciation and impairment
At 31 March 2021 268,973 582,837 851,810
Depreciation charge for the year 4,860 30,473 35,333
Disposal - (45,989) (45,989)
At 31 March 2022 273,833 567,321 841,154
Depreciation charge for the year 3,444 25,493 28,937
At 31 March 2023 277,277 592,814 870,091
Net book value
At 31 March 2023 384,368 26,565 410,933
At 31 March 2022 387,812 46,633 434,445

6. Intangible assets
2023 2022
WST WST
Cost
Opening balance 73,771 73,771
Closing balance 73,771 73,771
Amortisation and impairment
Opening balance 73,769 73,769
Closing balance 73,769 73,769
Net book value 2 2
24
 25
Notes to and forming part of the Financial Statements (Contd.)

Financial Statements
7. Inventories
2023 2022
WST WST
Finished goods 575,497 663,752
Packaging materials 16 -
Total inventories at the lower of cost and net realisable value 575,513 663,752

8. Trade receivables
2023 2022
WST WST
Trade receivables (net) 531,286 354,585

Trade receivables are non interest bearing and are generally on 30-90 day terms. As at 31 March 2023, trade
receivables at nominal value of WST nil (2022: WST nil) were impaired and fully provided for.

Movements in the provision for impairment of receivables were as follows:

WST WST
Opening balance - -
Utilised - -
Closing balance - -

At 31 March, the ageing analysis of trade receivables is as follows:

Neither past due Past due but not impaired
Total
nor impaired 31 - 90 days 91 - 180 days > 180 days
2023 531,286 342,632 187,851 803 -
2022 354,585 229,542 109,532 15,511 -

9. Prepayments and other assets

2023 2022

WST WST

Prepayments 13,114 11,403

Interest receivable 1,735 -
14,849 11,403
 Samoa Paints Limited

Notes to and forming part of the Financial Statements (Contd.)

10. Cash and cash equivalents

For the purpose of the statement of cash flows, cash comprises of cash at bank and on hand. Cash as at the end
of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance
sheet as follows:
2023 2022
WST WST
Cash at banks 217,252 283,837
Cash on hand 200 200
Term Deposits 86,260 2,99,477
303,712 583,514

11. Share capital and reserves

2023 2022
WST WST
Authorised, issued and fully paid
90,000 ordinary shares of WST 1 each 90,000 90,000
Asian Paints International Private Limited took over the ordinary shares of the Company on 8 September,
th

2015 from Asian Paints (International) Limited.

Reserves WST WST
Asset Revaluation Reserve 287,934 287,934

This reserve relates to the valuation of the Company’s land and building carried out by the licensed public valuer,
Elon Betahm and Associates Limited on 7th June 1995 and accepted by the Directors for incorporation into the
books at 31 March 1996. In 2011, the Directors resolved that no more revaluations will be adopted and there has
not been changes to this till 31 March 2023.

12. Trade and other payables

2023 2022
WST WST
Trade payables 99 9,439
Owing to related parties [refer note 14(c)] 203,282 288,515
VAGST payable 46,188 7,740
Accruals and liabilities 101,224 44,465
350,793 350,159

Terms and conditions of the above financial liabilities are:

- Trade payables and accruals are on commercial terms and conditions and are payable within 60 - 90 days.

13. Dividend payable
2023 2022
WST WST
Opening balance - 72,000
Arising during the year 585,000 -
Paid during the year (585,000) (72,000)
Balance at the end of the year - -
26
 27
Notes to and forming part of the Financial Statements (Contd.)

Financial Statements
14. Related party disclosures
(a) Directors
Directors at the date of this report are:

• Vaatuitui Apete Meredith

• Sireesh Rao Talluri
• Keeleri Raj Puthiyedath (resigned on 26 April 2022)
• Amit Bose (appointed on 26 April 2022)

(b) Transactions with related parties

During the year the company entered into transactions with related parties in the ordinary course of business
under normal commercial terms. Significant transactions during the year are as follows:

2023 2022
WST WST
Inter group purchases
Asian Paints (South Pacific) Pte Limited, Fiji 1,461,462 1,817,022
Inter group sales
Asian Paints (South Pacific) Pte Limited, Fiji - 106,334
Royalties
Asian Paints Limited 85,153 65,786
Regional expenses
Asian Paints (South Pacific) Pte Limited, Fiji 50,858 44,209

2023 2022
WST WST
(c) Amount owing to related parties (trade)
Asian Paints Limited 38,940 14,285
Asian Paints (South Pacific) Pte Limited, Fiji 164,342 274,230
203,282 288,515
(d) Key management personnel
Short-term employee benefits 78,980 70,215

15. Contingent liabilities

Contingent liabilities as at 31 March 2023 are WST nil (2022: WST nil).

16. Expenditure commitments

a) Capital commitments as at 31 March 2023 are WST nil (2022: WST nil).

b) Finance lease commitments as at 31 March 2023 are WST nil (2022: WST nil).

c) Operating lease commitments as at 31 March 2023 are WST nil (2022: WST nil).
 Samoa Paints Limited

Notes to and forming part of the Financial Statements (Contd.)

17. Financial risk management objectives and policies

Principal financial liabilities comprise trade payables. The main purpose of these financial liabilities is to raise
finance for the Company’s operations. The Company has various financial assets such as trade receivables and
cash which arise directly from its operations.

The main risk arising from the Company’s financial statements are market risk, credit risk, and liquidity risk.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarised
below.

Foreign currency
The Company has foreign exchange risk as a result of transactions denominated in foreign currencies arising from
normal trading activities. Normal currency trading activities foreign exchange risk are not hedged or subject to
foreign currency forward exchange contracts.

The following table demonstrates the sensitivity to a reasonably possible change in the USD, with all other
variables held constant, of the Company’s profit before tax.

Increase/Decrease in USD Effect on profit before tax
rate
2023 +10% (14,940)
-10% 18,260
2022 +10% (24,930)
-10% 30,470
Credit risk

The Company trades only with recognised, creditworthy third parties. It is the Company’s policy that all customers
who wish to trade on credit terms are subjected to credit verification procedures. In addition, receivable balances
are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.
There is no significant concentrations of credit risk within the Company.

Liquidity risk
The Company monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers
the maturity of both its financial investments and financial assets (example accounts receivables, other financial
assets) and projected cash flows from operations.

The table below summarises the maturity profile of the Company’s financial liabilities at 31 March 2023 based on
contractual undiscounted payments.

Year ended 31 March 2023 On demand 1 to 12 months 1 to 5 years > 5 years Total
WST WST WST WST WST
Trade and other payables - 350,793 - - 350,793
- 350,793 - - 350,793

Year ended 31 March 2022 On demand 1 to 12 months 1 to 5 years > 5 years Total
WST WST WST WST WST
Trade and other payables - 350,159 - - 350,159
- 350,159 - - 350,159

28
 29
Notes to and forming part of the Financial Statements (Contd.)

Financial Statements
17. Financial risk management objectives and policies (contd.)

Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating
and a healthy capital ratio in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, polices
or processes during the financial year ended 31 March 2023.
The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The
Company includes within net debt, trade and other payables less cash and cash equivalents. Capital includes
equity attributable to equity holders.

2023 2022
WST WST
Trade and other payables 350,793 350,159
Less cash and short term deposits (303,712) (583,514)
Net debt 47,081 (233,355)
Equity 1,454,449 1,724,816
Total capital 1,454,449 1,724,816
Capital and net debt 1,501,530 1,491,461
Gearing ratio 3% -14%

18. Financial instruments

Set out below is a comparison by category of carrying amounts and fair values of all of the Company’s financial
instrument that are carried on the financial statements:

Carrying amount Fair value

2023 2022 2023 2022
WST WST WST WST
Financial assets
Cash and short-term deposits 303,712 583,514 303,712 583,514
Trade receivables 531,286 354,585 531,286 354,585
Prepayments and other assets 14,849 11,403 14,849 11,403
849,847 949,502 849,847 949,502
Financial liabilities
Trade and other payables 350,793 350,159 350,793 350,159

The fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at
prevailing interest rates. The fair value of financial assets have been calculated using market interest rates.

19. Subsequent events

No matter or circumstance have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.
 Samoa Paints Limited

Notes to and forming part of the Financial Statements (Contd.)

20. Principal activities

The principal activities of the Company in the course of the year were sales and distribution of paints and paint
related products and there has been no significant change in these activities during the year.

21. Company details

Registered Office:

The registered office of the Company is located at:

Savalalo,
Vaimauga Sisifo,
Apia,
Samoa

Principal Place of Business:

Apia, Samoa

Number of Employees:
As at balance date, the company employed a total of 6 employees (2022: 7 employees).

22. Segment information

Industry segment
The Company operates predominantly in manufacture and sale of paints and related products.

Geographical Segment
The Company operates in Samoa and is therefore one geographical area for reporting purposes.

30
Asian Paints (South Pacific)
Pte Limited
Contents
Directors’ Report....................................................................................................................................................................................... 4-5

Directors’ Declaration..................................................................................................................................................................................6

Auditors’ Independence Declaration........................................................................................................................................................7

Independent Auditor’s Report............................................................................................................................................................... 8-9

Statement Of Profit Or Loss And Other Comprehensive Income.....................................................................................................10

Statement Of Changes In Equity..............................................................................................................................................................11

Statement Of Financial Position..............................................................................................................................................................12

Statement Of Cash Flows..........................................................................................................................................................................13

Notes to the Financial Statements.................................................................................................................................................... 14-39

Disclaimer On Additional Financial Information..................................................................................................................................40

Detailed Income Statement............................................................................................................................................................... 41-42

 Asian Paints (South Pacific) Pte Limited

Directors’ Report
For the year ended 31 March 2023

In accordance with a resolution of the Board of Directors, Bad and doubtful debts
the Directors herewith submit the statement of financial
Prior to the completion of the company’s financial
position of Asian Paints (South Pacific) Pte Limited (“the
statements, the Directors took reasonable steps to
Company”) as at 31 March 2023, the related statement
ascertain that action had been taken in relation to writing
of profit or loss and other comprehensive income,
off of bad debts and the provision for doubtful debts.
statement of changes in equity and the statement of cash
In the opinion of Directors, adequate provision has been
flows for the year then ended on that date and report as
made for doubtful debts.
follows:
As at the date of this report, the Directors are not aware
Directors
of any circumstances, which would render the amount
The following were Directors of the company at the date written for bad debts or the provision for doubtful debts
of this report: in the company, inadequate to any substantial extent.

•  eeleri Raj Puthiyedath

K • Vinod Patel Non-current assets
(resigned on 26 April 2022) Prior to the completion of the financial statements of the
• Sireesh Rao Talluri • Arvind Kasabia company and of the subsidiary company, the Directors
• J aoji Koroi •  bhishek
A took reasonable steps to ascertain whether any non
(appointed on 13 July Mohnot current assets were unlikely to be realised in the ordinary
2022) course of business compared to their values as shown in
•  bilash Ram
A • Rajesh Patel the accounting records of the company. Where necessary
(resigned on 13 July 2022) these assets have been written down or adequate
•  mit Bose
A • Lee Siow Koon provision has been made to bring the values of such
(appointed on 26 April assets to an amount that might be expected to realise.
2022)
As at the date of this report, the Directors are not
Principal activities aware of any circumstances, which would render the
values attributed to non current assets in the company’s
The principal activities of the company in the course
financial statements misleading.
of the year were the manufacturing and distribution
of paints and paint related products. There was no Basis of accounting
significant change in the nature of this activity during the
The Directors believe that the basis of the preparation of
financial year.
the financial statements is appropriate and the Company
Results will be able to continue its operation for at least twelve
months from the date of this statement. Accordingly, the
The profit for the year was $3,245,678 (2022: $5,132,623)
Directors believe the classification and carrying amounts
after accounting for income tax expense of $730,750
of assets and liabilities as stated in these financial
(2022: $1,148,989).
statements are appropriate.

Dividends Unusual transactions

The Directors declared dividends of $5,700,000 (2022:
$3,325,000).
Reserves
The Directors propose that no transfer be made to
reserves except for transfers required by International
Financial Reporting Standard (“IFRS”).
Apart from these matters and other matters specifically
referred to in the financial statements, in the opinion
of the Directors, the results of the operations of the
company during the financial year were not substantially
affected by any item, transaction or event of a material
and unusual nature likely, in the opinion of the Directors,
to affect substantially the results of the operations of the
company in the current financial year, other than those
reflected in the financial statements.

4

Directors’ Report (Contd.)
Events subsequent to balance sheet date
No matter or circumstance have arisen since the end of
the financial year which significantly affected or may
significantly affect the operations of the Company, the
results of those operations, or the state of affairs of the
Company in future financial years.
Other circumstances
As at the date of this report :
(i) no charge on the assets of the company has been
given since the end of the financial year to secure
the liabilities of any other person;
(ii) no contingent liabilities have arisen since the end
of the financial year for which the company could
become liable; and
(iii) no contingent liabilities or other liabilities of
the company has become or is likely to become
enforceable within the year of twelve months after
the end of the financial year which, in the opinion
of the Directors, will or may substantially affect the
ability of the company to meet its obligations as and
when they fall due.
As at the date of this report, the Directors are not aware
of any circumstances that have arisen, not otherwise
dealt with in this report or the company’s and the
subsidiary company’s financial statements, which would
make adherence to the existing method of valuation
of assets or liabilities of the company misleading or
inappropriate.
5
Statutory Reports
Directors’ benefits
Since the end of the previous financial year, no Director
has received or become entitled to receive a benefit
(other than those included in the aggregate amount of
emoluments received or due and receivable by Directors
shown in the financial statements or received as the fixed
salary of a full-time employee of the company or of a
related corporation) by reason of a contract made by the
company or by a related corporation with the Director or
with a firm of which he is a member, or with a company in
which he has a substantial financial interest.
Auditor independence
The Directors have obtained an independence
declaration from the Company’s auditor, Ernst & Young.
A copy of the auditor’s independence declaration is set
out in the Auditor’s Independence Declaration to the
Directors of Asian Paints (South Pacific) Pte Limited on
page 7.
Signed on behalf of the Board of Directors in accordance
with a resolution of the Directors.
Dated this 4th day of May 2023.
Amit Bose Sireesh Rao
Director Director
 Asian Paints (South Pacific) Pte Limited

Directors’ Declaration
For the year ended 31 March 2023

This Directors Declaration is required by the Companies
Act 2015.
The Directors of the Company have made a resolution
that declared:
(a) in the Directors’ opinion, the financial statements
and notes of the Company for the financial year
ended 31 March 2023:
(c) at the date of this declaration, in the Directors’
opinion, there are reasonable grounds to believe
that the Company will be able to pay its debts as and
when they become due and payable.
Signed on behalf of the Board of Directors in accordance
with a resolution of the Directors.

(i) give a true and fair view of the financial position

of the Company as at 31 March 2023 and of
the performance of the Company for the year Dated this 4th day of May 2023.
ended 31 March 2023; and

(ii) have been made out in accordance with the

Companies Act 2015. Amit Bose Sireesh Rao
Director Director
(b) they have received declarations as required by
section 395 of the Companies Act 2015; and

6
 7
Auditor’s Independence Declaration to the Directors of Asian

Financial Statements
Paints (South Pacific) Pte Limited
As lead auditor for the audit of Asian Paints (South This declaration is in respect of Asian Paints (South
Pacific) Pte Limited for the financial year ended 31 March Pacific) Pte Limited during the year.
2023, I declare to the best of my knowledge and belief,
there have been: Ernst & Young
Chartered Accountants
(a) no contraventions of the auditor independence
Steven Pickering
requirements of the Companies Act 2015 in relation Partner
to the audit; and
Suva, Fiji
(b) no contraventions of any applicable code of
4 May 2023
professional conduct in relation to the audit.
 Asian Paints (South Pacific) Pte Limited
Independent Auditor’s Report
To the Shareholders of Asian Paints (South Pacific) Pte
Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Asian Paints
(South Pacific) Pte Limited (“the Company”), which
comprise the statement of financial position as at 31
March 2023, and the statement of profit or loss and other
comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of
the Company as at 31 March 2023, and its financial
performance and its cash flows for the year then ended
in accordance with International Financial Reporting
Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISA). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the financial
statements section of our report. We are independent
of the Company in accordance with the International
Ethics Standards Board for Accountant’s Code of Ethics
for Professional Accountants (including International
Independence Standards) (IESBA Code) together with
the ethical requirements that are relevant to our audit
of the financial statements in Fiji and we have fulfilled
our other ethical responsibilities in accordance with
these requirements and the IESBA Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other information
The Directors are responsible for the other information.
The other information comprises the Director’s report
but does not include the financial statements and the
auditor’s report thereon.
Our opinion on the financial statements does not cover
the other information and we do not express any form of
assurance conclusion thereon.
8
In connection with our audit of the financial statements,
our responsibility is to read the other information
identified above and, in doing so, consider whether
the other information is materially inconsistent with
the financial statements or our knowledge obtained
during the audit, or otherwise appears to be materially
misstated. If, based upon 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 the management and those
charged with governance for the Financial Statements
The management and Directors are responsible for
the preparation and fair presentation of the financial
statements in accordance with IFRS, and for such internal
control as the management and Directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management
and Directors are 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 the management and Directors either intend to
liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISA will always detect a material
misstatement when it exists. Misstatements can arise
from fraud and 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 the financial statements.

Independent Auditor’s Report (Contd.)
As part of an audit in accordance with ISA, we exercise
professional judgement and maintain professional
skepticism throughout the audit. We also:
• I dentify and assess the risks of material
misstatement of the 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.
•  btain an understanding of internal control relevant
O matters that may reasonably be thought to bear on our
to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
•  valuate the appropriateness of accounting
E Companies Act 2015 in all material respects, and;
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
•  onclude on the appropriateness of management’s
C
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 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.
9
Financial Statements
•  valuate the overall presentation, structure and
E
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charge 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 the those charge with governance
with a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
In our opinion, the financial statements have been
prepared in accordance with the requirements of the
a) we have been given all information, explanations
and assistance necessary for the conduct of the
audit; and
b) t he Company has kept financial records sufficient to
enable the financial statements to be prepared and
audited.
Ernst & Young
Chartered Accountants
Steven Pickering
Partner
Suva, Fiji
4 May 2023
 Asian Paints (South Pacific) Pte Limited

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 March 2023

Notes 2023 2022

$ $
Revenue
Revenue from contracts with customers 2(a) 29,992,143 29,359,954
Other income 2(b) 252,011 435,963
30,244,154 29,795,917
Cost of sales (17,500,317) (15,808,670)
Gross profit 12,743,837 13,987,247
Salaries and employee benefits 3(a) (3,420,487) (3,319,534)
Depreciation and amortisation (975,191) (901,073)
Impairment reversal on trade receivables (74,093) 33,909
Other operating expenses 3(b) (4,297,638) (3,518,937)
Profit before tax from continuing operations 3,976,428 6,281,612
Income tax expense 4(a) (730,750) (1,148,989)
Profit for the year from continuing operations 3,245,678 5,132,623
Other comprehensive income
Other comprehensive income for the year - -
Total comprehensive income for the year, net of tax 3,245,678 5,132,623
Total comprehensive income attributable to:
Owners of the parent 3,245,678 5,132,623
Non-controlling interests - -
3,245,678 5,132,623

The accompanying notes form an integral part of the statement of profit or loss and other comprehensive income.

10
 11
Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

$ $
Retained earnings
Balance at the beginning of the year 18,924,311 17,116,688
Operating profit after tax 3,245,678 5,132,623
Dividends on ordinary shares 5 (5,700,000) (3,325,000)
Balance at the end of the year 16,469,989 18,924,311
Share capital
Balance at the beginning of the year 1,436,001 1,436,001
Balance at the end of the year 13 1,436,001 1,436,001
Total equity 17,905,990 20,360,312

The accompanying notes form an integral part of this statement of changes in equity.
 Asian Paints (South Pacific) Pte Limited

Statement of Financial Position

As at 31 March 2023

Notes 2023 2022

$ $
Assets
Non-current assets
Property, plant and equipment 6 6,595,271 6,974,204
Intangible assets 7 95,843 1,489
Right-of-use assets 14 1,030,257 1,300,126
Other financial assets 8 91,894 90,528
7,813,265 8,366,347
Current assets
Inventories 9 10,006,359 6,746,372
Trade receivables 10 6,545,465 6,120,600
Other assets 11 254,392 65,684
Cash and short term deposits 12(a) 3,207,661 8,629,326
Other financial assets 8 - 20,046
Income tax receivable 174,430 -
20,188,307 21,582,028
Total assets 28,001,572 29,948,375
Equity and liabilities
Equity attributable to equity holders
Share capital 13 1,436,001 1,436,001
Retained earnings 16469989 18,924,311
Total equity 17,905,990 20,360,312
Non current liabilities
Lease liabilities 20 889,214 1,157,362
Deferred income tax liability 4(c) 405,294 413,953
1,294,508 1,571,315
Current liabilities
Lease liabilities 20 268,148 256,683
Trade and other payables 15 8,377,610 7,414,974
Dividend payable 16 92,168 -
Employee benefit liability 17 63,148 113,856
Income tax payable - 231,235
8,801,074 8,016,748
Total liabilities 10,095,582 9,588,063
Total equity and liabilities 28,001,572 29,948,375

The accompanying notes form an integral part of the statement of financial position.

12
 13
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

Note 2023 2022

$ $
Operating activities
Profit before tax from continuing operations 3,976,428 6,281,612
Adjustment to reconcile profit before tax to net cash flows
Non cash:
Depreciation of property, plant and equipment and amortisation of 705,628 648,336
intangible assets
Depreciation of right-of-use assets 269,563 252,737
Movement in provisions (50,708) 3,488
Loss on disposal of property, plant and equipment - 654
Working capital adjustments:
(Increase) in trade receivables (424,865) (879,328)
(Increase)/decrease in other assets (170,028) 36,011
(Increase) in inventories (3,259,987) (68,591)
Increase in trade and other payables 962,011 646,835
Income tax paid (1,145,074) (1,347,898)
Net cash flows from operating activities 862,968 5,573,856
Investing activities
Acquisition of property, plant and equipment and intangibles (420,118) (248,076)
Proceed from disposal of property, plant and equipment - 30,272
Net cash flows (used in) investing activities (420,118) (217,804)
Financing activities
Repayments of lease liabilities (256,683) (186,302)
Dividends paid to shareholders (5,607,832) (3,468,010)
Net cash flows (used in) financing activities (5,864,515) (3,654,312)
Net (decrease)/increase in cash held (5,421,665) 1,701,740
Cash and cash equivalents at beginning of year 8,629,326 6,927,586
Cash and cash equivalents at end of year 12(b) 3,207,661 8,629,326

The accompanying notes form an integral part of the statement of cash flows.
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements
For the year ended 31 March 2023
1.0 CORPORATE INFORMATION
The financial statements of Asian Paints (South
Pacific) Pte Limited (‘the company’) for the year
ended 31 March 2023 was authorised for issue in
accordance with a resolution of the Directors dated
4th May 2023. Asian Paints (South Pacific) Pte Limited
is a limited liability company incorporated and
domiciled in the Republic of the Fiji Islands.
The principal activities of the company are described
in Note 25. Information on other related party
relationships of the company is provided in Note 18.
Significant policies which have been adopted in the
preparation of these financial statements are:
1.1 Basis of preparation of the Financial Statements
The financial statements have been prepared on a
historical cost basis. The financial statements are
presented in Fijian dollars.
Statement of compliance
The financial statements of Asian Paints (South
Pacific) Pte Limited have been prepared in
accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International
Accounting Standards Board (IASB).
1.2 Summary of significant accounting policies
a) Foreign currencies
The company’s financial statements are
presented in Fijian dollars, which is also the
company’s functional currency. The company
determines the functional currency and
items included in the financial statements
are measured using that functional currency.
Transactions in foreign currencies are initially
recorded by the company at their respective
functional currency spot rates at the date
the transaction first qualifies for recognition.
Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency spot rates of exchange
at the reporting date. Differences arising on
settlement or translation of monetary items are
recognised in profit or loss.
14
Non-monetary items that are measured in
terms of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are
translated using the exchange rates at the date
when the fair value is determined. The gain or
loss arising on translation of non-monetary
items measured at fair value is treated in line
with the recognition of the gain or loss on the
change in fair value of the item (i.e., translation
differences on items whose fair value gain or
loss is recognised in OCI or profit or loss are also
recognised in OCI or profit or loss, respectively).
b) Revenue recognition
 evenue is measured based on the
R
consideration specified in a contract with a
customer and excludes amounts collected on
behalf of third parties. The Company recognises
revenue when it transfers control over a
product or service to a customer.
 evenue is recognised when the significant
R
risks and rewards of ownership of the goods
have passed to the buyer, usually on delivery of
the goods. Sales revenue represents revenue
earned from the sale of the Company’s products
and is stated net of returns, trade allowances
and Value Added Tax.
Dividends
 evenue is recognised when the company’s
R
right to receive the payment is established,
which is generally when shareholders approve
the dividend.
c) Taxes
Current Income Tax
Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to
compute the amount are those that are enacted
or substantively enacted at the reporting date
in the countries where the company operates
and generates taxable income.
 15
Notes to the Financial Statements (Contd.)

Financial Statements
Current income tax relating to items recognised a business combination and, at the time
directly in equity is recognised in equity and not of the transaction, affects neither the
in the statement of profit or loss. Management accounting profit nor taxable profit or loss;
periodically evaluates positions taken in the and
tax returns with respect to situations in which
applicable tax regulations are subject to • I n respect of deductible temporary
interpretation and establishes provisions where differences associated with investments
appropriate. in subsidiaries, associates and interests in
joint arrangements, deferred tax assets

Deferred tax are recognised only to the extent that it is
probable that the temporary differences
Deferred tax is provided using the liability
will reverse in the foreseeable future and
method on temporary differences between
taxable profit will be available against
the tax bases of assets and liabilities and
which the temporary differences can be
their carrying amounts for financial reporting
utilised.
purposes at the reporting date. Deferred
tax liabilities are recognised for all taxable
The carrying amount of deferred tax assets is
temporary differences, except:
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
•  hen the deferred tax liability arises from
W
sufficient taxable profit will be available to
the initial recognition of goodwill or an
allow all or part of the deferred tax asset to
asset or liability in a transaction that is not
be utilised. Unrecognised deferred tax assets
a business combination and, at the time
are re-assessed at each reporting date and are
of the transaction, affects neither the
recognised to the extent that it has become
accounting profit nor taxable profit or loss;
probable that future taxable profits will allow
and
the deferred tax asset to be recovered.
• I n respect of taxable temporary
Deferred tax assets and liabilities are measured
differences associated with investments
at the tax rates that are expected to apply
in subsidiaries, associates and interests in
in the year when the asset is realised or the
joint arrangements, when the timing of the
liability is settled, based on tax rates (and tax
reversal of the temporary differences can
laws) that have been enacted or substantively
be controlled and it is probable that the
enacted at the reporting date. Deferred tax
temporary differences will not reverse in
relating to items recognised outside profit
the foreseeable future.
or loss is recognised outside profit or loss.
Deferred tax assets are recognised for all Deferred tax items are recognised in correlation
deductible temporary differences, the carry to the underlying transaction either in OCI or
forward of unused tax credits and any unused directly in equity.
tax losses. Deferred tax assets are recognised
Deferred tax assets and deferred tax liabilities
to the extent that it is probable that taxable
are offset if a legally enforceable right exists
profit will be available against which the
to set off current tax assets against current
deductible temporary differences, and the carry
tax liabilities and the deferred taxes relate to
forward of unused tax credits and unused tax
the same taxable entity and the same taxation
losses can be utilised, except:
authority. Tax benefits acquired as part of a
•  hen the deferred tax asset relating
W business combination, but not satisfying the
to the deductible temporary difference criteria for separate recognition at that date,
arises from the initial recognition of an are recognised subsequently if new information
asset or liability in a transaction that is not about facts and circumstances change. The
adjustment is either treated as a reduction in
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements (Contd.)
goodwill (as long as it does not exceed goodwill)
if it was incurred during the measurement
period or recognised in profit or loss.
The company offsets tax assets and liabilities
if and only if it has a legally enforceable right
to set off current tax assets and current tax
liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes
levied by the same tax authority.
Value Added Tax (VAT)
Expenses and assets are recognised net of the
amount of sales tax, except:
•  hen the sales tax incurred on a purchase
W or loss, except to the extent that it offsets an
of assets or services is not recoverable
from the taxation authority, in which case,
the sales tax is recognised as part of the
cost of acquisition of the asset or as part of
the expense item, as applicable; and
•  hen receivables and payables are stated
W the revalued carrying amount of the asset and
with the amount of sales tax included.
 he net amount of Value added tax recoverable
T the revaluation date is eliminated against the
from, or payable to, the taxation authority is
included as part of receivables or payables in
the statement of financial position.
d) Property, plant and equipment
Construction in progress, plant and equipment
are stated at cost, net of accumulated
depreciation and accumulated impairment
losses, if any. Such cost includes the cost of
replacing part of the plant and equipment and
borrowing costs for long-term construction
projects if the recognition criteria are met.
When significant parts of plant and equipment
are required to be replaced at intervals, the
company depreciates them separately based on
their specific useful lives. The present value of
the expected cost for the decommissioning of
an asset after its use is included in the cost of
the respective asset if the recognition criteria
for a provision are met.
16
The impairment accounting policy for goodwill
and intangible assets with indefinite lives
similarly applies to other non-financial assets,
including property, plant and equipment.
Property, plant and equipment transferred from
customers are initially measured at fair value at
the date on which control is obtained.
A revaluation surplus is recorded in OCI and
credited to the asset revaluation surplus in
equity. However, to the extent that it reverses a
revaluation deficit of the same asset previously
recognised in profit or loss, the increase is
recognised in profit and loss. A revaluation
deficit is recognised in the statement of profit
existing surplus on the same asset recognised in
the asset revaluation surplus.
An annual transfer from the asset revaluation
surplus to retained earnings is made for the
difference between depreciation based on
depreciation based on the asset’s original cost.
Additionally, accumulated depreciation as at
gross carrying amount of the asset and the net
amount is restated to the revalued amount
of the asset. Upon disposal, any revaluation
surplus relating to the particular asset being
sold is transferred to retained earnings.
Depreciation is calculated on a straight-line
basis over the estimated useful lives of the
assets, as follows:
Buildings 2.5%
Plant and machinery 10% - 33%
Motor vehicles 15% - 20%
Furniture, fittings and
10% - 33%
office equipment
An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the
difference between the net disposal proceeds

Notes to the Financial Statements (Contd.)
and the carrying amount of the asset) is
included in the statement of profit or loss when
the asset is derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment
are reviewed at each financial year end and
adjusted prospectively, if appropriate.
e) Leases
The company assesses at contract inception
ii)
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
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:
• Land 40 years
• Buildings 40 years
• Motor vehicles 3 to 5 years
17
Financial Statements
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.
 he right-of-use assets are also subject
T
to impairment. Refer to the accounting
policies in section (j) Impairment of non-
financial assets.
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
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements (Contd.)
(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.
The company’s lease liabilities are included
in lease liabilities (see Note 20).
iii) Short-term leases and leases of low-
value assets
The company applies the short-term
lease recognition exemption to its short-
term leases (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 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 and
is included in revenue in the statement of
profit or loss due to its operating nature.
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.
f) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial period
of time to get ready for its intended use or sale
are capitalised as part of the cost of the asset.
18
All other borrowing costs are expensed in the
period in which they occur. Borrowing costs
consist of interest and other costs that an entity
incurs in connection with the borrowing of
funds.
g) Intangible assets
Intangible assets acquired separately are
measured on initial recognition at cost. The
cost of intangible assets acquired in a business
combination is their fair value at the date
of acquisition. Following initial recognition,
intangible assets are carried at cost less any
accumulated amortisation and accumulated
impairment losses. Internally generated
intangibles, excluding capitalised development
costs, are not capitalised and the related
expenditure is reflected in profit or loss in the
period in which the expenditure is incurred.
The useful lives of intangible assets are
assessed as either finite or indefinite.
Intangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication
that the intangible asset may be impaired.
The amortisation period and the amortisation
method for an intangible asset with a finite
useful life are reviewed at least at the end
of each reporting period. Changes in the
expected useful life or the expected pattern
of consumption of future economic benefits
embodied in the asset are considered to
modify the amortisation period or method,
as appropriate, and are treated as changes
in accounting estimates. The amortisation
expense on intangible assets with finite lives is
recognised in the statement of profit or loss in
the expense category that is consistent with the
function of the intangible assets.
Intangible assets with indefinite useful lives are
not amortised, but are tested for impairment
annually, either individually or at the cash-
generating unit level. The assessment of
indefinite life is reviewed annually to determine
whether the indefinite life continues to be
supportable. If not, the change in useful

Notes to the Financial Statements (Contd.)
life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit or loss when the asset
is derecognised.
h) Financial instruments
(i) Recognition and measurement
Trade receivables 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 provisions of the instrument.
A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair
value plus, for an item not at FVTPL, transaction
costs that are directly attributable to its
acquisition or issue. A trade receivable without
a significant financing component is initially
measured at the transaction price.
(ii) Classification and measurement
Financial assets
On initial recognition, a financial asset is
classified as measured at amortised cost, FVOCI
or FVTPL.
Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing
financial assets, in which case all affected
financial assets are reclassified on the first
day of the first reporting period following the
change in the business.
A financial asset is measured at amortised cost
if it meets both of the following conditions and
is not designated as at FVTPL:
• i ts contractual terms give rise on specified
dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
19
Financial Statements
• i ts contractual terms give rise on specified
dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
All financial assets not classified as measured
at amortised cost as described above are
measured at FVTPL. On initial recognition, the
Company may irrevocably designate a financial
asset that otherwise meets the requirements
to be measured at amortised cost as at FVTPL
if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise
arise.
Financial assets: Business model assessment
 he Company makes an assessment of the
T
objective of the business model in which
a financial asset is held at a portfolio level
because this best reflects the way the business
is managed and information is provided to
management. The information considered
includes:
• t he stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management’s strategy focuses on earning
contractual interest income, maintaining
a particular interest rate profile, matching
the duration of the financial assets to
the duration of any related liabilities or
expected cash outflows or realising cash
flows through the sale of the assets;
•  ow the performance of the portfolio is
h
evaluated and reported to the Company’s
management;
• t he risks that affect the performance
of the business model (and the financial
assets held within that business model)
and how those risks are managed;
•  ow directors of the business are
h
compensated – e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements (Contd.)
• t he frequency, volume and timing of sales
of financial assets in prior periods, the
reasons for such sales and demonstrate
why those sales do not reflect a change in
the entity’s business model.
Transfers of financial assets to third parties
in transactions that do not qualify for
derecognition are not considered sales for
this purpose, consistent with the Company’s
continuing recognition of the assets.
Financial assets: Assessment whether
contractual cash flows are solely payments of
principal and interest
For the purposes of this assessment, ‘principal’
is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and
for the credit risk associated with the principal
amount outstanding during a particular period
of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows
are solely payments of principal and interest,
the Company considers the contractual terms of
the instrument. This includes assessing whether
the financial asset contains a contractual term
that could change the timing or amount of
contractual cash flows such that it would not
meet this condition. In making this assessment,
the Company considers:
• c ontingent events that would change the
amount or timing of cash flows;
• t erms that may adjust the contractual
coupon rate, including variable rate
features;
• prepayment and extension features; and
• t erms that limit the Company’s claim to
cash flows from specified assets (e.g.
non‑recourse features).
20
A prepayment feature is consistent with
the solely payments of principal and
interest criterion if the prepayment amount
substantially represents unpaid amounts of
principal and interest on the principal amount
outstanding, which may include reasonable
additional compensation for early termination
of the contract.
Financial assets: Subsequent measurement
and gains and loss
Financial assets that are measured at amortised
costs 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 profit
or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Financial assets
The Company classified its financial assets as
loans and receivable.
Financial assets: Subsequent measurement
and gains and loss
Loans and receivables - measured at amortised
cost using the effective interest method.
Financial liabilities – Classification,
subsequent measurement and gains and
losses
Financial liabilities are classified and measured
at amortised cost or FVTPL. A financial liability
is classified at FVTPL if it is classified as held-for
trading, 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 profit or 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 profit and
loss. Any gains or loss on derecognition is also
recognised in profit or loss.

Notes to the Financial Statements (Contd.)
(iii) 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 it does
not retain control of the financial asset.
The Company enters into transactions whereby
it transfers assets recognised in its statement
of financial position, but retains either all
or substantially all of the risks and rewards
of the transferred assets in these cases 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 of the modified
liability are substantially different, in which case
a new financial liability based on the modified
terms is recognised at fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid
(including any non‑cash assets transferred or
liabilities assumed) is recognised in profit or
loss.
(iv) Offsetting
Financial assets and financial liabilities are
offset and the net amount presented in the
statement of financial position 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.
21
Financial Statements
i) Inventories
Inventories are valued at the lower of cost and
net realisable value.
Costs incurred in bringing each product to its
present location and condition are accounted
for as follows:
Raw materials - purchase cost; and
 inished goods and work in progress - cost of
F
direct materials and labour and an appropriate
portion of fixed and variable overheads but
excluding borrowing costs;
Initial cost of inventories includes the transfer
of gains and losses on qualifying cash flow
hedges, recognised in OCI, in respect of the
purchases of raw materials.
Net realisable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and the
estimated costs necessary to make the sale.
j) Impairment
(i) Non-derivative financial assets
The Company recognises loss allowances for
ECLs on financial assets measured at amortised
cost.
The Company measures loss allowances at an
amount equal to lifetime ECL, except for the
following, which are measured as 12‑month ECL:
•  ther receivables and cash at bank
o
balances for which credit risk (i.e. the risk
of default occurring over the expected
life of the financial instrument) has
not increased significantly since initial
recognition.
 hen determining whether the credit risk of a
W
financial asset has increased significantly since
initial recognition and when estimating ECL, the
Company considers reasonable and supportable
information that is relevant and available
without undue cost or effort. This includes
both quantitative and qualitative information
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements (Contd.)
and analysis, based on the Company’s historical
experience and informed credit assessment and
including forward‑looking information.
 he Company assumes that the credit risk on a
T whether financial assets carried at amortised
financial asset has increased significantly if it is
more than 30 days past due.
The Company considers a financial asset to be in
default when:
• t he borrower is unlikely to pay its credit
obligations to the Company in full, without
recourse by the Company to actions such as
realising security (if any is held); or
• t he financial asset is more than 90 days
past due.
The Company considers another receivable or
cash balance to have low credit risk when its
credit risk rating is equivalent to the globally
understood definition of “investment grade”.
The Company considers this to be B1 or a higher
rating per Moody’s.
Lifetime ECLs are the ECLs that result from all
possible default events over the expected life
of a financial instrument.
12‑month ECLs are the portion of ECLs that
result from default events that are possible
within the 12 months after the reporting date
(or a shorter period if the expected life of the
instrument is less than 12 months).
The maximum period considered when
estimating ECLs is the maximum contractual
period over which the Company is exposed to
credit risk.
Measurement of ECLs
ECLs are a probability‑weighted estimate of
credit losses. Credit losses are measured as
the present value of all cash shortfalls (i.e the
difference between the cash flow due to the
entity in accordance with the contract and
the cash flows that the Company expects to
receive).
22
ECLs are discounted at the effective interest
rate of the financial asset.
At each reporting date, the Company assesses
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.
Credit-impaired financial assets
Evidence that a financial asset is credit‑impaired
includes the following observable data:
• s ignificant financial difficulty of the
borrower or issuer;
•  breach of contract such as a default or
a
being more than 90 days past due;
• t he restructuring of a loan or advance by
the Company on terms that the Company
would not consider otherwise;
• i t is probable that the borrower will
enter bankruptcy or other financial
reorganisation; and
• t he disappearance of an active market for a
security because of financial difficulties.

Presentation of allowance for ECL in the
statement of financial position
Loss allowances for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets.
Write-off
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

Notes to the Financial Statements (Contd.)
be subject to enforcement activities in order
to comply with the Company’s procedures for
recovery of amounts due.
(ii) Non-financial assets
The carrying amounts of the Company’s non-
financial assets, other than inventories are
reviewed at each reporting date to determine
whether there is any indication of impairment.
If any such indication exists, then the asset’s
recoverable amount is estimated.
The recoverable amount of an asset or cash-
generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset.
For the purpose of impairment testing, assets
that cannot be tested individually are grouped
together into the smallest group of assets that
generates cash inflows from continuing use
that are largely independent of the cash inflows
of other assets or groups of assets (the “cash-
generating unit, or CGU”).
An impairment loss is recognised if the carrying
amount of an asset or its CGU exceeds its
estimated recoverable amount. Impairment
losses are recognised in profit or loss.
An impairment loss is reversed only to the
extent that the asset’s carrying amount cannot
exceed the carrying amount that would have
been determined, net of depreciation or
amortisation, if no impairment loss has been
recognised.
k) Cash and short term deposits
Cash and short-term deposits in the statement
of financial position comprise cash at banks
and on hand and short-term deposits with a
maturity of three months or less, which are
subject to an insignificant risk of changes in
value. For the purpose of the statement of cash
flows, cash and cash equivalents consist of cash
23
Financial Statements
and short-term deposits, as defined above,
net of outstanding bank overdrafts as they are
considered an integral part of the company’s
cash management.
l) Provisions
Provisions are recognised when the company
has a present obligation (legal or constructive)
as a result of a past event, it is probable
that an outflow of resources embodying
economic benefits will be required to settle
the obligation and a reliable estimate can
be made of the amount of the obligation.
When the company expects some or all of a
provision to be reimbursed, for example, under
an insurance contract, the reimbursement is
recognised as a separate asset, but only when
the reimbursement is virtually certain. The
expense relating to a provision is presented
in the statement of profit or loss net of any
reimbursement.
If the effect of the time value of money is
material, provisions are discounted using
a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
When discounting is used, the increase in
the provision due to the passage of time is
recognised as a finance cost.
m) Employee entitlements
Provisions are made for wages and salaries,
incentive payments and annual leave estimated
to be payable to employees at balance date
on the basis of statutory and contractual
requirements.
n) Trade and other payables
Liabilities for trade creditors and other amounts
are carried at cost (inclusive of Value Added Tax
where applicable) which is the fair value of the
consideration to be paid in the future for goods
and services received whether or not billed to
the company. Amounts payable that have been
denominated in foreign currencies have been
translated to local currency using the rates
of exchange ruling at the end of the financial
period.
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements (Contd.)
o) Comparative figures
Comparative figures have been amended where
necessary, for changes in presentation in the
current period.
p) Dividend
The Company recognises a liability to pay a
dividend when the distribution is authorised
and the distribution is no longer at the
discretion of the Company. A corresponding
amount is recognised directly in equity.
q) Segment information
A business segment is a company of assets and
operations engaged in providing products or
services that are subject to risks and returns
that are different from those of other business
segments. A geographical segment is engaged
in providing products and services within a
particular economic environment that are
subject to risks and returns that are different
from those of segments operating in other
economic environment.
• Industry segment
The company operates predominantly in the
manufacturing and retailing industry.
• Geographical segment
 he company operates predominantly in Fiji and
T a convertible liability is itself an equity
is therefore one geographical area for reporting
purposes.
1.3 Standards issued but not yet effective
The new and amended standards and interpretations
that are issued, but not yet effective, up to the date
of issuance of the company’s financial statements
are disclosed below. The company intends to
adopt these new and amended standards and
interpretations, if applicable, when they become
effective.
Amendments to IAS 1: Classification of Liabilities
as Current or Non-current
I n January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the
24
requirements for classifying liabilities as current or
non-current. The amendments clarify:
• What is meant by a right to defer settlement
•  hat a right to defer must exist at the end of
T
the reporting period
•  hat classification is unaffected by the
T
likelihood that a Company will exercise its
deferral right
•  hat only if an embedded derivative in
T
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification
I n January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of
the reporting period
- That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
- That only if an embedded derivative in
instrument would the terms of a liability not
impact its classification”
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
must be applied retrospectively. The Company is
currently assessing the impact the amendments will
have on current practice.
Definition of Accounting Estimates - Amendments
to IAS 8
In February 2021, the IASB issued amendments
to IAS 8, in which it introduces a definition of
‘accounting estimates’. The amendments clarify
the distinction between changes in accounting
estimates and changes in accounting policies and the

Notes to the Financial Statements (Contd.)
correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
apply to changes in accounting policies and changes
in accounting estimates that occur on or after the
start of that period. Earlier application is permitted
as long as this fact is disclosed.
The amendments are not expected to have a
material impact on the Company.
Disclosure of Accounting Policies - Amendments
to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments
to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements, in which it provides
guidance and examples to help entities apply
materiality judgements to accounting policy
disclosures. The amendments aim to help entities
provide accounting policy disclosures that are more
useful by replacing the requirement for entities to
disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting
policies and adding guidance on how entities apply
the concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual
periods beginning on or after 1 January 2023 with
earlier application permitted. Since the amendments
to the Practice Statement 2 provide non-mandatory
guidance on the application of the definition
of material to accounting policy information,
an effective date for these amendments is not
necessary.
The Company is currently assessing the impact of the
amendments to determine the impact they will have
on the Company’s accounting policy disclosures.
1.4 Significant accounting judgements, estimates and
assumptions
The preparation of the company financial
statements requires management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
25
Financial Statements
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
Judgements
In the process of applying the company’s accounting
policies, management has made the following
judgements, which have the most significant
effect on the amounts recognised in the financial
statements:
Determining the lease term of contracts with
renewal and termination options – company as
lessee
The company determines the lease term as the
non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
The company has several lease contracts that
include extension and termination options. The
company applies judgement in evaluating whether
it is reasonably certain whether or not to exercise
the option to renew or terminate the lease. That
is, it considers all relevant factors that create an
economic incentive for it to exercise either the
renewal or termination. After the commencement
date, the company reassesses the lease term if there
is a significant event or change in circumstances
that is within its control and affects its ability to
exercise or not to exercise the option to renew or to
terminate (e.g., construction of significant leasehold
improvements or significant customisation to the
leased asset).
The company included the renewal period as part
of the lease term for leases with shorter non-
cancellable period (i.e., three to five years). The
company typically exercises its option to renew
for these leases because there will be a significant
negative effect on production if a replacement asset
is not readily available. The renewal periods for
leases with longer non-cancellable periods (i.e., 10 to
 Asian Paints (South Pacific) Pte Limited
Notes to the Financial Statements (Contd.)
15 years) are not included as part of the lease term
as these are not reasonably certain to be exercised.
In addition, the renewal options for leases of
motor vehicles are not included as part of the lease
term because the company typically leases motor
vehicles for not more than five years and, hence, is
not exercising any renewal options. Furthermore,
the periods covered by termination options are
included as part of the lease term only when they are
reasonably certain not to be exercised.
Estimates and assumptions
 he key assumptions concerning the future and
T (i.e., by geography, product type, customer type and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts
of assets and liabilities within the next financial
year, are described below. The company based its
assumptions and estimates on parameters available
when the financial statements were prepared.
Existing circumstances and assumptions about
future developments, however, may change due to
market changes or circumstances arising that are
beyond the control of the company. Such changes
are reflected in the assumptions when they occur.
Impairment of non-financial assets
Impairment exists when the carrying value of an
asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs
of disposal and its value in use. The fair value less
costs of disposal calculation is based on available
data from binding sales transactions, conducted
at arm’s length, for similar assets or observable
market prices less incremental costs of disposing of
the asset. The value in use calculation is based on
a DCF model. The cash flows are derived from the
budget for the next five years and do not include
restructuring activities that the company is not yet
committed to or significant future investments
that will enhance the performance of the assets
of the CGU being tested. The recoverable amount
is sensitive to the discount rate used for the
DCF model as well as the expected future cash-
inflows and the growth rate used for extrapolation
purposes. These estimates are most relevant to
goodwill and other intangibles with indefinite
26
useful lives recognised by the company. The key
assumptions used to determine the recoverable
amount for the different CGUs, including a
sensitivity analysis, are disclosed and further
explained in Note 22.
Provision for expected credit losses of trade
receivables
The company uses a provision matrix to calculate
ECLs for trade receivables. The provision rates are
based on days past due for groupings of various
customer segments that have similar loss patterns
rating, and coverage by letters of credit and other
forms of credit insurance).
The provision matrix is initially based on the
company’s historical observed default rates. The
company will calibrate the matrix to adjust the
historical credit loss experience with forward-
looking information. For instance, if forecast
economic conditions (i.e., gross domestic product)
are expected to deteriorate over the next year which
can lead to an increased number of defaults in the
manufacturing sector, the historical default rates
are adjusted. At every reporting date, the historical
observed default rates are updated and changes in
the forward-looking estimates are analysed.
The assessment of the correlation between
historical observed default rates, forecast economic
conditions and ECLs is a significant estimate.
The amount of ECLs is sensitive to changes in
circumstances and of forecast economic conditions.
The company’s historical credit loss experience
and forecast of economic conditions may also not
be representative of customer’s actual default in
the future. The information about the ECLs on the
company’s trade receivables and contract assets is
disclosed in Note 22.
Leases - Estimating the incremental borrowing
rate
The company cannot readily determine the interest
rate implicit in the lease, therefore, it uses its
incremental borrowing rate (IBR) to measure lease
liabilities. The IBR is the rate of interest that the
company would have to pay to borrow over a similar

Notes to the Financial Statements (Contd.)
term, and with a similar security, the funds necessary
to obtain an asset of a similar value to the right-of-
use asset in a similar economic environment. The IBR
therefore reflects what the company ‘would have to
pay’, which requires estimation when no observable
rates are available (such as for subsidiaries that
do not enter into financing transactions) or when
they need to be adjusted to reflect the terms and
conditions of the lease (for example, when leases
are not in the subsidiary’s functional currency). The
company estimates the IBR using observable inputs
(such as market interest rates) when available and is
required to make certain entity-specific estimates
(such as the subsidiary’s stand-alone credit rating).
Fair value measurement of financial instruments
When the fair values of financial assets and financial
liabilities recorded in the statement of financial
position cannot be measured based on quoted prices
in active markets, their fair value is measured using
valuation techniques including the discounted cash
flow (DCF) model. The inputs to these models are
taken from observable markets where possible, but
where this is not feasible, a degree of judgement
is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risk,
credit risk and volatility. Changes in assumptions
27
Financial Statements
relating to these factors could affect the reported
fair value of financial instruments.
Deferred income tax assets
Deferred income tax assets are recognised for
all unused tax losses to the extent that taxable
profit will be available against which the losses
can be utilised. Significant management judgment
is required to determine the amount of deferred
income tax assets that can be recognised, based
upon the likely and level of future taxable profits
together with future tax planning strategies. Further
details are contained in Note 4.
Going concern
The Directors have made an assessment of its ability
to continue as a going concern and is satisfied that
it has the resources to continue in business for the
foreseeable future. Furthermore, the Directors are
not aware of any material uncertainties that may
cast significant doubt on the Company’s ability to
continue as a going concern. Therefore, the financial
statements continue to be prepared on the going
concern basis.
 Asian Paints (South Pacific) Pte Limited

Notes to the Financial Statements (Contd.)

2. REVENUE AND EXPENSES

2023 2022
$ $
(a) Revenue from contracts with customers
Sales 29,992,143 29,359,954
(b) Other income
Realised exchange gain 146,886 150,811
Unrealised exchange gain 55,955 157,204
Interest income 14,052 87,956
Miscellaneous income 35,118 39,992
252,011 435,963

3. OPERATIONAL EXPENSES
2023 2022
$ $
(a) Salaries and employee benefits
Salaries and wages 2,710,738 2,606,161
Superannuation 112,445 83,179
OHS expenses 202,024 133,048
Relocation and furlough expenses 62,260 121,285
Lease expenses - vehicle and housing 66,777 82,151
Other employee cost 11,733 11,093
Medical and education expenses 254,510 282,617
3,420,487 3,319,534
(b) Other operating expenses
Auditors remuneration 16,000 14,000
Bank charges 14,381 10,784
Operating lease expense (3,341) 6,881
Other operating expenses 4,270,598 3,487,272
4,297,638 3,518,937

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
4. INCOME TAX
2023 2022
$ $
(a) A reconciliation between tax expense and the product of
accounting profit multiplied by the tax rate for the year ended 31
March 2023 and 31 March 2022 is as follows:
Accounting profit before income tax 3,976,428 6,281,612
At the Fiji rate of 20% (2022: 20%) 795,286 1,256,322
Tax effect of non deductible expense (net) - -
Under/(over) provision in prior year 561 (27,988)
Export incentive (65,097) (79,345)
Income tax expense attributable to operating profit 730,750 1,148,989
(b) Income statement
Current income tax:
Current income tax charge 739,158 1,148,384
Adjustments in respect of previous year 561 (27,988)
Deferred income tax:
Origination and reversal of temporary differences (8,969) 28,593
Income tax expense attributable to operating profit 730,750 1,148,989
(c) Deferred income tax at 31 March 2023 and 31 March 2022 relates to
the following:
Deferred income tax assets/(liability)
Accelerated depreciation for tax purposes (485,622) (510,149)
Provisions for employee entitlements 12,630 22,771
Provisions for fringe benefit tax 4,800 4,800
Provisions for doubtful debts 59,277 44,459
Unrealised exchange gain (21,464) (31,441)
Net right-of-use-assets 25,085 55,607
(405,294) (413,953)
Reflected in the statement of financial position as follows:
Deferred income tax asset 101,792 127,637
Deferred income tax liability (507,086) (541,590)
Deferred income tax liability (net) (405,294) (413,953)

5. DIVIDENDS PAID AND PROPOSED

2023 2022
$ $
Declared and paid during the year:
Ordinary Shares
Final dividends - FY21-22 $8 per share (FY20-21: $nil per share) 3,800,000 -
Interim dividends - FY22-23 $4 per share (FY21-22: $3 per share) 1,900,000 1,425,000
Second interim dividends - FY22-23 $nil per share (FY21-22: $4 per share) - 1,900,000
5,700,000 3,325,000
 Asian Paints (South Pacific) Pte Limited

Notes to the Financial Statements (Contd.)

6. PROPERTY, PLANT AND EQUIPMENT

Leasehold Plant & Office Work Total
land and equipment, & in progress $
buildings Motor vehicle $
$ $
Cost
At 1 April 2021 5,891,752 6,745,412 - 12,637,164
Additions 32,569 190,129 22,556 245,254
Disposals - (2,068,697) - (2,068,697)
At 31 March 2022 5,924,321 4,866,844 22,556 10,813,721
Additions 8,862 243,490 60,685 313,037
At 31 March 2023 5,933,183 5,110,334 83,241 11,126,758
Depreciation and impairment
At 1 April 2021 1,086,200 4,146,467 - 5,232,667
Depreciation charge for the year 207,023 437,598 - 644,621
Disposals - (2,037,771) - (2,037,771)
At 31 March 2022 1,293,223 2,546,294 - 3,839,517
Depreciation charge for the year 233,772 457,598 - 691,370
Reclassification 600 - - 600
At 31 March 2023 1,527,595 3,003,892 - 4,531,487
Net book value
At 31 March 2023 4,405,588 2,106,442 83,241 6,595,271
At 31 March 2022 4,631,098 2,320,550 22,556 6,974,204

7. INTANGIBLE ASSETS
2023 2022
$ $
Software costs:
Opening balance 279,775 276,953
Addition 107,081 2,822
Closing balance 386,856 279,775
Amortisation and impairment:
Opening balance 278,286 274,571
Amortisation 14,258 3,715
Reclassification (1,531) -
Closing balance 291,013 278,286
Net book value 95,843 1,489

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
8. OTHER FINANCIAL ASSETS
2023 2022
$ $
Bonds/deposits receivables 91,894 110,574
This is disclosed as:
Current assets - 20,046
Non-current assets 91,894 90,528
91,894 110,574

9. INVENTORIES
2023 2022
$ $
Finished goods 2,956,991 1,652,536
Semi-finished goods 219,749 78,524
Raw materials / Packing materials / Others 6,829,619 5,015,312
Total inventories at the lower of cost and NRV 10,006,359 6,746,372

10. TRADE AND OTHER RECEIVABLES

2023 2022
$ $
Trade receivables (net) 2,002,997 2,994,343
Receivable from related parties [refer note 18 (d)] 4,542,468 3,126,257
6,545,465 6,120,600

 rade receivables are non interest bearing and are generally on 30-60 day terms. As at 31 March 2023, $296,387
T
(2022: $222,294) trade receivables were impaired for the company and were fully provided for. A provision for
doubtful debts has already been accounted for in the balances above.

At 31 March 2023 and 31 March 2022, the ageing analysis of trade receivables is as follows:

Neither past Past due but not impaired

due nor
Total 31 - 90 days 90 - 180 days > 180 days
impaired
$ $ $ $ $
2023 6,545,465 4,605,505 1,435,922 504,038 -
2022 6,120,600 5,027,737 1,026,515 57,754 8,594

Movements in the provision for impairment of receivables were as follows:

$ $
Opening balance 222,294 253,988
Charge/(reversed) 74,093 (31,694)
296,387 222,294
 Asian Paints (South Pacific) Pte Limited

Notes to the Financial Statements (Contd.)

11. OTHER ASSETS

2023 2022
$ $
Refundable deposits/prepayments 158,783 7,515
Receivables from related parties [refer note 18 (e)] 43,348 49,908
Other receivables 52,261 8,261
254,392 65,684

12. CASH AND CASH EQUIVALENTS

2023 2022
$ $
(a) Cash and cash equivalents
Cash at banks and on hand 3,207,661 5,575,878
Short term deposits - 3,053,448
3,207,661 8,629,326
Cash at banks earns interest at floating rates based on daily bank
deposit rates.
(b) For the purpose of statement of cash flows, cash and cash equivalents
comprise the following at 31 March:
Cash at banks and on hand 3,207,661 5,575,878
Short term deposits - 3,053,448
3,207,661 8,629,326

13. SHARE CAPITAL

2023 2022
$ $
Ordinary shares issued and fully paid
475,000 ordinary shares 1,436,001 1,436,001
1,436,001 1,436,001

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
14. RIGHT-OF-USE ASSETS
Leasehold Motor vehicle Total
land and $ $
buildings
$
Cost
As at 1 April 2021 1,724,450 339,454 2,063,904
Additions - 205,221 205,221
Termination/reassessment (112,090) (61,800) (173,890)
As at 31 March 2022 1,612,360 482,875 2,095,235
As at 31 March 2023 1,612,360 482,875 2,095,235
Depreciation
As at 1 April 2021 567,389 110,574 677,963
Depreciation expense 153,871 98,866 252,737
Depreciation reversal - termination/reassessment (73,791) (61,800) (135,591)
As at 31 March 2022 647,469 147,640 795,109
Depreciation expense 148,919 120,644 269,563
Reclassification - 306 306
As at 31 March 2023 796,388 268,590 1,064,978
Net book value
At 31 March 2023 815,972 214,285 1,030,257
At 31 March 2022 964,891 335,235 1,300,126

15. TRADE AND OTHER PAYABLES

2023 2022
$ $
Trade and other payables 7,954,880 7,152,126
Owing to related parties [refer note 18 (c)] 422,730 262,848
8,377,610 7,414,974

Terms and conditions of the above financial liabilities are:

- Trade payables and accruals are on commercial terms and conditions and are payable within 60 - 90 days.

- For terms and conditions relating to related parties, refer to Note 18.

16. DIVIDEND PAYABLE

2023 2022
$ $
Opening balance - 143,010
Arising during the year 5,700,000 3,325,000
Utilised/paid during the year (5,607,832) (3,468,010)
Closing balance 92,168 -
 Asian Paints (South Pacific) Pte Limited

Notes to the Financial Statements (Contd.)

17. EMPLOYEE BENEFIT LIABILITY

2023 2022
$ $
Opening balance 113,856 110,368
Net movement during the year (50,708) 3,488
Closing balance 63,148 113,856
Employee benefit liability is disclosed in the statement of final position as:
Current
Employee benefit liability 63,148 113,856

Employee benefits liability is recognised for employee entitlements in accordance with the policy noted in 1.2.

18. RELATED PARTY DISCLOSURES

a) Controlling Entities
 sian Paints (South Pacific) Pte Limited is a subsidiary of Asian Paints International Private Limited. The
A
ultimate holding company is Asian Paints Limited.
b) Transactions with related parties
 uring the year the Holding Company entered into transactions with related parties in the ordinary
D
course of business under normal commercial terms. Significant transactions during the year are as
follows:
2023 2022
$ $
Technical/management fee income
Asian Paints (S.I) Limited 77,016 72,000
Asian Paints (Vanuatu) Limited 41,016 72,000
Samoa Paints Limited 77,016 36,000
195,048 180,000
Technical/management fee expense
Asian Paints International Private Limited 130,104 -
Berger Paints (Emirates) Limited 70,243 -
PT Asian Paints Indonesia 135,363 -
Asian Paints Limited 5,044 -
Causeway Paints Lanka (Private) Limited 129,430 83,275
470,184 83,275
Royalties
Asian Paints Limited 706,889 643,753
Intra group sales
Asian Paints (Bangladesh) Limited - 7,150
Asian Paints (S.I) Limited 1,440,710 1,372,921
Asian Paints (Vanuatu) Limited 1,067,656 861,875
Samoa Paints Limited 1,118,491 1,244,304
3,626,857 3,486,250

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
18. RELATED PARTY DISCLOSURES (Contd.)
Related party sales
Revenue from Directors controlled entities 16,839,352 15,943,761
Intra group purchases
PT Asian Paints Indonesia 4,179 -
Asian Paints Limited 25,288 13,542
Samoa Paints Limited - 115,065
29,467 128,607
Related party purchases
Purchase of materials from Directors controlled entities 280,189 353,177
c) Amount owing to related parties (trade / non trade)
Asian Paints International Private Limited 121,576 14,214
Asian Paints Limited 193,529 17,358
Asian Paints (S.I) Limited - 10,767
Berger Paints (Emirates) Limited 10,795 -
PT Asian Paints Indonesia 19,295 -
Causeway Paints Lanka (Private) Limited 26,594 23,971
Royalty payable to Asian Paints Limited - 168,116
Directors controlled entities 50,941 28,422
422,730 262,848
d) Due from related parties (trade)
Asian Paints (S.I) Limited 349,301 -
Asian Paints (Vanuatu) Limited 66,290 153,414
Samoa Paints Limited 118,228 213,459
Directors controlled entities 4,008,649 2,759,384
4,542,468 3,126,257
e) Due from related parties (others)
Asian Paints (S.I) Limited 13,116 15,596
Asian Paints (Vanuatu) Limited 13,116 21,517
Samoa Paints Limited 17,116 12,795
43,348 49,908
f) Compensation of key management personnel of the company
Short-term and post employee benefits 351,404 362,739

g) Directors
The following were Directors of the company at the date of this report:
• Keeleri Raj Puthiyedath (resigned on 26 April 2022) • Vinod Patel
• Sireesh Rao Talluri • Arvind Kasabia
• Jaoji Koroi (appointed on 13 July 2022) • Abhishek Mohnot
• Abilash Ram (resigned on 13 July 2022) • Rajesh Patel
• Amit Bose (appointed on 26 April 2022) • Lee Siow Koon
 Asian Paints (South Pacific) Pte Limited

Notes to the Financial Statements (Contd.)

19. EXPENDITURE COMMITMENTS

At 31 March 2023, the company had capital commitments of $464,136 relating to property, plant and equipment
(2022: $Nil).

20. LEASE LIABILITIES

2023 2022
$ $
As at 1 April 1,414,045 1,433,425
Additions - 205,221
Accretion of interest 111,026 122,463
Termination/reassessment - (38,299)
Payments (367,709) (308,765)
As at 31 March 1,157,362 1,414,045
Current 268,148 256,683
Non-current 889,214 1157,362
1,157,362 1,414,045

21. CONTINGENT LIABILITIES

Contingent liabilities as at 31 March 2023 are $nil (2022: $nil).

22. Financial risk management objectives and policies

The company’s principal financial liabilities, other than derivatives, comprise trade and other payables. The main
purpose of these financial liabilities is to raise finance for the company’s operations. The company has various
financial assets such as trade receivables, loans to related parties, available-for-sale investments, related party
receivables, and cash which arise directly from its operations.

 he main risks arising from the company’s financial statements are market risk and credit risk. The Board of
T
Directors reviews and agrees policies for managing each of these risks which are summarised below.

Foreign currency risk

The company has transactional currency exposures. Such exposures arises from sales by the company in currency
other than Fijian dollars and purchases of raw materials in foreign currency. Foreign currency sales represents
21% (2022: 16%) of total sales. Foreign currency risk is an inherent business risk as the Reserve Bank of Fiji and
banks do not permit hedging.

The following table demonstrates the sensitivity to a reasonable possible change in the US$, AU$ and NZ$
exchange rate, with all other variables held constant, of the company’s profit before tax

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
22. Financial risk management objectives and policies (Contd.)

Increase/ Effect on Increase/ Effect on

decrease in profit before decrease in profit before
USD rate tax NZD rate tax
$ $
2023 +10% (187,628) +10% (3,379)
-10% 229,323 -10% 2,765
2022 +10% (180,862) +10% (11,377)
-10% 221,054 -10% 9,308
Increase/ Effect on
decrease in profit before
AUD rate tax
$
2023 +10% (9,660)
-10% 7,903
2022 +10% (12,940)
-10% 10,587

Credit risk

I t is the company policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the company’s
exposure to bad debts is not significant. The company trades with only recognised, credit worthy third parties.
There are no significant concentrations of credit risk within the company. With respect to credit risk arising from
other financial assets of the company which comprise of cash and cash equivalents, available-for-sale financial
instruments, and loan notes, the company’s exposure to credit risk arises from default of the counter party, with
a maximum exposure equal to the carrying amount of these investments.

Liquidity risk

 he company monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers
T
the maturity of both its financial investments and financials assets (e.g. accounts receivables, other financial
assets) and projected cash flows from operations. The company’s objective is to maintain a balance between
continuity of funding and flexibility through the use of bank overdrafts and bank loans.
 Asian Paints (South Pacific) Pte Limited

Notes to the Financial Statements (Contd.)

22. Financial risk management objectives and policies (Contd.)

The table below summaries the maturity profile of the company’s financial liabilities at 31 March 2023 and 31
March 2022:

1 to 12
Year ended On demand 1 to 5 years > 5 years Total
months
31 March 2023
$ $ $ $ $
Trade and other payables - 8,377,610 - - 8,377,610
Lease liabilities - 268,148 889,214 - 1,157,362
- 8,645,758 889,214 - 9,534,972

1 to 12
Year ended On demand 1 to 5 years > 5 years Total
months
31 March 2022
$ $ $ $ $
Trade and other payables - 7,414,974 - - 7,414,974
Lease liabilities - 256,683 1,157,362 - 1,414,045
- 7,671,657 1,157,362 - 8,829,019

Capital management

 he primary objective of the company’s capital management is to ensure that it maintains a strong credit rating
T
and a healthy capital ratio in order to support its business and maximise shareholder value.

 he company manages its capital structure and makes adjustments to it, in light of changes in economic
T
conditions. To maintain or adjust the capital structure, the company may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, polices
or processes during the years 31 March 2023 and 31 March 2022. The company monitors capital using a gearing
ratio which is net debt divided by total capital. The company’s policy is to keep the gearing ratio between 20%
to 30%.The company includes within net debt, lease liabilities, trade and other payables, less cash and cash
equivalents. Capital includes equity shares attributable to equity holders of the parent less minority interests.

2023 2022
$ $
Trade and other payables 8,377,610 7,414,974
Lease liabilities 1,157,362 1,414,045
Less cash and cash equivalents (3,207,661) (8,629,326)
Net debt 6,327,311 199,693

Equity 17,905,990 20,360,312

Total capital 17,905,990 20,360,312
Capital and net debt 24,233,301 20,560,005

Gearing ratio 26% 1%

38
 39
Notes to the Financial Statements (Contd.)

Financial Statements
23. FINANCIAL INSTRUMENTS

Set out on the next page is a comparison by category of carrying amounts and fair values of all the company’s
financial instruments that are carried in the financial statements.

Carrying amount Fair value

2023 2022 2023 2022
Financial assets $ $ $ $
Trade receivables 6,545,465 6,120,600 6,545,465 6,120,600
Other assets 254,392 65,684 254,392 65,684
Cash and short term deposits 3,207,661 8,629,326 3,207,661 8,629,326
Other financial assets 91,894 90,528 91,894 90,528
10,099,412 14,906,138 10,099,412 14,906,138
Financial liabilities
Trade and other payables 8,377,610 7,414,974 8,377,610 7,414,974
Lease liabilities 1,157,362 1,414,045 1,157,362 1,414,045
9,534,972 8,829,019 9,534,972 8,829,019

 arket values have been used to determine the fair value of available-for-sale financial assets. The fair values of
M
borrowings has been calculated by discounting the expected future cash flows at prevailing interest rates. The
fair value of loan notes and other financial assets have been calculated using market interest rates.

24. SUBSEQUENT EVENTS

No matter or circumstance have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.

25. PRINCIPAL ACTIVITIES

The principal activities of the company in the course of the year were the manufacturing and distribution of
paints and paint related products. There was no significant change in the nature of this activity during the
financial year.

26. COMPANY DETAILS

(a) Company Incorporation

The company was incorporated in Fiji under the Companies Act, 1983.

(b) Company Operations

The company’s operations is located at 7-9-11 Ruve Place, Tavakubu, Lautoka, Fiji

(c) Number of Employees

As at reporting date, the holding company employed a total of 97 employees (2022: 100).
 Asian Paints (South Pacific) Pte Limited

Disclaimer on Additional Financial Information

For the year ended 31 March 2023

The additional financial information, being the attached detailed Income Statement has been compiled by the
management of Asian Paints (South Pacific) Pte Limited.

To the extent permitted by law, we do not accept liability for any loss or damage which any person, other than Asian
Paints (South Pacific) Pte Limited may suffer arising from any negligence on our part. No person should rely on the
additional financial information without having an audit or review conducted.

40
 41
Detailed Income Statement

Financial Statements
For the year ended 31 March 2023

2023 2022
$ $
Gross sales 34,968,699 34461,177
Less: Discounts and rebates (trade and other discounts) (4,342,930) (5,130,859)
Less: Consumer / dealers (gifts, promotions, trips etc.) (633,626) 29,636
Net sales 29,992,143 29,359,954
Less: Cost of materials consumed 17,500,317 15,808,670
Gross margin 12,491,826 13,551,284
Gross margin % 42% 46%
Expenses
Depreciation and amortization 975,191 901,073
Employee remuneration and benefits 3,420,487 3,319,534
Manufacturing, selling, distribution, administration and financial expenses 4,371,731 3,485,028
Total expenses 8,767,409 7,705,635
Other income
Realised foreign exchange gain 146,886 150,811
Unrealised foreign exchange gain 55,955 157,204
Interest income 14,052 87,956
Other income 35,118 39,992
252,011 435,963
Operating profit before income tax expense 3,976,428 6,281,612

The detailed income statement is to be read in conjunction with the disclaimer set out on page 40.
 Asian Paints (South Pacific) Pte Limited

Detailed Income Statement (Contd.)

2023 2022
$ $
Expenses
Advertising and promotion 834,731 605,939
Association fees 50,947 54,998
Audit fees 16,000 14,000
Bad and doubtful debts recovered 74,093 (33,909)
Bank charges 14,381 10,784
Depreciation 975,191 901,073
Entertainment 12,323 8,592
FNU levy 24,875 24,006
Freight 961,222 893,683
Interest on lease liabilities 111,026 122,463
General expenses 152,893 180,756
OHS expenses 202,024 133,048
Insurance 137,834 144,352
Legal and professional expenses 86,466 60,523
Light and power 104,730 213,210
Loss on disposal of property, plant and equipment - 654
Lease expenses - vehicle and housing 66,777 82,151
Manpower service - fee / charges 150,888 139,394
Printing and stationery 57,890 54,654
Relocation and furlough expenses 62,260 121,285
Rent - factory and office (3,341) 6,881
Repairs and maintenance 315,004 199,508
Regional expenses 129,098 (96,725)
Research and development 21,859 14,117
Royalty fees 706,889 643,753
Salaries and wages 2,559,850 2,466,767
Security services 178,512 149,233
Staff superannuation 112,445 83,179
Staff utility expenses 254,510 282,617
Systems expense 182,150 143,440
Staff training expense 8,873 2,086
Telephone, fax and internet 47,655 42,017
Travelling expenses and accommodation 160,429 27,599
Water (5,935) 500
Work permits and visa expenses 2,860 9,007
8,767,409 7,705,635

The detailed income statement is to be read in conjunction with the disclaimer set out on page 40.

42
Asian Paints (S.I.) Limited
Contents
Directors’ Report......................................................................................................................................................................................... 4-5

Directors’ Statement...................................................................................................................................................................................... 6

Independent Auditor’s Report..................................................................................................................................................................7-8

Statement of profit or loss and other comprehensive income.............................................................................................................. 9

Statement of Financial Position.................................................................................................................................................................10

Statement of Changes in Equity................................................................................................................................................................. 11

Statement of Cash Flows............................................................................................................................................................................. 12

Notes to the financial statements....................................................................................................................................................... 13-30

 Asian Paints (S.I.) Limited
Directors’ Report
For the year ended 31 March 2023
In accordance with a resolution of the Board of Directors,
the Directors herewith submit the statement of financial
position of Asian Paints (S.I) Limited (“the Company”)
as at 31 March 2023, the related statement of profit or
loss and other comprehensive income, the statement of
changes in equity and the statement of cash flows for the
year then ended on that date and report as follows:
Directors
The following were Directors of the company during the
financial year and at the date of this report:
• Francis Kelesi
• Keeleri Raj Puthiyedath (resigned on 26 April 2022)
• Amit Bose (appointed on 26 April 2022)
• Sireesh Rao Talluri
Principal activities
The principal activities of the Company in the course of
the year were the distribution of paints and paint related
products and there has been no significant change in
these activities during the year.
Results
The operating profit for the Company for the year was
SBD 47,13,210 (2022: SBD 39,23,882 ) after an income tax
expense of SBD 40,829 (2022: SBD 1,29,692).
Dividends
The Directors recommended that dividends of SBD
46,80,000 be declared and paid for the year (2022: SBD
40,00,000).
Reserves
The Directors recommended that no transfer be made to
reserve within the meaning of the Companies Act (CAP
175) of Solomon Islands.
Bad and doubtful debts months from the date of this statement. Accordingly, the
Prior to the completion of the Company’s financial
statements, the directors took reasonable steps to
ascertain that action had been taken in relation to writing
off of bad debts and the provision for doubtful debts. In
the opinion of the Directors, adequate provision has been
made for doubtful debts.
4
As at the date of this report, the directors are not aware
of any circumstances, which would render the amount
written off for bad debts or the provision for doubtful
debts in the company inadequate to any substantial
extent.
Non current assets
Prior to the completion of the financial statements of
the Company, the Directors took reasonable steps to
ascertain whether any non current assets were unlikely to
be realised in the ordinary course of business compared
to their values as shown in the accounting records of
the Company. Where necessary these assets have been
written down or adequate provision has been made to
bring the values of such assets to an amount that they
might be expected to realise.
As at the date of this report, the Directors are not aware
of any circumstances, which would render the values
attributed to non current assets in the Company’s
financial statements misleading.
Unusual transactions
Apart from these matters and other matters specifically
referred to in financial statements, in the opinion of the
Directors, the results of the operations of the Company
during the financial year were not substantially affected
by any item, transaction or event of a material unusual
nature, nor has there arisen between the end of the
financial year and the date of this report any item,
transaction or event of a material unusual nature likely,
in the opinion of the directors, to affect substantially the
results of the operations of the Company in the current
financial year, other than those reflected in the financial
statements.
Basis of accounting
The Directors believe that the basis of the preparation of
the financial statements is appropriate and the Company
will be able to continue its operation for at least twelve
Directors believe the classification and carrying amounts
of assets and liabilities as stated in these financial
statements are appropriate.
 5
Directors’ Report (Contd.)

Statutory Reports
Events subsequent to balance date As at the date of this report, the directors are not aware
of any circumstances that have arisen, not otherwise
No matters or circumstances have arise since the end
dealt with in this report or the Company’s financial
of the financial year which significantly affected or may
statements, which would make adherence to the existing
significantly affect the operations of the Company, the
method of valuation of assets or liabilities of the
results of those operations, or the state of affairs of the
company misleading or inappropriate.
Company in future financial years.
Director’s benefits
Other circumstances
Since the end of the previous financial year, no Director
As at the date of this report :
has received or become entitled to receive a benefit
(other than those included in the aggregate amount of
i) no charge on the assets of the Company has been
emoluments received or due and receivable by directors
given since the end of the financial year to secure
shown in the financial statements or received as the fixed
the liabilities of any other person;
salary of a full-time employee of the Company or of a
related company) by reason of a contract made by the
ii) no contingent liabilities have arisen since the end
Company or by a related company with the director or
of the financial year for which the Company could
with a firm of which he is a member, or with a company in
become liable; and
which he has a substantial financial interest.
iii) no contingent liabilities or other liabilities of
For and on behalf of the Board and in accordance with a
the Company has become or is likely to become
resolution of the Directors.
enforceable within the year of twelve months after

the end of the financial year which, in the opinion
of the directors, will or may substantially affect the
Dated this 4th day of May 2023.
ability of the Company to meet its obligations as and

when they fall due.

Amit Bose Sireesh Rao

Director Director

 Asian Paints (S.I.) Limited

Directors’ Statement
For the year ended 31 March 2023

In accordance with a resolution of the Board of Directors
of Asian Paints (S.I) Limited, we state that in the opinion
of the Directors:
i) the accompanying statement of profit or loss and
other comprehensive income of the Company is
drawn up so as to give a true and fair view of the
results of the company for the year ended 31 March
2023;
ii) the accompanying statement of changes in equity of
the Company is drawn up so as to give a true and fair
view of the changes in equity of the company for the
year ended 31 March 2023;
iii) the accompanying statement of financial position of
the Company is drawn up so as to give a true and fair
view of the state of affairs of the company as at 31
March 2023;
iv) the accompanying statement of cash flows of the
Company is drawn up so as to give a true and fair
view of the cash flows of the company for the year
ended 31 March 2023; and
v) at the date of this statement there are reasonable
grounds to believe the Company will be able to pay
its debts as and when they fall due.
For and on behalf of the Board and in accordance with a
resolution of the Directors.
Dated this 4th day of May 2023.
Amit Bose Sireesh Rao
Director Director

6

Independent Auditor’s Report
To the Shareholders of Asian Paints (S.I) Limited.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Asian
Paints (S.I) Limited (“the Company”), which comprise the
statement of financial position as at 31 March 2023, the
statement of profit or loss and other comprehensive
income, statement of changes in equity and statement
of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of
the Company as at 31 March 2023, and its financial
performance and its cash flows for the year then ended
in accordance with International Financial Reporting
standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISA). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent
of the Company in accordance with the International
Ethics Standards Board for Accountant’s Code of Ethics
for Professional Accountants (including International
Independence Standards) (IESBA Code) together with
the ethical requirements that are relevant to our audit of
the financial statements in Solomon Islands, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other Information
The Directors are responsible for the other information.
The other information comprises the Director’s report
but does not include the financial statements and the
auditor’s report thereon.
Our opinion on the 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 financial statements,
our responsibility is to read the other information
identified above and, in doing so, consider whether
7
Financial Statements
the other information is materially inconsistent with
the financial statements or our knowledge obtained
during the audit, or otherwise appears to be materially
misstated. If, based upon 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 the management and those
charged with governance for the Financial Statements
The management and Directors are responsible for
the preparation and fair presentation of the financial
statements in accordance with IFRS, and for such internal
control as the management and Directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management
and Directors are 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 the management and Directors either intend to
liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISA will always detect a material
misstatement when it exists. Misstatements can arise
from fraud and 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 the financial statements.
As part of an audit in accordance with ISA, we exercise
professional judgement and maintain professional
skepticism throughout the audit. We also:
 Asian Paints (S.I.) Limited
Independent Auditor’s Report (Contd.)
• Identify and assess the risks of material
misstatement of the 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• 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
and the Director’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
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.
8
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charge 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 the those charge 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.
Report on Other Legal and Regulatory Requirements
In our opinion, the financial statements have been
prepared in accordance with the requirements of the
Solomon Island Companies Act (CAP 175) in all material
respects, and;
a) we have been given all information, explanations
and assistance necessary for the conduct of the
audit; and
b) the Company has kept financial records sufficient to
enable the financial statements to be prepared and
audited.
Ernst & Young
Chartered Accountants
Steven Pickering
Partner
Nadi, Fiji
4 May 2023
 9
Statement of Profit or Loss and Other Comprehensive Income

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

SBD SBD
Revenue from contracts with customers 2.1 13,827,889 12,339,701
Other operating income 2.2 36,788 2,906
13,864,677 12,342,607
Cost and expenses
Cost of goods sold (6,684,577) (5,868,918)
Operating expenses 2.3 (1,724,666) (1,670,378)
Salaries and employee benefits 2.4 (756,357) (765,267)
Impairment reversal on trade receivables 216,829 112,223
Depreciation and amortisation 2.5 (161,867) (96,693)
(9,110,638) (8,289,033)
Operating profit 4,754,039 4,053,574
Finance income 2.6 - -
Profit before income tax 4,754,039 4,053,574
Income tax expense 3(a) (40,829) (129,692)
Profit for the year 4,713,210 3,923,882
Other comprehensive income for the year, net of tax - -
Total comprehensive income for the year, net of tax 4,713,210 3,923,882

The accompanying notes form an integral part of this statement of profit or loss and other comprehensive income.
 Asian Paints (S.I.) Limited

Statement of Financial Position

As at 31 March 2023

Notes 2023 2022

SBD SBD
Assets
Non-current assets
Property, plant and equipment 5 370,830 527,407
Intangible assets 6 1,197 1,197
Deferred income tax asset 3(c) 596,909 637,738
968,936 1,166,342
Current assets
Cash and cash equivalents 7 4,307,315 5,885,187
Trade receivables 8 2,281,749 1,251,844
Inventories 9 2,317,236 3,027,905
Prepayments and other assets 10 32,000 71,946
8,938,300 10,236,882
Total assets 9,907,236 11,403,224

Equity and liabilities

Equity attributable to equity holders
Share capital 11 630,000 630,000
Retained earnings 6,346,756 6,313,546
Total equity 6,976,756 6,943,546
Current liabilities
Trade and other payables 12 2,012,020 447,398
Dividend payable 13 900,000 4,000,000
Employee benefit liability 14 18,460 12,280
2930,480 4,459,678
Total liabilities 2,930,480 4,459,678
Total equity and liabilities 9,907,236 11,403,224

For and on behalf of the Board and in accordance with a resolution of the Directors.

Amit Bose Sireesh Rao

Director Director

The accompanying notes form an integral part of this statement of financial position.

10
 11
Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

SBD SBD
Issued capital
Balance at the beginning of the year 630,000 630,000
Balance at the end of the year 11 630,000 630,000
Retained earnings
Balance at the beginning of the year 6,313,546 6,389,664
Net profit for the year 4,713,210 3,923,882
11,026,756 10,313,546
Dividends paid/proposed 4 (4,680,000) (4,000,000)
Balance at the end of the year 6,346,756 6,313,546
Total equity and shares 6,976,756 6,943,546

The accompanying notes form an integral part of this statement of changes in equity.
 Asian Paints (S.I.) Limited

Statement of Cash Flows

For the year ended 31 March 2023

Notes 2023 2022

SBD SBD
Operating activities
Net profit before tax 4,754,039 4,053,574
Adjustment to reconcile profit before tax to net cash flows:
Amortisation of intangible asset - 283
Depreciation and impairment of property, plant and equipment 161,867 96,410
Movements in provision for doubtful debts (216,829) (112,223)
Movements in provision for employee entitlements 6,180 (9,380)
Working capital adjustments:
(Increase)/decrease in trade receivables (813,076) 516,786
Decrease in inventories 710,669 76,351
Decrease/(increase) in prepayments and other assets 39,946 (1,693)
(Increase)/decrease in trade and other payables 1,564,622 (1,555,448)
Net cash flows from operating activities 6,207,418 3,064,660
Investing activities
Acquisition of property, plant and equipment (5,290) (74,915)
Net cash flows (used in) investing activities (5,290) (74,915)
Financing activities
Dividends paid (7,780,000) -
Net cash flows (used in) financing activities (7,780,000) -
Net (decrease)/increase in cash held (1,577,872) 2,989,745
Cash and cash equivalents at the beginning of the year 5,885,187 2,895,442
Cash and cash equivalents at end of year 7 4,307,315 5,885,187

The accompanying notes form an integral part of this statement of cash flows.

12
 13
Notes to the financial statements

Financial Statements
For the year ended 31 March 2023

1.0 Corporate information credits attributable to exchange differences on

those monetary items are also recorded in OCI.
The financial statements of the Asian Paints (S.I)
Limited (‘’the Company’’) for the year ended 31
Non-monetary items that are measured in terms of
March 2023 were authorised for issue in accordance
historical cost in a foreign currency are translated
with a resolution of the Directors on 4 May 2023.
using the exchange rates at the dates of the initial
Asian Paints (S.I) Limited (“the Company”) is
transactions. Non-monetary items measured at fair
a limited company incorporated and domiciled in the
value in a foreign currency are translated using the
Solomon Islands.
exchange rates at the date when the fair value is
determined. The gain or loss arising on translation
The principal activities of the company are described
of non-monetary items measured at fair value is
in Note 21.
treated in line with the recognition of the gain or
loss on the change in fair value of the item (i.e.,
1.1 Basis of preparation of the Financial Statements
translation differences on items whose fair value
gain or loss is recognised in OCI or profit or loss are
The financial statements have been prepared
also recognised in OCI or profit or loss, respectively).
on a historical cost basis, except for investment
properties, land and buildings classified as
b) Revenue recognition
property, plant and equipment, derivative financial
instruments and available-for-sale financial assets Revenue is measured based on the consideration
that have been measured at fair value. The financial specified in a contract with a customer and excludes
statements are presented in Solomon dollars, except amounts collected on behalf of third parties. The
when otherwise indicated. Company recognises revenue when it transfers
control over a product or service to a customer.
Statement of compliance
Revenue is recognised when the significant risks
The financial statements of Asian Paints (S.I)
and rewards of ownership of the goods have passed
Limited have been prepared in accordance with
to the buyer, usually on delivery of the goods. Sales
International Financial Reporting Standards (IFRS) as
revenue represents revenue earned from the sale of
issued by International Accounting Standards Board
the Company’s products and is stated net of returns,
(IASB).
trade allowances and Goods and Service Tax (GST).
1.2 Summary of significant accounting policies
Dividends
a) Foreign currencies Revenue is recognised when the company’s right
to receive the payment is established, which is
The company’s financial statements are presented in
generally when shareholders approve the dividend.
Solomon Dollars, which is the company’s functional
currency. That is the currency of the primary
c) Taxes
economic environment in which Asian Paints (S.I)
Limited operates. Transactions in foreign currencies
Current income tax
are initially recorded by the company’s entities at
their respective functional currency spot rates at the Current income tax assets and liabilities are
date the transaction first qualifies for recognition. measured at the amount expected to be recovered
Monetary assets and liabilities denominated in from or paid to the taxation authorities. The tax
foreign currencies are translated at the functional rates and tax laws used to compute the amount are
currency spot rates of exchange at the reporting those that are enacted or substantively enacted,
date. Differences arising on settlement or at the reporting date in the countries where the
translation of monetary items are recognised in company operates and generates taxable income.
profit or loss with the exception of monetary items
that are designated as part of the hedge of the Current income tax relating to items recognised
company’s net investment of a foreign operation. directly in equity is recognised in equity and not
These are recognised in OCI until the net investment in the statement of profit or loss. Management
is disposed of, at which time, the cumulative amount periodically evaluates positions taken in the tax
is reclassified to profit or loss. Tax charges and returns with respect to situations in which applicable
 Asian Paints (S.I.) Limited
Notes to the Financial Statements (Contd.)
tax regulations are subject to interpretation and
establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method
on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable
temporary differences, except:
• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor
taxable profit or loss; and
• In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint arrangements,
when the timing of the reversal of the
temporary differences can be controlled and it
is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred
tax assets are recognised to the extent that it is
probable that taxable profit will be available against
which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax
losses can be utilised, except:
• When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects
d)
neither the accounting profit nor taxable profit
or loss; and
• In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint arrangements,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable
future and taxable profit will be available
against which the temporary differences can be
utilised.
14
The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that
it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting
date. Deferred tax relating to items recognised
outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation
to the underlying transaction either in OCI or directly
in equity.
Goods and Service Tax (GST)
Expenses and assets are recognised net of the
amount of sales tax, except:
• When the sales tax incurred on a purchase of
assets or services is not recoverable from the
taxation authority, in which case, the sales tax
is recognised as part of the cost of acquisition
of the asset or as part of the expense item, as
applicable; and
• When receivables and payables are stated with
the amount of sales tax included.
The net amount of Goods and Services Tax
recoverable or payable to the tax authority is
included as part of the receivables or payables in the
statement of financial position.
Property, plant and equipment
Construction in progress, plant and equipment are
stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. Such
cost includes the cost of replacing part of the plant
and equipment and borrowing costs for long-term
construction projects if the recognition criteria
are met. When significant parts of plant and
equipment are required to be replaced at intervals,
the company depreciates them separately based on
their specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in

Notes to the Financial Statements (Contd.)
the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred. The present
value of the expected cost for the decommissioning
of an asset after its use is included in the cost of
the respective asset if the recognition criteria for a
provision are met.
Depreciation is calculated on a straight-line basis
over the estimated useful lives of the assets, as
follows: ownership of an asset are classified as operating
Buildings 5%
Plant and equipment 5% - 25%
Motor vehicles 25%
Furniture and fittings 25%
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal
proceeds and the carrying amount of the asset) is
included in the income statement when the asset is
derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
e) Leases
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 applies the provision of low-value assets
and doesn’t recognises lease liabilities. No initial
upfront payment made on lease commencement
hence no right-of-use assets recognised.
15
Financial Statements
Leases of low-value assets
The company applies the lease of low-value assets
recognition exemption to leases that are considered
to be low value. Lease payments on 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
leases. Rental income arising is accounted for on
a straight-line basis over the lease terms and is
included in revenue in the statement of profit or
loss due to its operating nature. 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.
f) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised
as part of the cost of the asset. All other borrowing
costs are expensed in the period in which they
occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds.
g) Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles,
excluding capitalised development costs, are
not capitalised and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised
over the useful economic life and assessed for
 Asian Paints (S.I.) Limited
Notes to the Financial Statements (Contd.)
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an
intangible asset with a finite useful life are reviewed
at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset is accounted for by changing
the amortisation year or method, as appropriate,
and are treated as changes in accounting estimates.
The amortisation expense on intangible assets
with finite lives is recognised in profit or loss in the
expense category consistent with the function of
intangible asset.
Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit
level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life
continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit or loss when the asset is
derecognised.
h) Financial instruments
(i) Recognition and measurement
Trade receivables 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 provisions of the instrument.
A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair
value plus, for an item not at FVTPL, transaction
costs that are directly attributable to its
acquisition or issue. A trade receivable without
a significant financing component is initially
measured at the transaction price.
16
(ii) Classification and measurement
On initial recognition, a financial asset is
classified as measured at amortised cost, FVOCI
or FVTPL.
Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing
financial assets, in which case all affected
financial assets are reclassified on the first
day of the first reporting period following the
change in the business.
A financial asset is measured at amortised cost
if it meets both of the following conditions and
is not designated as at FVTPL:
• it is held within a business model whose
objective is to hold assets to collect
contractual cash flows; and
• its contractual terms give rise on specified
dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
All financial assets not classified as measured
at amortised cost as described above are
measured at FVTPL. On initial recognition, the
Company may irrevocably designate a financial
asset that otherwise meets the requirements
to be measured at amortised cost as at FVTPL
if doing so eliminates or significantly reduces
an accounting mismatch that would otherwise
arise.
Financial assets: Business model assessment
The Company makes an assessment of the
objective of the business model in which
a financial asset is held at a portfolio level
because this best reflects the way the business
is managed and information is provided to
management. The information considered
includes:
• The stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management’s strategy focuses on earning
contractual interest income, maintaining
a particular interest rate profile, matching
the duration of the financial assets to

Notes to the Financial Statements (Contd.)
the duration of any related liabilities or
expected cash outflows or realising cash
flows through the sale of the assets;
• how the performance of the portfolio is
evaluated and reported to the Company’s
management;
• the risks that affect the performance
of the business model (and the financial
assets held within that business model)
and how those risks are managed;
• how Directors of the business are
compensated – e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and
• “the frequency, volume and timing of sales
of financial assets in prior periods, the
reasons for such sales and demonstrate
why those sales do not reflect a change in
the entity’s business model.
Transfers of financial assets to third parties
in transactions that do not qualify for
derecognition are not considered sales for
this purpose, consistent with the Company’s
continuing recognition of the assets.
Financial assets: Assessment whether
contractual cash flows are solely payments of
principal and interest
For the purposes of this assessment, ‘principal’
is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and
for the credit risk associated with the principal
amount outstanding during a particular period
of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows
are solely payments of principal and interest,
the Company considers the contractual terms of
the instrument. This includes assessing whether
the financial asset contains a contractual term
that could change the timing or amount of
contractual cash flows such that it would not
17
Financial Statements
meet this condition. In making this assessment,
the Company considers:
• contingent events that would change the
amount or timing of cash flows;
• terms that may adjust the contractual
coupon rate, including variable rate
features;
• prepayment and extension features; and
• terms that limit the Company’s claim to
cash flows from specified assets (e.g.
non‑recourse features).
A prepayment feature is consistent with
the solely payments of principal and
interest criterion if the prepayment amount
substantially represents unpaid amounts of
principal and interest on the principal amount
outstanding, which may include reasonable
additional compensation for early termination
of the contract.
Financial assets: Subsequent measurement and
gains and loss
Financial assets that are measured at amortised
costs 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 profit
or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Financial assets
The Company classified its financial assets as
loans and receivable.
Financial assets: Subsequent measurement and
gains and loss
Loans and receivables - measured at amortised
cost using the effective interest method.
Financial liabilities – Classification, subsequent
measurement and gains and losses
Financial liabilities are classified and measured
at amortised cost or FVTPL. A financial liability
is classified at FVTPL if it is classified as held-for
 Asian Paints (S.I.) Limited

Notes to the Financial Statements (Contd.)

trading, it is a derivative or it is designated as (iv) Offsetting

such on initial recognition. Financial liabilities
Financial assets and financial liabilities are
at FVTPL are measured at fair value and
offset and the net amount presented in the
net gains and losses including any interest
statement of financial position when, and only
expense, are recognised in profit or loss. Other
when, the Company currently has a legally
financial liabilities are subsequently measured
enforceable right to set off the amounts and
at amortised cost using the effective interest
it intends either to settle them on a net basis
method. Interest expense and foreign exchange
or to realise the asset and settle the liability
gains and losses are recognised in profit and
simultaneously.
loss. Any gains or loss on derecognition is also
recognised in profit or loss.
i) Inventories

(iii) Derecognition Inventories are stated at the lower of cost (weighted

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 it does
not retain control of the financial asset.
The Company enters into transactions whereby
it transfers assets recognised in its statement
of financial position, but retains either all
or substantially all of the risks and rewards
of the transferred assets in these cases the
transferred assets are not derecognised.
Financial liabilities
average method) and net realisable value.
Costs incurred in bringing each product to its
present location and condition are accounted for as
follows:
Raw materials - purchase cost; and
Finished goods and work in progress - cost of direct
materials and labour and an appropriate portion
of fixed and variable overheads but excluding
borrowing costs.
Initial cost of inventories includes the transfer of
gains and losses on qualifying cash flow hedges,
recognised in OCI, in respect of the purchases of raw
materials.
Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to
make the sale.

The Company derecognises a financial liability j) Impairment

when its contractual obligations are discharged
or cancelled, or expire. The Company also (i) Non-derivative financial assets
derecognises a financial liability when its terms
The Company recognises loss allowances for
are modified and the cash flows of the modified
ECLs on financial assets measured at amortised
liability are substantially different, in which case
cost.
a new financial liability based on the modified
terms is recognised at fair value.
The Company measures loss allowances at an
amount equal to lifetime ECL, except for the
On derecognition of a financial liability, the
following, which are measured as 12‑month
difference between the carrying amount
ECL:
extinguished and the consideration paid
(including any non‑cash assets transferred or
• other receivables and cash at bank
liabilities assumed) is recognised in profit or
balances for which credit risk (i.e. the risk
loss.
of default occurring over the expected
life of the financial instrument) has
not increased significantly since initial
recognition.
18
 19
Notes to the Financial Statements (Contd.)

When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating ECL, the
Company considers reasonable and supportable
information that is relevant and available
without undue cost or effort. This includes
both quantitative and qualitative information
and analysis, based on the Company’s historical
experience and informed credit assessment and
including forward‑looking information.
The Company assumes that the credit risk on a
financial asset has increased significantly if it is
more than 30 days past due.
The Company considers a financial asset to be in
default when:
• the borrower is unlikely to pay its credit
obligations to the Company in full, without
recourse by the Company to actions such as
realising security (if any is held); or
Financial Statements
the difference between the cash flow due to
the entity in accordance with the contract and
the cash flows that the Company expects to
receive).
ECLs are discounted at the effective interest
rate of the financial asset.
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.
Credit-impaired financial assets
Evidence that a financial asset is credit‑impaired
includes the following observable data:
• significant financial difficulty of the
borrower or issuer;

• the financial asset is more than 90 days

• a breach of contract such as a default or
past due.
being more than 90 days past due;

The Company considers another receivable or

• the restructuring of a loan or advance by
cash balance to have low credit risk when its
the Company on terms that the Company
credit risk rating is equivalent to the globally
would not consider otherwise;
understood definition of “investment grade”.
The Company considers this to be B1 or a higher
• it is probable that the borrower will
rating per Moody’s.
enter bankruptcy or other financial
reorganisation; and
Lifetime ECLs are the ECLs that result from all
possible default events over the expected life
• the disappearance of an active market
of a financial instrument.
for a security because of financial
difficulties.
12‑month ECLs are the portion of ECLs that
result from default events that are possible
Presentation of allowance for ECL in the
within the 12 months after the reporting date
statement of financial position
(or a shorter period if the expected life of the
instrument is less than 12 months).
Loss allowances for financial assets measured
at amortised cost are deducted from the gross
The maximum period considered when
carrying amount of the assets.
estimating ECLs is the maximum contractual
period over which the Company is exposed to
Write-off
credit risk.
The gross carrying amount of a financial asset
Measurement of ECLs is written off (either partially or in full) to the
extent that there is no realistic prospect of
ECLs are a probability‑weighted estimate of
recovery. This is generally the case when the
credit losses. Credit losses are measured as
Company determines that the debtor does not
the present value of all cash shortfalls (i.e.
have assets or sources of income that could
 Asian Paints (S.I.) Limited
Notes to the Financial Statements (Contd.)
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.
The carrying amounts of the Company’s non-
financial assets, other than inventories are
reviewed at each reporting date to determine
whether there is any indication of impairment.
If any such indication exists, then the asset’s
recoverable amount is estimated.
The recoverable amount of an asset or cash-
generating unit is the greater of its value in use
and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset.
k) Cash and short term deposits
Cash and short-term deposits in the statement
of financial position comprise cash at banks and
on hand and short-term deposits with a maturity
of three months or less, which are subject to an
insignificant risk of changes in value. For the purpose
of the consolidated statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of
the company’s cash management.
l) Provisions
Provisions are recognised when the company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. When the company expects some or
all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense
relating to a provision is presented in the statement
of profit or loss net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
20
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time
is recognised as a finance cost.
m) Employee entitlements
Provisions are made for wages and salaries, incentive
payments and annual leave estimated to be payable
to employees at balance date on the basis of
statutory and contractual requirements.
n) Trade and other payables
Liabilities for trade creditors and other amounts
are carried at cost (inclusive of Consumption Tax
where applicable) which is the fair value of the
consideration to be paid in the future for goods
and services received whether or not billed to
the company. Amounts payable that have been
denominated in foreign currencies have been
translated to local currency using the rates of
exchange ruling at the end of the financial period.
o) Comparative figures
Comparative figures have been amended where
necessary, for changes in presentation in the current
period.
p) Dividend payable
Dividends are recorded in the Company’s financial
statements in the period in which the directors
approve them.
1.3 Standards issued but not yet effective
The new and amended standards and interpretations
that are issued, but not yet effective, up to the date
of issuance of the company’s financial statements
are disclosed below. The company intends to
adopt these new and amended standards and
interpretations, if applicable, when they become
effective.
Amendments to IAS 1: Classification of Liabilities as
Current or Non-current
In January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
Since the amendments apply prospectively to
transactions or other events that occur on or after

Notes to the Financial Statements (Contd.)
the date of first application, the entity will not
be affected by these amendments on the date of
transition.
• What is meant by a right to defer
settlement
• That a right to defer must exist at the end of
the reporting period
• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
• That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
must be applied retrospectively. The Company is
currently assessing the impact the amendments will
have on current practice. The Company is currently assessing the impact of the
Definition of Accounting Estimates - Amendments to
IAS 8
In February 2021, the IASB issued amendments
to IAS 8, in which it introduces a definition of
‘accounting estimates’. The amendments clarify
the distinction between changes in accounting
estimates and changes in accounting policies and the
correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
The amendments are effective for annual reporting
periods beginning on or after 1 January 2022 and
apply to changes in accounting policies and changes
in accounting estimates that occur on or after the
start of that period. Earlier application is permitted
as long as this fact is disclosed.
The amendments are not expected to have a
material impact on the Company.
Disclosure of Accounting Policies - Amendments to
IAS 1 and IFRS Practice Statement 2
21
Financial Statements
In February 2021, the IASB issued amendments
to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements, in which it provides
guidance and examples to help entities apply
materiality judgements to accounting policy
disclosures. The amendments aim to help entities
provide accounting policy disclosures that are more
useful by replacing the requirement for entities to
disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting
policies and adding guidance on how entities apply
the concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual
periods beginning on or after 1 January 2023 with
earlier application permitted. Since the amendments
to the Practice Statement 2 provide non-mandatory
guidance on the application of the definition
of material to accounting policy information,
an effective date for these amendments is not
necessary.
amendments to determine the impact they will have
on the Company’s accounting policy disclosures.
Deferred Tax related to Assets and Liabilities arising
from a Single Transaction - Amendments to IAS 12
In May 2021, the Board issued amendments to IAS
12, which narrow the scope of the initial recognition
exception under IAS 12, so that it no longer applies
to transactions that give rise to equal taxable and
deductible temporary differences.
The amendments should be applied to transactions
that occur on or after the beginning of the earliest
comparative period presented. In addition, at
the beginning of the earliest comparative period
presented, a deferred tax asset (provided that
sufficient taxable profit is available) and a deferred
tax liability should also be recognised for all
deductible and taxable temporary differences
associated with leases and decommissioning
obligations.
The Company is currently assessing the impact of the
amendments.
 Asian Paints (S.I.) Limited

Notes to the Financial Statements (Contd.)

1.4 Significant accounting judgments, estimates and
assumptions
The preparation of the company’s financial
statements requires management to make
judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
In the process of applying the company’s accounting
policies, management has made various judgements.
Those which management has assessed to have the
most significant effect on the amounts recognised in
the financial statements have been discussed in the
individual notes of the related financial statement
line items. the Directors are not aware of any material
The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year,
are also described in the individual notes of the
related financial statement line items below. The
company based its assumptions and estimates on
parameters available when the financial statements
were prepared. Existing circumstances and
assumptions about future developments, however,
may change due to market changes or circumstances
arising that are beyond the control of the company.
Such changes are reflected in the assumptions when
they occur.
Going concern
The Directors have made an assessment of the
Company’s ability to continue as a going concern and
are satisfied that it has the resources to continue in
business for the foreseeable future. Furthermore,
uncertainties that may cast significant doubt on the
Company’s ability to continue as a going concern.
Therefore, the financial statements continue to be
prepared on the going concern basis.

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
2. Revenue and expenses
2023 2022
SBD SBD
2.1 Revenue from contracts with customer
Sales 13,827,889 12,339,701
2.2 Other operating income
Net exchange gain 26,165 2,906
Insurance claims 10,623 -
36,788 2,906
2.3 Operating expenses
Included in other operating expenses are:
Auditors’ remuneration 40,062 35,714
Bank charges 2,887 6,433
Royalties 397,320 342,469
Other operating expenses 1,284,397 1,285,762
1,724,666 1,670,378
2.4 Salaries and employee benefits
Salaries and wages 439,095 461,348
Superannuation contributions 22,791 25,500
Staff costs 294,471 278,419
756,357 765,267
2.5 Depreciation and amortisation
Depreciation and impairment 161,867 96,410
Amortisation of intangible assets - 283
161,867 96,693

3. Income tax
The major components of income tax expense for the years ended 31 March 2023 and 31 March 2022 are:
a) A reconciliation between tax expense and the product of accounting profit multiplied by the tax rate
for the years ended 31 March 2023 and 31 March 2022 is as follows:

2023 2022
SBD SBD
Accounting profit before income tax 4,754,039 4,053,574

At the rate of 30% 1,426,212 1,216,072

Tax effect of non deductible expenses (1,404,000) (1,200,000)
(Over)/under provision in prior years (4,757) 86
Tax losses not recognised 23,374 113,534
Income tax expense attributable to operating profit 40,829 129,692
b) Current income tax:
Current income tax charge - -
Adjustments in respect of prior year (4,757) 86
Origination and reversal of temporary differences 45,586 129,606
Income tax expense attributable to operating profit 40,829 129,692
 Asian Paints (S.I.) Limited

Notes to the Financial Statements (Contd.)

3. Income tax (Contd.)

2023 2022
SBD SBD

c) Deferred income tax at 31 March 2023 and 31 March 2022 relates to

the following:
Deferred income tax assets
Provision for doubtful debts 636,881 701,930
Provision for employee entitlements 5,538 3,684
Net deferred income tax assets 642,419 705,614
d) Deferred income tax liability
Accelerated depreciation for tax purposes (34,101) (67,876)
Unrealised exchange gain (11,409) -
Net deferred income tax liability (45,510) (67,876)
Represented on the balance sheet as follows:
Deferred income tax asset 642,419 705,614
Deferred income tax liability (45,510) (67,876)
Deferred income tax asset, net 596,909 637,738

4. Dividends declared
2023 2022

SBD SBD
Declared during the year 4,680,000 4,000,000

5. Property, plant and equipment

Cost Buildings Plant & office Motor Furniture & Total
equipment vehicles Fittings
SBD SBD SBD SBD SBD
At 31 March 2021 450,691 527,619 484,500 190,580 1,653,390
Additions - 24,915 50,000 - 74,915
At 31 March 2022 450,691 552,534 534,500 190,580 1,728,305
Additions - 5,290 - - 5,290
At 31 March 2023 450,691 557,824 534,500 190,580 1,733,595
Depreciation and
impairment
At 31 March 2021 298,277 460,226 208,976 137,009 1,104,488
Depreciation charge 7,757 21,514 65,822 1,317 96,410
At 31 March 2022 306,034 481,740 274,798 138,326 1,200,898
Depreciation charge 39,810 45,120 72,991 3,946 161,867
At 31 March 2023 345,844 526,860 347,789 142,272 1,362,765
Net book value:
At 31 March 2023 104,847 30,964 186,711 48,308 370,830
At 31 March 2022 144,657 70,794 259,702 52,254 527,407

24
 25
Notes to the Financial Statements (Contd.)

Financial Statements
6. Intangible assets
2023 2022
SBD SBD
Software costs 103,291 103,291
Amortisation and impairment:
Opening balance 102,094 101,811
Amortisation - 283
Closing balance 102,094 102,094
Net book value: 1,197 1,197

7. Cash and cash equivalents

2023 2022
SBD SBD
Cash and cash equivalents 4,307,315 5,885,187

8. Trade receivables
2023 2022
SBD SBD
Trade receivables 4,404,685 3,591,609
Less provisions for impairment of receivables (2,122,936) (2,339,765)
2,281,749 1,251,844

Trade receivables are non-interest bearing and are generally on 45-60 day terms. At 31 March 2023, trade
receivables at nominal value of SBD 2,122,936 (2022: SBD 2,339,765) were impaired and fully provided for.
Movements in provision for impairment of receivables were as follows:

2023 2022
SBD SBD
Opening balance 2,339,765 2,451,988
Reversal for the year (216,829) (112,223)
Closing balance 2,122,936 2,339,765

At 31 March, the ageing analysis of trade receivables is as follows:

Neither Past due but not impaired
Total past due nor
31 - 90 days 91 - 180 days > 180 days
impaired
2023 2,281,749 1,457,624 673,798 33,137 117,190
2022 1,251,844 1,136,424 56,136 9,675 49,609
 Asian Paints (S.I.) Limited

Notes to the Financial Statements (Contd.)

9. Inventories
2023 2022
SBD SBD
Finished goods 2,317,236 3,027,905
Total inventories at the lower of cost and net realisable value 2,317,236 3,027,905

10. Prepayments and other assets

2023 2022
SBD SBD
Deposits receivable 14,000 14,000
Prepayments 18,000 57,946
32,000 71,946

11. Share capital

2023 2022
SBD SBD
Authorised
2,000,000 ordinary shares of SBD 1 each 2,000,000 2,000,000
Ordinary shares issued and fully paid
630,000 ordinary shares of SBD 1 each 630,000 630,000

12. Trade and other payables

2023 2022
SBD SBD
Trade payables 1,576 25,628
Related party payables [refer note 16(b)] 1,459,213 83,707
Other payables 551,231 338,063
2,012,020 447,398

Terms and conditions of the above financial liabilities:

• Trade payables are non-interest bearing and are normally settled on 60-day terms.
• Other payables are non-interest bearing and have an average term of six months..

13. Dividend payable

2023 2022
SBD SBD
Opening balance 4,000,000 -
Arising during the year 4,680,000 4,000,000
Paid during the year (7,780,000) -
Balance at end of the year 900,000 4,000,000

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
14. Employee benefit liability
2023 2022
SBD SBD
Opening balance 12,280 21,660
Arising/(utilised) during the year 6,180 (9,380)
Balance at end of the year 18,460 12,280

15. Commitments and contingencies

2023 2022
SBD SBD
Operating lease commitments - Company as lessee
Future commitments in respect of operating lease are as follows:
Within one year 7,819 7,819
After one year but not more than five years 23,457 26,479
More than five years 13,431 21,250
Minimum lease payment 44,707 55,548

Contingent liabilities
Contingent liabilities as at 31 March 2023 are SBD nil.
Capital commitments
Capital commitments as at 31 March 2023 are SBD nil (2022: SBD nil).
16. Related party disclosures
(a) Directors
The following were directors of the company during the financial year and at the date of this report:
• Francis Kelesi
• Keeleri Raj Puthiyedath (resigned on 26 April 2022)
• Amit Bose (appointed on 26 April 2022)
• Sireesh Rao Talluri

(b) Transactions with related parties

During the year the Company entered into transactions with related parties in the ordinary course of
business under normal commercial terms. Significant transactions during the year are as follows:

2023 2022
SBD SBD
Royalties
Asian Paints Limited 397,320 342,469
Technical fee
Asian Paints (South Pacific) Pte Limited, Fiji 285,816 279,827
Intra group purchases
Asian Paints (South Pacific) Pte Limited, Fiji 3,717,706 5,829,243
Amount owing to related parties
Asian Paints International Private Limited 1,351,188 18,609
Asian Paints Limited 108,025 65,098
1,459,213 83,707
 Asian Paints (S.I.) Limited

Notes to the Financial Statements (Contd.)

16. Related party disclosures (contd.)

(c) Key management personnel

2023 2022
SBD SBD
Short-term employee benefits 342,445 524,006

17. Financial risk management objectives and policies

Principal financial liabilities comprise trade payables. The main purpose of these financial liabilities is to raise
finance for the Company’s operations. The company has various financial assets such as trade receivables and
cash which arise directly from its operations.

The main risk arising from the Company’s financial statements are market risk, credit risk, and liquidity risk. The
Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.

Foreign currency risk

The Company has foreign exchange risk as a result of transactions denominated in foreign currencies arising from
normal trading activities. Normal currency trading activities foreign exchange risk are not hedged or subject to
foreign currency forward exchange contracts.

The following table demonstrates the sensitivity to a reasonably possible change in USD rates, with all other
variables held constant, of the company’s profit before tax.

Increase/ decrease in USD rate Effect on profit before tax
2023 +10% (120,635)
-10% 147,443
2022 +10% 1,693
-10% (2,069)

Interest rate risk

The Company’s exposure to the risk of changes in market interest rates relates primarily to the company’s
bank overdraft facility which has not yet been utilised. All other financial assets or liabilities are non-interest
bearing.

Credit risk
It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the
Company’s exposure to bad debts is not significant. There are no significant concentrations of credit risk within
the Company.

Liquidity risk
The Company monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers
the maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial
assets) and projected cash flows from operations.

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
17. Financial risk management objectives and policies (contd.)

The table below summarises the maturity profile of the company’s financial liabilities at 31 March 2023 based
on contractual undiscounted payments.

Year ended On demand 1 to 12 months 1 to 5 years > 5 years Total

31 March 2023 SBD SBD SBD SBD SBD
Trade and other - 2,012,020 - - 2,012,020
payable
Dividend payable - 900,000 - - 900,000
- 2,912,020 - - 2,912,020

Year ended On demand 1 to 12 months 1 to 5 years > 5 years Total

31 March 2022 SBD SBD SBD SBD SBD
Trade and other - 447,398 - - 447,398
payable
Dividend payable - 4,000,000 - - 4,000,000
- 4,447,398 - - 4,447,398

Capital management
The primary objective of the company’s capital management is to ensure that it maintains a strong credit rating
and a healthy capital ratio in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the company may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, polices
or processes during the years 31 March 2023 and 31 March 2022.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The
company includes within net debt, trade and other payables less cash and cash equivalents. Capital includes
equity attributable to equity holders.

2023 2022
SBD SBD
Trade and other payables 2,012,020 447,398
Dividend payable 900,000 4,000,000
Less cash and short term deposits (4,307,315) (5,885,187)
Net debt (1,395,295) (1,437,789)
Equity 6,976,756 6,943,546
Total capital 6,976,756 6,943,546
Capital and net debt 5,581,461 5,505,757
Gearing ratio -25% -26%
 Asian Paints (S.I.) Limited

Notes to the Financial Statements (Contd.)

18. Financial instruments

Set out below is a comparison by category of carrying amounts and fair values of all of the company’s financial
instrument that are carried on the financial statements.

Carrying amount Fair value
2023 2022 2023 2022
SBD SBD SBD SBD
Financial assets
Cash and cash equivalents 4,307,315 5,885,187 4,307,315 5,885,187
Trade receivables 2,281,749 1,251,844 2,281,749 1,251,844
Prepayments and other assets 32,000 71,946 32,000 71,946
6,621,064 7,208,977 6,621,064 7,208,977
Financial liabilities
Trade and other payables 2,012,020 447,398 2,012,020 447,398
Dividend payable 900,000 4,000,000 900,000 4,000,000
2,912,020 4,447,398 2,912,020 4,447,398

The fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at
prevailing interest rates. The fair value of financial assets have been calculated using market interest rates.

19. Events subsequent to balance date

No matters or circumstances have arise since the end of the financial year which significantly affected or may
significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.

20. Segment information

Industry segment
The company operates predominantly in distribution of paints and paints related items.

Geographical segment
The Company operates in Solomon Islands and is therefore one geographical area for reporting purposes.

21. Principal activities

The principal activities of the Company in the course of the year were the sale and distribution of paints and paint
related products and there has been no significant change in these activities during the year.

22. Company details

Registered Office
Asian Paints (S.I) Limited
c/- Morris & Sojocki Chartered Accountants
1st Floor, City Centre Building
Honiara
Solomon Islands

Number of Employees
As at balance date, the company employed a total of 6 (2022: 6 employees).
30
Asian Paints(Vanuatu) Limited
Contents
Directors’ Report....................................................................................................................................................................................... 4-5

Directors’ Statement....................................................................................................................................................................................6

Independent Auditor’s Report............................................................................................................................................................... 7-8

Statement of Profit or Loss and Other Comprehensive Income.........................................................................................................9

Statement of Financial Position...............................................................................................................................................................10

Statement of Changes in Equity...............................................................................................................................................................11

Statement of Cash Flows...........................................................................................................................................................................12

Notes to and forming part of the financial statements................................................................................................................ 13-30

 Asian Paints(Vanuatu) Limited
Directors’ Report
For the year ended 31 March 2023
In accordance with a resolution of the Board of Directors,
the Directors herewith submit the statement of financial
position of Asian Paints (Vanuatu) Limited (“the
Company”) as at 31 March 2023, the related statement
of profit or loss and other comprehensive income, the
statement of changes in equity and the statement of cash
flows for the year then ended on that date and report as
follows:
Directors
The following were Directors of the company during the
financial year and at the date of this report:
• Keeleri Raj Puthiyedath (resigned on 26 April 2022)
• Sireesh Rao Talluri
• Alain Lew
• Amit Bose (appointed on 26 April 2022)
Principal activities
The principal activities of the Company in the course of
the year were the distribution of paints and paint related
products and there has been no significant change in
these activities during the year.
Results
The operating profit for the company for the year was
VUV 17,211,830 (2022: VUV 21,699,112).
Dividends
The Directors declared total dividends amounting to VUV
43,200,000 (2022: VUV Nil) for the year.
Reserves
The Directors propose that no transfer be made to
reserve within the meaning of the Companies Act (CAP
191) of the Republic of Vanuatu.
Bad and doubtful debts
Prior to the completion of the Company’s financial
statements, the Directors took reasonable steps to
ascertain that action had been taken in relation to writing
off of bad debts and the provision for doubtful debts.
In the opinion of directors, adequate provision has been
made for doubtful debts.
As at the date of this report, the Directors are not aware
of any circumstances, which would render the amount
4
written off for bad debts, or the provision for doubtful
debts in the Company, inadequate to any substantial
extent.
Non current assets
Prior to the completion of the financial statements of
the Company, the Directors took reasonable steps to
ascertain whether any non current assets were unlikely to
be realised in the ordinary course of business compared
to their values as shown in the accounting records of
the Company. Where necessary these assets have been
written down or adequate provision has been made to
bring the values of such assets to an amount that they
might be expected to realise.
As at the date of this report, the Directors are not aware
of any circumstances, which would render the values
attributed to non current assets in the Company’s
financial statements misleading.
Basis of accounting
The Directors believe that the basis of the preparation of
the financial statements is appropriate and the Company
will be able to continue its operation for at least twelve
months from the date of this statement. Accordingly, the
Directors believe the classification and carrying amounts
of assets and liabilities as stated in these financial
statements are appropriate.
Unusual transactions
Apart from these matters and other matters specifically
referred to in financial statements, in the opinion of the
Directors, the results of the operations of the Company
during the financial year were not substantially affected
by any item, transaction or event of a material unusual
nature, nor has there arisen between the end of the
financial period and the date of this report any item,
transaction or event of a material unusual nature likely,
in the opinion of the Directors, to affect substantially the
results of the operations of the Company in the current
financial year, other than those reflected in the financial
statements.
Events subsequent to balance date
No matter or circumstance have arisen since the end of
the financial year which significantly affected or may
significantly affect the operations of the Company, the
results of those operations, or the state of affairs of the
Company in future financial years.

Director’s Report (Contd.)
Other circumstances
As at the date of this report :
i) no charge on the assets of the Company has been
given since the end of the financial year to secure
the liabilities of any other person;
ii) no contingent liabilities have arisen since the end
of the financial year for which the Company could
become liable and;
iii) no contingent liabilities or other liabilities of
the Company has become or is likely to become
enforceable within the period of twelve months
after the end of the financial period which, in the
opinion of the directors, will or may substantially
affect the ability of the Company to meet its
obligations as and when they fall due.
As at the date of this report, the Directors are not aware
of any circumstances that have arisen, not otherwise
dealt with in this report or the company’s financial
statements, which would make adherence to the existing
method of valuation of assets or liabilities of the
company misleading or inappropriate.
5
Statutory Reports
Director’s benefits
Since the end of the previous financial year, no Director
has received or become entitled to receive a benefit
(other than those included in the aggregate amount of
emoluments received or due and receivable by Directors
shown in the financial statements or received as the fixed
salary of a full-time employee of the Company or of a
related company) by reason of a contract made by the
Company or by a related company with the Director or
with a firm of which he is a member, or with a company in
which he has a substantial financial interest.
For and on behalf of the Board and in accordance with a
resolution of the Directors.
Dated this 4th day of May 2023.
Amit Bose Sireesh Rao
Director Director
 Asian Paints(Vanuatu) Limited

Directors’ Statement
For the year ended 31 March 2023

In accordance with a resolution of the Board of Directors
of Asian Paints (Vanuatu) Limited, we state that in the
opinion of the Directors: view of the cash flows of the Company for the year
i) the accompanying statement of profit or loss and
other comprehensive income of the Company is
drawn up so as to give a true and fair view of the
results of the Company for the year ended 31 March
2023;
ii) the accompanying statement of changes in equity of
the Company is drawn up so as to give a true and fair
view of the changes in equity of the Company for the
year ended 31 March 2023;
iv) the accompanying statement of cash flows of the
Company is drawn up so as to give a true and fair
ended 31 March 2023;
v) at the date of this statement there are reasonable
grounds to believe the Company will be able to pay
its debts as and when they fall due; and
vi) all related party transactions have been adequately
recorded in the books of the Company.
For and on behalf of the Board and in accordance with a
resolution of the Directors.

iii) the accompanying statement of financial position of Dated this 4th day of May 2023.
the Company is drawn up so as to give a true and fair
view of the state of affairs of the Company as at 31
March 2023;
Amit Bose Sireesh Rao
Director Director

6

Independent Auditor’s Report
To the Shareholders of Asian Paints (Vanuatu) Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Asian Paints
(Vanuatu) Limited (“the Company”), which comprise the
statement of financial position as at 31 March 2023, and
the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement
of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of
the Company as at 31 March 2023, and its financial
performance and its cash flows for the year then ended
in accordance with International Financial Reporting
Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISA). Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the financial statements
section of our report. We are independent of the
Company in accordance with the International Ethics
Standards Board for Accountant’s Code of Ethics for
Professional (including International Independence
Standards) (IESBA Code) together with the ethical
requirements that are relevant to our audit of the
financial statements in Vanuatu and we have fulfilled
our other ethical responsibilities in accordance with
these requirements and the IESBA Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other information
The Directors are responsible for the other information.
The other information comprises the Director’s report
but does not include the financial statements and the
auditor’s report thereon.
Our opinion on the financial statements does not cover
the other information and we do not express any form of
assurance conclusion thereon.
7
Financial Statements
In connection with our audit of the financial statements,
our responsibility is to read the other information
identified above and, in doing so, consider whether
the other information is materially inconsistent with
the financial statements or our knowledge obtained
during the audit, or otherwise appears to be materially
misstated. If, based upon 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 the management and those
charged with governance for the Financial Statements
The management and Directors are responsible for
the preparation and fair presentation of the financial
statements in accordance with IFRS, and for such internal
control as the management and Directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management
and Directors are 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 the management and Directors either intend to
liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISA will always detect a material
misstatement when it exists. Misstatements can arise
from fraud and 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 the financial statements.
As part of an audit in accordance with ISA, we exercise
 Asian Paints(Vanuatu) Limited

Independent Auditor’s Report (Contd.)

professional judgement and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
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 the those charge 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.
Report on Other Legal and Regulatory Requirements
In our opinion, the financial statements have been
prepared in accordance with the requirements of the
Vanuatu Companies Act (CAP 191) in all material respects,
and;
a) we have been given all information, explanations
and assistance necessary for the conduct of the
audit; and
b) the Company has kept financial records sufficient to
enable the financial statements to be prepared and
audited.

• Conclude on the appropriateness of management’s

use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a Ernst & Young
material uncertainty exists related to events or Chartered Accountants
conditions that may cast significant doubt on the
Steven Pickering
Company’s ability to continue as a going concern. If
Partner
we conclude that material uncertainty exists, we are
required to draw attention in our auditor’s report to Suva, Fiji
the related disclosures in the financial statements
4 May 2023
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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.

We communicate with those charge with governance

8
 9
Statement of Profit or Loss and Other Comprehensive Income

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

VUV VUV

Revenue

Revenue from contracts with customers 2.1 95,596,327 95,618,484

Other operating income 2.2 242,334 1,528,706

95,838,661 97,147,190

Cost and expenses

Cost of goods sold (51,496,976) (50,595,287)

Operating expenses 2.3 (16,565,734) (15,968,774)

Salaries and employee benefits 2.4 (9,202,574) (7,567,195)

Impairment reversal on trade receivables (552,451) 308,442

Depreciation and amortisation 2.5 (809,096) (1,625,264)

(78,626,831) (75,448,078)

Profit for the year 17,211,830 21,699,112

Other comprehensive income for the year - -

Total comprehensive income for the year 17,211,830 21,699,112

The accompanying notes form an integral part of this statement of profit or loss and other comprehensive income.
 Asian Paints(Vanuatu) Limited

Statement of Financial Position

As at 31 March 2023

Notes 2023 2022

VUV VUV
Assets
Non-current assets
Property, plant and equipment 4 26,324,951 27,102,435
Intangible assets 5 2 2
Right-of-use assets 16 1,181,412 1,215,409
27,506,365 28,317,846
Current assets
Cash at bank and on hand 6 10,982,929 37,206,783
Trade receivables 7 10,655,300 14,249,489
Inventories 8 24,374,222 23,796,034
Prepayments and other assets 9 3,031,634 2,710,043
49,044,085 77,962,349
Total assets 76,550,450 106,280,195

Equity and liabilities

Shareholders’ equity
Share capital 10 30,939,300 30,939,300
Retained earnings 37,266,037 63,254207
Total equity 68,205,337 94,193,507
Non-current liabilities
Employee benefit liability 13 - 236,600
Current liabilities
Trade and other payables 11 8,027,875 11,676,213
Employee benefit liability 13 317,238 173,875
8,345,113 11,850,088
Total liabilities 8,345,113 12,086,688
Total equity and liabilities 76,550,450 106,280,195

For and on behalf of the Board and in accordance with a resolution of the Directors.

Amit Bose Sireesh Rao

Director Director

10
 11
Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

VUV VUV
Issued capital
Balance at the beginning of the year 30,939,300 30,939,300
Balance at the end of the year 10 30,939,300 30,939,300
Retained earnings
Balance at the beginning of the year 63,254,207 41,555,095
Net profit for the year 17,211,830 21,699,112
80,466,037 63,254,207
Dividend declared (43,200,000) -
Balance at the end of the year 37,266,037 63,254,207
Total equity and shares 68,205,337 94,193,507

The accompanying notes form an integral part of this statement of changes in equity.
 Asian Paints(Vanuatu) Limited

Statement of Cash Flows

For the year ended 31 March 2023

Notes 2023 2022

VUV VUV
Operating activities
Profit for the year 17,211,830 21,699,112

Adjustment to reconcile profit before tax to net cash

flows
Non-cash adjustment:
Depreciation and impairment of property, plant and 775,099 1,564,184
equipment
Depreciation of right-of-use asset 33,997 61,080
Movements in provision for doubtful debts 552,451 (308,442)
Movements in provision for employee entitlements (93,237) (738,524)
Working capital adjustments:
Decrease/(increase) in trade receivables 3,041,738 (4,061,754)
Increase in inventories (578,188) (1,614,838)
Increase in prepayments and other assets (321,591) (339,998)
(Decrease)/increase in trade and other payables (3,645,953) 159,298
Net cash flows from operating activities 16,976,146 16,420,118
Investing activities
Acquisition of plant and equipment - (243,647)
Net cash flows (used in) investing activities - (243,647)
Financing activities
Dividends paid (43,200,000) -
Net cash flows (used in) financing activities (43,200,000) -
Net (decrease)/increase in cash and cash equivalents (26,223,854) 16,176,471
Cash and cash equivalents at beginning of year 37,206,783 21,030,312
Cash and cash equivalents at end of year 6 10,982,929 37,206,783

The accompanying notes form an integral part of this statement of cash flows.

12

Notes to and forming part of the Financial Statements
for the year ended 31 March 2023
1.0 Corporate information
The financial statements of Asian Paints (Vanuatu)
Limited (‘the Company’) for the year ended 31 March
2023 was authorised for issue in accordance with
a resolution of the Directors dated 4 of May 2023.
Asian Paints (Vanuatu) Limited is a limited liability
company incorporated and domiciled in Vanuatu.
The registered office is located at Port Villa,
Vanuatu.
The principal activities of the company are described
in Note 21.
Significant policies which have been adopted in the
preparation of these financial statements are:
b)
1.1 Basis of preparation of the Financial Statement
The financial statements have been prepared on a
historical cost basis. The financial statements are
presented in Vanuatu Vatu (VUV).
Statement of compliance
The financial statements of Asian Paints (Vanuatu)
Limited have been prepared in accordance with
International Financial Reporting Standards (“IFRS”)
as issued by International Accounting Standards
Board (IASB).
1.2 Summary of significant accounting policies
a) Foreign currencies
The company’s financial statements are presented
in Vatu, which is the Company’s functional currency.
That is the currency of the primary economic
environment in which Asian Paints (Vanuatu) Limited
c)
operates. Transactions in foreign currencies are
initially recorded by the Company’s entities at their
respective functional currency spot rates at the
date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency spot rates of exchange at the reporting
date. Differences arising on settlement or
translation of monetary items are recognised in
profit or loss with the exception of monetary items
that are designated as part of the hedge of the
Company’s net investment of a foreign operation.
These are recognised in OCI until the net investment
is disposed of, at which time, the cumulative amount
is reclassified to profit or loss. Tax charges and
credits attributable to exchange differences on
those monetary items are also recorded in OCI.
13
Financial Statements
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at
fair value in a foreign currency are translated
using the exchange rates at the date when the fair
value is determined. The gain or loss arising on
translation of non-monetary items measured at
fair value is treated in line with the recognition of
the gain or loss on the change in fair value of the
item (i.e., translation differences on items whose
fair value gain or loss is recognised in OCI or profit
or loss are also recognised in OCI or profit or loss,
respectively).
Revenue recognition
Revenue is measured based on the consideration
specified in a contract with a customer and excludes
amounts collected on behalf of third parties. The
Company recognises revenue when it transfers
control over a product or service to a customer.
Revenue is recognised when the significant risks
and rewards of ownership of the goods have passed
to the buyer, usually on delivery of the goods. Sales
revenue represents revenue earned from the sale of
the Company’s products and is stated net of returns,
trade allowances and Goods and Services Tax.
Dividends
Revenue is recognised when the company’s right
to receive the payment is established, which
is generally when shareholders approve the
dividend.
Taxes
Goods and Services Tax (GST)
Expenses and assets are recognised net of the
amount of sales tax, except:
• When the sales tax incurred on a purchase of
assets or services is not recoverable from the
taxation authority, in which case, the sales tax
is recognised as part of the cost of acquisition
of the asset or as part of the expense item, as
applicable; and
• When receivables and payables are stated with
the amount of sales tax included.
The net amount of Goods and Services Tax
recoverable or payable to the tax authority is
included as part of the receivables or payables in the
statement of financial position.
 Asian Paints(Vanuatu) Limited
Notes to the Financial Statements (Contd.)
d) Property, plant and equipment
Construction in progress, plant and equipment are
stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. Such
cost includes the cost of replacing part of the plant
and equipment and borrowing costs for long-term
construction projects if the recognition criteria are
met.
When significant parts of plant and equipment
are required to be replaced at intervals, the
company depreciates them separately based on
their specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred. The present
value of the expected cost for the decommissioning
of an asset after its use is included in the cost of
the respective asset if the recognition criteria for a
provision are met.
The impairment accounting policy for goodwill
and intangible assets with indefinite lives similarly
applies to other non-financial assets, including
property, plant and equipment. Property, plant and
equipment transferred from customers are initially
measured at fair value at the date on which control is
obtained.
Depreciation is calculated on a straight-line basis
over the useful lives of the assets as follows:
Buildings 1.5% - 2%
Plant and equipment 10% - 30%
Motor vehicles 20%
Furniture and fittings 6% - 18%
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds
and the carrying amount of the asset) is included
in the statement of profit or loss when the asset is
derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
14
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 applies the provision of low-value assets
and doesn’t recognises lease liabilities.
e) Leases
i) Right-of-use 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 initial
upfront payment made on lease commencement.
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:
• Land 50 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
section (j) Impairment of non-financial assets.
ii) Leases of low-value assets
The company applies the lease of low-value assets
recognition exemption to leases that are considered
to be low value. Lease payments on 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

Notes to the Financial Statements (Contd.)
a straight-line basis over the lease terms and is
included in revenue in the statement of profit or
loss due to its operating nature. 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. (i)
f) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised
as part of the cost of the asset. All other borrowing
costs are expensed in the period in which they
occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds.
g) Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles,
excluding capitalised development costs, are
not capitalised and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an
intangible asset with a finite useful life are reviewed
at least at the end of each reporting period.
Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit
level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life
continues to be supportable. If not, the change
in useful life from indefinite to finite is made on
a prospective basis. Gains or losses arising from
15
Financial Statements
derecognition of an intangible asset are measured
as the difference between the net disposal proceeds
and the carrying amount of the asset and are
recognised in the statement of profit or loss when
the asset is derecognised.
h) Financial instruments
Recognition and measurement
Trade receivables 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 provisions of the
instrument.
A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair value
plus, for an item not at FVTPL, transaction costs that
are directly attributable to its acquisition or issue.
A trade receivable without a significant financing
component is initially measured at the transaction
price.
(ii) Classification and measurement
Financial assets
On initial recognition, a financial asset is classified as
measured at amortised cost, FVOCI or FVTPL.
Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing financial
assets, in which case all affected financial assets are
reclassified on the first day of the first reporting
period following the change in the business.
A financial asset is measured at amortised cost if it
meets both of the following conditions and is not
designated as at FVTPL:
• it is held within a business model whose
objective is to hold assets to collect contractual
cash flows; and
• its contractual terms give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.
All financial assets not classified as measured at
amortised cost as described above are measured
at FVTPL. On initial recognition, the Company
may irrevocably designate a financial asset that
 Asian Paints(Vanuatu) Limited
Notes to the Financial Statements (Contd.)
otherwise meets the requirements to be measured
at amortised cost as at FVTPL if doing so eliminates
or significantly reduces an accounting mismatch that
would otherwise arise.
Financial assets: Business model assessment
The Company makes an assessment of the objective
of the business model in which a financial asset is
held at a portfolio level because this best reflects
the way the business is managed and information
is provided to management. The information
considered includes:
• the stated policies and objectives for the
portfolio and the operation of those policies in
practice. These include whether management’s
strategy focuses on earning contractual interest
income, maintaining a particular interest rate
profile, matching the duration of the financial
assets to the duration of any related liabilities
or expected cash outflows or realising cash
flows through the sale of the assets;
• how the performance of the portfolio is
evaluated and reported to the Company’s
management;
• the risks that affect the performance of the
business model (and the financial assets held
within that business model) and how those risks
are managed;
• how directors of the business are compensated
– e.g. whether compensation is based on the fair
value of the assets managed or the contractual
cash flows collected; and
• “the frequency, volume and timing of sales of
financial assets in prior periods, the reasons for
such sales and demonstrate why those sales
do not reflect a change in the entity’s business
model.
Transfers of financial assets to third parties in
transactions that do not qualify for derecognition are
not considered sales for this purpose, consistent with
the Company’s continuing recognition of the assets.
16
Financial assets: Assessment whether contractual
cash flows are solely payments of principal and
interest
For the purposes of this assessment, ‘principal’
is defined as the fair value of the financial asset
on initial recognition. ‘Interest’ is defined as
consideration for the time value of money and for
the credit risk associated with the principal amount
outstanding during a particular period of time and
for other basic lending risks and costs (e.g. liquidity
risk and administrative costs), as well as a profit
margin.
In assessing whether the contractual cash flows
are solely payments of principal and interest, the
Company considers the contractual terms of the
instrument. This includes assessing whether the
financial asset contains a contractual term that could
change the timing or amount of contractual cash
flows such that it would not meet this condition. In
making this assessment, the Company considers:
• contingent events that would change the
amount or timing of cash flows;
• terms that may adjust the contractual coupon
rate, including variable rate features;
• prepayment and extension features; and
• terms that limit the Company’s claim to cash
flows from specified assets (e.g. non‑recourse
features).
A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents unpaid
amounts of principal and interest on the principal
amount outstanding, which may include reasonable
additional compensation for early termination of the
contract.
Financial assets: Subsequent measurement and
gains and loss
Financial assets that are measured at amortised
costs 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 profit or loss. Any gain
or loss on derecognition is recognised in profit or
loss.

Notes to the Financial Statements (Contd.)
Financial assets
The Company classified its financial assets as loans
and receivable.
Financial assets: Subsequent measurement and
gains and loss
Loans and receivables - measured at amortised cost
using the effective interest method.
Financial liabilities – Classification, subsequent
(iv) Offsetting
measurement and gains and losses
Financial liabilities are classified and measured
at amortised cost or FVTPL. A financial liability
is classified at FVTPL if it is classified as held-for
trading, 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 profit or loss. Other financial liabilities are
i)
subsequently measured at amortised cost using the
effective interest method. Interest expense and
foreign exchange gains and losses are recognised in
profit and loss. Any gains or loss on derecognition is
also recognised in profit or loss.
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 it does not retain control of the
financial asset.
The Company enters into transactions whereby
it transfers assets recognised in its statement
of financial position, but retains either all or
substantially all of the risks and rewards of the
transferred assets in these cases the transferred
assets are not derecognised.
j)
(iii) Derecognition
(i)
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 of the modified liability are
17
Financial Statements
substantially different, in which case a new financial
liability based on the modified terms is recognised at
fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid (including
any non‑cash assets transferred or liabilities
assumed) is recognised in profit or loss.
Financial assets and financial liabilities are offset
and the net amount presented in the statement of
financial position 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.
Inventories
Inventories are stated at the lower of cost (weighted
average method) and net realisable value.
Costs incurred in bringing each product to its
present location and condition are accounted for as
follows:
Raw materials - purchase cost; and
Finished goods and work in progress - cost of direct
materials and labour and an appropriate portion
of fixed and variable overheads but excluding
borrowing costs.
Initial cost of inventories includes the transfer of
gains and losses on qualifying cash flow hedges,
recognised in OCI, in respect of the purchases of raw
materials.
Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to
make the sale.
Impairment
Non-derivative financial assets
The Company recognises loss allowances for ECLs on
financial assets measured at amortised cost.
The Company measures loss allowances at an
amount equal to lifetime ECL, except for the
following, which are measured as 12‑month ECL:
 Asian Paints(Vanuatu) Limited
Notes to the Financial Statements (Contd.)
• other receivables and cash at bank balances
for which credit risk (i.e. the risk of default
occurring over the expected life of the financial
instrument) has not increased significantly since
initial recognition.
When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating ECL, the
Company considers reasonable and supportable
information that is relevant and available without
undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on
the Company’s historical experience and informed
credit assessment and including forward‑looking
information.
The Company assumes that the credit risk on a
financial asset has increased significantly if it is more
than 30 days past due.
The Company considers a financial asset to be in
default when:
• the borrower is unlikely to pay its credit
obligations to the Company in full, without
recourse by the Company to actions such as
realising security (if any is held); or
• the financial asset is more than 90 days past
due.
The Company considers another receivable or cash
balance to have low credit risk when its credit risk
rating is equivalent to the globally understood
definition of “investment grade”. The Company
considers this to be B1 or a higher rating per
Moody’s.
Lifetime ECLs are the ECLs that result from all
possible default events over the expected life of a
financial instrument.
12‑month ECLs are the portion of ECLs that result
from default events that are possible within the 12
months after the reporting date (or a shorter period
if the expected life of the instrument is less than 12
months).
The maximum period considered when estimating
ECLs is the maximum contractual period over which
the Company is exposed to credit risk.
18
Measurement of ECLs
ECLs are a probability‑weighted estimate of credit
losses. Credit losses are measured as the present
value of all cash shortfalls (i.e the difference
between the cash flow due to the entity in
accordance with the contract and the cash flows that
the Company expects to receive).
ECLs are discounted at the effective interest rate of
the financial asset.
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.
Credit-impaired financial assets
Evidence that a financial asset is credit‑impaired
includes the following observable data:
• significant financial difficulty of the borrower
or issuer;
• a breach of contract such as a default or being
more than 90 days past due;
• the restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise;
• it is probable that the borrower will enter
bankruptcy or other financial reorganisation;
and
• the disappearance of an active market for a
security because of financial difficulties.
Presentation of allowance for ECL in the statement
of financial position
Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.
Write-off
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

Notes to the Financial Statements (Contd.)
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.
The carrying amounts of the Company’s non-
financial assets, other than inventories are reviewed
at each reporting date to determine whether there
is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is
estimated.
The recoverable amount of an asset or cash-
generating unit is the greater of its value in use and
its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset.
(ii) Non-financial assets
For the purpose of impairment testing, assets that
cannot be tested individually are grouped together
into the smallest group of assets that generates
cash inflows from continuing use that are largely
independent of the cash inflows of other assets
or groups of assets (the “cash-generating unit, or
CGU”).
An impairment loss is recognised if the carrying
amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are
recognised in profit or loss.
An impairment loss is reversed only to the extent
that the asset’s carrying amount cannot exceed the
carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment
loss has been recognised.
k) Cash and short term deposits
Cash and short-term deposits in the statement
of financial position comprise cash at banks and
on hand and short-term deposits with a maturity
of three months or less, which are subject to an
insignificant risk of changes in value. For the purpose
of the consolidated statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of
the Company’s cash management.
19
Financial Statements
l) Provisions
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. When the Company expects some or
all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense
relating to a provision is presented in the statement
of profit or loss net of any reimbursement.
If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used, the
increase in the provision due to the passage of time
is recognised as a finance cost.
m) Employee entitlements
Provisions are made for wages and salaries, incentive
payments and annual leave estimated to be payable
to employees at balance date on the basis of
statutory and contractual requirements.
n) Trade and other payables
Liabilities for trade creditors and other amounts
are carried at cost (inclusive of Consumption Tax
where applicable) which is the fair value of the
consideration to be paid in the future for goods
and services received whether or not billed to
the company. Amounts payable that have been
denominated in foreign currencies have been
translated to local currency using the rates of
exchange ruling at the end of the financial period.
o) Comparative figures
Comparative figures have been amended where
necessary, for changes in presentation in the current
period.
1.3 Significant accounting judgments, estimates and
assumptions
The preparation of the company’s financial
statements requires management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
 Asian Paints(Vanuatu) Limited
Notes to the Financial Statements (Contd.)
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.
In the process of applying the company’s accounting
policies, management has made various judgements.
Those which management has assessed to have the
most significant effect on the amounts recognised in
the financial statements have been discussed in the
individual notes of the related financial statement
line items.
The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year,
are also described in the individual notes of the
related financial statement line items below. The
company based its assumptions and estimates on
parameters available when the financial statements
were prepared. Existing circumstances and
assumptions about future developments, however,
may change due to market changes or circumstances
arising that are beyond the control of the company.
Such changes are reflected in the assumptions when
they occur.
Judgements
In the process of applying the company’s accounting
policies, management has made the following
judgements, which have the most significant effect
on the amounts recognised in the consolidated
financial statements:
Determining the lease term of contracts with
renewal and termination options – company as
lessee
The company determines the lease term as the
non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
The company has a lease contract that include
extension and termination options. The company
applies judgement in evaluating whether it is
reasonably certain whether or not to exercise
the option to renew or terminate the lease. That
is, it considers all relevant factors that create an
20
economic incentive for it to exercise either the
renewal or termination. After the commencement
date, the company reassesses the lease term if there
is a significant event or change in circumstances
that is within its control and affects its ability to
exercise or not to exercise the option to renew or to
terminate (e.g., construction of significant leasehold
improvements or significant customisation to the
leased asset).
Going concern
The Directors have made an assessment of the
Company’s ability to continue as a going concern and
are satisfied that it has the resources to continue in
business for the foreseeable future. Furthermore,
the Directors are not aware of any material
uncertainties that may cast significant doubt on the
Company’s ability to continue as a going concern.
Therefore, the financial statements continue to be
prepared on the going concern basis.
1.4 Standards issued but not yet effective
The new and amended standards and interpretations
that are issued, but not yet effective, up to the date
of issuance of the Company’s financial statements
are disclosed below. The Company intends to
adopt these new and amended standards and
interpretations, if applicable, when they become
effective.
Amendments to IAS 1: Classification of Liabilities
as Current or Non-current
In January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of
the reporting period
• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
• That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
must be applied retrospectively. The Company is
currently assessing the impact the amendments will
have on current practice.

Notes to the Financial Statements (Contd.)
Amendments to IAS 1: Classification of Liabilities
as Current or Non-current
In January 2020, the IASB issued amendments
to paragraphs 69 to 76 of IAS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of
the reporting period
- That classification is unaffected by the
likelihood that an entity will exercise its
deferral right
- That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
must be applied retrospectively. The Company is
currently assessing the impact the amendments will
have on current practice.
Definition of Accounting Estimates - Amendments
to IAS 8
In February 2021, the IASB issued amendments
to IAS 8, in which it introduces a definition of
‘accounting estimates’. The amendments clarify
the distinction between changes in accounting
estimates and changes in accounting policies and the
correction of errors. Also, they clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
21
Financial Statements
The amendments are effective for annual reporting
periods beginning on or after 1 January 2023 and
apply to changes in accounting policies and changes
in accounting estimates that occur on or after the
start of that period. Earlier application is permitted
as long as this fact is disclosed.
The amendments are not expected to have a
material impact on the Company.
Disclosure of Accounting Policies - Amendments
to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments
to IAS 1 and IFRS Practice Statement 2 Making
Materiality Judgements, in which it provides
guidance and examples to help entities apply
materiality judgements to accounting policy
disclosures. The amendments aim to help entities
provide accounting policy disclosures that are more
useful by replacing the requirement for entities to
disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting
policies and adding guidance on how entities apply
the concept of materiality in making decisions about
accounting policy disclosures.
The amendments to IAS 1 are applicable for annual
periods beginning on or after 1 January 2023 with
earlier application permitted. Since the amendments
to the Practice Statement 2 provide non-mandatory
guidance on the application of the definition
of material to accounting policy information,
an effective date for these amendments is not
necessary.
The Company is currently assessing the impact of the
amendments to determine the impact they will have
on the Company’s accounting policy disclosures.
 Asian Paints(Vanuatu) Limited

Notes to the Financial Statements (Contd.)

2. Revenue and expenses

2023 2022
VUV VUV
2.1 Revenue from contracts with customers
Sales 95,596,327 95,618,484
2.2 Other operating income
Net exchange gain - 1,528,706
Insurance claims 242,334 -
242,334 1,528,706
2.3 Operating expenses
Auditors’ remuneration 596,295 511,110
Bank charges 107,759 93,225
Royalties 2,961,629 3,215,352
Net exchange loss 343,198 -
Other operating expenses 12,556,853 12,149,087
16,565,734 15,968,774
2.4 Salaries and employee benefits
Salaries and wages 5,223,168 4,643,554
Superannuation contributions 194,875 214,004
Staff costs 3,784,531 2709,637
9,202,574 7,567,195
2.5 Depreciation and amortisation
Depreciation and impairment - property, plant and equipment 775,099 1,564,184
Depreciation - right-of-use assets 33,997 61,080
809,096 1,625,264

3. Dividends declared/paid
2023 2022
VUV VUV
Dividend declared/paid during the year 43,200,000 -

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
4. Property, plant and equipment

Building Plant & Office Work in progress Total

equipment, &
Motor Vehicle
VUV VUV VUV VUV
Cost
At 1 April 2021 48,508,067 47,247,293 - 95,755,360
Additions - 241,262 2,385 243,647
At 31 March 2022 48,508,067 47,488,555 2,385 95,999,007
Disposal - - (2,385) (2,385)
At 31 March 2023 48,508,067 47,488,555 - 95,996,622
Depreciation and
impairment
At 1 April 2021 21,337,117 45,995,271 - 67,332,388
Depreciation charge 727,621 836,563 - 1,564,184
At 31 March 2022 22,064,738 46,831,834 - 68,896,572
Depreciation charge 501,290 273,809 - 775,099
At 31 March 2023 22,566,028 47,105,643 - 69,671,671
Net book value:
At 31 March 2023 25,942,039 382,912 - 26,324,951
At 31 March 2022 26,443,329 656,721 2385 27,102,435

5. Intangible assets
2023 2022
VUV VUV
Software costs 1,715,966 1,715,966
Amortisation and impairment 1,715,964 1,715,964
Net book value 2 2

6. Cash at bank and on hand

2023 2022
VUV VUV
Cash at bank and on hand 10,982,929 37,206,783
For the purpose of the cash flow statement, cash and cash equivalents
comprise the following at 31 March:
Cash at bank 10,974,758 37,202,097
Cash on hand 8,171 4,686
10,982,929 37,206,783
 Asian Paints(Vanuatu) Limited

Notes to the Financial Statements (Contd.)

7. Trade receivables
2023 2022
VUV VUV
Trade receivables 6,593,327 6,463,145
Related party receivables [refer note 15(b)] 4,061,973 7,786,344
10,655,300 14,249,489
Trade and other receivables are non-interest bearing and are generally on 30-90 day terms. At 31 March 2023,
trade receivables at nominal value of VUV 2,121,169 (2022: VUV 1,568,718) were impaired and fully provided for.

Movements in provision for impairment of receivables were as follows:

2023 2022
VUV VUV
Opening balance 1,568,718 1,877,160
Charged/(reversed) for the year 552,451 (308,442)
Closing balance 2,121,169 1,568,718

At 31 March, the ageing analysis of trade receivables for the Company is as follows:

Neither past due nor Past due but not impaired

Total
impaired 31 - 90 days 91 - 180 days > 180 days
2023 10,655,300 2,623,546 4,347,658 3,622,788 61,308
2022 14,249,489 1,102,912 11,330,519 1,244,895 571,163

8. Inventories
2023 2022
VUV VUV
Finished goods 24,125,182 23,127,290
Raw materials, accessories, stores and spares 249,040 668,744
Total inventories at the lower of cost and net realisable value 24,374,222 23,796,034

9. Prepayments and other assets

2023 2022
VUV VUV
Prepayment 2,399,662 1,808,478
Deposits 401,706 401,706
Other receivables 230,266 499,859
3,031,634 2,710,043

24
 25
Notes to the Financial Statements (Contd.)

Financial Statements
10. Share capital
2023 2022
VUV VUV
Authorised
270000 ordinary shares of USD 1.00 each 30,939,300 30,939,300

Ordinary shares issued and fully paid

270000 ordinary shares of USD 1.00 each 30,939,300 30,939,300

11. Trade and other payables

2023 2022
VUV VUV
Trade payables 730 136,934
Related party payables 15 (b) 4,629,674 10,013,074
Other payables 3,397,471 1,526,205
8,027,875 11,676,213

Terms and conditions of the above financial liabilities:

• Trade payables are non-interest bearing and are normally settled on 60-day terms.
• Other payables are non-interest bearing and have an average term of six months.

12. Dividend payable

2023 2022
VUV VUV
Arising during the year 43,200,000 55,350,000
Paid during the year (43,200,000) (55,350,000)
Balance at the end of the year - -

13. Employee benefit liability

2023 2022
VUV VUV
Opening balance 410,475 1,148,999
Utilised arising during the year net (93,237) (738,524)
Balance at the end of the year 317,238 410,475
This is disclosed as:
Current 317,238 173,875
Non-current - 236,600
317,238 410,475
 Asian Paints(Vanuatu) Limited

Notes to the Financial Statements (Contd.)

14. Commitments and contingencies

Operating lease commitments - Company as lessee
The company has entered into commercial leases on land. This lease has average life of 50 years with no renewal
option included in the contracts. There are no restrictions placed upon the company by entering into these leases

Future minimum rental payable under non-cancellable operating leases as at 31 March 2023 and March 2022 are
as follows:
2023 2022
VUV VUV
Within one year 100,000 100,000
After one year but not more than five years 300,000 300,000
More than five years 1,500,000 1600,000
Minimum lease payments 1,900,000 2,000,000

Contingent liabilities
Contingent liabilities as at 31 March 2023 are $nil (2022: $nil).

15. Related party disclosures

(a) Directors
Directors at the date of this report are:
• Keeleri Raj Puthiyedath (resigned on 26 April 2022)
• Sireesh Rao Talluri
• Alain Lew
• Amit Bose (appointed on 26 April 2022)

(b) Transactions with related parties

During the year Company entered into transactions with related parties in the ordinary course of business under
normal commercial terms. Significant transactions during the year are as follows:

2023 2022
VUV VUV
Royalties
Asian Paints Limited 2,260,263 2,190,869
Technical/Management fee
Asian Paints (South Pacific) Pte Ltd, Fiji 4,206,806 4,009,271
Intra group sales
Au Bon Marche 225,089 -
Santo Hardware Ltd, Vanuatu 22,097,973 -
Port Villa Hardware Ltd, Vanuatu 26,867,961 25,429,221
49,191,023 25,429,221

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
15. Related party disclosures (Contd.)

2023 2022
VUV VUV
Intra group purchases
Asian Paints (South Pacific) Pte Ltd, Fiji 55,497,946 49,867,210
Au Bon Marche 584,867 484,386
56,082,813 50,351,596
Amount owing to related parties
Asian Paints (South Pacific) Pte Ltd, Fiji 4,254,059 9,657,844
Asian Paints Limited 375,615 355,230
4,629,674 10,013,074
Due from related parties
Au Bon Marche 134,139 -
Santo Hardware Ltd, Vanuatu 1,034,771 -
Port Villa Hardware Ltd, Vanuatu 2,893,063 7,786,344
4,061,973 7,786,344
Key management personnel
Short-term employee benefits 4,434,582 4,182,767

16. Right-of-use assets

Leasehold land Total
VUV VUV
As at 1 April 2022 1,276,489 1,276,489
Depreciation expense (61,080) (61,080)

As at 31 March 2022 1,215,409 1,215,409

Depreciation expense (33,997) (33,997)
As at 31 March 2023 1,181,412 1,181,412

17. Financial risk management objectives and policies

Principal financial liabilities comprise trade payables. The main purpose of these financial liabilities is to raise
finance for the Company’s operations. The Company has various financial assets such as trade receivables and
cash which arise directly from its operations.

The main risk arising from the Company’s financial statements are market risk, credit risk, and liquidity risk.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarised
below.

Interest rate risk

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s short
term deposits and bank overdraft facility which has not yet been utilised.

Credit risk
It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the
 Asian Paints(Vanuatu) Limited

Notes to the Financial Statements (Contd.)

Company’s exposure to bad debts is not significant. There are no significant concentrations of credit risk within
the Company.

Foreign currency risk

The Company has foreign exchange risk as a result of transactions denominated in foreign currencies arising from
normal trading activities. Normal currency trading activities foreign exchange risk are not hedged or subject to
foreign currency forward exchange contracts.

Increase/(decrease) in USD rate Effect on profit before tax

VUV
+10% 398,532
2023
-10% (398,532)
+10% 965,785
2022
-10% (965,785)

Liquidity risk
The Company monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers
the maturity of both its financial investments and financial assets (e.g. accounts receivables, other financial
assets) and projected cash flows from operations.

The table below summarises the maturity profile of the Company’s financial liabilities at 31 March 2023 based on
contractual undiscounted payments.

Year ended 31 March 2023 On demand 1 to 12 1 to 5 years > 5 years Total
months
VUV VUV VUV VUV VUV
Trade and other payables - 8,027,875 - - 8,027,875
- 8,027,875 - - 8,027,875

Year ended 31 March 2022 On demand 1 to 12 1 to 5 years > 5 years Total

months
VUV VUV VUV VUV VUV
Trade and other payables - 11,676,213 - - 11,676,213
- 11,676,213 - - 11,676,213

Capital management
The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating
and a healthy capital ratio in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to
shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, polices
or processes during the financial year ended 31 March 2023.

The company monitors capital using a gearing ratio below 30%, which is net debt divided by total capital plus net
debt. The company includes within net debt, trade and other payables less cash and cash equivalents. Capital
includes equity attributable to equity holders.

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
2023 2022
VUV VUV
Trade and other payables 8,027,875 11,676,213
Less cash and short term deposits (10,982,929) (37,206,783)
Net debt (2,955,054) (25,530,570)
Equity 68,205,337 94,193,507
Total capital 68,205,337 94,193,507
Capital and net debt 65,250,283 68,662,937
Gearing ratio -4% -27%

18. Financial instruments

Set out below is a comparison by category of carrying amounts and fair values of all of the Company’s financial
instrument that are carried on the financial statements.

Carrying amount Fair value

2023 2022 2023 2022
VUV VUV VUV VUV
Financial assets
Cash at bank and on hand 10,982,929 37,206,783 10,982,929 37,206,783
Trade receivables 10,655,300 14,249,489 10,655,300 14,249,489
Prepayments and other 3,031,634 2,710,043 3,031,634 2,710,043
assets
24,669,863 54,166,315 24,669,863 54,166,315
Financial liabilities
Trade and other payables 8,027,875 11,676,213 8,027,875 11,676,213
8,027,875 11,676,213 8,027,875 11,676,213

The fair value of derivatives and borrowings has been calculated by discounting the expected future cash flows at
prevailing interest rates. The fair value of financial assets have been calculated using market interest rates.

19. Events subsequent to balance date

No matter or circumstance have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial years.

20. Segment information

Industry segment
The Company operates predominantly in distribution of paints and paints related items.

Geographical segment
The Company operates in Vanuatu and is therefore one geographical area for reporting purposes.
 Asian Paints(Vanuatu) Limited

Notes to the Financial Statements (Contd.)

21. Principal activities

The principal activities of the Company in the course of the year were sale and distribution of paints and paint
related products and there has been no significant change in these activities during the year.

22. Company details

Registered Office
Asian Paints (Vanuatu) Limited
Port Villa
Vanuatu.

Number of Employees
As at balance date, the company employed a total of 6 (2022: 6 employees).

30
Asian Paints (Middle East) SPC
Contents
Proprietor’s Report......................................................................................................................................................................................... 4

Administration and Contact details............................................................................................................................................................. 5

Independent Auditor’s Report..................................................................................................................................................................6-7

Statement of Financial Position................................................................................................................................................................... 8

Statement of profit or loss and other comprehensive income.............................................................................................................. 9

Statement of Changes in Equity.................................................................................................................................................................10

Statement of Cash Flows............................................................................................................................................................................. 11

Notes to the financial statements....................................................................................................................................................... 12-35

 Asian Paints (Middle East) SPC

Proprietor’s Report
For the year ended 31 March 2023

Proprietor’s report Results and appropriations

The Member submit his report and the audited financial The results of the Company for the year ended 31 March
statements for the year ended 31 March 2023. 2023 are set out on page 6 of the financial statements.

Principal activities Auditors

The Company’s principal activity is manufacturing The financial statements have been audited by BDO L.L.C.
and trading in paints and allied products and sale of who offer themselves for re-appointment.
construction materials.

Basis of preparation of accounts

The accompanying financial statements have been Paranthaman Azagarsamy Krishnan
prepared in accordance with International Financial Director
Reporting Standards and the Commercial Companies Law
and Regulations of the Sultanate of Oman.

Joseph Eapen
Director

4
 5
Administration and contact details

Statutory Reports
as at 31 March 2023

Commercial registration number 1571133 (Mortgaged)

Member Asian Paints International Private Limited

Board of Directors Pragyan kumar

Joseph Eapen
Paranthaman Azagarsamy Krishnan

Bankers Ahli Bank SAOG

Bank Muscat SAOG
State Bank of India
HSBC Bank Oman SAOG
HSBC Ltd Singapore

Registered office PO Box 462, Al Khuwair

PC 133
Muscat
Sultanate of Oman

Auditors BDO L.L.C.

Suite No. 601 & 602, Pent House
Beach One Building, Way No. 2601
Shatti Al Qurum
PO Box 1176, PC 112, Ruwi
Muscat
Sultanate of Oman
 Asian Paints (Middle East) SPC
Independent Auditor’s Report
TO THE MEMBERS OF materially inconsistent with the financial statements
ASIAN PAINTS (MIDDLE EAST) SPC appears to be materially misstated. If, based on the work
Report on the Audit of the Financial Statements
Opinion regard.
We have audited the financial statements of Asian Paints
(Middle East) SPC (the Company), which comprise the
statement of financial position as at 31 March 2023, the
statements of profit or loss and other comprehensive
income, changes in equity and cash flows for the year
then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying financial statements
present fairly, in all material respects, the financial
position of the Company as at 31 March 2023, and its
financial performance and its cash flows for the year
then ended in accordance with International Financial
Reporting Standards (IFRSs).
Basis for Opinion continue as a going concern, disclosing, as applicable,
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent
of the Company in accordance with the International
Code of Ethics for Professional Accountants (including
International Independence Standards) issued by the
International Ethics Standards Board for Accountants
(IESBA Code) together with the ethical requirements
that are relevant to our audit of the financial statements
in the Sultanate of Oman, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information.
Other information comprises the Proprietors’ report
but does not include the financial statements and our
auditor’s report thereon.
Our opinion on the 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 financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
6
or our knowledge obtained in the audit, or otherwise
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
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation and fair
presentation of the financial statements in accordance
with IFRSs and their preparation in compliance with the
applicable provisions of the Commercial Companies Law
and Regulations of the Sultanate of Oman, and for such
internal control as management determines is necessary
to enable the preparation of financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, management
is responsible for assessing the Company’s ability to
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.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
“BDO LLC, an Omani registered limited liability company,
is a member of BDO International Limited, a UK company
limited by guarantee, and forms part of the international
BDO network of Independent member firms.
BDO is the brand name for the BDO International
network and for each of the BDO Member Firms.”
Accountants and Auditors License No. SMH/13/2015,
Financial Advisory License No. SMA/69/2015, Commercial
Registration No. 1222681. VATIN: OM1100002154, TAX
Card No. 8056881
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISAs will always detect a material
misstatement when it exists. Misstatements can arise

Independent Auditor’s Report (Contd.)
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 financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• 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
7
Financial Statements
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 financial statements, including the
disclosures, and whether the 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.
Report on Other Legal and Regulatory Requirements
We report that the financial statements of the Company
as at, and for the year ended 31 March 2023, in all
material respects, comply with the applicable provisions
of the Commercial Companies Law and Regulations of the
Sultanate of Oman.
Muscat BDO LLC
04 May 2023
 Asian Paints (Middle East) SPC

Statement of Financial Position

As at 31 March 2023

Notes 2023 2022

OMR OMR
ASSETS
Non-current assets
Property, plant and equipment 5 3,672,787 3,641,429
Right-of-use assets 7 348,835 403,359
Deferred tax asset 23 14,624 -
Total non-current assets 4,036,246 4,044,788
Current assets
Inventories 8 2,501,674 2,424,476
Trade and other receivables 9 4,607,542 3,668,841
Lease receivables 6 19,088 19,219
Due from related parties 10 577,122 386,226
Cash and bank balances 24 381,874 1,253,292
Total current assets 8,087,300 7,752,054
Total assets 12,123,546 11,796,842
EQUITY AND LIABILITIES
Capital and reserves
Share capital 11 1,122,000 1122,000
Legal reserve 12 374,000 374,000
Retained earnings 5,280,581 4,072,093
Total capital and reserves 6,776,581 5,568,093
Non-current liabilities
Lease liabilities 13 367,854 427,937
Employees’ terminal benefits 14 321,044 317,842
Deferred tax liability 23 - 30,222
Total non-current liabilities 688,898 776,001
Current liabilities
Lease liabilities 13 52,639 49,248
Bank borrowings 16 - 1,123,699
Due to related parties 10 673,765 375,383
Trade and other payables 15 3,672,700 3,881,950
Income tax payable 23 258,963 22,468
Total current liabilities 4,658,067 5,452,748
Total liabilities 5,346,965 6,228,749
Total equity and liabilities 12,123,546 11,796,842

These financial statements, as set out on pages 8 to 35, were approved and authorised for issue by the Board of
Directors on 30 April 2023 and signed on their behalf by:

Joseph Eapen Paranthaman Azagarsamy Krishnan

Director Director

8
 9
Statement of Profit or Loss and Other Comprehensive Income

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

OMR OMR
Revenue 17 15,248,559 12,438,625
Cost of sales 18 (10,093,100) (9,054,835)
Gross profit 5,155,459 3,383,790
Other income 19 15,890 44,491
5,171,349 3,428,281
Expenses
Salaries and other related staff costs 20 (1,702,269) (1,521,093)
General, administrative, selling and distribution expenses 21 (1,681,490) (1,514,577)
Expected credit losses on trade receivables 9 (287,403) (34,193)
Depreciation 5 (32,356) (33,134)
(3,703,518) (3,102,997)
Profit from operations 1,467,831 325,284
Finance cost 22 (63,273) (91,972)
(63,273) (91,972)
Profit before tax for the year 1,404,558 233,312
Income tax 23 (211,410) (31,940)
Net profit for the year 1,193,148 201,372
Other comprehensive income
Items that will not be reclassified to profit or loss
Actuarial gain on defined benefit plan 14 18,047 -
Deferred tax liabilities on above 23 (2,707) -
Total other comprehensive income for the year 15,340 -
Total comprehensive income and net profit for the year 1,208,488 201,372
 Asian Paints (Middle East) SPC

Statement of Changes In Equity

For the year ended 31 March 2023

Share capital Legal reserve Retained Total

earnings
At 31 March 2021 1,122,000 374,000 3,870,721 5,366,721
Total comprehensive income and net profit for - - 201,372 201,372
the year
At 31 March 2022 1,122,000 374,000 4,072,093 5,568,093
Total comprehensive income and net profit for - - 1,193,148 1,193,148
the year
Items that will not be reclassified to profit or
loss
Acturial gain on defined benefit plan, - - 15,340 15,340
net of tax
At 31 March 2023 1,122,000 374,000 5,280,581 6,776,581

10
 11
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

OMR OMR
Operating activities
Net profit for the year 1,193,148 201,372
Adjustments for:
Depreciation 5 269,631 267,038
Amortisation of right-of-use assets 7 67,506 78,589
Loss on disposal of property, plant and equipment 21 - 514
Provision for/(reversal of) obsolete and slow-moving 8 32,075 (15,388)
inventories
Expected credit losses on trade receivables 9 287,403 34,193
Provision for employees’ benefit liabilities 14 59,191 37,373
COVID-19 related rent concession 19 - (3,091)
Gain on lease modification 19 - (7,276)
Finance costs 22 63,273 91,972
Taxation 23 211,410 31,940
2,183,637 717,236
Working capital changes
Inventories (109,273) (420,136)
Trade and other receivables (including lease receivables) (1,225,973) 168,371
Due from related parties (190,896) (374926)
Trade and other payables (209,250) 864,097
Due to related parties 298,382 (257,006)
Net cash generated from operating activities 746,627 697,636
Employees’ terminal benefits paid 14 (37,942) (56,278)
Income tax paid 23 (22,468) (88,662)
Net cash generated from operating activities 686,217 552,696
Investing activities
Purchase of property, plant and equipment 5 (301,352) (81,190)
Proceeds from disposal of office equipment 363 -
Net cash used in investing activities (300,989) (81,190)
Financing activities
Repayment of bank borrowings (5,608,434) (5,627,810)
Receipts from bank borrowings 4,484,735 6,187,242
Payment of lease liabilities (91,662) (72,984)
Finance costs paid 22 (41,285) (69,038)
Net cash (used in)/from financing activities (1,256,646) 417,410
Net change in cash and cash equivalents (871,418) 888,916
Cash and cash equivalents at beginning of year 1,253,292 364,376
Cash and cash equivalents at end of year 24 381,874 1,253,292

Disclosure as required by IAS 7 “Statement of Cash Flows” has been shown in Note 28 to the financial
statements.
 Asian Paints (Middle East) SPC

Notes to the Financial Statements

for the year ended 31 March 2023

1 Legal status and principal activities
Asian Paints (Middle East) SPC (“the Company”)
is a sole proprietor company registered with the
Ministry of Commerce, Industry and Investment
Promotion (MOCIIP) in accordance with the
provisions of the Commercial Companies Law of the
Sultanate of Oman. The Company’s principal activity
is manufacturing and trading in paints and allied
products and sale of construction materials. The
Company is a subsidiary of Asian Paints International
Private Limited incorporated in Singapore and the
ultimate parent Company is Asian Paints (India) Ltd
incorporated in India.
The Company’s principal place of business is located
at Ghala, Muscat, Sultanate of Oman.
2 Basis of preparation The financial statements are presented in Omani
Statement of compliance
The financial statements have been prepared in
accordance with International Financial Reporting
Standards (“IFRS”) issued by the International
Accounting Standards Board (IASB), interpretations
issued by the International Financial Reporting
Interpretation Committee (IFRIC) and the relevant
requirements of the Commercial Companies Law and
Regulations of the Sultanate of Oman.
Basis of measurement
The financial statements have been prepared under
the historical cost convention and going concern
assumption. The preparation of financial statements
is in conformity with IFRS that requires the use of
certain critical accounting estimates. It also requires
management to exercise judgment in the process of
applying the Company’s accounting policies.
Functional currencies
Rials (RO) which is the Company’s functional and
reporting currency.

3 Effect of adoption of new

accounting standards
Standards, amendments and interpretations effective and adopted in the year 2022 - 2023

The following new standards, amendment to existing standards or interpretations to published standards are
mandatory for the first-time and have been adopted in the preparation of the financial statements for the year
ended 31 March 2023:

Standard or Title Effective for annual periods

Interpretation beginning on or after
Amendments to IAS 37 Onerous Contracts: Cost of Fulfilling a 1 January 2022
Contract
Amendments to IAS 16 Property, Plant and Equipment: Proceeds 1 January 2022
Before Intended Use
Amendments to IFRS 1, Annual Improvements to IFRS Standards 2018- 1 January 2022
IFRS 9 and IAS 41 2020
Amendments to IFRS 3 References to Conceptual Framework 1 January 2022

Amendments to IAS 37: Onerous Contracts: Cost The amendments to IAS 37.68A clarify, that the costs
of Fulfilling a Contract relating directly to the contract consist of both:
IAS 37 defines an onerous contract as a contract in
• The incremental costs of fulfilling that contract-
which the unavoidable costs (costs that the Company
e.g. direct labour and material; and
has committed to pursuant to the contract) of
meeting the obligations under the contract exceed
• An allocation of other costs that relate
the economic benefits expected to be received
directly to fulfilling contracts: e.g. Allocation
under it.
of depreciation charge on property, plant and
equipment used in fulfilling the contract.
12
 13
Notes to the Financial Statements (Contd.)

This amendment had no impact on the financial
statements of the Company as there were no
onerous contracts.
Amendments to IAS 16: Property, Plant and
Equipment: Proceeds Before Intended Use
The amendment to IAS 16 prohibits an entity from
deducting from the cost of an item of property,
plant and equipment, any proceeds received from
selling items produced while the entity is preparing
the asset for its intended use (for example, the
proceeds from selling samples produced during the
testing phase of a manufacturing facility after it is
being constructed but before start of commercial
production). The proceeds from selling such samples,
together with the costs of producing them, are now
recognised in profit or loss.
This amendment had no impact on the financial
statements of the Company as there were no sales
of such items produced by property, plant and
equipment made available for use on or after the
beginning of the earliest period presented.
Financial Statements
Annual Improvements to IFRS Standards 2018-
2020
• Amendments to IFRS 1: Subsidiary as a First-
time Adopter
• IFRS 9 Financial Instruments – Fees in the ‘10
per cent’ Test for Derecognition of Financial
liabilities
• IAS 41 Agriculture – Taxation in Fair Value
Measurements
These amendments had no impact on the financial
statements of the Company.
Amendments to IFRS 3: References to Conceptual
Framework
In May 2020, the IASB issued amendments to IFRS
3, which update a reference to the Conceptual
Framework for Financial Reporting without
changing the accounting requirements for business
combinations.
This amendment had no impact on the financial
statements of the Company.

Standards, amendments and interpretations issued but not yet effective in the year 2022 - 2023

The following new/amended accounting standards and interpretations have been issued, but are not mandatory
and have not been adopted in preparing the financial statements for the year ended 31 March 2023:

Standard or Title Effective for annual

Interpretation periods beginning on
or after
IFRS 17 Insurance Contracts 1 January 2023
Amendments to IAS 1 Disclosure of Accounting Policies 1 January 2023
Amendments to IAS 8 Definition of Accounting Estimates 1 January 2023
Amendments to IAS 12 Deferred Tax Related to Assets and Liabilities Arising 1 January 2023
from a Single Transaction
Amendments to IFRS Leases: Liability in a Sale and Leaseback 1 January 2024
16
Amendments to IAS 1 Classification of Liabilities as Current or Non-current 1 January 2024
Amendments to IAS 1 Non-current Liabilities with Covenants 1 January 2024

The Company is currently assessing the impact of these new accounting standards and amendments. The
Company does not expect these amendments and standards issued but not yet effective, to have a material
impact on the financial statements of the Company.

 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

4 Summary of significant accounting (b) Capital-work-in-progress

policies Capital-work-in-progress is stated at cost, including
A summary of the significant accounting policies borrowing costs incurred for financing the asset. All
adopted in the preparation of these financial costs directly incurred during the period related to
statements is set out below. These policies have specific assets are carried under this heading. These
been adopted for all the years presented, unless are transferred to specific assets and depreciated
otherwise stated. when they are available for use.

(a) Property, plant and equipment (c) Financial instruments

Property, plant and equipment are stated at Financial instruments are recognised when the
historical cost less accumulated depreciation and Company becomes a party to the contractual
any impairment in value. Cost includes all costs provisions of the instrument. A financial instrument
directly attributable to bringing the asset to working is any contract that gives rise to a financial asset
condition for their intended use. of one entity and a financial liability or equity
instrument of another entity.
Depreciation is calculated in accordance with the
straight-line method to write-off the cost of each Financial assets
asset to its estimated residual value over the useful
The Company determines the classification of
economic life.
its financial assets at initial recognition. The
classification depends on the business model for
Depreciation has been calculated from the date of
managing the financial assets and the contractual
acquisition at the following rates:
terms of the cash flows.

Description No of years (i) Classification
Building 50 The financial assets are classified in the
Plant and machinery 4 - 15 following measurement categories:
Furniture and fixtures 4-8
a) those to be measured subsequently at fair
Forklifts 4
value (either through other comprehensive
Office equipment 3 income, or through profit or loss); and
Computer software 3
b) those to be measured at amortised
Freehold land is not depreciated as it is deemed to cost.
have an infinite life.
For assets measured at fair value, gains and
The useful lives and depreciation methods are losses are recorded in the Company’s profit or
reviewed regularly and any adjustments required loss or other comprehensive income.
are affected in the change for the current and future
years as a change in accounting estimate. (ii) Measurement

Gains and losses on disposal of property, plant and At initial recognition, the Company measures a
equipment are determined by reference to their financial asset at its fair value plus, in the case
carrying amount and are taken into account in of a financial asset not at fair value through
determining net profit or loss. profit or loss, transaction costs that are directly
attributable to the acquisition of the financial
Repairs and renewals are charged to profit or loss asset. Transaction costs of financial assets
when the expenditure is incurred. carried at fair value through profit or loss are
expensed in profit or loss as incurred.

The Company has classified fair value

measurements on a recurring basis using a fair
value hierarchy that reflects the significance of
14

Notes to the Financial Statements (Contd.)
the inputs used in making the measurements.
The fair value hierarchy has the following levels:
- quoted prices (unadjusted) in active
markets for identical assets or liabilities
(Level 1);
- inputs other than quoted prices included
within Level 1 that are observable for
the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from
prices) (Level 2); and
- inputs for the asset or liability that are
not based on observable market data
(unobservable inputs) (Level 3).
Debt instruments
Subsequent measurement of debt instruments
depends on the Company’s business model for
managing the asset and the cash flow characteristics
of the asset. The Company classifies debt
instruments at amortised cost based on the below:
a) the asset is held within a business model with
the objective of collecting the contractual cash
flows; and
b) the contractual terms give rise on specified
dates to cash flows that are solely payments
of principal and interest on the principal
outstanding.
Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees
or costs that are an integral part of the Effective
Interest Rate (EIR).
Equity instruments
For an equity instrument that is not held for trading,
the Company may elect at initial recognition to
irrevocably designate those instruments under
FVOCI. This election is made on an instrument by
instrument basis on initial recognition. Amounts
presented in other comprehensive income are not
subsequently transferred to profit or loss.
(iii) Derecognition of financial assets
The Company derecognises a financial asset
when the contractual rights to the cash flows
from the assets expire, or when it transfers
the financial asset and substantially all the
15
Financial Statements
risks and rewards of ownership of the asset
to another party. If the Company neither
transfers nor retains substantially all the risks
and rewards of ownership and continues to
control the transferred asset, the Company
recognises its retained interest in the asset and
associated liability for amounts it may have
to pay. If the Company retains substantially
all the risks and rewards of ownership of the
transferred financial asset, the Company
continues to recognise the financial asset and
also recognises a collateralised borrowing for
the proceeds received.
(iv) Impairment of financial assets
The Company applies the Expected Credit
Losses (ECL) model for measurement and
recognition of impairment loss on the financial
assets.
ECLs are the probability-weighted estimate
of credit losses (i.e. present value of all cash
shortfalls) over the expected life of the
financial asset. A cash shortfall is the difference
between the cash flows that are due in
accordance with the contract and the cash flows
that the Company expects to receive. The ECL
considers the amount and timing of payments
and, hence, a credit loss arises even if the
Company expects to receive the payment in full
but later than when contractually due. The ECL
method requires assessing credit risk, default
and timing of collection since initial recognition.
This requires recognising allowance for ECL in
profit or loss even for receivables that are newly
originated or acquired.
Impairment of financial assets is measured
as either 12 months ECL or lifetime ECL,
depending on whether there has been a
significant increase in credit risk since initial
recognition. ‘12 months ECL’ represents the
ECL resulting from default events that are
possible within 12 months after the reporting
date. ‘Lifetime ECL’ represent the ECL that
result from all possible default events over the
expected life of the financial asset.
Trade receivables are of a short duration,
normally less than 12 months and hence the loss
allowance measured as lifetime ECL does not
differ from that measured as 12 months ECL.
 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

The Company uses the practical expedient in (ii) Measurement

IFRS 9 for measuring ECL for trade receivables
All financial liabilities are recognised initially
using a provisioning matrix based on ageing of
at fair value. Financial liabilities accounted at
the trade receivables.
amortised cost like borrowings are accounted
at the fair value determined based on the
The Company uses historical loss experience
EIR method after considering the directly
and derived loss rates based on the past
attributable transaction costs.
twelve months and adjusts the historical loss
rates to reflect the information about current
The Company classifies all its financial liabilities
conditions and reasonable and supportable
subsequently at amortised cost, except for
forecasts of future economic conditions. The
financial liabilities at fair value through profit or
loss rates differ based on the ageing of the
loss. Such liabilities, including derivatives that
amounts that are past due and are generally
are liabilities, are subsequently measured at fair
higher for those with the higher ageing.
value.

(v) Income recognition

(iii) Derecognition of financial liabilities
Interest income
The EIR method calculates the amortised cost
For all financial instruments measured at of a debt instrument by allocating interest
amortised cost and interest bearing financial charged over the relevant EIR period. The EIR is
assets, interest income is recognised using the rate that exactly discounts estimated future
the EIR, which is the rate that discounts the cash outflows (including all fees and points paid
estimated future cash receipts through the or received that form an integral part of the
expected life of the financial instrument or a EIR, transaction costs and other premiums or
shorter period, where appropriate, to the net discounts) through the expected life of the debt
carrying amount of the financial asset. instrument, or, where appropriate, a shorter
period, to the net carrying amount on initial
When a loan or receivable is impaired, the recognition. This category generally applies to
Company reduces the carrying amount to its borrowings, trade payables, etc.
recoverable amount, being the estimated
future cash flows discounted at the original EIR The Company’s financial liabilities include trade
of the instrument, and continues unwinding the and other payables, due to related parties, lease
discount as interest income. Interest income on liabilities and bank borrowings. The Company
impaired financial assets is recognised using the measures financial liabilities at amortised cost.
original EIR.
A financial liability is derecognised when the
Financial liabilities obligation under the liability is discharged or
cancelled or expires. When an existing financial
The Company determines the classification of
liability is replaced by another from the same
its financial liabilities at initial recognition. The
lender on substantially different terms, or the
classification depends on the business model
terms of an existing liability are substantially
for managing the financial liabilities and the
modified, such an exchange or modification
contractual terms of the cash flows.
is treated as a derecognition of the original
liability and the recognition of a new liability,
(i) Classification
and the difference in the respective carrying
The financial liabilities are classified in the amounts is recognised in profit or loss.
following measurement categories:
(d) Impairment of non-financial assets
a) those to be measured as financial liabilities
The carrying amount of the Company’s assets or its
at fair value through profit or loss; and
cash generating unit, other than financial assets,
are reviewed at each statement of financial position
b) those to be measured at amortised cost.
date to determine whether there is any indication of

16

Notes to the Financial Statements (Contd.)
impairment. A cash generating unit is the smallest
identifiable asset group that generates cash flows
that largely are independent from other asset and
groups. If any such indication exists, the asset’s
recoverable amount is estimated. The recoverable
amount of an asset or a cash generating unit is the
greater of its value in use or fair value less costs to
sell. An impairment loss is recognised whenever the
carrying amount of an asset or its cash generating
unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss.
Impairment losses are reversed only if there is an
indication that the impairment loss may no longer
exist and there has been a change in the estimates
used to determine the recoverable amount.
(e) Leases
As lessee
The Company assesses whether a contract is or
contains a lease, at inception of the contract. The
Company recognises a right-of-use asset and a
corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for
short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value
assets. For these leases, the Company recognises
the lease payments as an operating expense on a
straight-line basis over the term of the lease unless
another systematic basis is more representative of
the time pattern in which economic benefits from
the leased assets are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Company uses the incremental
borrowing rate specific to the lessee.
Lease payments included in the measurement of the
lease liability comprise:
- fixed lease payments (including in-substance
fixed payments), less any lease incentives;
- variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
- the amount expected to be payable by the
lessee under residual value guarantees;
17
Financial Statements
- the exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and
- payments of penalties for terminating the
lease, if the lease term reflects the exercise of
an option to terminate the lease.
The lease liability is presented as a separate line in
the statement of financial position.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and by reducing the carrying amount to
reflect the lease payments made.
The Company remeasures the lease liability (and
makes a corresponding adjustment to the related
right-of-use asset) whenever:
- the lease term has changed or there is a
significant event or change in circumstances
resulting in a change in the assessment of
exercise of a purchase option, in which case the
lease liability is remeasured by discounting the
revised lease payments using a revised discount
rate;
- the lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual value,
in which cases the lease liability is remeasured
by discounting the revised lease payments
using the initial discount rate (unless the
lease payments change is due to a change in a
floating interest rate, in which case a revised
discount rate is used); or
- a lease contract is modified and the lease
modification is not accounted for as a separate
lease, in which case the lease liability is
remeasured by discounting the revised lease
payments using a revised discount rate at the
effective date of the modification.
Right-of-use assets
The right-of-use assets comprise the initial
measurement of the corresponding lease
liability, lease payments made at or before the
commencement day, less any lease incentives
received and any initial direct costs. They are
subsequently measured at cost less accumulated
amortisation and impairment losses.
 Asian Paints (Middle East) SPC
Notes to the Financial Statements (Contd.)
Whenever the Company incurs an obligation for
costs to dismantle and remove a leased asset,
restore the site on which it is located or restore
the underlying asset to the condition required by
the terms and conditions of the lease, a provision
is recognised and measured under IAS 37. To the
extent that the costs relate to a right-of-use asset,
the costs are included in the related right-of-use
asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are amortised over the
shorter period of lease term and useful life of the
underlying asset. If a lease transfers ownership of
the underlying asset or the cost of the right-of-use
asset reflects that the Company expects to exercise
a purchase option, the related right-of-use asset
is amortised over the useful life of the underlying
asset. The amortisation starts at the commencement
date of the lease.
The right-of-use assets are presented as a separate
line in the statement of financial position.
The Company applies IAS 36 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in
‘Impairment of tangible and intangible assets
excluding goodwill’ policy.
Variable rents that do not depend on an index or
rate are not included in the measurement of the
lease liability and the right-of-use asset. The related
payments are recognised as an expense in the period
in which the event or condition that triggers those
payments occurs and expensed in profit or loss.
As a practical expedient, IFRS 16 permits a lessee
not to separate non-lease components, and instead
account for any lease and associated non-lease
components as a single arrangement. The Company
has not used this practical expedient. For a contracts
that contain a lease component and one or more
additional lease or non-lease components, the
Company allocates the consideration in the contract
to each lease component on the basis of the relative
stand-alone price of the lease component and
the aggregate stand-alone price of the non-lease
components.
As lessor
Income from operating leases is recognised on a
straight-line basis over the term of the relevant
18
lease unless another systematic basis is more
representative of the time pattern in which use
benefit derived from the leased asset is diminished.
Initial direct costs incurred in negotiating and
arranging an operating lease are added to the
carrying amount of the leased asset and recognised
as an expense over the lease term on the same basis
as the lease income.
(f) Lease receivable
When assets are leased out under a finance
lease, the present value of the lease payments is
recognised as a receivable. The difference between
the gross receivable and the present value of the
receivable is recognised as unearned finance income.
(g) Inventories
Inventories of raw materials, packing materials
and colour world items are stated at the lower
of cost and net realisable value. Cost, which
is determined on the weighted average basis,
comprises expenditure incurred in the normal course
of business in bringing inventories to their present
location and condition. Cost of finished goods
includes cost of direct materials, direct labour and
applicable overheads. Net realisable value is the
estimate of the selling price in the ordinary course of
business less any incidental selling expenses. Where
necessary, provision is made for obsolete, slow-
moving and defective inventories.
(h) Cash and cash equivalents
For the purposes of the statement of cash flows,
cash and cash equivalents comprise cash in hand
and bank balances, net of bank overdraft. In the
statement of financial position, bank overdraft is
included as part of current liabilities.
(i) Provisions
A provision is recognised in the statement of
financial position when the Company has a legal
or constructive obligation as a result of a past
event, and it is probable that an outflow of
economic benefits will be required to settle the
obligation.
(j) Employees’ terminal benefits
In respect of Omani employees, contributions are
made in accordance with the Oman Social Insurance
Law and recognised as an expense in profit or loss
as incurred.

Notes to the Financial Statements (Contd.)
For non-Omani employees, provision is made for
amounts payable under the Oman Labour Law, based
on the employees’ accumulated periods of service
at the statement of financial position date. This
provision is classified as a non-current liability.
Employee entitlements to annual leave and air
passage are recognised when they accrue to the
employees and an accrual is made for the estimated
liability for annual leave and air passage as a result
of services up to the reporting date. The accruals
relating to annual leave and air passage is disclosed
as a part of current liabilities.
(k) Revenue from contracts with customers
Revenue is measured at the fair value of the
consideration received or receivable. The Company
recognises revenue when it transfers control over
a product or services to a customer. The Company’s
timing of revenue recognition is at a point in time
upon the satisfaction of the performance obligation
by transferring control of the goods or services to
the customer.
If the consideration promised in a contract includes
variable amount, then the Company estimates
the amount of consideration to which it expects
to be entitled. Consideration can vary because
of discounts, rebates, refunds, credits, price
concessions, incentives, performance bonuses,
penalties or other similar items.
(l) Other income
Other income is accounted for on accruals basis,
unless collectability is in doubt.
(m) Foreign currencies
Foreign currency transactions are accounted for
at the rates of exchange prevailing at the dates of
the transactions. Gains and losses resulting from
the settlement of such transactions and from the
translation, at the year-end rates, of monetary
assets and liabilities denominated in foreign
currencies, are recognised in the profit or loss.
Monetary assets and liabilities denominated in
foreign currencies are translated at the rates of
exchange prevailing at the end of the year. Non-
monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the date when the
carrying value was determined.
19
Financial Statements
(n) Bank borrowings
Bank borrowings are recognised initially at fair value,
net of transaction costs incurred. Bank borrowings
are subsequently stated at amortised cost. Any
difference between the proceeds (net of transaction
costs) and the redemption value is recognised in
profit or loss over the period of the bank borrowings
using the effective interest rate method.
(o) Borrowings costs
Borrowing costs are expensed in the period in which
they are incurred. However borrowing costs that are
directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised
as part of the cost of the asset till such time as the
asset is put to commercial use. Thereafter all the
borrowings costs are expensed. A qualifying asset is
an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale.
(p) Income tax
Taxation is provided in accordance with the Omani
fiscal regulations. Taxation for the year comprises
current and deferred tax. Current tax is the expected
tax payable on the taxable income for the year, using
tax-rates enacted or substantively enacted at the
end of the reporting period.
Deferred income tax is provided on all temporary
differences at the reporting date between the tax
bases of assets and liabilities and their carrying
amounts. Deferred income tax assets and liabilities
are measured at the tax rates that are expected to
apply in the period when the asset is realised or the
liability is settled, based on tax laws that have been
enacted at the reporting date. Deferred income tax
assets are recognised for all deductible temporary
differences, carry-forward of unused tax credits and
unused tax losses, to the extent that it is probable
that taxable profit will be available, against which
the deductible temporary differences and the carry-
forward of unused tax credits and unused tax losses
can be utilised.
The carrying amount of deferred income tax assets
are reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred income tax asset to be
utilised.
 Asian Paints (Middle East) SPC
Notes to the Financial Statements (Contd.)
(q) Determination of fair values
A number of the Company’s accounting policies
and disclosures require the determination of fair
value, for both financial and non-financial assets and
liabilities. Fair value is the amount for which an asset
could be exchanged or a liability settled between
knowledgeable, willing parties in an arm’s length
transaction. Fair values have been determined for
measurement and/or disclosure purposes based
on certain methods. When applicable, further
information about the assumptions made in
determining fair values is disclosed in the notes
specific to that asset or liability.
(r) Critical accounting judgments and key source of
estimating uncertainty
Preparation of financial statements in accordance
with IFRS requires the Company’s management
to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported
amounts of revenue and expenses during the
reporting period. The determination of estimates
requires judgments which are based on historical
experience, current and expected economic
conditions, and all other available information.
Actual results could differ from those estimates.
The most significant areas requiring the use of
management estimates and assumptions in these
financial statements relate to:
i) Impairment reviews
IFRS requires management to undertake
an annual test for impairment of indefinite
lived assets and, for finite lived assets, to
test for impairment if events or changes
in circumstances indicate that the carrying
amount of an asset may not be recoverable.
Impairment testing is an area involving
management judgment, requiring inter alia an
assessment as to whether the carrying value
of assets can be supported by the net present
value of future cash flows derived from such
assets using cash flow projections which have
been discounted at an appropriate rate.
In calculating the net present value of the
future cash flows, certain assumptions are
required to be made in respect of highly
20
uncertain matters including management’s
expectations of:
a) growth in earnings before interest,
tax, depreciation and amortisation
(EBITDA), calculated as adjusted
operating profit before depreciation and
amortisation;
b) timing and quantum of future capital
expenditure;
c) long-term growth rates; and
d) selection of discount rates to reflect the
risks involved.
Changing the assumptions selected by
management, in particular the discount rate
and growth rate assumptions used in the cash
flow projections, could significantly affect the
Company’s impairment evaluation and hence
results.
(ii) Economic useful lives of property, plant and
equipment
The Company’s property, plant and equipment
are depreciated on a straight-line basis over
their economic useful lives. The economic
useful lives of property, plant and equipment
are reviewed periodically by management. The
review is based on the current condition of the
assets and the estimated period during which
they will continue to bring economic benefit to
the Company.
(iii) Impairment of inventories
The Company creates a provision for obsolete
and slow-moving inventories. Estimates of net
realisable value of inventories are based on the
most reliable evidence available at the time
the estimates are made. These estimates take
into consideration fluctuations of price or cost
directly relating to events occurring subsequent
to the statement of financial position date to
the extent that such events confirm conditions
existing at the end of the reporting period.
(iv) Impairment losses on trade receivables
Trade receivables are stated at their amortised
cost as reduced by provision for ECL for
estimated irrecoverable amounts. Estimated
irrecoverable amounts are based on the

Notes to the Financial Statements (Contd.)
ageing of the trade receivable balances and
historical experience adjusted appropriately
for the future expectations. Individual trade
receivables are written-off when management
deems them not to be collectible.
v) Going concern
The management of the Company reviews
the financial position of the Company on a
periodical basis and assesses the requirement
of any additional funding to meet the working
capital requirements and estimated funds
required to meet the liabilities as and when they
become due. In addition, the members of the
Company ensure that they provide adequate
financial support, whenever necessary, to
funding the requirements to the Company
to ensure the going concern status of the
Company.
(vi) Contingencies
By their nature, contingencies will only be
resolved when one or more future events
occur or fail to occur. The assessment of such
contingencies inherently involves the exercise
of significant judgment and estimates of the
outcome of future events.
(vii) Taxation
Uncertainties exist with respect to the
interpretation of tax regulations and the
21
Financial Statements
amount and timing of future taxable income.
Given the wide range of business relationships
and nature of the existing contractual
agreements, differences arising between the
actual results and the assumptions made, or
future changes to the assumptions, could
necessitate future adjustments to taxable
income and expenses already recorded.
The Company establishes provisions, based
on reasonable estimates, for possible
consequences of finalisation of tax assessments
of the Company. The amount of such provisions
is based on various factors, such as experience
of previous tax assessments and differing
interpretations of tax regulations by the
taxable entity and the responsible taxation
authority.
(viii) Estimation uncertainty relating to the global
health pandemic on COVID-19
Now in the third year of the COVID-19 pandemic,
the Sultanate of Oman similar to other jurisdictions
around the world has experienced an improved
economic outlook, as the number of COVID-19 cases
have declined significantly.
The operations of the Company have returned to
business-as-usual, although the crisis did test the
commercial, operational, financial and organisational
resilience of the Company highlighting the risks
and resilience gaps, as the effects of the pandemic
continue to impact the global supply chains.
22
5 Property, plant and equipment

(a) The movement in property, plant and equipment is as set out below:

(In OMR)
2023 Freehold Building Plant and Furniture Forklifts Office Computer Capital Total
Asian Paints (Middle East) SPC

land machinery and equipment software work-in-

fixtures progress
Cost
At 31 March 2022 159,302 2,669,465 2,639,716 180,705 180,085 95,383 53,232 5,165 5,983,053
Additions during the year - 232,945 15,109 44,624 - 8,674 - - 301,352
Transfer during the year - 5,165 - - - - - (5,165) -
Disposals during the year - - - - - (524) - - (524)
At 31 March 2023 159,302 2,907,575 2,654,825 225,329 180,085 103,533 53,232 - 6,283,881
Notes to the Financial Statements (Contd.)

Accumulated
depreciation
At 31 March 2022 - 473,304 1,432,767 155,200 164,385 82,622 33,346 - 2,341,624
Charge for the year - 53,632 180,866 9,788 2,211 7,127 16,007 - 269,631
Disposals during the year - - - - - (161) - - (161)
At 31 March 2023 - 526,936 1,613,633 164,988 166,596 89,588 49,353 - 2,611,094
Net book value At 31
March 2023 159,302 2,380,639 1,041,192 60,341 13,489 13,945 3,879 - 3,672,787
5 Property, plant and equipment (continued)

(In OMR)
2022 Freehold Building Plant and Furniture Forklifts Office Computer Capital Total
land machinery and equipment software work-in-
fixtures progress
Cost
At 31 March 2021 159,302 2,669,465 2589095 179,537 180,085 89,672 46,957 - 5,914,113
Additions during the year - - 55097 6,584 - 8,069 6,275 5,165 81,190
Disposals during the year - - (4476) (5,416) - (2,358) - - (12,250)
At 31 March 2022 159,302 2,669,465 2639716 180,705 180,085 95,383 53,232 5,165 5,983,053
Accumulated
depreciation
At 31 March 2021 - 419,698 1261036 148,541 162,175 76,937 17,935 - 2,086,322
Charge for the year - 53,606 176203 11,571 2,210 8,037 15,411 - 267,038
Disposals during the year - - (4472) (4,912) - (2,352) - - (11,736)
Notes to the Financial Statements (Contd.)

At 31 March 2022 - 473,304 1432767 155,200 164,385 82,622 33,346 - 2,341,624

Net book value At 31
March 2022 159,302 2,196,161 1206949 25,505 15,700 12,761 19,886 5,165 3,641,429

(b) The depreciation charge for the year has been dealt with in profit or loss as follows:

(In OMR)
2023 2022
Cost of sales (Note 18) 237,275 233,904
Profit or loss 32,356 33,134
269,631 267,038
23

Financial Statements
 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

6 Lease receivable

2023 2022
OMR OMR
Lease receivable 19,088 19,219

The Company enters into finance leasing arrangements for Automated Colour Dispensers, which generally are on
12 to 24 months repayment terms.

7 Right-of-use assets
(a) The Company has obtained land, motor vehicles and employee accommodation on lease. The average lease
term for land is 25 years, employee accommodation is 1 year and vehicles is 4 years.

Land Vehicles Employee Total
accommodation

At 1 April 2022 302,725 96,797 3,837 403,359

Additions during the year - - 12,982 12,982

Amortisation for the year (21,023) (36,065) (10,418) (67,506)

At 31 March 2023 281,702 60,732 6,401 348,835

At 1 April 2021 498,724 37,124 4,238 540,086

Additions during the year 14,479 96,881 7,804 119,164

Modification during the year (177,302) - - (177,302)

Amortisation for the year (35,608) (37,208) (5,773) (78,589)

Transfer during the year 2,432 - (2,432) -

At 31 March 2022 302,725 96,797 3,837 403,359

(b) Amount recognised in profit or loss relating to leases

2023 2022
OMR OMR
Amortisation of right-of-use assets
Charged to cost of sales (Note 18) 21,023 35,608
Charged to other related staff costs (Note 20) 46,483 42,981
Interest expense on lease liabilities 21,988 22,934
89,494 101,523

24
 25
Notes to the Financial Statements (Contd.)

Financial Statements
8 Inventories
2023 2022
OMR OMR
Raw materials 1,285,360 1,292,842
Packing materials 119,908 84,094
Work-in-progress 31,144 17,793
Finished goods 1,043,153 1,026,404
Colour World items 81,615 30,774
Less: provision for obsolete and slow-moving inventories (59,506) (27,431)
2,501,674 2,424,476

The movement in provision for obsolete and slow-moving inventories is as follows:

2023 2022
OMR OMR
At 1 April 27,431 42,819
Provision/(reversal) for the year 32,075 (15,388)
At 31 March 59,506 27,431

9 Trade and other receivables

2023 2022
OMR OMR
Trade receivables (gross) 5,291,019 4,074,110
Less: ECL (804,232) (516,829)
Trade receivables net 4,486,787 3,557,281
Prepayments 23,013 17,443
Deposits 1,350 -
Advances to suppliers 47,367 32,755
Advances against capital expenditure - 5,437
Other receivables 49,025 55,925
4,607,542 3,668,841

Trade receivables are generally on 30 to 120 days credit terms and are non-interest bearing.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned
above. The Company does not hold any collateral as security.

The carrying amounts of the Company’s trade receivables are denominated in Omani Rial.

The Company applies the IFRS 9 simplified approach to measure ECL using a lifetime ECL provision for trade
receivables and other financial assets. To measure ECL on a collective basis trade receivables and other financial
assets are grouped based on similar credit risk and aging. The ECL rates are based on the Company’s historical
credit losses experienced over the one year period prior to the year-end. The historical losses are then adjusted
for the current and forward-looking information on macro-economic factors affecting the Company’s customers.
 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

9 Trade and other receivables (contd.)

At 31 March 2023 the lifetime ECL provision for trade receivables is as follows:

(In OMR)
Upto 180 days past Above 180 days past More than 365 days Total
due due past due
Gross carrying 4,732,549 161,751 396,7195,291,019
amount
Loss provision 310,462 97,051 396,719 804,232

At 31 March 2022 the lifetime ECL provision for trade receivables is as follows:
(In OMR)
Upto 180 days past Above 180 days past More than 365 days Total
due due past due
Gross carrying 3,553,137 156,069 364,904 4,074,110
amount
Loss provision 79,278 93,694 343,857 516,829

The movement in provision for ECL of trade receivables is as follows:

2023 2022
OMR OMR
1 April 516,829 558,630
Provision for the year 287,403 34,193
Written off during the year - (75,994)
31 March 804,232 516,829

10 Related party transactions and balances

The Company, in the ordinary course of business, deals with parties, which fall within the definition of ‘related
parties’ as contained in International Accounting Standard 24. Such transactions are entered at mutually agreed
terms and approved by the management. The balances due from and to related parties are unsecured, bear
no interest, have no fixed repayment terms and have been disclosed separately in the statement of financial
position.
(a) Significant transactions during the year with related parties are as follows:

Year ended 31 Year ended 31
March 2023 March 2022
OMR OMR
Ultimate Parent
Royalty 300,261 246,011
Purchases 84,940 136,118
Services 9,652 11,104
Parent
Royalty 138,651 110,831
Service 19,010 28,140
Fellow subsidiaries
Revenue 101,268 30,753
Purchases 96,845 152,349
26 Services 40,434 54,242
 27
Notes to the Financial Statements (Contd.)

Financial Statements
10 Related party transactions and balances (contd.)
(b) Due from related parties

2023 2022
OMR OMR
Berger Paints Bahrain WLL 11,023 14,434
Causeway Paints Lanka (Pvt) Ltd. - 924
Berger Paints Emirates Ltd., United Arab Emirates 553,132 370,868
PT Asian Paints Indonesia 12,967 -
577,122 386,226

(c) Due to related parties

2023 2022
OMR OMR
Ultimate Parent
Asian Paints (India) Ltd. 524,443 250,284
Parent
Asian Paints International Private Limited, Singapore 143,810 125,099
Fellow subsidiaries
Scib Chemicals S.A.E 5,454 -
Asian Paints (Nepal) Pvt. Ltd. 58 -
673,765 375,383

11 Share capital
The share capital, as registered with the MOCIIP is RO 1,122,000, comprising of 1,122,000 shares of RO 1 each
(2022: 1,122,000 shares of RO 1 each).

A break-down of the share capital as at 31 March 2023 and 2022 is as set out below:

Percentage share Amount
holding (In OMR)
Name of the shareholders
Asian Paints International Private Limited 100% 1,122,000
100% 1,122,000

12 Legal reserve
In accordance with the applicable provisions of the Commercial Companies Law of the Sultanate of Oman, an
amount equivalent to 10% of the Company’s net profit before appropriations is required to be transferred to a
non-distributable reserve until such time as a minimum of one-third of the share capital is set aside.
 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

13 Lease liabilities
2023 2022
OMR OMR
As at 1 April 477,185 595,740
Add: additions during the year 12,982 119,164
Add: lease modification during the year - (184,578)
Add: interest on lease liabilities during the year 21,988 22,934
Less: paid during the year (91,662) (72,984)
Less: COVID-19 rent related concession - (3,091)
Closing balance 420,493 477,185
Lease liabilities 420,493 477,185
Less: current portion (52,639) (49,248)
Non-current portion 367,854 427,937

Details regarding the contractual maturities of lease liabilities on an undiscounted basis

2023 2022
OMR OMR
Less than a year 72,147 71,080
One to five years 180,272 212,556
More than 5 years 301,561 336,024
Closing balance on undiscounted basis 553,980 619,660
Less: interest for future period (133,487) (142,475)
Closing balance at present value 420,493 477,185
Discount rate (weighted average) 5% 5%

14 Employees’ terminal benefits

2023 2022
OMR OMR
At 1 April 317,842 336,747
Provision for the year 59,191 37,373
Unrealised actuarial gain (18,047) -
Payments during the year (37,942) (56,278)
At 31 March 321,044 317,842
Total number of employees 168 162

15 Trade and other payables

2023 2022
OMR OMR
Trade payables 2,934,501 3,393,006
Accrued expenses 477,302 303,226
Other payables 260,897 185,718
3,672,700 3,881,950

Trade payables are generally settled within 30 to 90 days of the suppliers’ invoice date.
28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
16 Bank borrowings
2023 2022
OMR OMR
Loan against imports - 1,123,699

The loan against imports which were secured against commercial mortgage over inventories and assignment of
trade receivables of the Company in favour of Ahli Bank SAOG, bears interest of 5.75% and which were repaid in
current year.

17 Revenue
Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Sale of paints and allied products 15,248,559 12,438,625

Operating segments

The Company has a single reportable business segment and the geographical information of the sales for the
reportable segment is as follows:

Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Local (Oman) 13,412,921 10,743,836
Export 1,835,638 1,694,789
15,248,559 12,438,625

18 Cost of sales
Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Raw materials consumed 8,956,843 7,719,445
Wages 650,454 620,762
Factory overheads 165,330 120,714
Amortisation of right-of-use assets (Note 7) 21,023 35,608
Depreciation (Note 5) 237,275 233,904
Net movement in work-in-progress and finished goods 30,100 339,790
Provision/(reversal of provision) for obsolete and slow-moving 32,075 (15,388)
inventories
10,093,100 9,054,835
 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

19 Other income
Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Sale of scrap 12,503 14,222
Interest on leased machines 763 640
COVID-19 related rent concession - 3,091
Gain on lease modification - 7,276
Foreign exchange gain 741 -
Other miscellaneous income 1,883 19,262
15,890 44,491

20 Salaries and other related staff costs

Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Salaries 995,096 918,754
Other related staff costs 660,690 559,358
Amortisation of right-of-use assets (vehicles and employee-
accommodation) (Note 7)
46,483 42,981
1,702,269 1,521,093

21 General, administrative, selling and distribution expenses

Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Selling and distribution expenses 970,247 870,475
Royalty (Note 10) 438,912 356,842
Conveyance and vehicle expenses 86,878 80,256
System expenses 20,296 25,470
Legal and professional fees 27,224 13,681
Communication 27,373 29,526
Short-term rental 39,668 38,801
Bank charges 16,408 11,401
Foreign exchange loss - 10,972
Printing and stationary 11,109 10,958
Insurance 9,571 9,569
Recruitment expenses 14,278 17751
Repairs and maintenance 1,791 1,295
Loss on disposal of property, plant and equipment - 514
Miscellaneous expenses 17,735 37,066
1,681,490 1,514,577

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
22 Finance costs
Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Interest on lease liabilities 21,988 22,934
Interest on short-term loan - 8,630
Interest on bank overdraft and loan against imports 41,285 60,408
63,273 91,972

23 Income tax
(a) Provision for income tax has been made after giving due consideration to adjustments for potential allowances
and disallowances. Income tax has been agreed with the Oman Tax Authorities up to the tax year 2018-19. The
management considers that the amount of additional taxes, if any, that may become payable in relation to the tax
years for which assessments are pending would not be material to the Company’s financial position as at 31 March
2023.
(b) The movement in current year tax and deferred tax provision is as follows:
The movement in provision for tax is as follows:

Year ended Year ended

31 March 2023 31 March 2022
OMR OMR
At 1 April 22,468 88,662
Provision for the current year 256,256 22,468
Recognised in other comprehensive income 2,707 -
Less: payment during the year (22,468) (88,662)
At 31 March 258,963 22,468

(c) The movement in deferred tax liability is as follows:

Year ended Year ended

31 March 2023 31 March 2022
OMR OMR
At 1 April 30,222 20,750
(Reversal of)/recognised deferred tax liability (44,846) 9,472
At 31 March (14,624) 30,222

Year ended Year ended
31 March 2023 31 March 2022
OMR OMR
Provisions (129,561) (83,578)
Accelarated tax depreciation 125,685 122,935
Right of use asset net of lease liabilities (10,748) (9,135)
(14,624) 30,222

(d) Income tax expense is as follows:

Year ended Year ended

31 March 2023 31 March 2022
OMR OMR
Current tax 256,256 22,468
Deferred tax (44,846) 9,472
211,410 31,940
 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

24 Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents comprise the following:

Year ended Year ended

31 March 2023 31 March 2022
OMR OMR
Cash in hand 4,317 4,300
Current account balances with banks 377,557 1,248,992
381,874 1,253,292

The current account balances with banks are non-interest bearing.

25 Contingent liabilities and capital commitments

(a) Contingent liabilities as at 31 March 2023 amounted to RO 126,613 (2022: RO 202,452) which represented inward
bills for collection and bank guarantees.

(b) Capital commitments contracted for at the statement of financial position date amounted to RO 40,565 (2022:
RO 5,437).

26 Financial assets and liabilities and risk management

(a) Financial assets and liabilities
Financial assets and liabilities carried on the statement of financial position include cash and bank balances, trade
receivables and other financial assets at amortised cost, due from related parties, lease receivable, trade and
other payables, due to related parties, lease liabilities and bank borrowings. The particular recognition methods
adopted are disclosed in the individual policy statements associated with each item.

(b) Risk management

Risk management is carried out by the Finance Department of the Company under the guidance of the senior
management and directors. The senior management and directors provide significant guidance for overall risk
management covering specific areas such as credit risk, interest rate risk, foreign exchange risk and investment of
excess liquidity.

(c) Capital management

The primary objective if the Company’s capital management is to ensure that it maintains a healthy capital ratio in
order to support its business and maximise members’ value.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. No changes were made in the objectives, policies and processes during the years ended 31 March 2023
and 2022.

In addition, the Company’s activities expose it to a variety of financial risks: market risk (including currency rate
risk, interest rate risk and price risk), credit risk and liquidity risk.

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
26 Financial assets and liabilities and risk management (contd.)

(d) Market risk

(i) Foreign exchange risk

Foreign exchange risk is the risk that the fair values or future cash flows of financial instruments will
fluctuate because of changes in foreign exchange rates.

The Company’s exposure to foreign currency risk as follows:

In RO 31 March 2023 31 March 2022
Euro Euro
Trade payables (16,839) (29,955)
Net exposure (16,839) (29,955)

The following significant exchange rates were applied during the year:

31 March 2023 31 March 2022

Euro 0.46263 0.46263

Some of the Company’s financial assets and financial liabilities are either denominated in USD, AED and SAR
which are fixed against the RO.

Sensitivity Analysis
A 10 percent strengthening or weakening of Rial Omani against the following currency at 31 March would
have increased/(decreased) profit and equity by RO 1,684 (2022: RO 2,996). The analysis assumes that all
other variables remain constant.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in interest rates.

The Company is exposed to interest rate risk as the Company borrows funds at commercial interest rates.
Sensitivity analysis of interest rates is as follows: if the interest rates were to be 50 basis points higher or
lower with all other variables held constant, will have no impact on the Company’s net profit (2022: decrease
or increase by RO 5,618).

(iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices (other than those arising from interest rate risk or currency risk), whether those
changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting
all similar financial instruments traded in the market.

The Company has no equity investments which can give exposure to price risk.

 Asian Paints (Middle East) SPC

Notes to the Financial Statements (Contd.)

26 Financial assets and liabilities and risk management (contd.)

(e) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by
failing to discharge an obligation.

The Company is potentially exposed to credit risk principally on its trade receivables and cash and bank balances.
The bank balances are held with national and international banks with good credit ratings. The credit risk on
trade receivables is subject to credit evaluations and provision is made for estimated irrecoverable amounts. The
Company is not exposed to any significant concentration of credit risk due to its large number of customers.

(f) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.

The Company’s management monitors liquidity requirements on a regular basis to help ensure that sufficient
funds are available, including unutilised credit facilities with banks, to meet any future commitments. The
Company manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecasted and
actual cash flows.
At the end of the reporting period, the contractual maturity analysis in respect of financial liabilities is provided
below:
(In OMR)
Liabilities as at 31 March 2023 Total Less than 1 year Between 1 and 5 years
Trade and other payables 3,672,700 3,672,700 -
Due to related parties 673,765 673,765 -
Lease liabilities 420493 52,639 367,854
4,766,958 4,399,104 367,854

(In OMR)
Liabilities as at 31 March 2022 Total Less than 1 year Between 1 and 5 years
Trade and other payables 3,881,950 3,881,950 -
Due to related parties 375,383 375,383 -
Lease liabilities 477,185 49,248 427,937
Bank borrowings 1,123,699 1,123,699 -
5,858,217 5,430,280 427,937

27 Fair values of financial instruments

Financial instruments consist of financial assets and liabilities. Financial assets and liabilities carried on the
statement of financial position include cash and bank balances, trade receivables and other financial assets at
amortised cost, trade and other payables, lease liabilities, bank borrowings and due from and to related parties.
The particular recognition methods adopted are disclosed in the individual policy statements associated with
each item.

In the opinion of the Company’s management, the fair values of the financial assets and liabilities are not
materially different from their carrying amounts.
34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
28 Note supporting the statement of cash flows
Transactions from financing activities shown in the reconciliation of liabilities from financing transactions is as
follows:
2023
Particulars 1 April 2022 Cash inflow Cash outflows Non-cash 31 March 2023
changes
Lease liabilities 477,185 - (91,662) 34,970 420,493
Bank borrowings 1,123,699 4,484,735 (5,608,434) - -

2022
Particulars 1 April 2021 Cash inflow Cash outflows Non-cash 31 March 2022
changes
Lease liabilities 595,740 - (72,984) (45,571) 477,185
Bank borrowings 564,267 6,187,242 (5,627,810) - 1,123,699

29 Comparative figures
Certain comparative figures of the previous year have been either regrouped or reclassified, wherever necessary,
in order to conform with the presentation adopted in the current year’s financial statements. Such regroupings or
reclassification did not affect previously reported net profit or members’ equity.

30 Subsequent events
There were no events subsequent to 31 March 2023 and occurring before the date of the approval that are
expected to have a significant impact on these financial statements.
Asian Paints (Bangladesh) Limited
Contents
Independent Auditor’s Report............................................................................................................................................................... 4-5

Statement of Financial Position.................................................................................................................................................................6

Statement of profit or loss and other comprehensive income............................................................................................................7

Statement of Changes in Equity.................................................................................................................................................................8

Statement of Cash Flows.............................................................................................................................................................................9

Notes to the financial statements.................................................................................................................................................... 10-46

 Asian Paints (Bangladesh) Limited
Independent Auditor’s Report
To the Shareholders of Asian Paints (Bangladesh)
Limited
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Asian
Paints (Bangladesh) Limited, (the “Company”) which
comprise the statement of financial position as at 31
March 2023, and the statement of profit or loss and other
comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of
the Company as at 31 March 2023, and of its financial
performance and its cash flows for the year then ended
in accordance with International Financial Reporting
Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the
Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements
in Bangladesh, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation of the
financial statements that give a true and fair view in
accordance with IFRSs, and for such internal control
as management determines is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the 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.
4
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISAs 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 financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the 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 omission, 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, but not for the purpose
of expressing an opinion on the effectiveness of the
Company’s internal control.
• 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
 5
Independent Auditor’s Report (Contd.)

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 going concern.
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in a
manner that achieves fair presentation.
Financial Statements
b. in our opinion, proper books of account as required
by law have been kept by the Company so far as it
appeared from our examination of those books;
c. the Company’s statement of financial position, the
statement of profit or loss and other comprehensive
income dealt with by the report are in agreement
with the books of account and return.

We communicate with those charged with governance For Nurul Faruk Hasan & Co
regarding, among other matters, the planned scope Chartered Accountants
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit. Sk Ashik Iqbal FCA
Enrollment Number: 1310
Report on Other Legal and Regulatory Requirements DVC: 2305151310AS718463
In accordance with the Companies Act, 1994, we also
report the following:
Dhaka, Bangladesh
a. we have obtained all the information and Date: 2 May 2023
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit and made due verification thereof;
 Asian Paints (Bangladesh) Limited

Statement of Financial Position

As at 31 March 2023

Note 31 March 2023 31 March 2022

Taka Taka
Assets
Non-current assets
Property, plant and equipment 8 2,473,907,328 2,466,602,488
Intangible asset 9 2,948,455 6,704,798
Right-of-use assets 10 368,960,498 350,474,015
Other non-current assets 11 22,501,490 33,424,242
Deferred tax assets 12 - 65,593,030
Trade and other receivables 14 28,295,891 27,387,379
Total non‑current assets 2,896,613,662 2,950,185,952
Current assets
Inventories 13 966,778,082 1,166,726,435
Trade and other receivables 14 797,189,531 846,230,075
Other current assets 15 191,210,146 234,910,370
Current tax assets 16 127,393,970 63,025,571
Cash and cash equivalents 17 199,579,317 13,348,420
Total current assets 2,282,151,046 2,324,240,871
Total assets 5,178,764,708 5,274,426,823
Equity and liabilities
Capital and reserves
Share capital 18 1,847,766,000 887,766,000
Retained earnings (638,455,979) (284,997,196)
Total equity 1,209,310,021 602,768,804
Non-current liabilities
Long term loans 23 215,533,362 -
Lease liabilities 19 374,352,994 296,512,388
Defined benefit obligation 20 63,048,290 50,703,656
Unearned finance income 21 7,745,459 6,904,675
Total non‑current liabilities 660,680,105 354,120,719
Current liabilities
Long term loans 23 24,406,444 -
Lease liabilities 19 49,987,509 57,112,285
Defined benefit obligation 20 12,067,160 11,836,655
Bank overdraft 22 274,660,772 638,241,379
Short term loans 23 1,190,000,000 1,309,000,000
Trade and other payables 24 1,757,652,697 2,301,346,981
Total current liabilities 3,308,774,582 4,317,537,300
Total liabilities 3,969,454,687 4,671,658,019
Total equity and liabilities 5,178,764,708 5,274,426,823

The accompanying notes 1 to 40 form an integral part of these financial statements.

Head of Finance Director Director

Per our annexed report of same date
Dhaka, Bangladesh For Nurul Faruk Hasan & Co.
Dated: 2 May 2023 Chartered Accountants

Sk Ashik Iqbal FCA

Partner
Enrollment No: 1310
6
DVC: 2305151310AS718463
 7
Statement of Profit or Loss and Other Comprehensive Income

Financial Statements
For the year ended 31 March 2023

Note 31 March 2023 31 March 2022

Taka Taka
Revenue 25 5,577,220,464 4,942,178,320
Cost of sales 26 (4,193,061,585) (3,830,660,333)
Gross profit 1,384,158,879 1,111,517,987
Other income 27 14,683,488 15,376,160
Selling and distribution expenses 28 (896,103,330) (775,289,607)
Administrative expenses 29 (311,645,884) (286,148,679)
Foreign exchange loss 30 (189,588,199) (6,651,044)
Operating profit 1,504,954 58,804,817
Finance income 31 5,658,425 6,192,576
Finance costs 32 (202,706,677) (110,584,622)
Net finance costs (197,048,252) (104,392,046)
Loss before tax (195,543,298) (45,587,229)
Income tax 33 (155,578,116) (68,174,679)
Loss for the year (351,121,414) (113,761,908)
Other comprehensive loss for the year
Item that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liability (1,065,387) (4,239,939)
Related tax (1,271,982) 1,271,982
Other comprehensive loss for the year, net of tax (2,337,369) (2,967,957)
Total comprehensive loss for the year (353,458,783) (116,729,865)

The accompanying notes 1 to 40 form an integral part of these financial statements.

Head of Finance Director Director

Per our annexed report of same date
Dhaka, Bangladesh For Nurul Faruk Hasan & Co.
Dated: 2 May 2023 Chartered Accountants

Sk Ashik Iqbal FCA

Partner
Enrollment No: 1310
DVC: 2305151310AS718463
 Asian Paints (Bangladesh) Limited

Statement of Changes In Equity

For the year ended 31 March 2023

Share capital Retained earnings Total equity

Taka Taka Taka
Balance at 1 April 2021 887,766,000 (168,267,331) 719,498,669
Loss for the year - (113,761,908) (113,761,908)
Other comprehensive loss for the year - (2,967,957) (2,967,957)
Balance at 31 March 2022 887,766,000 (284,997,196) 602,768,804
Balance at 1 April 2022 887,766,000 (284,997,196) 602,768,804
Loss for the year - (351,121,414) (351,121,414)
Other comprehensive loss for the year - (2,337,369) (2,337,369)
Total comprehensive loss for the year - (353,458,783) (353,458,783)
Issue of share capital 960,000,000 - 960,000,000
Balance at 31 March 2023 1,847,766,000 (638,455,979) 1,209,310,021

The accompanying notes 1 to 40 form an integral part of these financial statements.

Head of Finance Director Director

Per our annexed report of same date
Dhaka, Bangladesh For Nurul Faruk Hasan & Co.
Dated: 2 May 2023 Chartered Accountants

Sk Ashik Iqbal FCA

Partner
Enrollment No: 1310
DVC: 2305151310AS718463

8
 9
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

31 March 2023 31 March 2022

Taka Taka
Operating activities:
Loss for the year (351,121,414) (113,761,908)
Adjustments for:
Finance income (4,910,718) (5,341,219)
Finance costs 202,706,677 110,584,622
Provision for inventories 16,112,252 14,986,926
Provision for trade receivables (221,696,894) (226,512,002)
Interest income on security deposit (747,707) (851,357)
Income tax expenses 155,578,116 66,902,695
Depreciation of property, plant and equipment 112,077,088 48,316,644
Depreciation of right-of-use assets 64,261,667 64,090,506
Amortisation of intangible assets 4,711,843 4,605,865
Gain on disposal of fixed assets 2,089,403 1,730,387
Foreign exchange loss 189,588,202 6,651,044
Actuarial loss (1,065,387) (4,239,939)
Operating cash flows before movements in working capital 167,583,128 (32,837,736)
Decrease/ (increase) in inventories 183,836,101 (543,063,642)
Decrease/(increase) in trade and other receivables 269,828,926 (200,109,786)
Decrease/(increase) in other non-current assets (69,640,426) 138,797,998
Decrease/(increase) in other current assets 43,700,224 (465,861)
Increase/(decrease) in trade and other payables (543,694,257) 919,912,897
Increase in defined benefits obligation 13,640,526 10,637,140
Increase in unearned finance income 5,751,502 4,542,300
Cash generated by operations 71,005,724 297,413,310
Income tax paid (155,625,467) (130,433,794)
Net cash (used in)/ from operating activities (84,619,743) 166,979,516
Investing activities
Proceeds on disposal of property, plant and equipment 2,770,321 1,789,238
Purchases of property, plant and equipment (102,218,230) (1,397,458,160)
Purchases of intangible assets (955,500) (239,093)
Net cash used in investing activities (100,403,409) (1,395,908,015)
Financing activities
Interest paid (9,333,947) (17,057,919)
Proceeds from issue of share capital 960,000,000 -
Proceeds from long term loan 227,737,385 -
Repayments of short term loan (370,758,508) 888,822,253
Repayment of lease liabilities (72,810,274) (60,330,383)
Net cash from financing activities 734,834,656 811,433,951
Net increase/(decrease) in cash and cash equivalents 549,811,504 (417,494,548)
Cash and cash equivalents at beginning of year (624,892,959) (207,398,411)
Cash and cash equivalents at end of year* (75,081,455) (624,892,959)

* Cash and cash equivalents includes bank overdrafts that are repayable on demand and form an integral part of the
Company’s cash management.

The accompanying notes 1 to 40 form an integral part of these financial statements.

 Asian Paints (Bangladesh) Limited

Notes to the Financial Statement

for the year ended 31 March 2023

1. General information start commercial operations in the Economic Zone

located in Bangabandhu Sheikh Mujib Shilpa Nagar
Asian Paints (Bangladesh) Limited (“the Company”)
(Mirsarai, Feni & Sitakundo), Chattogram from 10
was incorporated as a Private Limited Company on
April 2022.
4 October 2000, under the Companies Act 1994. On
1 April 2015, the Company became a subsidiary of
The Company is involved in manufacturing and
Asian Paints International Private Limited (formerly
distributing a wide range of decorative, marine
known as Berger International Private Limited),
and industrial paint products with its expertise and
a registered company in Singapore. The ultimate
cutting edge technology to satisfy the painting
controlling party of the Company is Asian Paints Ltd,
needs of consumers in Bangladesh. The Company
a company registered in India. The head office of the
has ten sales depots in Dhaka, Chattogram, Cumilla,
Company is situated at The Pearl Trade Center (PTC),
Khulna, Sylhet, Bogura, Mymensingh, Barisal, and
4th Floor, Cha-90/3, Progoti Sarani, North Badda,
Rajshahi.
Dhaka-1212 and the manufacturing plant is located
at Gazipur. The Company received permission to

2. Adoption of new and revised Standards

2.1 New and amended IFRS Standards that are effective for the current year
The following are the amendments that are mandatorily effective for an accounting period that begins on or after
1 January 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in
these financial statements.

Amendments to IFRS 3 Reference to the Conceptual Framework

Amendments to IAS 16
Amendments to IAS 37
Annual Improvements to IFRS
Standards 2018-2020 Cycle
Property, Plant and Equipment—Proceeds before Intended Use
Onerous Contracts – Cost of Fulfilling a Contract
Amendments to IFRS 1 First-time Adoption of International Financial
Reporting Standards, IFRS 9 Financial Instruments, IFRS 16 Leases, and IAS
41 Agriculture

2.2 New and revised IFRS Standards in issue but not yet effective
At the date of authorization of these financial statements, the Company has not applied the following new and
revised IFRS Standards that have been issued but are not yet effective:

IFRS 17 (including the June 2020 Insurance Contracts

amendments to IFRS 17)
Amendments to IFRS 10 and IAS
28
Amendments to IAS 1
Amendments to IAS 1 and IFRS
Practice Statement 2
Amendments to IAS 8
Amendments to IAS 12
Sale or Contribution of Assets between an Investor and its Associate or
Joint Venture
Classification of Liabilities as Current or Non-current
Disclosure of Accounting Policies
Disclosure of Accounting Estimates
Deferred Tax related to Assets and Liabilities arising from a single
transaction

The directors do not expect that the adoption of the Standards listed above will have a material impact on the
financial statements of the Company in future periods.

3. Significant accounting policies

10

Notes to the Financial Statements (Contd.)
3.1 Basis of accounting
The financial statements have been prepared in
accordance with International Financial Reporting
Standards (IFRS Standards) and the Companies Act,
1994.
3.2 Basis of measurement
These financial statements have been prepared on
historical cost basis except for the following items in
the statement of financial position;
a) Inventories are measured at lower of cost and
net realisable value.
b) lease liabilities are measured at the present
value of the lease payments discounted by
using implicit rate. Furniture and fixtures
3.3 Functional and presentation currency
The financial statements are presented in
Bangladesh Taka (Tk/BDT), which is the Company’s
functional currency. All financial information
presented in (Tk/BDT) has been rounded off to the
nearest (Tk/BDT) unless otherwise indicated.
3.4 Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are
measured at cost less accumulated depreciation and
impairment losses, if any. Cost includes expenditures
that are directly attributable to the acquisition of
the property, plant and equipment.
Subsequent costs
The cost of replacing part of an item of property,
plant and equipment is recognised in the carrying
amount of the item if it is probable that the future
economic benefits embodied within the part will
flow to the Company and its cost can be measured
reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in the
statement of comprehensive income as incurred.
Depreciation
Depreciation is charged on all items of property,
plant and equipment (excluding land and land
development) on a straight line method. Right-
of-use assets are depreciated over the shorter of
11
Financial Statements
the lease term of the underlying asset. If a lease
transfers ownership of the underlying asset or
the cost of the right-of-use asset reflects that the
Company expects to exercise a purchase option,
the related right-of-use asset is depreciated over
the useful life of the underlying asset. Depreciation
method, estimated useful lives and residual values
are reviewed at each reporting period, with the
effect of any changes in estimate accounted for on a
prospective basis. The rates of depreciation for the
current and comparative year which vary according
to the estimated useful lives of the class of property,
plant and equipment, are as follows:
Building 2 percent per annum
Plant and machinery 10 percent per annum
10 percent per annum
Office equipment 20 percent per annum
Vehicles 20 percent per annum
Color World Machines 20 percent per annum
Retirements and disposals
An item of property, plant and equipment is
derecognised on disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. The gain or loss
arising from the retirement or disposal of an asset
is determined as the difference between the net
disposal proceeds and the carrying amount of the
asset and is recognised in the statement of profit or
loss and other comprehensive income.
Construction in progress
Under construction in progress represents the
cost incurred for acquisition and construction of
items of property, plant and equipment that are
not ready for use which is measured at cost. As per
Company’s policy each addition of property, plant
and equipment assets is passed through capital work
in progress.
3.5 Intangible asset
Recognition and measurement
An intangible asset is recognised if it is probable that
future economic benefits that are attributable to
the asset will flow to the Company and cost of the
asset can be measured reliably. Intangible assets
with finite useful lives that are acquired separately
are carried at cost less accumulated amortisation
 Asian Paints (Bangladesh) Limited
Notes to the Financial Statements (Contd.)
and accumulated impairment losses.
Amortisation of intangible asset
Intangible assets are amortised on a straight-line
basis over their estimated useful lives, from the
date that they are available for use. Amortisation
method, estimated useful lives and residual values
are reviewed at each reporting period, with the
effect of any changes in estimate accounted for on a
prospective basis.
The rate of amortisation is as follows:
Software 25 percent per annum
Derecognition of intangible asset
An intangible asset is derecognised on disposal, or
when no future economic benefits are expected
from use or disposal. Gain or losses arising from
derecognition of an intangible asset, measured
as the difference between the net disposal
proceeds and the carrying amount on the asset,
are recognised in profit or loss when the asset is
derecognised.
3.6 Financial instruments
Recognition and initial measurement
Trade receivables 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 provisions of the
instrument.
A financial asset (unless it is a trade receivable
without a significant financing component) or
financial liability is initially measured at fair value
plus, for an item not at FVTPL, transaction costs that
are directly attributable to its acquisition or issue.
A trade receivable without a significant financing
component is initially measured at the transaction
price.
Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as
measured at: amortised cost; FVOCI and FVTPL.
Financial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing financial
12
assets, in which case all affected financial assets are
reclassified on the first day of the reporting period
following the change in the business model.
A financial asset is measured at amortised cost if it
meets both of the following conditions and is not
designated as at FVTPL.
– it is held within a business model whose
objective is to hold assets to collect contractual
cash flows; and
– its contractual terms give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding.
Financial assets – Business model assessment
The Company makes an assessment of the objective
of the business model in which a financial asset is
held at a portfolio level because this best reflects
the way the business is managed and information
is provided to management. The information
considered includes:
– the stated policies and objective for the
portfolio and the operation of those policies in
practice. These include whether management’s
strategy focuses on earning contractual interest
income, maintaining a particular interest rate
profile, matching the duration of the financial
assets to the duration of any related liabilities
or expected cash outflows or realising cash
flows through the sale of the assets;
– how the performance of the portfolio is
evaluated and reported to the Company’s
management;
– the risks that affect the performance of the
business model (and the financial assets held
within that business model) and how those risks
are managed;
– how managers of the business are
compensated-e.g. whether compensation is
based on the fair value of the assets managed
or the contractual cash flows collected;
and
– the frequency, volume and timing of sales of
financial assets in prior periods, the reasons for
such sales and expectations about future sales
activity.
Transfers of financial assets to third parties in

Notes to the Financial Statements (Contd.)
transactions that do not qualify for derecognition
are not considered sales for this purpose, consistent
with the Company’s continuing recognition of the
assets.
Financial assets-Subsequent measurement and gains
and losses
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 profit or loss. Any
gain or loss on derecognition is recognised in profit
or loss.
Financial liabilities- Classification, subsequent
measurement and gains and losses
Financial liabilities are classified as measured at
amortised cost or FVTPL. Financial liabilities are
subsequently measured at amortised cost using the
effective interest method. Interest expense and
foreign exchange gains and losses are recognised
in profit or loss. Any gain or loss on derecognition is
also recognised in profit or loss.
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 it does not retain control of the
financial asset.
The Company enters into transactions whereby
it transfers assets recognised in its statement
of financial position, but retains either all or
substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred
assets are not derecognised.
Financial liabilities
13
Financial Statements
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 of the modified liability are
substantially different, in which case a new financial
liability based on the modified terms is recognised at
fair value.
On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid (including
any non-cash assets transferred or liabilities
assumed) is recognised in profit or loss.
Impairment
Financial instruments
The Company recognises loss allowances for
expected credit losses (ECLs) on financial assets
measured at amortised cost.
The Company measures loss allowances at an
amount equal to lifetime ECLs. Loss allowances for
trade receivables and contract assets are always
measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating ECLs, the
Company considers reasonable and supportable
information that is relevant and available without
undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on
the Company’s historical experience and informed
credit assessment and including forward-looking
information.
The Company assumes that the credit risk on a
financial asset has increased significantly if it is more
than 30 days past due.
The Company considers a financial asset to be in
default when:
– the borrower is unlikely to pay its credit
obligations to the Company in full, without
recourse by the Company to actions such as
realising security (if any is held); or
– the financial asset is more than 90 days past
due.
Lifetime ECLs are the ECLs that result from all
 Asian Paints (Bangladesh) Limited
Notes to the Financial Statements (Contd.)
possible default events over the expected life of a
financial instrument. 12-month ECLs are the portion
of ECLs that result from default events that are
possible within the 12 months after the reporting
date (or a shorter period if the expected life of the
instrument is less than 12 months).
The maximum period considered when estimating
ECLs is the maximum contractual period over which
the Company is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit
losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference
between the cash flows due to the entity in
accordance with the contract and the cash flows
that the Company expects to receive). ECLs are
discounted at the effective interest rate of the
financial asset.
Credit-impaired financial assets
At each reporting date, the Company assesses
whether financial assets carried at amortised cost
and debt securities at FVOCI 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.
Evidence that a financial asset is credit-impaired
includes the following observable data:
– significant financial difficulty of the borrower
or issuer;
– a breach of contract such as a default or being
more than 90 days past due;
– the restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise;
– it is probable that the borrower will enter
bankruptcy or other financial reorganisation; or
– the disappearance of an active market for a
security because of financial difficulties.
Write-off
The gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectation. method) and by reducing the carrying amount to
14
3.7 Leases
The Company assesses whether a contract is or
contains a lease, at inception of the contract. The
Company recognises a right-of-use asset and a
corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for
short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value
assets (such as tablets and personal computers,
small items of office furniture and telephones). For
these leases, the Company recognises the lease
payments as an operating expense on a straight-
line basis over the term of the lease unless another
systematic basis is more representative of the time
pattern in which economic benefits from the leased
assets are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Company uses its incremental
borrowing rate.
Lease payments included in the measurement of the
lease liability comprise:
– Fixed lease payments (including in-substance
fixed payments), less any lease incentives
receivable;
– Variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
– The amount expected to be payable by the
lessee under residual value guarantees;
– The exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and
– Payments of penalties for terminating the
lease, if the lease term reflects the exercise of
an option to terminate the lease.
The lease liability is presented as a separate line in
the statement of financial position.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
reflect the lease payments made.

Notes to the Financial Statements (Contd.)
In addition, the Company remeasured the lease
liability (and makes a corresponding adjustment to
the related right-of-use asset) whenever:
– The lease term has changed or there is a
significant event or change in circumstances
resulting in a change in the assessment of
exercise of a purchase option, in which case the
lease liability is remeasured by discounting the
revised lease payments using a revised discount
rate.
– The lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual value,
in which cases the lease liability is remeasured
by discounting the revised lease payments
using an unchanged discount rate (unless the
lease payments change is due to a change in a
floating interest rate, in which case a revised
discount rate is used).
– A lease contract is modified and the lease
modification is not accounted for as a separate
lease, in which case the lease liability is
remeasured based on the lease term of the
modified lease by discounting the revised lease
payments using a revised discount rate at the
effective date of the modification.
The right-of-use assets comprise the initial
measurement of the corresponding lease
liability, lease payments made at or before the
commencement day, less any lease incentives
received and any initial direct costs. They are
subsequently measured at cost less accumulated
depreciation and impairment losses.
3.8 Inventories
Whenever the Company incurs an obligation for
costs to dismantle and remove a leased asset,
restore the site on which it is located or restore
the underlying asset to the condition required by
the terms and conditions of the lease, a provision
is recognised and measured under IAS 37. To the
extent that the costs relate to a right-of-use asset,
the costs are included in the related right-of-use
asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter
period of lease term and useful life of the right-of
-use asset. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset
15
Financial Statements
reflects that the Company expects to exercise a
purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying
asset. The depreciation starts at the commencement
date of the lease.
The right-of-use assets are presented as a separate
line in the consolidated statement of financial
position.
The Company applies IAS 36 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the
‘Property, Plant and Equipment’ policy.
Variable rents that do not depend on an index or
rate are not included in the measurement the lease
liability and the right-of-use asset. The related
payments are recognised as an expense in the
period in which the event or condition that triggers
those payments occurs and are included in the
line “Manufacturing overhead and administrative
expense” in profit or loss.
As a practical expedient, IFRS 16 permits a lessee
not to separate non-lease components, and instead
account for any lease and associated non-lease
components as a single arrangement. The Company
has not used this practical expedient. For a contracts
that contain a lease component and one or more
additional lease or non-lease components, the
Company allocates the consideration in the contract
to each lease component on the basis of the relative
stand-alone price of the lease component and
the aggregate stand-alone price of the non-lease
components.
Inventories are stated at the lower of cost and net
realisable value. The cost of inventories is based
on the weighted average principle and includes
expenditure incurred in acquiring the inventories
and other costs incurred in bringing them to their
present location and condition. In the case of
manufactured work-in-progress, cost includes an
appropriate share of production overheads based on
normal operation capacity.
Net realisable value is defined as 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.
 Asian Paints (Bangladesh) Limited
Notes to the Financial Statements (Contd.)
Goods in transit represents goods for which
shipment is done but are not received till the
reporting date.
3.9 Share capital
Paid up share capital represents total amount
contributed by the shareholders of ordinary shares
who are entitled to receive dividends as declared
from time to time and are entitled to vote at
shareholders’ meetings. In the event of a winding up
of the Company, ordinary shareholders rank after
all other shareholders and creditors and are fully
entitled to any residual proceeds of liquidation.
Incremental costs directly articulable to the issue of
ordinary shares are recognised as a deduction from
equity. Income tax relating to transaction costs of
an equity transaction is accounted for in accordance
with IAS 12.
3.11 Provision
3.10 Employee benefit
Short-term benefits
Short-term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related service provided. A liability
is recognised for the amount expected to be paid
under short-term cash bonus or profit-sharing plans
3.12 Revenue recognition
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 obligation
can be estimated reliably.
Defined contribution plan (provident fund)
All permanent employees contribute 12% of their
basic salary to the provident fund and the Company
also makes equal contribution. Provident fund is
administered by a Board of Trustees. Registration
of the provident fund with the National Board of
Revenue (NBR) was effected on 31 August 2008.
The Company recognises contribution to defined
contribution plan as an expense when an employee
has rendered services in exchange for those
contributions. The legal and constructive obligation
is limited to the amount it agrees to contribute to
the fund.
Workers’ profit participation fund
As per Bangladesh Labour Act, 2006, the Company
had created a fund for workers as ‘Workers’ Profit
Participation Fund’ and 5% of the profit before
16
charging such expense has been transferred to this
fund. The Company has introduced the fund since
2009.
Defined benefit plan (gratuity)
The Company operates an unfunded gratuity
scheme; provision in respect of which is made
annually covering all its permanent eligible
employees and workers who have completed five
years of their service with the Company. This scheme
is qualified as defined benefit plan.
Other long term benefit (leave encashment)
The Company initiated a leave encashment scheme
under which employees would be paid maximum 90
days of his/her latest gross salary for annual leave
balance carried forward at final settlement.
Provisions are recognised on the reporting date
if, as a result of past events, 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.
Revenue from contracts with customers
As per IFRS 15, revenue is measured based on
the consideration specified in a contract with a
customer. The Company recognises revenue when it
transfers control over goods to customer.
Manufacturing
Revenue from manufactured goods comprises of
the sale of locally manufactured finished goods
measured at the fair value of the consideration
received or receivable which is net off sales return,
VAT, trade discounts, early settlement discount and
volume rebates and discounts.
Trading
The Company sells Color World Machines to dealers
both in the form of on cash and on deferred credit.
In case of deferred credit, the instalment is received
from dealers over a period of years. Revenue is
recognised at the present value of all equal monthly
instalments with down-payment. The present value
is determined by discounting all the future monthly

Notes to the Financial Statements (Contd.)
instalments using an imputed rate of interest.
Difference between present value and gross value
is reflected as unearned finance income which is
amortised over a period of years using effective
interest rate method.
3.13 Finance income and finance costs
Finance income is the amount of current year’s
reduction of unearned finance income that arises
from a credit sale of Color World Machine.
Finance costs comprise interest on bank overdraft,
short term loan, inter-company loan and finance
charge on lease.
3.14 Taxation
Income tax expense comprises current and deferred
tax. Income tax expense is recognised in the
statement of comprehensive income except to the
extent that it relates to items recognised directly in
equity, in which case it is recognised in equity.
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 or current
tax payable or receivable is the best estimate of the
tax amount expected to be paid or received that
reflects uncertainty related to income taxes, if any. It
is measured using tax rates enacted or substantively
enacted at the reporting date. Current tax also
includes any tax arising from dividends. As a private
limited company, the applicable rate of taxation is
30% (change brought in Finance Act 2021).
Deferred tax
Deferred tax is provided using the balance sheet
method for temporary differences between the
carrying amount of assets and liabilities for financial
reporting purposes and the amount used for
taxation purpose. Currently enacted tax rate is being
used in the determination of deferred income tax.
A deferred tax asset is recognised for deductible
temporary differences, to the extent that it is
probable that future taxable profits will be available
against which they can be utilised. Deferred tax
assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
17
Financial Statements
Deferred tax liabilities are the amounts of income
taxes payable in future periods in respect of taxable
temporary differences.
3.15 Foreign currency
Transactions denominated in foreign currencies are
translated to the Company’s functional currencies at
the exchange rates at the date of the transactions.
Monetary assets and liabilities denominated
in foreign currencies at the reporting date are
retranslated to the functional currency at the
exchange rate at that date.
Foreign currency differences arising on translation
are recognised in the statement of comprehensive
income as per IAS 21: The Effects of Changes in
Foreign Exchange Rates.
3.16 Contingencies
Contingencies arising from claims, litigation,
assessment, fines, penalties, L/C opened for the
procurement, etc. are recorded when it is probable
that a liability has been incurred and the amount can
be reasonably estimated.
Contingent liability
Contingent liability is a possible obligation that
arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly
within the control of the entity.
Contingent liability shall not be recognised in the
financial statements, but requires disclosure in the
notes of the financial statements. A provision shall
be recognised in the period in which the recognition
criteria of provision have been met.
Contingent asset
Contingent asset is a possible asset that arises from
past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one
or more uncertain future events not wholly within
the control of the entity. The Company does not
recognise contingent asset.
3.17 Statement of cash flows
Cash flows from operating activities are presented
under Indirect Method as per IAS 7: Statement of
Cash Flows.
 Asian Paints (Bangladesh) Limited
Notes to the Financial Statements (Contd.)
3.18 Reporting period
The financial period of the Company is determined
from 1 April to 31 March each year and is followed
consistently.
4. Critical accounting judgements and
key sources of estimation
uncertainty
In applying the Company’s accounting policies,
which are described in note 3, judgments (other
than those involving estimations) are required to be
made that have a significant impact on the amounts
recognised and to make estimates and assumptions
about the carrying amounts of assets and liabilities
that are not readily apparent from other sources.
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.
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.
4.1 Critical judgements in applying the Company’s
accounting policies
The following are the critical judgements, apart from
those involving estimations (which are presented
separately below), that has been made in the process
of applying the Company’s accounting policies and
that have the most significant effect on the amounts
recognised in financial statements.
Classification and measurement of financial assets
depends on the results of the Solely Payments of
Principal and Interest and the business model test
(please see financial assets sections of note 3). The
Company determines the business model at a level
that reflects how Company’s of financial assets are
managed together to achieve a particular business
objective. This assessment includes judgement
reflecting all relevant evidence including how the
performance of the assets is evaluate and their
performance measured, the risks that affect the
performance of the assets and how these are
managed and how the managers of the assets are
compensated. The Company monitors financial
18
assets measured at amortised cost or fair value
through other comprehensive income that are
derecognised prior to their maturity to understand
the reason for their disposal and whether the
reasons are consistent with the objective of the
business for which the asset was held. Monitoring
is part of the Company’s continuous assessment of
whether the business model for which the remaining
financial assets are held continues to be appropriate
and if it is not appropriate whether there has been
a charge in business model and so a prospective
change to the classification of those assets. No
such changes were required during the periods
presented.
4.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and
other key sources of estimation uncertainties at
31 March 2020 that may have a significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
financial year is included in the following notes:
– Note 8 Property, plant and equipment
– Note 9 Intangible assets
– Note 12 Deferred tax assets
– Note 13 Inventories
– Note 14 Trade and other receivables
– Note 16 Provision for income tax
– Note 20 Defined benefits obligation
– Note 36 Contingencies and commitments
4.3 Financial information about commercial operation
in the Economic Zone
The Company received permission to start
commercial operations in the Economic Zone located
in Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai,
Feni & Sitakundo), Chattogram from 10 April 2022. In
line with the Bangladesh Economic Zone Act (BEZA),
2010 and the relevant Statutory Regulatory Order
(SRO), the Company plans to utilize the income
tax benefits available for conducting business
operations within this Economic Zone. In order to
provide additional information to stakeholders,
the Company has included a separate note in the
financial statements that outlines the financial
performance of its operations within the Economic
Zone. This includes a breakdown of the revenue
and costs associated with the Company’s activities
 19
Notes to the Financial Statements (Contd.)

Financial Statements
within the Economic Zone, along with the allocation 7. Going concern
of common costs based on sales volume or net sales
The Company has adequate resources to continue in
value. Any directly identifiable assets and liabilities
operation for the foreseeable future. For this reason
related to the Economic Zone have been disclosed in
the directors continue to adopt going concern basis
the form of footnotes under the relevant sections of
in preparing the financial statements. The current
the financial statements.
resources of the Company provide sufficient fund
to meet the present requirements of its existing
5. Comparatives and
business.
rearrangement

To facilitate comparison, certain relevant balances
pertaining to the previous years have been
rearranged or reclassified whenever considered
necessary to conform to the current year’s
presentation.

6. Events after the reporting period
Events after the reporting period that provide
additional information about the Company’s position
at the date of statement of financial position or
those that indicate the going concern assumption
is not appropriate are reflected in the financial
statements. Events after the reporting period that
are not adjusting events are disclosed in the notes
when material.
20
8. Property plant and equipment
In Taka
Land and land Building Plant and Furniture Office Color Motor Construction in Total
development machinery and fixtures equipment World vehicle progress
Machines
Cost
At 1 April 2021 11,171,550 325,896,575 361,805,932 68,922,209 49,840,859 7,613,676 31,328,450 644,079,170 1,500,658,421
Additions - 1,785,555 769,095 934,306 4,504,772 - - 1,394,374,663 1,402,368,392
Transfers - - - - - - - (7,993,728) (7,993,728)
Asian Paints (Bangladesh) Limited

Disposals - - - (239,012) (112,199) - (4,617,870) - (4,969,081)

At 31 March 2022 11,171,550 327,682,130 362,575,027 69,617,503 54,233,433 7,613,676 26,710,580 203,046,105 2,890,064,004
At 1 April 2022 11,171,550 327,682,130 362,575,027 69,617,503 54,233,433 7,613,676 26,710,580 2,030,460,105 2,890,064,004
Additions - 1,270,962,468 858,440,528 8,675,927 11,321,770 - - 234,076 2,149,634,769
Transfers - - - - - - - (2,029,571,927) (2,029,571,927)
Disposals - - (1,359,500) (74,129) - - (5,380,099) - (6,813,728)
At 31 March 2023 11,171,550 1,598,644,598 1,219,656,055 78,219,301 65,555,203 7,613,676 21,330,481 1,122,254 3,003,313,118
Notes to the Financial Statements (Contd.)

Accumulated
depreciation
At 1 April 2021 - 46,807,851 222,766,461 32,362,585 40,379,478 7,466,798 30,257,555 - 380,040,728
Charge for the - 6,532,448 30,024,455 6,357,220 4,537,058 72,830 792,633 - 48,316,644
year
Adjustment - - - (186,168) (91,821) - (4,617,872) - (4,895,860)
for disposals/
transfers
At 31 March 2022 - 53,340,299 252,790,916 38,533,637 44,824,716 7,539,628 26,432,316 - 423,461,512
At 1 April 2022 - 53,340,299 252,790,916 38,533,637 44,824,716 7,539,628 26,432,316 - 423,461,512
Charge for the - 29,993,380 69,491,452 6,755,892 5,558,100 - 278,264 - 112,077,088
year
Adjustment - - (707,019) (45,692) - - (5,380,099) - (6,132,810)
for disposals/
transfers
At 31 March 2023 - 83,333,679 321,575,349 45,243,837 50,382,816 7,539,628 21,330,481 - 529,405,790
Carrying amount
At 31 March 2023 11,171,550 1,515,310,919 898,080,706 32,975,464 15,172,387 74,048 - 1,122,254 2,473,907,328
At 31 March 2022 11,171,550 274,341,831 109,784,111 31,083,866 9,408,717 74,048 278,260 2,030,460,105 2,466,602,488
At 1 April 2021 11,171,550 279,088,724 139,039,471 36,559,624 9,461,381 146,878 1,070,895 644,079,170 1,120,617,693
 21
Notes to the Financial Statements (Contd.)

Financial Statements
8. Property, plant and equipment (Contd.)
Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)

As of 31 March 2023, out of the total carrying amount, the portion of the Company’s property, plant and
equipment that can be attributed to the commercial operations in the Economic Zone amounts to Tk
2,070,642,451.

Depreciation charge for the year allocated to

In Taka
Note 31 March 2023 31 March 2022
Manufacturing expenses 26.1 103,016,216 37,810,757
Administrative expenses 29 5,752,449 6,473,994
Selling and distribution expenses 28 3,308,423 4,031,893
112,077,088 48,316,644

9. Intangible assets
In Taka
Software Total
Cost
At 1 April 2021 39,962,089 39,962,089
Additions 239,093 239,093
At 31 March 2022 40,201,182 40,201,182
At 1 April 2022 40,201,182 40,201,182
Additions 955,500 955,500
At 31 March 2023 41,156,682 41,156,682
Accumulated amortisation
At 1 April 2021 28,890,519 28,890,519
Charge for the year 4,605,865 4,605,865
At 31 March 2022 33,496,384 33,496,384
Balance at 1 April 2022 33,496,384 33,496,384
Charge for the year 4,711,843 4,711,843
At 31 March 2023 38,208,227 38,208,227
Carrying amount
At 31 March 2023 2,948,455 2,948,455
At 31 March 2022 6,704,798 6,704,798
At 1 April 2021 11,071,570 11,071,570

Amortisation charge for the year allocated to

In Taka
Note 31 March 2023 31 March 2022
Administrative expenses 29 4,711,843 4,605,865
4,711,843 4,605,865
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

10. Right-of-use assets

In Taka
Building Land Vehicles Employee Total
accommodation
Cost
At 1 April 2021 196,277,111 305,710,459 21,755,407 6,688,973 530,431,950
Additions 7,882,271 - 18,050,457 736,030 26,668,758
Expiry of lease term (13,425,818) - (19,689,448) (673,000) (33,788,266)
At 31 March 2022 190,733,564 305,710,459 20,116,416 6,752,003 523,312,442
At 1 April 2022 190,733,564 305,710,459 20,116,416 6,752,003 523,312,442
Additions 5,800,409 76,012,969 934,772 - 82,748,150
Expiry of lease term (13,821,317) - (4,193,186) (6,015,973) (24,030,476)
At 31 March 2023 182,712,656 381,723,428 16,858,002 736,030 582,030,116
Accumulated
depreciation
At 1 April 2021 92,827,987 35,091,525 11,920,469 2,018,748 141,858,729
Charge for the year 39,188,786 9,561,688 12,443,635 2,896,397 64,090,506
Expiry of lease term (13,425,818) - (19,011,990) (673,000) (33,110,808)
At 31 March 2022 118,590,955 44,653,213 5,352,114 4,242,145 172,838,427
At 1 April 2022 118,590,955 44,653,213 5,352,114 4,242,145 172,838,427
Charge for the year 36,289,239 14,869,125 10,834,185 2,269,119 64,261,667
Expiry of lease term (13,821,317) - (4,193,186) (6,015,973) (24,030,476)
At 31 March 2023 141,058,877 59,522,338 11,993,113 495,291 213,069,618
Carrying amount
At 31 March 2023 41,653,779 322,201,090 4,864,889 240,739 368,960,498
At 31 March 2022 72,142,609 261,057,246 14,764,302 2,509,858 350,474,015
At 1 April 2021 103,449,124 270,618,934 9,834,938 4,670,225 388,573,221

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
10. Right-of-use assets (Contd.)
Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)

As of 31 March 2023, out of the total carrying amount, the portion of the Company’s right-of-use assets that can be
attributed to the commercial operations in the Economic Zone amounts to Tk 245,013,394.

The Company leases several assets including buildings, land and vehicles. The average lease term is 2.36 years
(FY2021-22: 1.93 years).

The maturity analysis of lease liabilities is presented in note 19.

Taka
31 March 2023 31 March 2022
Amounts recognised in profit or loss
Depreciation expense on right-of-use assets 64,261,667 64,090,506
Interest expense on lease liabilities 9,333,947 17,057,919
73,595,614 81,148,425
Amounts recognised in statement of cash flow
Interest payment on lease 9,333,947 17,057,919
Principal payment on lease 72,810,274 60,330,383
82,144,221 77,388,302

Depreciation charge for the year allocated to

In Taka
Note 31 March 2023 31 March 2022
Manufacturing expenses 26.1 13,681,636 14,206,185
Administrative expenses 29 11,203,695 12,134,110
Selling and distribution expenses 28 39,376,336 37,750,211
64,261,667 64,090,506

11. Other non-current assets

In Taka
Note 31 March 2023 31 March 2022
Advances for acquisition of fixed assets 2,623,162 22,262,553
Security deposit for rent and others 19,878,328 11,161,689
22,501,490 33,424,242
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

12. Deferred tax assets

In Taka
31 March 2023 31 March 2022
Property, plant and equipment excluding land 66,723,378 (66,723,378)
Intangible assets (3,395,230) 3,395,230
Business loss (7,503,949) 7,503,949
Provision for trade receivables (67,953,600) 67,953,600
Provision for inventories (15,121,667) 15,121,667
Provision for gratuity (18,762,093) 20,034,075
Provision for leave encashment (8,428,943) 8,428,943
Provision for sick leave (639,416) 639,416
Right-of-use assets 105,144,296 (105,144,296)
Other assets (8,567,964) 8,567,964
Lease liabilities (105,815,860) 105,815,860
Deferred tax assets (64,321,048) 65,593,030
Deferred tax assets- write off 64,321,048 -
- 65,593,030
Deferred tax income/(expense)
Deferred tax assets at the end of the year - 65,593,030
Deferred tax assets at the beginning of the year 65,593,030 43,835,390
(65,593,030) 21,757,640
Deferred tax income/(expense) recognised directly in profit and
equity
Deferred tax income/(expense) recognised in profit and loss (64,321,048) 20,485,658
Deferred tax attributable to actuarial gain on gratuity recognised in (1,271,982) 1,271,982
equity
(65,593,030) 21,757,640

13. Inventories
In Taka
Note 31 March 2023 31 March 2022
Raw materials 13.1 468,785,585 584,572,961
Packing materials 13.3 17,364,717 12,566,499
Finished goods 13.4 320,557,444 295,736,219
Work-in-process 13.5 51,955,950 7,686,077
Goods in transit 96,748,667 262,234,730
Stores, spares and consumables 13.2 11,365,719 3,929,949
966,778,082 1,166,726,435

Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)
As of 31 March 2023, out of the total carrying amount, the portion of the Company’s inventories that can be
attributed to the commercial operations in the Economic Zone amounts to Tk 332,673,765.

24
 25
Notes to the Financial Statements (Contd.)

Financial Statements
13. INVENTORIES (Contd.)
Taka
31 March 2023 31 March 2022
13.1 Raw Materials
Raw materials 510,985,847 598,220,115
Provision for obsolescence (42,200,262) (13,647,154)
468,785,585 584,572,961

13.2 Stores, Spares And Consumables

Stores, spares and consumables 11,365,719 3,929,949

13.3 Packing Materials

Packing materials 17,743,463 12,994,297
Provision for obsolescence (378,746) (427,798)
17,364,717 12,566,499

13.4 Finished Goods

Locally manufactured finished goods 333,442,402 316,951,950
Color World Machines 10,849,281 14,559,002
344,291,683 331,510,952
Provision for obsolescence (23,734,239) (35,774,733)
320,557,444 295,736,219

13.5 Work-In-Process
Work-in-process 52,160,509 8,241,947
Provision for obsolescence (204,559) (555,870)
51,955,950 7,686,077

13.6 Movement In Provision For Inventories

Opening balance 50,405,554 35,418,628
Provision made during the year 16,112,252 14,986,926
66,517,806 50,405,554
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

14. Trade and other receivables

In Taka
Note 31 March 2023 31 March 2022
Trade receivables 14.1 810,996,516 835,671,042
Other receivables 2,106,871 309,565
Other receivable from related party 12,382,035 37,636,847
825,485,422 873,617,454
Non-current 28,295,891 27,387,379
Current 797,189,531 846,230,075
825,485,422 873,617,454

Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)

As of 31 March 2023, out of the total carrying amount, the portion of the Company’s trade and other
receivables that can be attributed to the commercial operations in the Economic Zone amounts to Tk
535,110,465.

14.1 Trade receivables

Taka
31 March 2023 31 March 2022
Trade receivables - manufactured finished goods 983,153,057 1,010,039,691
Trade receivables - Color world machines 47,997,499 52,143,353
Receivable from related party 1542,854 -
1,032,693,410 1,062,183,044
Provision for trade receivables (221,696,894) (226,512,002)
810,996,516 835,671,042

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
15. Other current assets
Taka
31 March 2023 31 March 2022
Advances
Advance to employees 9,316,103 9,438,920
Advance to suppliers against materials and services 77,413,708 213,056,403
Letter of credit margin 83,391,331 3,401,983
170,121,142 225,897,306
Deposits
Security deposit for rent & others 7,166,550 1,379,955
7,166,550 1,379,955
Prepayments
Prepaid expenses 13,922,454 7,633,109
13,922,454 7,633,109
191,210,146 234,910,370

16. Current tax assets

In Taka
Note 31 March 2023 31 March 2022
Advance income tax 16.1 874,291,684 718,666,217
Provision for income tax 16.2 (746,897,714) (655,640,646)

127,393,970 63,025,571

16.1 Advance income tax

In Taka
Note 31 March 2023 31 March 2022
Opening balance 718,666,217 588,232,423
Paid during the year for:
Income year 2021-22 - 130,433,794
Income year 2022-23 155,625,467 -
874,291,684 718,666,217

16.2 Provision for income tax

In Taka
Note 31 March 2023 31 March 2022
Opening balance 655,640,646 566,980,309
Provision for:
Current year 89,448,265 84,122,243
Prior years 1,808,803 4,538,094
746,897,714 655,640,646
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

17. Cash and cash equivalents

In Taka
Note 31 March 2023 31 March 2022
Cash in hand - 812,543
Cash at bank 199,579,317 12,535,877
Cash and cash equivalents in the statement of financial 199,579,317 13,348,420
position
Bank overdrafts 22 (274,660,772) (638,241,379)
Cash and cash equivalents in the statement of cash flows (75,081,455) (624,892,959)

Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)

As of 31 March 2023, out of the total carrying amount, the portion of the Company’s cash at bank that can be
attributed to the commercial operations in the Economic Zone amounts to Tk 126,607.

18. Share capital

In Taka
Note 31 March 2023 31 March 2022
Authorised:
25,000,000 ordinary shares of Tk 100 each in 2023 2,500,000,000 900,000,000
(9,000,000 ordinary shares of Tk 100 each in 2022)
Issued and fully paid up:
18,477,660 ordinary shares of Tk 100 each in 2023 18.1 1,847,766,000 887,766,000
(8,877,660 ordinary shares of Tk 100 each in 2022)

18.1 Composition of shareholders at 31 March

Name of shareholders Nationality/ Number of Shares Holding %
Incorporated in 2023 2022 2023 2022
Asian Paints International Singapore 17,570,232 7,970,232 95.09% 89.78%
Private Limited
Confidence Cement Ltd. Bangladesh 412,312 412,312 2.23% 4.64%
Late Shamsul Alam Bangladesh 82,462 82,462 0.45% 0.93%
Rupam Kishore Barua Bangladesh 82,462 82,462 0.45% 0.93%
Rezaul Karim Bangladesh 132,111 132,111 0.71% 1.49%
Late Shah Md. Hasan Bangladesh 132,111 132,111 0.71% 1.49%
Runu Anwar Bangladesh 65,970 65,970 0.36% 0.74%
18,477,660 8,877,660 100% 100%

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
19. Lease liabilities
Taka
31 March 2023 31 March 2022
Opening balance 353,624,674 383,328,759
Additions 143,526,102 30,626,298
Finance cost accrued during the period 9,333,948 17,057,919
Payment of lease liabilities (82,144,221) (77,388,302)
424,340,503 353,624,674
Non-current 374,352,994 296,512,388
Current 49,987,509 57,112,285
424,340,503 353,624,673

Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)

As of 31 March 2023, out of the total carrying amount, the portion of the Company’s lease liabilities that can be
attributed to the commercial operations in the Economic Zone amounts to Tk 291,024,195.

Maturity analysis of lease liabilities on undiscounted basis

Taka
31 March 2023 31 March 2022
Less than one year (66,344,799) (70,108,882)
One to five year (134,815,424) (98,794,397)
More than five year (520,634,933) (433,772,563)
Closing balance on undiscounted basis (721,795,156) (602,675,842)
Less: Impact of discounting 297,454,653 249,051,168
(424,340,503) (353,624,674)

20. Defined benefit obligation

Taka
31 March 2023 31 March 2022
Opening balance 62,540,311 53,175,153
Service cost 9,723,715 7,953,845
Interest cost 4,660,475 5,512,759
Actuarial loss recognised in other comprehensive income 1,065,387 4,239,939
Benefit paid (2,874,438) (8,341,385)
Expat gratuity 237,961 226,077
Payable to intercompany (237,961) (226,077)
75,115,450 62,540,311
Current 12,067,160 11,836,655
Non-current 63,048,290 50,703,656
75,115,450 62,540,311
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

20. DEFINED BENEFIT OBLIGATION (Contd.)

Significant actuarial assumptions

Discount rate 8.80% 7.58%
Salary growth 10% 10%
Employee turnover 20% 24%

Taka
31 March 2023 31 March 2022
Sensitivity Analysis
Due to change in significant actuarial assumptions by 1%, potential
impact would range from
Discount rate +1% (3,241,499) (2,218,020)
Discount rate -1% 3,547,895 2,486,809
Salary growth +1% 3,853,647 2,793,205
Salary growth -1% (3,582,927) (2,452,232)
Life expectancy +1% 116,200 81,928
Life expectancy -1% (107,905) (75,124)

21. Unearned finance income

Taka
31 March 2023 31 March 2022
Opening balance 6,904,675 7,703,594
Addition during the year 5,751,502 4,542,300
Finance income recognised during the year (4,910,718) (5,341,219)
7,745,459 6,904,675

22. Bank overdraft

Taka
31 March 2023 31 March 2022
Bank overdrafts are repayable on demand and used for cash 274,660,772 638,241,379
management purposes. See note 23.1 for detail.

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
23. Bank loans
Taka
31 March 2023 31 March 2022
Long term loans from commercial banks 239,939,806 -
Short term loans from commercial banks 1,190,000,000 1,309,000,000

Long term loans from commercial banks

Current 24,406,444 -
Non-current 215,533,362 -
239,939,806 -

Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)
As of 31 March 2023, out of the total carrying amount, the portion of the Company’s Long term loans from
commercial banks that can be attributed to the commercial operations in the Economic Zone amounts to Tk
239,939,806.

23.1 The detail information regarding various short term facilities with commercial banks is provided
below.

Taka
Facilities as at 31 March 2023 Nominal Carrying Maturity
interest rate amount
Long term loan facilities
Long term loan (B) 8.5% - 9% pa 239,939,806 60 months
Short term loan facilities
Short term loan (A) 3.9% pa 810,000,000 12 months
Short term loan (D) 8% pa 150,000,000 Six months
Short term loan (C) 6.5% pa 230,000,000 Six months
1,190,000,000
Overdraft facilities
Overdraft (B) 7% pa 60,264,867 On demand
Overdraft (C) 6.5% pa 214,395,905 On demand
274,660,772

A. a First registered hypothecation charge on pari-passu basis with existing lenders over fixed assets for
Tk 1.25 billion.
b First registered hypothecation charge on pari-passu basis with existing lenders over floating assets
for Tk 1.25 billion.
B. a Registered hypothecation (first charge) for specific charge over plant and machinery for Tk 685
million.
b Registered hypothecation (first charge) for floating charge over stock and book debts on pari-passu
basis with other lenders for Tk 1.41 billion.
c Registered hypothecation (first charge) for floating charge over plant and machinery on pari-passu
basis with other lendersok for Tk 1.41 billion.
C. a Registered hypothecation on fixed and floating assets on pari-passu security sharing basis with other
lenders covering Tk 500 million.
D. a First charge over stock of raw materials, work-in-progress, finished goods, book debts and receivables
on pari-passu basis with other lenders for Tk 800 million.
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

24. Trade and other payables

In Taka
Note 31 March 2023 31 March 2022
Trade payables due to related parties 29,329,960 25,135,737
Trade payable to local suppliers 158,477,082 419,743,949
Trade payable to foreign suppliers 430,035,005 404,535,907
Other payables 24.1 1,139,810,650 1,451,931,388
1,757,652,697 2,301,346,981

Bangabandhu Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo) (The “Economic Zone”)

As of 31 March 2023, out of the total carrying amount, the portion of the Company’s trade and other payables
that can be attributed to the commercial operations in the Economic Zone amounts to Tk 179,634,068.

24.1 Other payables

In Taka
Note 31 March 2023 31 March 2022
Other payables due to related parties 24.2.1 64,011,700 86,185,917
Tax deducted at source 21,897,279 23,912,979
VAT deducted at source 9,896,718 17,146,613
VAT & SD payable 93,126,109 91,997,096
Royalty payable to third party 523,953 523,953
Royalty payable to parent company 24.2.2 302,612,835 249,555,686
Payable to employees 24.2.3 60,616,378 47,489,234
Payable for capital items 55,696,802 520,226,401
Accrued expenses 506,526,873 404,336,930
Interest on short term loan 24,302,003 10,121,579
Audit fees 600,000 435,000
1,139,810,650 1,451,931,388

24.2.1 Other payables due to related parties

Taka
31 March 2023 31 March 2022
Asian Paints International Private Limited, Singapore 35,757,591 58,789,664
Asian Paints Limited, India 26,065,599 21,275,312
Causeway Paints Lanka (Private) Limited - 6,120,941
Berger Paints Emirates Ltd. 1,299,257 -
PT Asian Paints Indonesia 2,698 -
Asian Paints (Nepal) Limited 886,555 -
64,011,700 86,185,917

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
24.2.2 Royalty payable to parent company
In Taka
Note 31 March 2023 31 March 2022
Opening balance 249,555,686 218,780,602
Charge during the year 28 160,989,822 141,623,012
410,545,508 360,403,614
Paid during the year (107,932,673) (110,847,928)
302,612,835 249,555,686

24.2.3 Payable to employees

Taka
31 March 2023 31 March 2022
Employees provident fund - (541,005)
Short term benefits 57,455,611 16,748,672
Other long term benefits 3,160,767 31,281,567
60,616,378 47,489,234

Payment of Tk 7,243,421 was made for worker’s profit participation fund during the year ended 31 March
2022.

25. Revenue
Taka
31 March 2023 31 March 2022
Revenue from manufactured goods 5,546,034,990 4,911,604,706
Revenue from trading goods 31,185,474 30,573,614
5,577,220,464 4,942,178,320

Revenue (category-wise)
Quantity Taka
2023 2022 2023 2022
Paints & others 34,309,634 Ltr. 36,569,666 Ltr. 5,546,034,990 4,911,604,706
Color World Machine sales 126 pieces 98 pieces 31185474 30,573,614
5,577,220,464 4,942,178,320
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

26. Cost of sales

In Taka
Note 31 March 2023 31 March 2022
Manufactured portion:
Opening finished goods 281,177,217 257,627,639
Cost of goods manufactured 26.1 4,188,599,421 3,824,640,929
Cost of finished goods available for sale 4,469,776,638 4,082,268,568
Closing finished goods (309,708,163) (281,177,217)
4,160,068,475 3,801,091,351
Trading portion:
Opening finished goods 14,559,002 2,697,185
Purchase during the year 29,283,389 41,430,799
Cost of finished goods available for sale 43,842,391 44,127,984
Closing finished goods (Color world machine) (10,849,281) (14,559,002)
32,993,110 29,568,982
4,193,061,585 3,830,660,333

26.1 Cost of goods manufactured

In Taka
Note 31 March 2023 31 March 2022
A. RAW MATERIALS AND PACKING MATERIALS 26.1.1 3,793,773,883 3,550,986,856
CONSUMED
3,793,773,883 3,550,986,856
B. MANUFACTURING OVERHEAD:
Personnel expenses 106,943,543 80,129,004
Outsourced personnel expenses 35,993,427 28,750,826
OPC processing charges 22,628,609 12,448,093
Utilities expenses 27,314,535 16,181,254
Entertainment expenses 833,511 457,002
Consumable stores and spare parts 17,557,382 13,908,053
Printing and stationeries expenses 1,127,500 626,878
Courier charges 413,428 416,212
Travel and transportation expenses 3,703,943 562,939
Security expenses 5,416,352 2,269,593
Rent, rates and taxes 1,700,107 2,150,846
Repairs and maintenance expenses 17,401,123 6,166,658
Insurance expenses 5,135,036 1,529,116
Depreciation on property, plant & equipment 103,016,216 37,810,757
Depreciation on right-of-use assets 13,681,636 14,206,185
Primary freight expenses 60,506,067 51,994,787
Car hire charges 7,522,368 3,178,677
Training expenses 386,640 -

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
26.1 Cost of goods manufactured (contd.)

In Taka
Note 31 March 2023 31 March 2022
Legal and professional fees 1,620,230 105,221
Staff and other welfare 462,701 -
Foreign travel expenses 62,847 -
System expenses 97,754 -
Research and development expenses 1,244,337 401,703
License fees 4,272,419 3,107,950
439,095,411 276,557,704
C. OPENING WORK-IN-PROCESS 7,686,077 4,782,446
D. Closing work-in-process (51,955,950) (7,686,077)
Cost of goods manufactured (A+B+C+D) 4,188,599,421 3,824,640,929


26.1.1 Raw materials and packing materials consumed
Taka
31 March 2023 31 March 2022
Opening balance 601,069,409 338,839,524
Purchase during the year 3,678,854,776 3,813,216,741
4,279,924,185 4,152,056,265
Closing balance (486,150,302) (601,069,409)
3,793,773,883 3,550,986,856

27. Other income

In Taka
Note 31 March 2023 31 March 2022
Gain on disposal of fixed assets 27.1 2,089,403 1,730,387
Income from scrap sales 11,505,020 13,645,773
Forfeiture amount from provident fund account 1,089,065 -
14,683,488 15,376,160
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

27.1 (Loss)/gain on sales/ dismantling of assets

31 March 2023
In Taka Original cost Accumulated Carrying Sale value Gain/(loss) on sale
depreciation amount of fixed assets
Office equipment 74,129 45,692 28,437 10,884 (17,553)
Motor Vehicles 5,380,100 5,380,100 - 2,165,019 2,165,019
Plant and machinery 1,359,500 707,019 652,481 594,419 (58,062)
6,813,729 6,132,811 680,918 2,770,321 2,089,403

31 March 2022
In Taka Original cost Accumulated Book value Sale value Gain/(loss) on sale
depreciation of assets
Motor vehicle 4,617,870 4,617,872 - 1,742,139 1,742,139
Furniture and fixtures 239,012 180,163 58,849 47,099 (11,750)
4,856,882 4,798,035 58,849 1,789,238 1,730,389

28. Selling and distribution expenses

Taka

31 March 2023 31 March 2022

Personnel expenses 277,149,875 223,719,070

Outsourced personnel expenses 175,697,689 138,127,269

Secondary freight expenses 81,790,674 85,936,459

Advertisement 99,438,697 64,279,395

Events/Workshops 9,729,256 26,923,807

Promotional expenses 41,892,958 42,856,974

Research and others 6,729,600 10,041,517

Royalty charge* 160,989,822 141,623,012

Depreciation on property, plant & equipment 3,308,423 4,031,893

Depreciation on right-of-use assets 39,376,336 37,750,211

896,103,330 775,289,607

*As per agreement between Asian Paints (Bangladesh) Limited and Asian Paints Limited, India, royalty at
the rate of 3% is payable on net sales, except for sale of the Chemours Company FC, LLC (Wilmington, USA)’s
product which is sales net off return and VAT less the primary and secondary freight. Royalty at the rate of
1% of net sales of the Chemours Company FC, LLC (Wilmington, USA)’s product is payable to the Chemours
Company FC, LLC (Wilmington, USA).

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
29. Administrative expenses
Taka
31 March 2023 31 March 2022
Personnel expenses 99,734,205 120,024,887
Outsourced personnel expenses 4,283,527 2,949,266
Medical expenses 3,150,364 3,318,361
Printing and stationery 3,661,281 3,054,203
Travel and transportation 50,359,371 36,119,675
Foreign travel expenses 926,005 26,969
Vehicle fuel and maintenance 9,459,595 4,870,017
Office maintenance 7,685,688 10,231,554
Electricity, gas and water 2,841,003 2,925,875
Rent, rates and taxes 4,846,037 7,519,639
Telephone and internet expenses 7,830,387 7,834,373
Insurance expenses 4,440,683 3,708,592
Bad debt written off 10,464,703 -
Provision for bad debts (4,815,108) (5,948,014)
Courier and postage expenses 1,632,019 1,599,156
Training expenses 1,139,357 406,394
Entertainment expenses 2,461,037 2,937,686
Recruitment expenses 3,250,085 1,133,500
Security expenses 6,645,616 6,057,840
Audit fees 600,000 435,000
Legal and professional fees 14,840,145 12,852,508
Depreciation on property, plant & equipment 5,752,449 6,473,994
Amortisation 4,711,843 4,605,865
Depreciation on right-of-use assets 11,203,695 12,134,110
Staff and other welfare 24,072,010 9,380,436
System expenses 18,146,218 14,968,449
License fee 375,941 652,017
Other administrative expenses 11,393,226 15,876,327
Repairs and maintenance expenses 554,502 -
311,645,884 286,148,679

30. Foreign exchange loss

In Taka
31 March 2023 31 March 2022
Unrealised exchange loss (62,860,565) (5,070,687)
Realised foreign exchange loss (126,727,634) (1,580,357)
(189,588,199) (6,651,044)
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

31. Finance income

In Taka
31 March 2023 31 March 2022
Earned finance income 4,910,718 5,341,219
Interest income on security deposit 747,707 844,139
Income on remeasurement / termination of lease - 7,218
5,658,425 6,192,576

32. Finance costs

In Taka
31 March 2023 31 March 2022
Interest on short term loan 105,770,975 46,804,567
Interest on long term loan 12,202,421 -
Interest on bank overdraft 55,867,435 26,878,641
Other financial charges 19,531,899 19,843,495
Interest on lease liability 9,333,947 17,057,919
202,706,677 110,584,622

33. Income tax expense

In Taka
Note 31 March 2023 31 March 2022
Current tax expense 33.1 91,257,068 88,660,337
Deferred tax expense/ (income) 12 64,321,048 (20,485,658)
155,578,116 68,174,679

33.1 Current tax

In Taka
31 March 2023 31 March 2022
Current year 89,448,265 84,122,243
Adjustment for prior year 1,808,803 4,538,094
91,257,068 88,660,337

38
 39
Notes to the Financial Statements (Contd.)

Financial Statements
34. Financial instruments - Fair values and risk management
A. Accounting classifications and fair values
The following table shows the carrying amounts and fair values, where applicable, of financial assets and financial
liabilities. It does not include fair value information for financial assets and financial liabilities not measured at
fair value if the carrying amount is a reasonable approximation of fair value.

31 March 2023 Carrying amount
In Taka Note Financial assets Total
at amortised amount
cost
Financial assets not measured at fair value
Trade and other receivables 14 825,485,422 825,485,422
Deposits 11 &15 27,044,878 27,044,878
Cash and cash equivalents 17 199,579,317 199,579,317
1,052,109,617 1,052,109,617

Other financial Total

liabilities amount
Financial liabilities not measured at fair value
Long term loan 23 239,939,806 239,939,806
Short term loan 23 1,190,000,000 1,190,000,000
Bank overdraft 22 274,660,772 274,660,772
Trade and other payables 24 1,757,652,697 1,757,652,697
3,462,253,275 3,462,253,275

31 March 2022 Carrying amount

In Taka Note Financial assets Total
at amortised amount
cost
Financial assets not measured at fair value
Trade receivables 14 873,617,454 873,617,454
Deposits 11 &15 12,541,644 12,541,644
Cash and bank balances 17 13,348,420 13,348,420
899,507,518 899,507,518

Other financial Total

liabilities amount
Financial liabilities not measured at fair value
Short term loan 23 1,309,000,000 1,309,000,000
Bank overdraft 22 638,241,379 638,241,379
Trade and other payables 24 2,301,346,981 2,301,346,981
4,248,588,360 4,248,588,360
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

34. Financial instruments - Fair values and risk management (Contd.)

B. Financial risk management framework
The Company has exposure to the following risks arising from financial instruments:
– credit risk (see (B) (ii));
– liquidity risk (see (B) (iii)); and
– market risk (see (B) (iv)).

i. Risk management framework

The Company’s management has overall responsibility for the establishment and oversight of the company’s
risk management framework. The company’s risk management policies are established to identify and
analyse 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.
ii. Credit risk
Credit risk is the risk of a 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 dealers, institutional and individual customers etc.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. In
monitoring credit risk, receivables are grouped according to their risk profile, i.e. their legal status, financial
condition, ageing profile etc. The Company’s exposure to credit risk on receivables is mainly influenced by
customers.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the
statement of financial position.
a) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:

In Taka
Note 31 March 2023 31 March 2022
Trade and other receivables (net) 14 825,485,422 873,617,454
Deposits 11 &15 27,044,878 12,541,644
Cash and cash equivalents 17 199,579,317 13,348,420
1,052,109,617 899,507,518

b) Ageing of trade receivables (gross)

In Taka
Note 31 March 2023 31 March 2022
Invoiced 0-180 days 685,917,510 741,329,280
Invoiced 181-365 days 122,011,155 71,856,026
Invoiced 365 days 224,764,745 248,997,738
1,032,693,410 1,062,183,044

40
 41
Notes to the Financial Statements (Contd.)

Financial Statements
34. Financial instruments - Fair values and risk management (Contd.)
iii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or other financial assets. The Company’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation. Typically, the Company ensures that it has sufficient cash and
bank balances to meet expected operational expenses, including financial obligations through preparation
of the cash flow forecast, based on time line of payment of financial obligations and accordingly arrange for
sufficient liquidity/fund to make the expected payments within due dates. Moreover, the Company has short
term credit facilities with scheduled commercial banks to ensure payment of obligation in the event that
there is insufficient cash to make the required payment. The requirement is determined in advance through
cash flow projections and credit lines with banks are negotiated accordingly.

The followings are the contractual maturities of financial liabilities:

31 March 2023 Carrying Contractual cash flows
In Taka amount Expected cash Within 6 Within 6-12 More than 1
flows months or less months years
Long term loan 239,939,806 239,939,806 12,203,222 12,203,222 215,533,362
Bank overdraft 274,660,772 274,660,772 274,660,772 - -
Short term loan 1,190,000,000 1,190,000,000 1,190,000,000 - -
Trade and other payables 1,757,652,697 1,757,652,697 1,596,662,875 160,989,822 -
3,462,253,275 3,462,253,275 3,073,526,869 173,193,044 215,533,362

31 March 2022 Carrying Contractual cash flows

In Taka amount Expected cash Within 6 Within 6-12 More than 1
flows months or less months years
Bank overdraft 638,241,379 638,241,379 638,241,379 - -
Short term loan 1,309,000,000 1,309,000,000 1,309,000,000 - -
Trade and other payables 2,301,346,981 2,301,346,981 2,159,723,969 141,623,012 -
4,248,588,360 4,248,588,360 4,106,965,348 141,623,012 -
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

34. Financial instruments - Fair values and risk management (Contd.)

iv. Market risk

Market risk is the risk that any changes in market prices, such as foreign exchange rates and interest rates
will affect the Company’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters while
optimising the return.

a) Currency risk
The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in
which purchases and borrowings are denominated and the respective functional currency of the Company.
The functional currency of the Company is Taka. The currencies in which these transactions are denominated
is USD and INR.

Exposure to currency risk

The summary quantitative data about the Company’s exposure to currency risk as reported to the
Management of the Company based on its risk management policy was as follows:

31 March 2023 31 March 2022
INR USD INR USD
Foreign currency
denominated assets
Trade and other receivable - 132,542 - 464,132
from related party
- 132,542 - 464,132
Foreign currency
denominated liabilities
Trade payable due to related - (279,174) - (291,436)
parties
Other payable due to related (20,363,749) (361,185) (217,870,564) (762,064)
parties
Other trade payables - (4,093,232) - -
(20,363,749) (4,733,591) (217,870,564) (1,053,499)
Net exposure (20,363,749) (4,601,049) (217,870,564) (589,367)

The following exchange rates are applied at reporting date:

In Taka
Year end spot rate 31 March 2023 31 March 2022
USD 105.06 86.25
INR 1.28 1.14

42
 43
Notes to the Financial Statements (Contd.)

Financial Statements
34. Financial instruments - Fair values and risk management (Contd.)

Sensitivity analysis
A reasonably possible strengthening (weakening) of USD and INR against Taka at 31 March would have
effected the measurement of financial instruments denominated in foreign currencies and affected equity
and profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular
interest rates, remain constant and ignore any impact of forecast sales and purchases.

31 March 2023 Profit or (loss) Equity
In Taka Strengthening Weakening Strengthening Weakening
USD (15% movement) (72,507,931) 72,507,931 72,507,931 (72,507,931)
INR (10% movement) (2,600,451) 2,600,451 2,600,451 (2,600,451)
(75,108,382) 75,108,382 75,108,382 (75,108,382)

31 March 2022 Profit or (loss) Equity

In Taka Strengthening Weakening Strengthening Weakening
USD (3% movement) (1,524,987) 1,524,987 1,524,987 (1,524,987)
INR (3% movement) (7,418,820) 7,418,820 7,418,820 (7,418,820)
(8,943,807) 8,943,807 8,943,807 (8,943,807)

b) Interest rate risk

At the date of financial position the interest risk profile of the Company’s interest bearing financial
instruments were as follows:

Variable rate instruments
In Taka
31 March 2023 31 March 2022
Financial asset
Cash at bank 199,579,317 12,535,877
Financial liabilities
Long term loan 239,939,806 -
Bank overdraft 274,660,772 638,241,379
Short term loan 1,190,000,000 1,309,000,000
1,704,600,578 1,947,241,379

The following significant interest rates are applied per annum

31 March 2023 31 March 2022
Long term loan 8.5% - 9.0% -
Bank overdraft 6.5% - 7.0% 4.9% - 7.0%
Short term loan 3.9% - 8.0% 4.0% - 6.5%

Interest rates on overdraft, short term loan and long term loan may be changed subject to mutual consent.

 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

35. Related party disclosures

Key management personnel
Name Designation
Mr.Budhaditya Mukherjee Director/General Manager
Mr. Budhaditya Mukherjee have authority and responsibility for planning, directing and controlling the activities
of the Company.
Transactions with key management personnel

Key management personnel compensation comprised the following:

In Taka
31 March 2023 31 March 2022
Employee benefits (salary and other allowances) 15,341,010 12,389,226
15,341,010 12,389,226

Other related party transactions

Name of the party Relationship Nature of transaction Transaction Balance

value for the outstanding
year ended as at
31 March 2023 31 March 2023
Asian Paints Limited, Group company Purchase of raw materials 111,892,284 24,028,926
India Royalty 160,989,822 302,612,835
Service fees 4,358,898 26,065,599
Export sales 15,559,869 -
Others Receivable- Expenses 6,820,759 12,337,997
Reimbursement
Berger Paints Group company Purchase of trading stock 8,276,708 3,062,625
Emirates Ltd. Export sales- Trade Receivable 4,360,939 1,542,854
Others 563,018 1,299,257
Asian Paints Group company Sundry expenses 17,910,004 35,757,591
International Private Others Receivable- Expenses 44,038 44,038
Limited, Singapore Reimbursement
Confidence Steel Shareholder’s Payable for capital items 26,819,406 34,522,780
Limited associated
entity
Confidence Steel Shareholder’s Receivable 29,982,510 4,452,383
Limited associated
entity
PT Asian Paints Group company Purchase of raw materials 869,897 869,897
Indonesia Sundry expenses 2,698 2,698
Causeway Paints Group company Employee cost - -
Lanka (Private)
Limited
SCIB Chemicals, Group company Purchase of raw materials 1,368,512 1,368,512
S.A.E., Egypt
Asian Paints (Nepal) Group company Sundry expenses 886,555 886,555
Limited
44
 45
Notes to the Financial Statements (Contd.)

Financial Statements
35. Related party disclosures (Contd.)

Name of the party Relationship Nature of transaction Transaction Balance

value for the outstanding
year ended as at
31 March 2022 31 March 2022
Asian Paints Limited, Group company Purchase of raw materials 127,873,690 21,123,863
India Royalty 141,623,012 249,555,686
Service fees 4,168,814 21,275,312
Others 2,412,928 5,517,238
Berger Paints Group company Purchase of trading stock 10,894,109 4,011,874
Emirates Ltd. Export sales 32,119,609 32,119,609
Others 375,877 513,627
Asian Paints Group company Sundry expenses 14,743,200 58,276,037
International Private
Limited, Singapore
Confidence Steel Shareholder’s Payable for capital items 189,932,670 43,643,227
Limited associated
entity
PT Asian Paints Group company Purchase of raw materials 2,106,504 -
Indonesia
Asian Paints (South Group company Purchase of raw materials 299,454 -
Pacific) Limited, Fiji
Causeway Paints Group company Employee cost 6,120,941 6,120,941
Lanka (Private)
Limited

36. Contingencies and commitments

36.1 Contingent liabilities

There is contingent liability in respect of outstanding letters of credit of Tk 115,880,088 (last year: Tk
2,001,484,315). No contingent tax liabilities exist as on 31 March 2023.

36.2 Commitment

There was capital commitment of Tk 46,378,717 for business as at 31 March 2023 (last year: TK 668,151,680).

37. Particulars of employees

The number of employees engaged by the Company for the whole year or part thereof who received a total salary
of Tk 36,000 or above was 408 (last year: 375).
 Asian Paints (Bangladesh) Limited

Notes to the Financial Statements (Contd.)

38. New Factory in Bangladesh Economic Zone

The Company received permission to start commercial operations in the Economic Zone located in Bangabandhu
Sheikh Mujib Shilpa Nagar (Mirsarai, Feni & Sitakundo), Chattogram from 10 April 2022. In line with the
Bangladesh Economic Zone Act (BEZA), 2010 and the relevant Statutory Regulatory Order (SRO), the Company
plans to utilize the income tax benefits available for conducting business operations within this Economic Zone.
In order to provide additional information to stakeholders, the Company has included a separate note in the
financial statements that outlines the financial performance of its operations within the Economic Zone. This
includes a breakdown of the revenue and costs associated with the Company’s activities within the Economic
Zone, along with the allocation of common costs based on sales volume or net sales value.

Financial Performance Economic Zone
31 March 2023
Taka
Revenue 1,140,048,444
Cost of sales (905,830,713)
Gross profit 234,217,731
Other income 2,360,654
Selling and distribution expenses (112,381,854)
Administrative expenses (102,918,913)
Foreign exchange loss (107,121,652)
Operating profit (85,844,034)
Finance costs (46,629,338)
Loss before tax (132,473,372)

39. Events after the reporting period

There is no material events after the reporting date.

40. Approval of the financial statements

The financial statements were approved by the board of directors and authorised for issue on 2 May 2023.

46
SCIB Chemicals S.A.E.
Contents
Independent Auditor’s Report...................................................................................................................................................................4

Statement of Financial Position.................................................................................................................................................................5

Statement of Profit or Loss.........................................................................................................................................................................6

Statement of Other Comprehensive Income..........................................................................................................................................7

Statement of Cash Flows.............................................................................................................................................................................8

Statement of Shareholders’ Equity...........................................................................................................................................................9

Notes to the financial statements.....................................................................................................................................................10-26

 SCIB Chemicals S.A.E.
Independent Auditor’s Report
To The Shareholders’ of SCIB Chemicals
Report on the Financial Statements
We have audited the accompanying financial statements
of SCIB Chemicals S.A.E., which are comprised of the
statement of financial position as of March 31, 2023, and
the statements of profit or loss, other comprehensive
income, cash flows and changes in equity for the year
from April 1, 2022, till March 31, 2023, and summary of
the significant accounting policies and other notes.
Management Responsibility on the Financial
Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance
with the Egyptian Accounting Standards and in light of
the relevant Egyptian laws. This responsibility includes
designing, implementing internal control relevant to the
preparation and fair presentation of financial statements
that are free from material misstatements, whether due
to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates
that are reasonable in the circumstances.
Auditor’s Responsibility
Our responsibility is to express an opinion on these
financial statements based on our audit. We
conducted our audit in accordance with the Egyptian
Auditing Standards and in light of the relevant Egyptian
laws. Those standards require that we should plan
and perform the audit to obtain reasonable assurance
whether the financial statements are free of material
misstatements.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
financial statements. The procedures selected depend
on the auditors’ judgment, including the assessment
of the risks of material misstatement in the financial
statements, due to fraud or errors, in making those risk
assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation
4
of the financial statements in order to design audit
procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of
accounting estimates made by management, as well
as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we obtained are
sufficient and appropriate and provide a reasonable basis
for our opinion.
Opinion
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial
position of SCIB Chemicals S.A.E. as of March 31, 2023,
and the results of its operations and cash flows for
the year then ended in accordance with the Egyptian
Accounting Standards and the applicable Egyptian laws
and regulations relating to the preparation of these
financial statements.
Report on the Legal and Other Organizational
Requirements
The company maintains proper books of accounts,
which include all that is required by law and by the
statues of the company. The company maintains proper
cost accounts. The physical inventory was held by the
company on a consistent basis.
The financial information referred to in the Board of
Directors report is prepared in compliance with Law No.
159 of 1981 and its executive regulation thereto and is in
accordance with what is recorded in the company’s books
of account.
Cairo, May 7,2023
Kamel Magdy Saleh FCA
F.E.S.A.A (R.A.A. 8510)
 5
Statement of Financial Position

Financial Statements
As at 31 March 2023

Note No. 31/3/2023 31/3/2022

EGP EGP
Assets
Non-Current Assets
Property, plant and equipment (net) (5) 104 407 368 104 653 407
Long term notes receivable (net) (6) -- 397 449
Right to Use of assets - building (net) (2.3,7) 14 696 299 8 085 701
Deferred tax Assets (18) 23 727 154 24 393 768
Total non-current assets 142 830 821 137 530 325
Current Assets
Inventories (net) (8) 364 396 636 180 655 206
Accounts and notes receivable (net) (9) 154 707 481 127 490 270
Other debit accounts (net) (10) 48 936 487 25 437 074
Cash on hand and at banks (11) 142 043 526 77 774 482
Total current assets 710 084 130 411 357 032
Total assets 852 914 951 548 887 357
Owners’ Equity and Liabilities
Owners’ Equity
Issued and paid-up capital (16) 18 000 000 18 000 000
Legal reserve 9 000 000 9 000 000
General reserve 73 948 455 73 948 455
Retained earnings (17) 90 517 195 172 626 848
Income (losses) for the year 12 116 823 (82 109 653)
Total owners’ equity 203 582 473 191 465 650
Non-Current Liabilities
Deferred tax liabilities (18) 10 069 796 9 881 685
Lease Liabilities - Long term (2.3,15) 10 313 883 5 773 467
Total non-current liabilities 20 383 679 15 655 152
Current Liabilities
Provisions (12) 21 075 305 16 561 975
Short term loan (19) 51 051 000 --
Banks Over draft 459 31 829 239
Lease Liabilities - Short term (2.3,15) 4 120 586 4 526 936
Accounts and notes payable (13) 368 943 709 148 414 517
Other credit accounts (14) 183 757 744 140 433 888
Total current liabilities 628 948 799 341 766 555
Total liabilities and owners’ equity 852 914 951 548 887 357

The accompanying notes form an integral part of the financial statements and to be read therewith.

Financial Controller Chief Executive

* Audit report attached.

 SCIB Chemicals S.A.E.

Statement of Profit or Loss

For the year ended 31 March 2023

Note No. 31/3/2023 31/3/2022

EGP EGP
Sales of paints (net) 1345 284 122 931 987 352
Sales of coloring machines 3 590 368 3 248 708
Sales of other materials 6 170 055 7 286 556
(22) 1355 044 545 942 522 616
Less:
Cost of sales (1021 157 819) (848 742 207)
Cost of coloring machines (1 845 014) (2 155 165)
Cost of other materials (5 907 019) (7 975 705)
(1028 909 852) (858 873 077)
Gross profit 326 134 693 83 649 539
Less:
Selling and marketing expenses (203 761 646) (166 364 755)
General and administrative expenses (16 160 024) (28 371 100)
Finance expenses (7 115 820) (2 815 919)
Provision no longer required (12) 3 388 130 5 393 179
Provision for claims (12) (20 885 819) (4 692 213)
Interest income 3 620 497 768 350
Other Income 15 946 248 2 768 034
Treasury bills interest income 1 556 944 2 854 988
Capital gains 9 355 53 763
Capital Losses -- ( 715)
Foreign currency exchange differences (88 170 380) 932 308
Income (losses) for the year before taxes 14 562 178 (105 824 541)
Current tax (1 590 630) 1 298 457
Deferred tax (18) ( 854 725) 22 416 431
Income (losses) for the year after taxes 12 116 823 (82 109 653)

The accompanying notes form an integral part of the financial statements and to be read therewith.

Financial Controller Chief Executive

6
 7
Statement of Other Comprehensive Income

Financial Statements
For the year ended 31 March 2023

Note No. 31/3/2023 31/3/2022

EGP EGP
Income (losses) for the year 12 116 823 (82 109 653)
Other comprehensive income - -
Income (losses) for the year after taxes 12 116 823 (82 109 653)

The accompanying notes form an integral part of the financial statements and to be read therewith.

Financial Controller Chief Executive

 SCIB Chemicals S.A.E.

Statement of Cash Flows

For the year ended 31 March 2023

Note No. 31/3/2023 31/3/2022

EGP EGP
Cash flows from operating activities
income (losses) for the year before taxes 14 562 179 (105 824 541)
Adjustments for:
Depreciation (5) 9 009 024 8 655 317
Lease Obligation adjustment (15,7) (6 610 598) 3 610 398
Provisions for claims (12) 10 969 383 2 780 870
Provisions used (12) (4 546 277) (2 439 246)
Impairment in account receivables and other debit balance (12) 4 462 006 1 911 343
Reversal of in accounts receivable (12) ( 699 511) ( 477 385)
Inventory write down (12) 5 454 430 --
Reversal of Inventory write down -- (4 915 794)
Interest related to lease contracts -- 1 388 318
Capital Losses -- 715
Capital Gains ( 9 355) ( 53 763)
Operating (loss) profits before working capital changes 32 591 281 (95 363 768)
(increase ) decrease in inventories (188 417 018) 3 981 669
(Increase) Decrease in accounts and notes receivable and (63 343 859) 11 401 334
other debit accounts
Decrease in long-term notes receivable 397 449 209 333
Decrease in investments in treasury bills -- 88 019 096
Increase in accounts and notes payable, other credit accounts 265 298 494 11 944 935
Taxes paid * 7 274 107 (5 359 275)
Net cash flows provided from operating activities 53 800 454 14 833 324
Cash flows from investing activities
Payments for the purchase of property, plant and equipment (5) (8 765 036) (2 566 193)
Proceeds from the sale of property, plant and equipment 11 406 68 722
Net cash (used in) investing activities (8 753 630) (2 497 471)
Cash flows from financing activities
Dividends paid -- (30 000 000)
Proceed from loan 51 051 000 --
Interest paid related to lease contracts -- (1 388 318)
Net cash provided from (used in) financing activities 51 051 000 (31 388 318)
Net changes in cash and cash equivalents during the year 96 097 824 (19 052 465)
Cash and cash equivalents at the beginning of the year 45 945 243 64 997 708
Cash and cash equivalents at the end of the year (11) 142 043 067 45 945 243

* Taxes Paid represent prior year income tax net of withholding tax in addition to advance payment paid till final
settlement from Current year income tax

** The accompanying notes form an integral part of the financial statements and to be read therewith.

Financial Controller Chief Executive

8
 9
Statement of Changes in Shareholders’ Equity

Financial Statements
For the year ended 31 March 2023

Capital Legal General Retained Profits Total

Reserve Reserve (losses) for
Earnings the year
EGP EGP EGP EGP EGP EGP
Balance as of 18 000 000 9 000 000 73 948 455 156 482 675 46 144 173 303 575 303
March 31, 2021
Transferred to 46 144 173 (46 144 173) -
retained earnings
Dividends distribution (30 000 000) (30 000 000)
according to the
General Assembly
Meeting Decree on
June 29, 2021
(losses) for the year (82 109 653) (8,21,09,653.00)
Balance as of 18 000 000 9 000 000 73 948 455 172 626 848 (82 109 653) 191 465 650
March 31, 2022
Transferred to -- -- -- (82 109 653) 82 109 653 -
retained earnings
Income for the year -- -- -- -- 12 116 823 1,21,16,823.00
Balance as of 18 000 000 9 000 000 73 948 455 90 517 195 12 116 823 203 582 473
March 31, 2023

The accompanying notes form an integral part of the financial statements and to be read therewith.

Financial Controller Chief Executive

 SCIB Chemicals S.A.E.
Notes to the Financial Statements
for the year ended 31 March 2023
1 The Company background
SCIB Chemicals Company S.A.E. was incorporated
on July 31, 1990 according to the provisions of Law
No. 159 of 1981. It was registered at the Commercial
Register under No. 1519 (Cairo – South) on August
27, 1990. On March 2, 1997, the Commercial Register
was transferred to Giza under No. 1025.
The purpose of the company is:
- Manufacturing, trading, and distributing of
modern building chemicals of all types.
- Manufacturing of roof fixtures, paints, polishes,
industrial detergents and anti-wear floors.
- Manufacturing of isolation materials for (water,
heat and fire), concrete additions, adhesive
materials, restoring and filling materials, anti-
leaking, and all special construction materials.
- Performing all needed and supplementary
activities for all these products such as packing,
storing and distributing either through the
company stores or others (distribution outlets),
for the company’s products or others.
- The trading in all tools and equipment related
to the company’s activities.
- The import, export, and distribution in
accordance with laws and decrees regulating
those activities.
- Re-exportation of any products or imported
materials in accordance with the regulating
laws and decrees.
2 Statement of compliance
The financial statements have been prepared in
accordance with the Egyptian Accounting Standards
issued by the Minister of Investment’s Decree No.
(110) of 2015 and applicable laws and regulations.
The Egyptian Accounting Standards require referral
to International Financial Reporting Standards
“IFRSs”, when no Egyptian Accounting Standard or
legal requirement exists to address certain types of
transactions and treatments.
10
3 Basis of Preparing the Financial
Statements
The financial statements have been prepared on the
historical cost basis. The following is the company’s
significant accounting policies Applied:
a Property, plant and equipment and their
depreciation
Property, plant and equipment are stated at
historical cost and depreciated according to the
straight-line method over their estimated useful
lives. Property, plant and equipment in the course of
construction are carried at cost, less any recognized
impairment losses.
Cost of an asset comprises its purchase price,
including import duties, non-refundable purchase
taxes, professional fees and any directly attributable
costs of bringing the asset to its working condition
and location for its use intended by management.
Depreciation of these assets commences when the
assets are ready for their intended use.
The estimated useful lives, residual values and
depreciation methods are reviewed at each year end,
with the effect of any resulting changes accounted
for on a prospective basis.
The gain or loss arising on the disposal or retirement
of an item of property, plant and equipment is
determined as the difference between the sales
proceeds and the carrying amount of the asset and is
recognized in income statement.
Depreciation is calculated on a straight line basis
according to the following estimated annual rates:
Description Useful life Rates
Buildings and utilities 50 years 2%
Plant machinery and 14.3 years 7%
equipment
Computers and Software 4,5 years 25,20%
Furniture and office 10 years 10%
equipment
Vehicles 5 years 20%

Notes to the Financial Statements (Contd.)
b Investments in treasury Bills
Treasury bills acquired with sale back commitment
are stated at cost plus accrued interest for the year
starting from the acquisition date till the financial
statements date. Interest earned is recorded as
income on treasury bills in the statement of profit or
loss.
c Revenue recognition and measurement
Sales revenue is recognized upon delivery of
products to customers. Other earned revenues and
interests are recognized on accrual basis.
d Inventory
Sales of goods
Revenue is measured at the fair value of the
consideration received or receivable. Net sales are
represented by the value of sales invoices for the
goods sold less any discounts and returns. Revenue
resulting from the sale of goods is recognized, when
delivered to customers provided that the following
conditions are all met:
- The company transfers the significant risks and
rewards of ownership of the goods to the buyer.
- The company does not maintain the right of
the continuous managerial involvement to the
degree usually associated with ownership nor
effective control over the goods sold.
- The amount of revenue can be measured
reliably.
- It is probable that the economic benefits
associated with the transaction will flow to the
company.
e-
- The costs incurred or to be incurred in respect
of the transactions can be measured reliably.
- Revenue is recognized when goods are
delivered to the buyer.
  Revenue from contracts with customers
Revenue from contracts with customers is
recognized on transfer of control of promised
goods or services to a customer at an amount that
reflects the consideration to which the company
is expected to be entitled to in exchange for those
goods or services. Revenue towards satisfaction
of a performance obligation is measured at the
11
Financial Statements
amount of transaction price (net of variable
consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered is net of variable consideration
on account of various discounts and schemes
offered by the company as part of the contract. This
variable consideration is estimated based on the
expected value of outflow. Revenue (net of variable
consideration) is recognized only to the extent that
it is highly probable that the amount will not be
subject to significant reversal when uncertainty
relating to its recognition is resolved.
Inventory is valued at the end of the financial year as
follows:
1- Finished goods.
Finished goods are stated at the lower of
cost or net realizable value. Cost includes
direct materials, direct labor, and indirect
manufacturing overhead. Cost is defined
according to the average method.
2- Work in process
Work in process is stated at the production
cost incurred till the last stage of production
reached.
3- Raw and packing materials.
Raw and packing materials are stated at the
lower of cost or net realizable value. Cost is
defined according to the average method.
Foreign Currency Transactions
Functional and Reporting Currency
The company’s records are maintained in Egyptian
Pound which is the functional currency of the
primary economic environment in which the entity
operates. The Egyptian pound has been designated
as the functional and reporting currency of the
company.
Transactions in Foreign Currencies
Transactions denominated in foreign currencies
are translated into Egyptian pound at the rates
prevailing at each transaction date. At the financial
statements date, monetary assets and liabilities
 SCIB Chemicals S.A.E.
Notes to the Financial Statements (Contd.)
denominated in foreign currencies are translated to
Egyptian Pounds at the exchange rates prevailing
on the financial statements date. The company uses
the free market rates which will be the rates to be
used at which the future cash flows represented
by the transaction or balance could have been
settled of those cash flows had occurred at the
measurement date. For non-monetary assets and
liabilities denominated in foreign currencies and
stated at fair value, they are retranslated to the
Egyptian pound according to the prevailing rates on
the date the fair value is determined, while the non-
monetary assets and liabilities stated at historical
cost are not retranslated. Foreign exchange gains
and losses resulting from translation and settlement
of transactions in foreign currencies are recognized
in the income statement for the year except for
the differences resulting from the non-monetary
balances of assets and liabilities stated at fair value,
which are recognized as part of the changes in fair
value.
f Taxation
Taxes is provided for in accordance with the Egyptian
Income Tax Law. Income tax expense represents the
sum of the tax currently payable and deferred tax.
Current Tax
The tax currently payable is based on taxable
profit for the year Taxable profit differs from
net profit as reported in the income statement
because it excludes items of income or expense
that are taxable or deductible in other years and
it further excludes items that are never taxable or
deductible. The company’s liability for current tax is
calculated using tax rates that have been enacted or
substantively enacted as of the financial statements
date.
g Provisions
Deferred Tax
Deferred tax is recognized on the differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation
of taxable profit, and are accounted for using the
balance sheet liability method.
Deferred tax liabilities are generally recognized
for all taxable temporary differences, and
deferred tax assets are generally recognized for
12
all deductible temporary differences to the extent
that it is probable that taxable profits will be
available against which those deductible temporary
differences can be utilized. The carrying amount
of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be
recovered.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
in which the liability is settled or the asset realized,
based on tax rates (and tax laws) that have been
enacted or substantively enacted as of the financial
statements date.
The measurement of deferred tax liabilities and
assets reflects the tax consequences that would
follow from the manner in which the company
expects, at the financial statements date, to recover
or settle the carrying amount of its assets and
liabilities.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when
the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority
and the company intends to settle its deferred tax
assets and liabilities on a net basis.
Current and Deferred Tax
Current and deferred tax are recognized as an
expense or income in the statement of profit or
loss, except when they relate to items credited or
debited directly to equity, in which case the tax is
also recognized directly in equity.
Provisions are recognized when the company has a
present obligation, legal or constructive, as a result
of past events and that it is probable that an outflow
of economic resources will be required to settle the
obligation and a reliable estimate for the amount
of obligation can be made. Provisions are reviewed
at each financial statements date and adjusted to
management best estimate. Changes in the carrying
amount of provisions are recognized in the income
statement in the year during which a change in
estimate arises.

Notes to the Financial Statements (Contd.)
h Leases contracts
The Company assesses whether a contract is or
contains a lease at inception of the contract. The
assessment involves the exercise of judgement
about whether it depends on a specified asset, or
whether the company contains substantially all the
economic benefits from the use of that asset or has
the right to direct the use of the asset.
The Company recognizes a right-of-use asset and
a lease liability at the lease commencement date.
The right-of-use asset initially measured at cost
(including any direct costs, if any), and subsequently
depreciated using the straight-line method from
the commencement date to the earlier of the end
of the useful life of the right-of-use asset or the end
of the lease term. In addition, the right-of-use asset
is periodically reduced by impairment losses, if any,
and adjusted for certain re-measurements of the
lease liability
The lease liability initially measured at the present
value of the lease payments, discounted using
borrowing rate prescribed by Central Bank of Egypt.
Lease payments included in the measurement of the
lease liability include Fixed payments, Variable lease
payments, if any that depend on an index or a rate
known at the commencement date and extension
option payments or purchase options which the
Company is reasonable certain to exercise. After the
commencement date, the amount of lease liabilities
increase to reflect the accretion of interest and
reduce for the lease payments, re-measure (with a
corresponding adjustment to the related Right to
Use asset) when there is a change in future lease
payments in case of renegotiation, changes of an
index or rate or in case of reassessment of options.
i Impairment loss
1. Impairment of non-financial assets
At each balance sheet date, the Company
reviews the carrying amounts of its cash
generating units to determine whether there is
any indication that those assets have suffered
an impairment loss. If any such indication
exists, the recoverable amount of the asset
is estimated in order to determine the extent
of the impairment loss (if any). Recoverable
amount is the higher of fair value less costs to
sell and value in use. In assessing value in use,
the estimated future cash flows are discounted
13
Financial Statements
to their present value using a pre-tax discount
rate that reflects current market assessments
of the time value of money and the risks specific
to the asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of the cash-
generating unit is estimated to be less than
its carrying amount, the carrying amount of
the cash-generating unit is reduced to its
recoverable amount. An impairment loss is
recognized as an expense immediately unless
the relevant asset is carried at a revalued
amount in which case the impairment loss is
treated as a revaluation decrease.
Where an impairment loss subsequently
reverses the carrying amount of the cash-
generating unit is increased to the revised
estimate of its recoverable amount so that the
increased carrying amount does not exceed
the carrying amount that would have been
determined had no impairment loss been
recognized for the cash-generating unit in
prior years. A reversal of an impairment loss is
recognized as income immediately, unless the
relevant asset is carried at a revalued amount,
in which case the reversal of the impairment
loss is treated as a revaluation increase.
2. Impairment of financial assets
Financial assets, other than those at fair value
through profit or loss (FVTPL) are assessed for
indicators of impairment at each balance sheet
date. Financial assets are impaired where there
is objective evidence that as a result of one
or more events that occurred after the initial
recognition of the financial asset, the estimated
future cash flows of the investment have
been impacted. For financial assets carried at
amortized cost, the amount of the impairment
is the difference between the asset’s carrying
amount and the present value of estimated
future cash flows discounted at the original
effective interest rate.
The carrying amount of the financial asset
is reduced by the impairment loss directly
for all financial assets with the exception
of trade receivables where the carrying
amount is reduced through the use of an
allowance account. When a trade receivable
 SCIB Chemicals S.A.E.
Notes to the Financial Statements (Contd.)
is uncollectible it is written off against the
allowance account. Subsequent recoveries of
amounts previously written off are credited
against the allowance account. Changes in the
carrying amount of the allowance account are
recognized in profit or loss.
j Financial instruments
A financial instrument is any contract that gives
rise to both a financial asset of one enterprise and
a financial liability or equity instrument of another
enterprise.
Financial assets and financial liabilities are
recognized on the company’s balance sheet when
the company becomes a party to the contractual
rights and obligations of the financial instrument.
Financial liabilities or part of a financial liability are
removed from the financial statements when, and
only when the obligation specified in the contract is
discharged, cancelled or expired.
The difference between the carrying amount of
a financial liability (or the completed portion or
the transferred to another party) and the cash
flows, including any transferred non-cash assets or
estimated liabilities, is recognized in the statement
of profit or loss.
Accounts receivable
Accounts receivable balance represents sales
not collected as of the date of the balance sheet.
Accounts receivable are shown net of accumulated
impairment losses and deferred revenue, which
represents issued and uncollected invoices.
Cash
Cash and bank balances include cash on hand,
current accounts with banks, short-term deposits
with an original maturity of three months or less.
Accounts payable
Accounts payable are recognized for amounts to
be paid in the future for goods received or services
rendered during the year.
k Statement of cash flows
The statement of cash flows is prepared applying
the indirect method. For the purpose of preparing
14
the cash flows, the cash and the cash equivalents
represent cash on hand and at banks and deposits
with banks less bank overdraft balance.
l Legal reserve
According to the company’s Articles of Association,
5% of the net profit is reserved to form a legal
reserve, and it ceases once the reserve reaches
50% of the company’s issued capital, and resumes
whenever the reserve decreases.
m EAS 47 ‘Financial instruments’
EAS 47 replaces the provisions of EAS 26 that relates
to the recognition, classification and measurement
of financial assets and financial liabilities, de-
recognition of financial instruments, impairment of
financial assets and hedge accounting. The adoption
of EAS 47 resulted in changes in accounting policies
and adjustments to the amounts recognized in
the financial statements. In accordance with the
transitional provisions in EAS 47, comparative
figures have not been restated. EAS 47 replaces the
‘incurred loss’ model in EAS 26 with an ‘expected
credit loss’ (ECL) model. The new impairment model
applies to financial assets measured at amortized
cost and debt investments at FVOCI (fair value
through other comprehensive income), but not
to investments in equity instruments. Under EAS
47, credit losses are recognized earlier than under
EAS 26. The Company applies the EAS 47 simplified
approach in measuring expected credit losses, which
uses a lifetime expected loss allowance for all trade
receivables.
The assessment of the expected credit losses did
not result in an additional impairment of trade
receivables at the initial adoption of the standard as
at 1st April 2019 , will be monitored on a continuous
basis going forward and periodically re-assessed; as
EAS 47 is required to be applied retrospectively.
As a practical expedient, the Company uses a
provision matrix to measure lifetime ECL on its
portfolio of trade receivables. 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. At each
reporting date, the historically observed default
rates and changes in the forward-looking estimates
are updated.

Notes to the Financial Statements (Contd.)
n EAS 49 ‘Leases’
EAS 49 issued on 18 March 2019 is effective for
reporting years beginning on or after 1 January
2020. EAS 49 sets out the principles for the
recognition, measurement, presentation and
disclosure of leases for the customer (‘lessee’) and
the supplier (‘lessor’).
EAS 49 introduces lessee accounting model under
which a lessee will recognize a liability to make
lease payments (i.e. the lease liability) and an asset
representing the right to use the underlying asset
during the lease term (i.e. the right of use asset) at
the commencement date of lease. Lessees will be
required to separately recognize interest expense on
the lease liability and depreciation expense on the
right of use asset. Though, EAS 49 is effective for
annual years beginning on or after 1 April 2020, the
company has elected to adopt EAS 49, effective from
April 1st 2019. Refer to notes (8,17, 19).
o EAS 48 - Revenue from contracts with customers
EAS 48 has been adopted retrospectively. No
opening balance adjustments were made, as the
impact was immaterial.
4 Critical accounting estimates and
judgments
In the application of the company’s accounting
policies, management is required to make
judgments, estimates and assumptions about the
carrying amounts of assets and liabilities that are
not readily apparent from other sources.
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. The estimates and underlying
assumption are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized
in the year during which the estimate is revised if
the revision affects only that year or in the year of
revision and future years if the revision affects both
current and future years.
a. Critical judgments in applying accounting policies
The following are the critical judgments in
estimations, that company has made in the process
of applying the entity’s accounting policies and that
have the most significant effect on the amounts
recognized in financial statements:
15
Financial Statements
Revenue recognition
In making its judgment, management
considered the detailed criteria for the
recognition of revenue from the sale of goods
and services rendered set out in EAS (49)
“Revenue from Contracts with customers”
See Note (3C), and in particular, whether the
company had transferred to the buyer the
significant risks and rewards of ownership of
the goods or services rendered. Management is
satisfied that the significant risks and rewards
have been transferred and that recognition of
the revenue in the current year is appropriate,
in conjunction with the recognition of an
appropriate provision for the related costs.
b. Key sources of estimating uncertainty
1. Useful lives of tangible assets
As at March 31, 2023, the carrying value of
tangible assets amounted to EGP 104 407
368 against EGP 104 653 407 as at March 31,
2022, (Note No. 5). Management’s assessment
of the useful life of a tangible asset is
based on the expected use of the asset, the
expected physical wear and tear on the asset,
technological developments as well as past
experience with comparable assets. A change in
the useful life of an asset may have an effect on
the future amount of depreciation recognized
in the statement of profit or loss.
2. Inventories write-down
Inventory is written-down to net realizable
value if it is lower than its cost. Net realizable
value is determined based on management
assessment for obsolete and slow-moving
items. Inventories write-down amounted to
EGP 9,624,913 as of March 31, 2023, against
EGP 4 170 484 as at March 31, 2022 (Note 8).
3. Impairment of accounts receivable and other
receivables
Impairment is recognized for estimated
irrecoverable amounts in order to record
foreseeable losses arising from events such
as customer’s insolvency. In determining
appropriate impairment several factors are
considered. These include the aging of accounts
receivable balances, the current solvency of the
customers and historical recovery experience.
 SCIB Chemicals S.A.E.
Notes to the Financial Statements (Contd.)
The actual write-offs might be higher than
expected if these factors are actually different
from estimated, or there are new factors that
were not considered earlier.
As of March 31, 2023, accounts receivable
impairment amounted to EGP 4 636 013 against
EGP 1 824 729 as at March 31, 2022 (Note 9) and
other debit accounts impairment amounted to
EGP 1 562 794 as at March 31, 2023 against
EGP 1 390 425 as at March 31, 2022 (Note 10).
4. Provision
Provision is based on an estimate of future
costs for claims made by other parties in
connection with the company’s activity. As the
claims cannot be determined with accuracy, this
amount could change in the future. The carrying
amount of provision as of March 31, 2023
amounted to EGP 21 075 305 compared to
EGP 16 561 975 as at March 31, 2022 (Note 12).
16
5. Deferred income tax
The valuation of deferred income tax assets
and liabilities is based on the management’s
judgment. Deferred income tax assets are
only recognized if it is probable that they can
be used. The deferred tax asset arising from
accumulated tax losses is recognized to the
extent that it is probable to realize sufficient
taxable profit in the future, to offset these
accumulated losses. The estimate is based on
a variety of factors such as future operating
results. If there is a difference between the
actual and the estimated value, this may
lead to a re-evaluation of the possibility of
accommodating the future tax profits to the
value of deferred tax asset. The deferred tax
assets balance amounted to EGP 23 727 154
as at March 31, 2023 against EGP 24 393 768 as
at March 31, 2022. The deferred tax liabilities
balance amounted to EGP 10 069 796 as at
March 31, 2023 against 9 881 685 as at March 31,
2022 (Note No 18).
5 Property, Plant and Equipment (Net)
Land * Buildings Plant, Computers Furniture Vehicles Total
and utilities machinery and and office
and software equipment
equipment
EGP EGP EGP EGP EGP EGP EGP
Cost
As of April 1, 2021 11 436 000 67 028 913 87 669 725 7 690 341 5 210 087 632 991 179 668 057
Additions during the year -- -- 1 973 769 890 442 23 500 -- 2 887 711
Disposals -- -- -- ( 163 361) -- ( 10 000) ( 173 361)
As of March 31, 2022 11 436 000 67 028 913 89 643 494 8 417 422 5 233 587 622 991 182 382 407
Additions during the year -- 2 215 331 5 653 174 594 507 302 024 -- 8 765 036
Disposals -- -- -- ( 141 877) -- -- ( 141 877)
As of March 31, 2023 11 436 000 69 244 244 95 296 668 8 870 052 5 535 611 622 991 191 005 566
Accumulated depreciation
As of April 1, 2021 -- 13 984 771 45 278 190 5 075 403 4 260 018 632 988 69 231 370
Notes to the Financial Statements (Contd.)

Depreciation -- 1 339 270 5 954 095 1 104 978 256 974 -- 8 655 317
Accumulated depreciation for disposals -- -- -- ( 147 687) -- ( 10 000) ( 157 687)
As of March 31, 2022 -- 15 324 041 51 232 285 6 032 694 4 516 992 622 988 77 729 000
Depreciation -- 1 355 097 6 270 490 1 151 434 232 000 3 9 009 024
Accumulated depreciation for disposals -- -- -- ( 139 826) -- -- ( 139 826)
As of March 31, 2023 -- 16 679 138 57 502 775 7 044 302 4 748 992 622 991 86 598 198
Net Book Value as of March 31, 2023 11 436 000 52 565 106 37 793 893 1 825 750 786 619 -- 104 407 368
Net Book Value as of March 31, 2022 11 436 000 51 704 872 38 411 209 2 384 728 716 595 3 104 653 407
Fully depreciated fixed assets -- -- 10 829 835 3 966 404 3 155 422 622 991 18 574 652

*The opening balance includ an amount of EGP 10 509 450, related to land purchased at the 6th of October Governorate during 2008. The company paid
the full amount but the ownership of the land not transfer to the company till now, as the sales agreement stipulate that the built up area must be
equivalent to 40% of the plot area as a precondition to the transfer of the title.
Depreciation charges is allocated for Profit or loss as follows:

31/03/2023 31/03/2022
EGP EGP
Cost of sales 7 629 520 7 350 135
Selling and marketing expenses 359 260 390 735
General and administrative expenses 1 020 244 914 447
9 009 024 8 655 317
17

Financial Statements
 SCIB Chemicals S.A.E.

Notes to the Financial Statements (Contd.)

6 Long-Term notes receivable

31/03/2023 31/03/2022
EGP EGP
Long term notes receivable -- 467 000
Less: Interest -- (69 551)
-- 397 449

7 Right of Use assets - building (net)

31/03/2023 31/03/2022
EGP EGP
Cost at Beginning of the year 21 221 417 23 099 538
Addition during the year 13 405 637 2 805 586
Disposal during the year (8 482 360) (4 683 707)
Cost at Ending of the year 26 144 694 21 221 417
Accumulated depreciation at Beginning of the year 13 135 716 11 403 441
Amortization during the year 6 173 716 6 159 236
Disposal during the year 7 861 037)) (4 426 961)
Accumulated depreciation at Ending of the year 11 448 395 13 135 716
Net at Ending of the year 14 696 299 8 085 701

8 Inventories (net)

31/03/2023 31/03/2022
EGP EGP
Raw materials 228 964 869 110 188 228
Packing materials 21 177 766 8 816 522
Work in process 7 133 669 5 849 705
Finished goods 91 538 622 48 957 041
Tinting machines 1 860 275 1 906 181
Goods in transit 23 346 348 9 108 012
374 021 549 184 825 689
Less: Inventory write-down (Note No. 12) (9 624 913) (4 170 483)
364 396 636 180 655 206

18
 19
Notes to the Financial Statements (Contd.)

Financial Statements
9 Accounts and notes receivables (net)
31/03/2023 31/03/2022
EGP EGP
Accounts receivables 88 560 754 90 559 985
Notes receivable 68 875 411 37 937 615
Related Parties
Berger paints Emirates limited (Note No. 21) 361 379 817 399
Asian Paints Middle East L.L.C -Oman 465 585 --
Fiji Islands Asian Paints PTE LTD 67 449 --
Asian Paints Nepal PVT LTD 609 889 --
Asian Paints Bangladesh Ltd 403 027 --
159 343 494 129 314 999
Less: Impairment in accounts and notes receivable (Note No. 12) (4 636 013) (1 824 729)
154 707 481 127 490 270

10 Other debit accounts

31/03/2023 31/03/2022
EGP EGP
Advance payments to suppliers 7 078 521 6 115 611
Refundable deposits 1 447 875 1 438 540
Prepaid expenses 3 550 154 5 014 700
Employees’ loans 5 253 308 4 378 463
Tax Authority - Withholding taxes 7 342 440 3 622 573
Tax Authority – advance payments for current tax 11 311 542 6 166 672
Accrued Revenue 10 673 119 --
Accrued interest 291 737 90 940
Other debit balance 3 550 585 --
50 499 281 26 827 499
Less: Impairment in debit accounts’ value (Note No. 12) (1 562 794) (1 390 425)
48 936 487 25 437 074

11 Cash on hand and at banks

31/03/2023 31/03/2022
EGP EGP
Banks current accounts 129 651 513 77 615 001
Time Deposits 12 376 000 --
Cash on hand 16 013 159 481
142 043 526 77 774 482
 SCIB Chemicals S.A.E.

Notes to the Financial Statements (Contd.)

11 Cash on hand and at banks (Contd.)

For purpose of preparing the statement of cash flows, cash and cash equivalents are comprised of the following:

31/03/2023 31/03/2022
EGP EGP
Cash and cash equivalents at Ending of the year
Banks current accounts 129 651 513 77 615 001
Time Deposits 12 376 000 --
Cash on hand 16 013 159 481
Less:
Bank overdraft (459) (13 364 690)
142 043 067 16 249 766

12 Provisions, impairment loss and Inventory write-down

Balance as of Recognized Reversed Used during Balance as of

01/04/2022 during the during the the year 31/03/2023
year year
EGP EGP EGP EGP EGP
Provisions 16 561 975 5 226 775 (2 688 619) (3 767 435) 15 332 696
Provisions for leaves -- 5 742 609 -- -- 5 742 609
Total Provision 16 561 975 10 969 384 (2 688 619) (3 767 435) 21 075 305
Impairment
Impairment in accounts 1 824 729 4 212 133 (699 511) (701 338) 4 636 013
receivable
Impairment in other debit 1 390 425 249 872 -- (77 503) 1 562 794
accounts
Inventory write-down 4 170 483 5 454 430 -- -- 9 624 913
Total provision, 23 947 612 20 885 819 (3 388 130) (4 546 276) 36 899 025
impairment, and write-
down

13 Accounts and notes payable

31/03/2023 31/03/2022
EGP EGP
Accounts payable 294 210 456 95 914 300
Notes payable 69 881 883 43 431 262
Related Parties Supplier
Asian Paints International Private Limited (Note No.21) 2 700 754 2 128 938
Asian Paints Limited- India (Note No.21) 1 308 061 202 527
Asian Paints Limited- Indonesia (Note No.21) -- 293 480
Asian Paints Middle East L.L.C -Oman (Note No.21) 25 918 --
Berger Paints Emirates (Note No.21) 816 637 6 444 010
368 943 709 148 414 517

20
 21
Notes to the Financial Statements (Contd.)

Financial Statements
14 Other credit accounts
31/03/2023 31/03/2022
EGP EGP
Accrued expenses 98 258 261 82 980 553
Accrued taxes 2 969 223 6 890 557
Tax Authority-Value added taxes 5 638 372 --
Tax Authority- current tax 1 590 630 --
Asian Paints Limited- India 66 578 356 42 633 650
Asian Paints International Private Limited (Holding company) 1 530 045 870 563
Other credit balances 7 192 857 7 058 565
183 757 744 140 433 888

15 Lease Liabilities
31/03/2023 31/03/2022
EGP EGP
Balance at beginning of year (10 300 403) (13 860 960)
Movement during current year
Payment 7 587 551 7 330 266
Additions (10 967 490) (2 765 585)
Disposals 800 540 384 194
Accretion of interest (1 554 666) (1 388 318)
Total at ending year (14 434 469) (10 300 403)
lease liabilities – Current (within one year) 4 120 586 4 526 936
lease liabilities – Non current (from 2 to 5 years) 10 313 883 5 773 467

16 Capital
The authorized capital amounted to EGP 50 million and the issued and paid-up capital amounted to
EGP 18 million, distributed among 1.8 million shares with a par value of EGP 10 each, fully paid.

17 Retained earnings and dividends distribution.

The Ordinary General Assembly Meetings held on June 28, 2022, didn’t approve dividends distribution of year
ended as of March 31, 2023, as follows:
EGP
Retained earnings as of April 1, 2022 172 626 848
Losses for the year ended March 31, 2022 (82 109 653)
Distributable profit 90 517 195
Dividends distribution according to the General Assembly Meeting Decree on --
June 28, 2022
Retained earnings as of March 31, 2023 90 517 195
 SCIB Chemicals S.A.E.

Notes to the Financial Statements (Contd.)

18 Deferred Tax assets and (liabilities)

Deferred tax assets and liabilities are attributable to the following:
Assets / (Liabilities)
31/03/2023 31/03/2022
EGP EGP
Balance at the beginning of the year 24 393 768 2 044 413
Closing Deferred tax related carryforward losses (23 455 408) --
Deferred tax Assets during the year 22 788 794 22 349 355
Balance at the end of the year 23 727 154 24 393 768
Balance at the beginning of the year (9 881 685) (9 948 761)
Deferred tax liabilities during the year (188 112) 67 076
Balance at the end of the year (10 069 796) (9 881 685)

19 Short term loan

On November 10, 2023, the company signed 3 short term loans agreement with Asian Paints International Private
Limited with an amounted to USD 550 000 each, to support in discharge of outstanding united states Dollar, all
loans shall be repaid after 12 months from date of receipt of the loan proceeds. The applicable interest rate is
3-months USD term SOFR plus 2.5% p.a which may be subject to revision. Balance as of March 31, 2023, is
EGP 51 051 000 which is equivalent to USD 1 650 000.

20 Treasury bills revenue

31/03/2023 31/03/2022
EGP EGP
Income from treasury bills purchased during the previous year, and sold -- 144 654
during the current year
Income from treasury bills purchased and sold during the year 1 556 944 2 710 334
Accrued treasury bills revenue -- --
1 556 944 2 854 988

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
21 Related Parties transaction

Volume
Balance Balance
Nature of Transaction during the
Company Name 31/03/2023 31/03/2022
Relationship Description year
EGP EGP EGP
Berger paints Emirates limited Customer Paints Sales 289 547 361 379 817 399
Fiji Islands Asian Paints PTE LTD Customer Paints Sales 66 119 67 449 --
Asian Paints Nepal PVT LTD Customer Paints Sales 603 581 609 889 --
Berger Paints Bahrain W.L. L Customer Paints Sales 16 415 -- --
Asian Paints Bangladesh Ltd Customer Paints Sales 395 772 403 027 --
Berger paints Emirates limited Purchases 55 507 816 637 6 444 010
Consultation
Supplier
and other 4 718 560 -- --
expenses
Asian Paints International Private Consultation
Limited (Holding company) Supplier and other 2 028 363 2 700 754 2 128 937
expenses
Asian Paints Limited- Indonesia Consultation
Supplier and other -- -- 293 480
expenses
Asian Paints Limited - India Supplier Expenses 1 375 652 1 308 061 202 527
Asian Paints Limited - India Royalty 38 711 011 66 578 356 42 633 650
Current
Purchases 1 033 344 -- --
Asian Paints (Middle East) LLC (Oman) Customer Paints Sales 555 402 465 585 --
Asian Paints (Middle East) LLC (Oman) Purchases 962 456 -- --
Supplier Other
15 916 25 918 --
Expenses
Asian Paints International Private Current Royalty 1 530 045 1 530 045 870 563
Limited (Holding company) Short term
51 051 000 51 051 000 --
loan
Finance
Accrued
1 258 357 1 258 357 --
interest

22 Sales, net
The company`s net sales amounting to EGP 1 355 044 545 and analyzed as follows:

31/03/2023 31/03/2022
EGP EGP
Export Sales 124 170 621 107 004 186
Local Sales 1 230 873 924 835 518 430
1 355 044 545 942 522 616
 SCIB Chemicals S.A.E.
Notes to the Financial Statements (Contd.)
23 Contingent Liabilities
Contingent liabilities balance represents the
uncovered portion of letters of guarantee as of
March 31, 2023 amounted to EGP 1 317 407.
24 Financial instruments fair value
The financial instruments represent balances of
cash in hand and at banks, debtors, creditors and
related party balances. The carrying amounts of
these financial instruments represent a reasonable
estimate for their fair values. Note (4) includes
significant accounting policies applied in recognition
and measurement of those financial instruments,
and its related revenues and expenses.
26 Tax Position
25 Financial risk management
The company is exposed to the following risks, due
to its use of financial instruments:
• Credit risk
• Liquidity risk
• Market risk
Credit risk
Credit risk represented in the failure of the
customers to discharge their obligations at the due
date, the company deals with customers who has a
good reputation.
Liquidity
This risk represents the Company’s inability to
settle its financial liabilities on maturity dates. The
Company’s liquidity risk management policy requires
that sufficient cash is maintained to meet short term
funding requirements, to avoid unacceptable loss
that may affect the Company’s reputation.
Market risk
Market risk is the risk that changes in market prices,
such as foreign exchange rates and interest rates,
will affect the company’s income or the value of its
holding of financial instruments.
24
Foreign currencies fluctuation risk
Foreign currency Fluctuation risk represented in
the risk of change in foreign currencies exchange
rates, which in turn affects payments and receipts in
foreign currencies as well as the value of monetary
assets and liabilities reported in foreign currency.
Interest rate risk
This risk represents the effect of changes in interest
rate, which might adversely affect the results of
operations and the value of the financial assets
and liabilities. In order to minimize the interest rate
risk, the company tends to reduce interest rates
on facilities obtained from its banks on an ongoing
basis.
The company was exempted from taxes according to
the New Urban Community Law No. 59 of 1979 and
its amendments for the period of ten years ending
December 31, 2007.
Corporate Tax
The company’s records has been inspected and due
taxes were settled from year 1994 until March 31, 2016.
From year 2017 till 2020 where inspected on a
deemed basis and the company taking measurement
to re-inspect.
From year 2021 to March 31, 2023, the company’s
books not yet inspected.
Salary Tax
The company was inspected, and due taxes were
settled until December 31, 2018.
From January 1, 2019, till March 31, 2023, the
company’s books not yet inspected.
Stamp Tax
The company was inspected and due taxes were
settled until March 31, 2021.
Sales Tax (Value Added)
The company was inspected until March 31, 2020 and
due taxes were settled
From April 1, 2020 till March 31, 2023 the company’s
books not yet inspected.

Notes to the Financial Statements (Contd.)
27 Significant events during the year
(A) Decisions issued by the Central Bank of Egypt
On Sunday, February 13, 2022, the Central Bank
of Egypt issued a decision to stop dealing with
collection documents in the implementation of all
import operations and to work with letter of credits
only, as of the month following that decision.
The Central explained that the decision comes within
the framework of the governance of the import
process and the activation of the pre-registration
system for shipments, which will be applied
compulsorily from the beginning of March 2022, with
some exceptions detailed in that decision.
The Monetary Policy Committee of the Central
Bank of Egypt decided, in its extraordinary meeting
on Monday, March 21, 2022, to raise the overnight
deposit and lending rates and the central bank’s
main operation rate by 100 basis points to reach
9.25%, 10.25% and 9.75%, respectively. The credit
and discount rate also raised by 100 basis points to
9.75%.
On October 27, 2022 The Monetary Policy
Committee of the Central Bank of Egypt decided,
to raise the overnight deposit and lending rates
and the central bank’s main operation rate by 200
basis points to reach 13.25%, 14.25% and 13.75%,
respectively. The credit and discount rate also raised
by 200 basis points to 13.75%. Also, to gradual
cancellation of the instructions issued on February
13, 2022, regarding the use of letter of credits in
import financing operations, until the completion of
their complete cancellation in December 2022.
(B) The events of the outbreak of war between Russia
and Ukraine
In view of the political events that occurred after
February 2022, which led to the outbreak of war
between Russia and Ukraine, global inflationary
pressures began due to the developments of that
conflict; Which led to a increase in risks related
to the global economy. On top of these pressures
comes the noticeable rise in global commodity
prices, supply chain disruptions and rising freight
costs, in addition to the fluctuations in financial
markets in emerging countries. This coincided
with the devaluation of the local currency against
the US dollar in April 2022, at a rate of decline of
approximately 17.2%.
25
Financial Statements
(C) The decision to amend some provisions of the
Egyptian Accounting Standards
On April 27, 2022, the Prime Minister issued a
decision to amend some provisions of the Egyptian
Accounting Standards, adding Annex (B) to the
Egyptian Accounting Standard No. 13 Effects of
Changes in Foreign Exchange Rates.
This appendix aims to develop a special accounting
treatment to deal with the effects of the exceptional
economic decision related to moving the exchange
rate by placing an additional, temporary option
for paragraph No. 28 of the amended Egyptian
Accounting Standard No. 13, the effects of changes
in foreign exchange rates, which require recognition
of foreign currency differences in Statement
of profit or loss for the period in which these
differences arise. Alternatively, it is allowed for
enterprises that have outstanding obligations in
foreign currency at the date of the exchange rate
linked to fixed assets, real estate investments,
intangible assets (excluding goodwill), exploration
assets and valuation of his holding during the period
from the beginning of January 2020 until the date of
Moving the exchange rate, by recognizing the debit
currency differences resulting from the translation
of these obligations on the date of moving the
exchange rate within the cost of these assets. Other
comprehensive income.
On December 27, 2022, the Prime Minister issued a
decision to amend some provisions of the Egyptian
Accounting Standards, adding Annex (C) to the
Egyptian Accounting Standard No. 13 Effects of
Changes in Foreign Exchange Rates. This appendix
aims to develop a special accounting treatment to
deal with the effects of the exceptional economic
decision related to moving the exchange rate
by placing an additional, temporary option for
paragraph No. 28 of the amended Egyptian
Accounting Standard No. 13, the effects of changes
in foreign exchange rates, which require recognition
of foreign currency differences in Statement
of profit or loss for the period in which these
differences arise. Alternatively, it is allowed for
enterprises that have outstanding obligations in
foreign currency at the date of the exchange rate
linked to fixed assets, real estate investments,
intangible assets (excluding goodwill), exploration
assets and valuation of his holding on October 27,
2022,the date of Moving the exchange rate, by
recognizing the debit currency differences resulting
 SCIB Chemicals S.A.E.

Notes to the Financial Statements (Contd.)

27 Significant events during the year (Contd.)

from the translation of these obligations on the date

of moving the exchange rate within the cost of these
assets. Other comprehensive income.

The management adopted not to apply amendment

of Annex C from Egyptian Accounting Standard

No. 13 Effects of Changes in Foreign Exchange Rates

that affected statement of profit or loss for current
year with foreign exchange losses by EGP 38 335 191.

Financial Controller Chief Executive

26
Berger Paints Bahrain W.L.L
BERGER PAINTS BAHRAIN W.L.L.

Commercial Registration No. 11658

General Manager Mr. Gurpreet Singh Sarna

Registered Office Building 412, Block 601, Road 108

P. O. Box 26688
Manama
Kingdom of Bahrain

Bankers HSBC Bank Middle East

Ahli United Bank

Auditor Deloitte & Touche – Middle East

P.O. Box 421
Manama
Kingdom of Bahrain
Contents
Independent Auditor’s Report............................................................................................................................................................... 4-5

Statement of Financial Position.................................................................................................................................................................6

Statement of Profit or Loss and Other Comprehensive Income.........................................................................................................7

Statement of Changes in Equity.................................................................................................................................................................8

Statement of Cash Flows.............................................................................................................................................................................9

Notes to the Financial Statements....................................................................................................................................................10-26

 Berger Paints Bahrain W.L.L
Independent Auditor’s Report
To the Shareholders of Berger Paints Bahrain W.L.L.
Kingdom of Bahrain
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Berger
Paints Bahrain W.L.L. (the “Company”), which comprise
the statement of financial position as at March 31,
2023, and the statement of profit or loss and other
comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements
present fairly, in all material respects, the financial
position of the Company as at March 31, 2023, and its
financial performance and its cash flows for the year
then ended in accordance with International Financial
Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent
of the Company in accordance with the International
Ethics Standards Board for Accountants’ Code of Ethics
for Professional Accountants (IESBA Code), together
with the other ethical requirements that are relevant
to our audit of the Company’s financial statements
in the Kingdom of Bahrain, and we have fulfilled our
other ethical responsibilities. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Other Information
Management is responsible for the other information.
The other information comprises the Manager’s Report.
The Manager’s Report is expected to be made available
to us after the date of this auditor’s report. The other
information does not include the financial statements
and our auditor’s report thereon.
Our opinion on the financial statements does not cover
the other information and we will not express any form of
assurance conclusion thereon.
4
In connection with our audit of the financial statements,
our responsibility is to read the other information when
it becomes available and, in doing so, consider whether
the other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation and fair
presentation of the financial statements in accordance
with IFRSs, and for such internal control as management
determines is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the 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.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 ISAs 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 financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional
skepticism throughout the audit. We also
• Identify and assess the risks of material
misstatement of the 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

Independent Auditor’s Report (Contd.)
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than the one resulting from error,
as fraud may involve collusion, forgery, intentional
omission, 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, but not
for the purpose of expressing an opinion on the
effectiveness of the internal control.
• 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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
5
Financial Statements
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.
Report on Other Legal and Regulatory Requirements
As required by the Bahrain Commercial Companies Law
2001 and its subsequent amendments, we report that:
• We have obtained all the information that we
considered necessary for the purpose of our audit;
• The Company has maintained proper accounting
records and the financial statements and the
financial information included in the Manager’s
report are in agreement therewith;
• we are not aware of any violations during the year of
the Commercial Companies Law or the terms of the
Company’s memorandum and articles of association
that would have had a material adverse effect on the
business of the Company or on its financial position;
and
• Satisfactory explanations and information have been
provided to us by the Management in response to all
our requests.
DELOITTE & TOUCHE – MIDDLE EAST
Registration No. 256
Manama, Kingdom of Bahrain
April 27, 2023
 Berger Paints Bahrain W.L.L

Statement of Financial Position

As at 31 March 2023

Notes 2023 2022

BD BD
ASSETS
Non-current assets
Property, plant and equipment 5 416,066 412,842
Intangible assets 2,692 6,712
Right of use asset 6.1 51,346 46,103
Total non-current assets 470,104 465,657
Current assets
Inventories 7 1,113,452 1,190,009
Accounts receivable 8 1,790,578 1,365,531
Due from related parties 15(b) 7,944 7,600
Prepayment and other receivables 25,466 52,918
Cash and bank balances 9 394,929 825,400
Total current assets 3,332,369 3,441,458
Total assets 3,802,473 3,907,115
EQUITY AND LIABILITIES
Equity
Share capital 10 418,000 418,000
Statutory reserve 11 209,000 209,000
Retained earnings 1,475,995 1,447,732
Total equity 2,102,995 2,074,732
Liabilities
Non-current liabilities
Provision for employees’ end-of-service benefits 12 347,739 351,528
Lease liabilities 6.2 26,904 24,353
Total non-current liabilities 374,643 375,881
Current liabilities
Accounts payable 13 842,318 975,422
Accruals and other payables 14 348,551 343,555
Due to related parties 15(b) 106,009 112,045
Lease liabilities 6.2 27,957 25,480
Total current liabilities 1,324,835 1,456,502
Total liabilities 1,699,478 1,832,383
Total equity and liabilities 3,802,473 3,907,115

These financial statements were approved and authorised for issue on April 27, 2023 by the General Manager:

-----------------------------------
Mr. Gurpreet Singh Sarna
General Manager

The attached notes form an integral part of these financial statements

6
 7
Statement of Profit or Loss and Other Comprehensive Income

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

BD BD
Sales 16 5,742,557 5,457,907
Cost of goods sold 17 (3,131,929) (2,952,704)
Gross profit 2,610,628 2,505,203
General and administrative expenses 18 (1,239,008) (1,141,334)
Selling and distribution expenses 19 (356,697) (322,183)
Technical fee 15(a) (136,992) (126,475)
Depreciation on property, plant and equipment 5 (72,895) (75,714)
Amortisation of intangible assets (4,020) (4,020)
Depreciation on right-to-use assets 6.1 (152,007) (146,759)
Provision for impaired receivables 8 (15,500) (4,978)
Operating profit 633,509 683,740
Interest expense on lease liabilities 6.2 (3,714) (6,670)
Other income 20 23,468 14,065
Profit for the year 653,263 691,135
Other comprehensive income for the year - -
Total comprehensive income for the year 653,263 691,135

-----------------------------------
Mr. Gurpreet Singh Sarna
General Manager

The attached notes form an integral part of these financial statements

 Berger Paints Bahrain W.L.L

Statement of Changes In Equity

For the year ended 31 March 2023

Share Capital Statutory Retained Total

Reserve Earnings
BD BD BD BD
Balance at April 1, 2021 418,000 209,000 1,506,597 2,133,597
Total comprehensive income for the year - - 691,135 691,135
Dividends paid - - (750,000) (750,000)
Balance at March 31, 2022 418,000 209,000 1,447,732 2,074,732
Total comprehensive income for the year - - 653,263 653,263
Dividends paid - - (625,000) (625,000)
Balance at March 31, 2023 418,000 209,000 1,475,995 2,102,995

The attached notes form an integral part of these financial statements

8
 9
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

Notes 2023 2022

BD BD
Cash flows from operating activities:
Profit for the year 653,263 691,135
Adjustments for:
Depreciation of property, plant and equipment 5 72,895 75,714
Depreciation of right-to-use assets 6.1 152,007 146,759
Amortisation of intangible assets 4,020 4,020
Interest expense on lease liabilities 6.2 3,714 6,670
Loss on disposal of property, plant and equipment - 114
Provision for employees’ end-of-service benefits 12 45,170 46,644
Impairment losses recognised on receivables 8 15,500 4,978
Interest income on short term deposits 20 (1,431) (2,073)
Provision/(reversal) of allowance for obsolete inventory 18,968 (21,990)
964,106 951,971
Changes in operating assets and liabilities:
Decrease/(increase) in inventories 57,589 (311,939)
Increase in accounts receivable (440,547) (46,782)
Increase in due from related parties (344) (7,600)
Decrease/(increase) in prepayments and other receivables 27,452 (36,469)
(Decrease)/increase in accounts payable (133,104) 295,670
Decrease in accruals and other payables (4,996) (35,947)
(Decrease)/increase in due to related parties (6,036) 12,412
Cash from operations 474,112 821,316
Payment of employees’ end-of-service benefits 12 (48,959) (14,660)
Interest element of lease liabilities 6.2 (3,714) (6,670)
Net cash generated from operating activities 421,439 799,986
Cash flows from investing activities:
Purchase of property, plant and equipment 5 (76,119) (18,591)
Interest income on short term deposits 1,431 2,073
Net cash used in investing activities (74,688) (16,518)
Cash flows from financing activities:
Payment of principal payment of lease liabilities (152,222) (146,005)
Dividends paid (625,000) (750,000)
Net cash used in financing activities (777,222) (896,005)
Net decrease in cash and cash equivalents (430,471) (112,537)
Cash and cash equivalents beginning of year 825,400 937,937
Cash and cash equivalents end of year 9 394,929 825,400

The attached notes form an integral part of these financial statements

 Berger Paints Bahrain W.L.L
Notes to the Financial Statements
for the year ended 31 March 2023
1. STATUS AND ACTIVITIES
Berger Paints Bahrain W.L.L. (the “Company”) is a
limited liability company registered in the Kingdom
of Bahrain under commercial registration number
11658 on September 9, 1981 and is engaged in the
manufacture and distribution of paints, resins, wood
preservatives, industrial sealants and wall coverings.
The Company is a subsidiary of Universal Paints
Limited (the “Parent Company”) an entity
incorporated in Isle of Man, owned 100% by Asian
Paints International Private Limited, Singapore and
Asian Paints Limited, India is the ultimate parent
company (“the Ultimate Parent”).
2. ADOPTION OF NEW AND REVISED
STANDARDS (IFRSs)
2.1 New and revised Standards applied with no
material impact on the financial statements
In the current year, the Company has applied
the below amendments to IFRS Standards and
Interpretations issued by the Board that are
effective for an annual period that begins on or
after January 1, 2022. Their adoption has not had
any material impact on the disclosures or on the
amounts reported in these financial statements.
• Amendments to IFRS 3 Business Combinations
Reference to the Conceptual Framework:
The Company has adopted the amendments to
IFRS 3 Business Combinations for the first time
in the current year. The amendments update
IFRS 3 so that it refers to the 2018 Conceptual
Framework instead of the 1989 Framework.
They also add to IFRS 3 a requirement that,
for obligations within the scope of IAS
37 Provisions, Contingent Liabilities and
Contingent Assets, an acquirer applies IAS 37
to determine whether at the acquisition date
a present obligation exists as a result of past
events. For a levy that would be within the
scope of IFRIC 21 Levies, the acquirer applies
IFRIC 21 to determine whether the obligating
event that gives rise to a liability to pay the levy
has occurred by the acquisition date.
• Amendments to IAS 16 Property, Plant and
Equipment related to proceeds before intended
use:
The Company has adopted the amendments to
IAS 16 Property, Plant and Equipment for the
10
first time in the current year. The amendments
prohibit deducting from the cost of an item of
property, plant and equipment any proceeds
from selling items produced before that
asset is available for use, i.e. proceeds while
bringing the asset to the location and condition
necessary for it to be capable of operating
in the manner intended by management.
Consequently, an entity recognises such sales
proceeds and related costs in profit or loss.
The entity measures the cost of those items in
accordance with IAS 2 Inventories.
The amendments also clarify the meaning
of ‘testing whether an asset is functioning
properly’. IAS 16 now specifies this as assessing
whether the technical and physical performance
of the asset is such that it is capable of
being used in the production or supply of
goods or services, for rental to others, or for
administrative purposes.
If not presented separately in the statement
of comprehensive income, the financial
statements shall disclose the amounts of
proceeds and cost included in profit or loss that
relate to items produced that are not an output
of the entity’s ordinary activities, and which
line item(s) in the statement of comprehensive
income include(s) such proceeds and cost.
• Amendments to IAS 37 Provisions, Contingent
Liabilities and Contingent Assets related to
Onerous Contracts-Cost of Fulfilling a Contract:
The Company has adopted the amendments to
IAS 37 for the first time in the current year. The
amendments specify that the cost of fulfilling a
contract comprises the costs that relate directly
to the contract. Costs that relate directly to a
contract consist of both the incremental costs
of fulfilling that contract (examples would be
direct labour or materials) and an allocation
of other costs that relate directly to fulfilling
contracts (an example would be the allocation
of the depreciation charge for an item of
property, plant and equipment used in fulfilling
the contract).
• Annual Improvements to IFRS Accounting
Standards 2018-2020 Cycle: The Annual
Improvements include amendments to IFRS 1,
IFRS 9, IFRS 16 and IAS 41.

Notes to the Financial Statements (Contd.)
2.2 New and revised standards issued but not yet
effective
At the date of authorization of these financial
statements, the Company has not applied the
following new and revised IFRS Standards that have
been issued but are not yet effective:
• IFRS 17 Insurance Contracts (effective from
January 1, 2023).
• Amendments to IFRS 10 Consolidated
Financial Statements and IAS 28 Investments
in Associates and Joint Ventures: Sale or
Contribution of Assets between an Investor and
its Associate or Joint Venture (effective date
not yet decided).
• Amendments to IAS 1 Presentation of Financial
Statements: Classification of Liabilities as
Current or Non-current (effective from January
1, 2024).
• Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2
Making Materiality Judgements—Disclosure of
Accounting Policies (effective from January 1,
2023).
• Amendments to IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors—
Definition of Accounting Estimates (effective
from January 1, 2023).
• Amendments to IAS 12 Income Taxes—Deferred
Tax related to Assets and Liabilities arising from
a Single Transaction (effective from January 1,
2023).
The management do not expect that the adoption
of the above Standards will have a material impact
on the Company’s financial statements in future
periods.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The financial statements have been prepared
in accordance with the International Financial
Reporting Standards (“IFRSs”) and applicable
requirements of the Bahrain Commercial Companies
Law and its subsequent amendments.
11
Financial Statements
The financial statements are prepared under the
historical cost convention and accrual basis of
accounting. The financial statements are presented
in Bahraini Dinars (”BD”), being the functional
currency of the Company. The accounting policies
are consistent with those used in the prior years,
unless otherwise stated.
The significant accounting policies adopted are as
follows:
Property, Plant and Equipment
Property, plant and equipment are stated at cost,
less accumulated depreciation and any accumulated
impairment losses, all subsequent additions to
buildings have been included at cost. Cost is the
amount of cash or cash equivalents paid or the fair
value of the other consideration given to acquire an
asset at the time of its acquisition or construction.
Depreciation is charged so as to write off cost of the
property, plant and equipment, other than capital
work in progress, over their estimated useful lives,
using the straight line method.
The estimated useful lives of the assets for the
calculation of depreciation are as follows:
Buildings on Leased Land 25 years
Plant and Machinery 8 to 10 years
Furniture, Fixtures and 4 to 8 years
Equipment
The gain or loss arising on disposal or retirement
of an item of property, plant and equipment
is determined as the difference between sale
proceeds and the carrying amount of the asset and is
recognised in profit or loss for the year.
Intangible Assets
Intangible assets with finite useful lives that
are acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment losses.
An intangible asset is derecognised on disposal, or
when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as
the difference between the net disposal proceeds
and the carrying amount of the asset, are recognised
in profit or loss when the asset is derecognised.
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

Impairment of non-financial assets (other than
goodwill)
Where there is an indication of impairment in value,
such that the recoverable amount of an asset (other
than goodwill) falls below its net book value, an
impairment loss is recognised immediately in profit
or loss, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss
is treated as a revaluation decrease.
When an impairment loss subsequently reverses,
the carrying amount of the asset is increased to
the revised estimate of its recoverable amount,
but so that the increased carrying amount does
not exceed the carrying amount that would have
been determined had no impairment loss been
recognised for the asset in prior years. A reversal
of an impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at
a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
Inventories
Inventories are valued at the lower of cost and net
realisable value. Cost is determined on a weighted
average basis. In the case of finished goods and work
in progress, cost comprises material cost plus cost of
conversion.
Net realisable value represents the estimated selling
price for inventories less all estimated costs of
completion and costs necessary to make the sale.
to be 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 relevant
asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation
decrease.
Financial instruments
Financial assets and financial liabilities are
recognized in the Company’s statement of financial
position when the Company becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted
from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the
acquisition of financial assets and financial liabilities
at fair value through profit or loss are recognized
immediately in profit or loss.
Financial assets
All recognized financial assets are measured
subsequently in their entirety at either at either
amortized cost or fair value, depending on their
classification at either:

Impairment of tangible assets • Financial assets at amortized cost

At each reporting date, the Company reviews the
• Financial assets at Fair Value Through Other
carrying amounts of its tangible assets to determine
Comprehensive Income (FVOCI)
whether there is any indication that those assets
have suffered an impairment loss. If any such
• Financial asset at Fair Value Through Profit or
indication exists, the recoverable amount of the
Loss (FVTPL)
asset is estimated in order to determine the extent
of the impairment loss (if any).
The classification and measurement category of
financial assets, except for equity instruments and
Recoverable amount is the higher of fair value less
derivatives, are assessed based on a combination
costs to sell and value in use. In assessing value in
of the entity’s business model for managing the
use, the estimated future cash flows are discounted
assets and the instruments’ contractual cash flow
to their present value using a discount rate that
characteristics.
reflects current market assessments of the time
value of money and the risks specific to the asset for
Business model assessment:
which the estimates of future cash flows have not
been adjusted. The Company determines its business model at the
level that best reflects how it manages groups of
If the recoverable amount of an asset is estimated financial assets to achieve its business objective.
12
 13
Notes to the Financial Statements (Contd.)

Financial Statements
That is, whether the Company’s objective is solely to ECL is based on historical credit loss experience,
collect the contractual cash flows from the assets adjusted for forward-looking factors specific to the
or is to collect both the contractual cash flows and debtors and the economic environment.
cash flows arising from the sale of assets. If neither
of these are applicable (e.g. financial assets are held Derecognition of financial assets
for trading purposes), then the financial assets are
The Company derecognizes a financial asset only
classified as part of ‘Sell’ business model.
when the contractual rights to the cash flows
from the asset expire; or it transfers the financial
The business model assessment is based on
asset and substantially all the risks and rewards of
reasonably expected scenarios without taking ‘worst
ownership of the asset to another entity.
case’ or ‘stress case’ scenarios into account.
Financial liabilities
Contractual cash flow characteristics test:
Financial liabilities that are not (i) contingent
The Company assesses whether the financial
consideration of an acquirer in a business
instruments’ cash flows represent Solely for
combination, (ii) Held for trading, or (iii) designated
Payments of Principal and Interest (the ‘SPPI’).
at FVTPL, are subsequently measured at amortized
The most significant elements of interest within a
cost.
lending arrangement are typically the consideration
for the time value of money and credit risk. The
The Company derecognises financial liabilities
Company reclassifies a financial asset only when its
when, and only when, the Company’s obligations
business model for managing those assets changes.
are discharged, cancelled or they expire. The
The reclassification takes place from the start of the
difference between the carrying amount of the
first reporting period following the change. Such
financial liability derecognised and the sum of the
changes are expected to be very infrequent.
consideration paid and payable is recognised in
profit or loss.
Financial assets at amortized cost
A financial asset is measured at amortized cost if it Offsetting
satisfies the SPPI test and is held within a business
Financial assets and financial liabilities are offset and
model whose objective is to hold assets to collect
reported net in the statement of financial position
contractual cash flows; and its contractual terms
only when there is a legally enforceable right to set
give rise, on specified dates, to cash flows that
off the recognised amounts and when the Company
are solely payments of principal and profit on the
intends to settle on a net basis, or to realise the
principal amount outstanding.
asset and settle the liability simultaneously.

All the Company’s financial assets consisting of

Defined Benefit Obligation and Provision for
cash and cash equivalents, accounts and other
Employees End-of-Service Benefits
receivables, finance lease receivables and due from
related a party are classified as financial assets at For defined retirement benefit plans, the cost of
amortized cost. providing benefits is determined using the Projected
Unit Credit Method, with actuarial valuations being
Impairment of financial assets carried out at each reporting date. The retirement
benefit obligation recognised at the reporting date
A loss allowance for expected credit losses (ECL) is
represents the present value of the defined benefit
recognized on debt instruments that are measured
obligation as adjusted for unrecognised actuarial
at amortized cost or at FVOCI, bank balance, account
gains and losses and unrecognised past service
receivable and other assets and due from a related
cost.
parties, as well as on financial guarantee contracts.
The amount of expected credit loss is updated at
For Bahraini employees, the Company makes
each reporting date to reflect changes in credit risk
contribution to the Social Insurance Organisation,
since initial recognition of the respective financial
calculated as percentage of the employees’ salaries.
instrument.
The Company’s obligations are limited to their
contributions, which are expensed when due.
 Berger Paints Bahrain W.L.L
Notes to the Financial Statements (Contd.)
Revenue recognition
Revenue from the sale of goods is recognised in
the profit or loss when the control has been passed
to the customer i.e. when goods are delivered,
accepted by the customer and the amount of
revenue can be measured reliably.
Interest income is recognised on a time basis by
reference to the principal outstanding and the
applicable interest rate.
Foreign Currencies
Transactions in foreign currencies are recognised
in functional currency at the rates prevailing
at the dates of the transactions. At reporting
date, monetary assets and monetary liabilities
denominated in currencies other than functional
currency are retranslated at the rate of exchange
prevailing at the reporting date. All differences are
taken to profit or loss. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.
Provision
Provisions are recognised when the Company has
a present obligation (legal or constructive) arising
from a past event and the costs to settle the
obligation are both probable and able to be reliably
measured.
The amount recognised as a provision is the best
estimate of the consideration required to settle
the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding
the obligation. Where a provision is measured using
the cash flows estimated to settle the present
obligation, its carrying amount is the present value
of those cash flows.
Leases
The Company as lessee:
The Company assesses whether a contract is or
contains a lease, at the inception of the contract.
The Company recognizes a right-of-use asset and
a corresponding lease liability with respect to all
14
lease arrangements in which it is the lessee, except
for leases of low value assets. For these leases,
the Company recognizes the lease payments as an
operating expense on a straight-line basis over the
term of the lease.
The lease liability is initially measured at the present
value of lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Company uses its incremental
borrowing rate.
Lease payments included in the measurement of
the lease liability comprise the following where
applicable:
• Fixed lease payments, less any lease incentives;
• Variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
• Amount expected to be payable by the lessee
under the residual value guarantees;
• The exercise price of the purchase option, if
the lessee is reasonably certain to exercise the
options; and
• Payment of penalties for terminating the lease,
if the lease term reflects the exercise of an
option to terminate the lease.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest on
the lease liability (using effective interest method)
and by reducing the carrying amount to reflect the
lease payments made.
The right-of-use assets comprise the initial
measurement of the corresponding lease
liability, lease payments made at or before the
commencement day and any initial direct costs. They
are subsequently measured at cost less accumulated
amortization (over the shorter period of lease
term and useful life of the underlying asset) and
impairment losses.

Notes to the Financial Statements (Contd.)
4. CRITICAL ACCOUNTING JUDGEMENTS Key sources of estimation uncertainty
AND KEY SOURCES OF ESTIMATION The following are the key assumptions concerning
UNCERTAINTY
In the application of the Company’s accounting
policies, which are described in Note 3, management
is required to make judgements, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from
other sources. 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.
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.
Critical judgements in applying the entity’s
accounting policies
In the process of applying the entity’s accounting
policies, which are described in Note 3, and due
to the nature of operation, management did not
have to make judgements that may have significant
effect on the amounts recognised in the financial
statements.
15
Financial Statements
the future, and other key sources of estimation
uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within
the next financial year.
Useful lives property, plant and equipment
The Company’s management determines the
useful lives of property, plant and equipment and
the related depreciation charge. The depreciation
charge for the year will change significantly if the
actual life is different from the estimated useful life
of the asset. The review carried out by management
in the current year did not indicate any necessity for
changes in the useful lives of the property, plant and
equipment.
Measurement of the expected credit loss
allowance
Loss allowances for financial assets are based on
assumptions about risk of default and expected loss
rates. The Company’s management uses judgement
in making these assumptions and selecting the
inputs to the impairment calculation, based on the
Company’s past history, existing market conditions
as well as forward looking estimates at the end of
each reporting period.
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

5. PROPERTY, PLANT AND EQUIPMENT

Land Buildings on Plant and Fixtures and Total
Leased Machinery Furniture,
Equipment
BD BD BD BD
Cost :
At April 1, 2021 661,146 1,322,097 126,847 2,110,090
Additions - 10,933 7,658 18,591
Disposals - (7,929) (6,218) (14,147)
At March 31, 2022 661,146 1,325,101 128,287 2,114,534
Additions - 73,849 2,270 76,119
At March 31, 2023 661,146 1,398,950 130,557 2,190,653
Accumulated depreciation:
At April 1, 2021 494,312 1,032,770 112,929 1,640,011
Depreciation expense 9,046 61,547 5,121 75,714
Relating to disposals - (7,929) (6,104) (14,033)
At March 31, 2022 503,358 1,086,388 111,946 1,701,692
Depreciation expense 9,047 58,336 5,512 72,895
At March 31, 2023 512,405 1,144,724 117,458 1,774,587
Carrying amount:
At March 31, 2023 148,741 254,226 13,099 416,066
At March 31, 2022 157,788 238,713 16,341 412,842

Buildings are constructed on land leased from the Government of the Kingdom of Bahrain. The lease period of
twenty-five years starting from July 1, 2001 to June 30, 2026.

6. LEASES
The Company only operates as a lessee.

6.1 Right-of-use assets

The recognized right-of-use assets relates to the below types of leased asset in the Company:

Land Motor Vehicle Premises Total

BD BD BD BD
Balance, April 1, 2021 22,462 57,878 4,012 84,352
Additions - 2,107 106,403 108,510
Amortisation (4,277) (32,067) (110,415) (146,759)
Balance, March 31, 2022 18,185 27,918 - 46,103
Additions - 41,006 116,244 157,250
Amortisation (4,277) (31,486) (116,244) (152,007)
Balance, March 31, 2023 13,908 37,438 - 51,346

16
 17
Notes to the Financial Statements (Contd.)

Financial Statements
The following are the amounts recognized in profit and loss for the year:

2023 2022
BD BD
Amortization expense on right-of-use assets 152,007 146,759
Interest element of lease liabilities 3,714 6,670

At the reporting date, none of the property leases in which the Company is the lessee, contain variable lease
payment terms.

6.2 Lease liabilities

2023 2022
BD BD
Balance at beginning of the year 49,833 87,328
Additions 157,250 108,510
Accretion of interest 3,714 6,670
Payments (155,936) (152,675)
Balance at end of the year 54,861 49,833

Below is the allocation of lease liabilities as at March 31:

2023 2022
BD BD
Current lease liabilities 27,957 25,480
Non-current lease liabilities 26,904 24,353
54,861 49,833

The maturity analysis of lease liabilities is as follows:

2023 2022
BD BD
Not later than 1 year 30,352 27,781
Later than 1 year and not later than 5 years 28,517 26,589
58,869 54,370
Less: unearned interest (4,008) (4,537)
54,861 49,833
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

7. INVENTORIES
2023 2022
BD BD
Raw materials 524,689 390,515
Finished goods 363,200 359,118
Packing material 95,330 145,692
983,219 895,325
Allowance for obsolete and slow moving inventories (30,896) (11,928)
952,323 883,397
Work-in-progress 6,856 6,962
Goods in transit 151,972 293,780
Colour world stock items 2,301 5,870
1,113,452 1,190,009

The cost of inventories recognised as an expense during the year ended March 31, 2023, in respect of operations,
was BD 3,037,698 (2022: BD 2,862,233) (Note 17).

Movement in the allowance for obsolete and slow-moving inventories:

2023 2022
BD BD
Balance at April 1, 11,928 33,918
Charge for the year 18,968 -
Reversal for the year - (21,990)
Balance at March 31, 30,896 11,928

8. ACCOUNTS RECEIVABLE
2023 2022
BD BD
Trade receivables 2,155,425 1,715,378
Allowance for impaired receivables (364,847) (349,847)
1,790,578 1,365,531

There is no concentration of customer balances in the trade receivables at the reporting dates.

The average credit period on sales is 90 days. No interest is charged on overdue customers’ balances. Trade
receivables are provided for based on estimated irrecoverable amounts from the goods or service provided,
determined by reference to past default experience.

18
 19
Notes to the Financial Statements (Contd.)

Financial Statements
8. ACCOUNTS RECEIVABLE (contd.)

March 31, 2023 March 31, 2022

Estimated Expected Lifetime Estimated Expected Lifetime ECL
total gross credit loss ECL total gross credit loss
Aging brackets carrying rate carrying rate
amount at amount at
default default
BD % BD BD % BD
Not due 1,184,274 1% 12,309 1,070,680 1% 10,473
Less than 90 days 469,756 3% 16,027 240,127 4% 10,423
90 - 180 days 117,091 13% 15,435 35,732 18% 6,509
180 - 365 days 58,452 37% 21,650 54,356 51% 30,137
More than 365 days 325,852 92% 299,426 314,483 82% 292,305
2,155,425 364,847 1,715,378 349,847

Movement in the allowance for impaired receivables is as follow:

2023 2022
BD BD
Balance at beginning of the year 349,847 375,504
Charge for the year 15,500 4,978
Recovered during the year - -
Write off during the year (500) (30,635)
Balance at end of the year 364,847 349,847

The Company applied simplified approach for expected credit loss. Accordingly, the Company assessed
historically credit losses and apply that ratio to outstanding trade receivables after adjusting any factors
anticipated to increase/decrease the credit losses going forward. The Company’s historical experience did not
indicate significant credit losses. Accordingly, the management believes that there is no further loss allowance
required in excess of the allowance for doubtful debts.

9. CASH AND BANK BALANCES

2023 2022
BD BD
Cash on hand 1,311 291
Current accounts with banks 343,618 825,109
Short term deposit 50,000 -
394,929 825,400

10. SHARE CAPITAL

The share capital comprises 8,360 authorised, issued and fully paid shares of BD 50 each.
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

11. STATUTORY RESERVE

As required by the Bahrain Commercial Companies Law and the Company’s Articles of Association 10% of the
profit of prior years was transferred to statutory reserve, until the reserve equaled 50% of the issued share
capital. The reserve is not available for distribution, except in the circumstances stipulated in the Bahrain
Commercial Companies Law.

12. PROVISION FOR EMPLOYEES’ END-OF-SERVICE BENEFITS

The movement in the provision for employee’s end-of-service benefits is as follows:

2023 2022
BD BD
At beginning of year 351,528 319,544
Charge for the year 45,170 46,644
Payments (48,959) (14,660)
At end of year 347,739 351,528

The provision for employees’ end-of-service benefits are calculated under the Bahrain Labour Law approximates
to BD 328,604 (2022: BD 328,492) whereas the liability calculated as per the actuarial valuation carried out at the
reporting date amounts to BD 347,739 (2022: BD 351,528).

(a) The most recent actuarial valuation of the present value of the end-of-service benefits was carried out at
March 31, 2023 by a qualified actuary. The present value of the defined benefit obligations and the related
current service cost and past service cost were measured using the Projected Unit Credit Method, which is
the same method that was used in the previous year.

(b) The principal assumptions used for the purpose of the actuarial valuations were as follows

2023 2022
Discount rate 5.50% 5.45%
Salary escalation rate 5.50% 5.5%

13. ACCOUNTS PAYABLE

2023 2022
BD BD
Trade accounts payable 842,318 975,422

There is no interest charge on overdue payables to suppliers. The Company has financial risk management policies
in place to ensure that all payables are paid within the credit timeframe.

14. ACCRUALS AND OTHER PAYABLES

2023 2022
BD BD
Accruals for employee benefits 134,596 129,382
Value added tax payable 25,686 30,131
Accrued expenses and other payables 188,269 184,042
348,551 343,555

20
 21
Notes to the Financial Statements (Contd.)

Financial Statements
15. RELATED PARTIES
Related parties as defined in International Accounting Standard 24 include shareholders and key management
personnel of the Company and their close family members and entities controlled, jointly controlled or
significantly influenced by such parties. Pricing policies and terms of the transactions with related parties are
approved by the Company’s management.

(a) During the year the Company entered into the following trading transactions with Asian Paints Limited
Group entities:

2023 2022
BD BD
Purchases 89,336 44,813
Sales 32,188 2,113
Technical fee 136,992 126,475
General and administrative expenses - charged by related parties 40,694 56,368
Selling and distribution expenses charged by related parties 123,667 124,166

Technical fee is paid to Asian Paints International Private Limited, Singapore at the rate of 3% (2022: 3%) of net
sales excluding traded items from related parties and other sundry sales.

(b) Related party balances consist of:

2023 2022
BD BD
Due from:
Kadisco Paint Adhesive Industry SC (Affiliate) - 7,600
Asian Paints Limited (Ultimate Parent) 7,600 -
Asian Paints Middle East LLC (Affiliate) 344 -
7,944 7,600

Due to:
Asian Paints International Private Limited (Parent Company) 47,961 45,462
Asian Paints Limited (Ultimate Parent) 4,560 8,585
Berger Paints Emirates Ltd (Affiliate) 42,338 43,848
Asian Paints Middle East LLC (Affiliate) 11,150 14,150
106,010 112,045

(c) Compensation of key management personnel

Remuneration of members of key management during the year was as follows:
2023 2022
BD BD
Short term benefits 55,773 61,856
Long term benefits 1,700 2,278
57,473 64,134

The above compensation was in the form of salaries, allowances and bonuses.
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

16. SALES
2023 2022
BD BD
Local Sales 5,710,369 5,455,794
Export Sales 32,188 2,113
5,742,557 5,457,907

17. COST OF GOODS SOLD

2023 2022
BD BD
Costs of finished goods –(a) 3,037,698 2,862,233
Overheads 94,231 90,471
3,131,929 2,952,704

(a) Details of cost of finished goods are as follows

2023 2022
BD BD
Raw material consumed – (b) 2,021,086 1,811,311
Packing material consumed – (c) 365,520 423,261
Cost of goods purchased for resale 655,174 671,284
Movement in finished goods manufactured (4,082) (43,623)
Materials consumption 3,037,698 2,862,233

(b) Details of raw material consumed are as follows:

2023 2022
BD BD
Opening balance raw material including goods in transit –net of 645,316 462,103
provision
Purchases 2,025,495 1,994,524
Closing balance of raw material – net of provision (649,725) (645,316)
Raw material consumed 2,021,086 1,811,311

(c) Details of packing material consumed are as follows:

2023 2022
BD BD
Opening balance packing material –net of provision 145,692 66,989
Purchases 309,360 501,964
Closing balance of packing material – net of provision (89,532) (145,692)
Raw material consumed 365,520 423,261

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
18. GENERAL AND ADMINISTRATIVE EXPENSES
2023 2022
BD BD
Staff Costs – (a) 1,115,521 990,456
Power and fuel 10,934 10,975
System expense 14,210 19,169
Communication 16,126 15,287
Outsourced manpower expenses 2,940 2,940
Travel 5,034 1,423
Postage, printing and stationary 7,231 8,061
Legal and professional fees 6,861 15,814
Insurance 7,511 6,723
Repairs and maintenance 400 2,647
Other expenses 52,240 67,839
1,239,008 1,141,334

(a) Movement in number of employees during the year

2023 2022
At beginning of the year 89 92
Joined 14 4
Left (11) (7)
At end of the year 92 89

19. SELLING AND DISTRIBUTION EXPENSES

2023 2022
BD BD
Advertisement and promotion expense 251,802 218,808
Freight 48,730 50,553
Vehicle charges 41,477 39,768
Rent 3,000 2,640
Other 11,688 10,414
356,697 322,183

20. OTHER INCOME

2023 2022
BD BD
Interest from short term deposits 1,431 2,073
Scrap sales 8,996 7,187
Exchange gain 7,566 1,842
Miscellaneous income 5,475 2,963
23,468 14,065
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

21. FINANCIAL INSTRUMENTS

Categories of financial instruments
Financial instruments consist of financial assets and financial liabilities.

Financial assets of the Company include cash and bank balances, accounts receivables and other receivables.

Financial liabilities of the Company include payables and accrued liabilities, lease liabilities and due to related
parties.

A summary of financial assets and financial liabilities is as follows:

2023 2022
BD BD
Financial assets
Receivables at amortised cost (excluding prepayments) 2,216,692 2,251,233
Financial liabilities
Amortised cost 1,326,053 1,455,261

The risk associated with financial instruments and the Company’s approaches to managing such risks are as
follows:

Financial risk management objectives

The Company’s finance function provides services to the business, monitors and manages the financial risks
relating to the operations of the Company through internal risk reports which analyse exposures by degree
and magnitude of risks. These risks include credit risk, liquidity risk and market risk (which primarily consists of
foreign currency risk and interest rate risk).

  Credit risk management

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss.

The Company seeks to limit the credit risk with respect of trade debtors by implementing credit policy and
procedures. The Company ensures that sales are made only to customers with appropriate credit history and does
not allow them to exceed an acceptable credit exposure limit, in addition to the standard process of receivable
review.

There is no concentration of credit risk on accounts receivable. The credit risk on liquid funds is limited because
the counterparties are banks with good credit ratings assigned by international rating agencies.

The Company has not obtained any collateral of any kind.

Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations associated with
financial liabilities.

Ultimate responsibility for liquidity risk management rests with the Company management. To mitigate the risk,
management has diversified funding sources and assets are managed with a liquidity approach, maintaining a
healthy balance of cash and cash equivalents. The Company manages the maturities of the Company’s assets and
liabilities in a way to be able to maintain adequate liquidity.
24
 25
Notes to the Financial Statements (Contd.)

Financial Statements
Liquidity and interest risk tables
The following table details the Company’s remaining contractual maturity for its non-derivative financial
liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities excluding
lease liabilities based on the earliest date on which the Company can be required to pay.

Less than 1 1-3 months 3 months to 1 year to 5 Total

month 1 year years
BD BD BD BD BD
2023
Non-interest bearing 293,483 625,292 352,417 - 1,271,192
Interest bearing - - 27,957 26.904 54,861
293,483 625,292 380,374 26,904 1,326,053
2022
Non-interest earning 162,380 1,005,131 261,161 26,589 1,455,261

The following table details the Company’s expected maturity for its non-derivative financial assets. The table
below has been drawn up based on the undiscounted contractual maturities of the financial assets including
interest that will be earned on those assets except where the Company anticipates that the cash flow will occur in
a different period.

Less than 1 1-3 months 3 months to 1 1 year to 5 Total

month year years
BD BD BD BD BD
2023
Non-interest earning 1,847,845 290,227 28,619 - 2,166,692
Interest earning - 50,000 - - 50,000
1,847,845 340,227 28,619 - 2,216,692
2022
Non-interest earning 1,132,115 726,561 392,557 - 2,251,233

Market risk
Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to
changes in market prices. The Company’s activities expose it primarily to the financial risk in changes in foreign
exchange rates and interest rate risk.

Currency risk management

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to
changes in foreign exchange rates.

The Company’s financial assets and financial liabilities are mainly denominated in Bahraini Dinars, United States
Dollars, United Arab Emirates Dirhams and Saudi Arabian Riyals. As the Bahraini Dinar, United Arab Emirates
Dirham and Saudi Arabian Riyal are effectively pegged to the United States Dollar, balances in those currencies
are not considered to represent a significant currency risk.

Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to
changes in market interest rates.

The Company is not exposed to significant interest risk as there are no significant interest-bearing financial assets
or liabilities with variable interest rates at the reporting dates.
 Berger Paints Bahrain W.L.L

Notes to the Financial Statements (Contd.)

22. CAPITAL MANAGEMENT

The Company manages its capital to ensure that the Company will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The Company’s
strategy remains unchanged from previous period.

The capital structure of the Company consists of equity comprising share capital, reserves and retained earnings.
The Company is debt free at the reporting dates.

23. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform to current year presentation.

26
Berger Paints Emirates
Limited Group
Contents
Independent Auditors’ Report...................................................................................................................................................................4

Combined Statement of Profit or Loss and Other Comprehensive Income.....................................................................................6

Combined Statement of Financial Position.............................................................................................................................................7

Combined Statement of Cash Flows.........................................................................................................................................................8

Combined Statement of Changes In Equity.............................................................................................................................................9

Notes........................................................................................................................................................................................................10-35
 Berger Paints Emirates Limited Group
Independent Auditors’ Report
To the Shareholders of Berger Paints Emirates Limited
Group
Report on the Audit of the Combined Financial
Statements
Opinion
We have audited the combined financial statements of
entities as set out in note 1 to the combined financial
statements (collectively referred to as “Berger Paints
Emirates Limited Group” or “the Group”), which comprise
the combined statement of financial position as at 31
March 2023, the combined statements of profit or loss
and other comprehensive income, cash flows and changes
in equity for the year then ended, and notes, comprising
significant accounting policies and other explanatory
information.
In our opinion, the accompanying combined financial
statements present fairly, in all material respects,
the combined financial position of the Group as at 31
March 2023, and its combined financial performance
and its combined cash flows for the year then ended
in accordance with IFRS Standards as issued by the
International Accounting Standards Board (IFRS
Standards).
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditors’
Responsibilities for the Audit of the Combined Financial
Statements section of our report. We are independent of
the
Group in accordance with International Ethics Standards
Board for Accountants International
Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code)
together with the ethical requirements that are relevant
to our audit of the combined financial statements in
the United Arab Emirates, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
4
Emphasis of Matter - Basis of Preparation
We draw attention to note 2 to the combined financial
statements, which describes their basis of preparation,
including the approach to and the purpose for preparing
them. The combined financial statements were prepared
for the information of the beneficial shareholder of the
Group. Our opinion is not modified in respect of this
manner.
Responsibilities of Management and Those Charged
with Governance for the Combined Financial
Statements
Management is responsible for the preparation and fair
presentation of the combined financial statements in
accordance with IFRS Standards and for such internal
control as management determines is necessary to
enable the preparation of combined financial statements
that are free from material misstatement, whether due
to fraud or error.
In preparing the combined financial statements,
management is responsible for assessing the Group’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 Group or to
cease operations, or has no realistic alternative but to do
so.
Those charged with Governance are responsible for
overseeing the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the
Combined Financial Statements
Our objectives are to obtain reasonable assurance about
whether the combined financial statements as a whole
are free from material misstatement, whether due to
fraud or error, and to issue an auditors’ 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 ISAs 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 combined financial
statements.
 5
Independent Auditors’ Report (Contd.)

As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
— Identify and assess the risks of material
misstatement of the combined 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Financial Statements
— Evaluate the overall presentation, structure and
content of the combined financial statements,
including the disclosures, and whether the combined
financial statements represent the underlying
transactions and events in a manner that achieves
fair presentation.
— Obtain sufficient appropriate audit evidence
regarding the financial information of the entities
or business activities within the Group to express an
opinion on the combined financial statements. We
are responsible for the direction, supervision and
performance of the Group audit. We remain solely
responsible for our audit opinion.
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.

— Evaluate the appropriateness of accounting

policies used and the reasonableness of accounting KPMG Lower Gulf Limited
estimates and related disclosures made by
Fawzi AbuRass
management.
Registration No.: 968
— Conclude on the appropriateness of management’s
Dubai, United Arab Emirates
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a
Date: 02 May 2023
material uncertainty exists related to events or
conditions that may cast significant doubt on the
Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are
required to draw attention in our auditors’ report
to the related disclosures in the combined 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 auditors’ report. However, future events or
conditions may cause the Group to cease to continue
as a going concern.
 Berger Paints Emirates Limited Group

Combined Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 March 2023

Notes 2023 2022

AED AED
Revenue 5 214,639,421 201,266,858
Cost of sales 6 (160,743,707) (157,374,708)
Gross profit 53,895,714 43,892,150
Selling and distribution expenses 7 (43,496,665) (52,369,852)
General and administrative expenses 8 (9,919,350) (8,267,308)
Impairment loss on trade receivables 27 (5,220,791) (3,645,157)
Other expenses - net 9 (897,076) (391,535)
Result from operating activities (5,638,168) (20,781,702)
Finance expenses 10 (2,020,210) (1,303,439)
Loss for the year (7,658,378) (22,085,141)
Other comprehensive income for the year - -
Total comprehensive loss for the year (7,658,378) (22,085,141)

The notes set out on pages 10 to 35 form an integral part of these combined financial statements.

The independent auditors’ report is set out on pages 4 to 5.

6
 7
Combined Statement of Financial Position

Financial Statements
As at 31 March 2023

Notes 2023 2022

AED AED
Assets
Non-current assets
Property, plant and equipment 11 11,345,686 13,006,412
Right-of-use assets 12 10,305,694 11,850,913
Intangible assets 13 227,549 306,098
21,878,929 25,163,423
Current assets
Inventories 14 24,473,640 29,764,589
Trade and other receivables 15 90,342,182 82,658,974
Due from related parties 16 4,428,387 9,785,662
Other financial assets 17 1,857,488 41,000
Cash and cash equivalents 18 6,289,815 5,913,442
127,391,512 128,163,667
Total assets 149,270,441 153,327,091
Equity and liabilities
Capital and reserves
Share capital 19 1,000,000 1,000,000
Subordinated loan from a related party 16 16,797,741 16,797,741
General reserve 21 10,851,738 10,851,738
Retained earnings 8,698,679 16,357,057
Statutory reserve 20 500,000 500,000
Total equity 37,848,158 45,506,536
Non-current liabilities
Lease liabilities 24 6,890,548 8,324,161
Provision for staff terminal benefits 22 3,711,769 3,660,686
10,602,317 11,984,847
Current liabilities
Trade and other payables 25 64,231,940 69,098,979
Bank borrowings 23 17,142,246 8,266,837
Due to related parties 16 15,544,098 14,238,462
Current maturity of lease liabilities 24 3,901,682 4,231,429
100,819,966 95,835,707
Total liabilities 111,422,283 107,820,555
Total equity and liabilities 149,270,441 153,327,091

The notes set out on pages 10 to 35 form an integral part of these combined financial statements.
The independent auditors’ report is set out on pages 4 to 5.
To the best of our knowledge, the combined financial statements present fairly, in all material respects, the combined
financial position, combined results of operations and combined cashflows of the Group as of and for the year ended
31 March 2023.
These combined financial statements were approved by the General Manager of the Group on 02 May 2023
____________________
Abhiman Bararia
 Berger Paints Emirates Limited Group

Combined Statement of Cash Flows

For the year ended 31 March 2023

Notes 2023 2022

AED AED
Operating activities
Loss for the year (7,658,378) (22,085,141)
Adjustments for:
Depreciation of right-of-use assets 12 6,466,334 6,076,603
Impairment loss on trade receivables 27 5,220,791 3,645,157
Depreciation of property, plant and equipment 11 2,271,623 2,078,099
Interest accrued on lease liability 24 669,365 803,658
Provision for stock obsolescence 14 649,505 95,753
Provision for staff terminal benefits 22 623,995 563,577
Loss / (gain) on lease termination 9 168,616 (18,113)
Amortisation of intangible assets 13 105,834 108,335
(Gain) / loss on sale of property, plant and equipment 9 (5,933) 32,035
8,511,752 (8,700,037)
Changes in:
- trade and other receivables (12,903,999) (11,017,126)
- inventories 4,641,444 (6,721,755)
- due from related parties 5,357,275 (5,865,613)
- other financial assets (1,816,488) 3,000
- trade and other payables (4,898,746) 18,876,726
- due to related parties 1,305,636 13,284,797
196,874 (140,008)
Staff terminal benefits paid 22 (572,912) (244,329)
Net cash from / (used in) operating activities (376,038) (384,337)
Investing activities
Acquisition of property, plant and equipment and intangible (640,678) (3,029,877)
assets
Proceeds from disposal of property, plant and equipment 8,429 -
Net cash used in investing activities (632,249) (3,029,877)
Financing activities
Proceeds from bank borrowings 23 8,875,409 8,266,837
Payment against lease liabilities 24 (7,490,749) (6,557,684)
Net cash from financing activities 1,384,660 1,709,153
Net movement in cash and cash equivalents 376,373 (1,705,061)
Cash and cash equivalents at the beginning of the year 5,913,442 7,618,503
Cash and cash equivalents at the end of the year 6,289,815 5,913,442

The notes set out on pages 10 to 35 form an integral part of these combined financial statements.

The independent auditors’ report is set out on pages 4 to 5.

8
 9
Combined Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023

Share Statutory General Retained Subordinated Total

capital reserve reserve earnings loan from a
related party
AED AED AED AED AED AED
At 1 April 2021 1,000,000 500,000 10,851,738 38,442,198 16,797,741 67,591,677
Total comprehensive
loss for the year
Loss for the year - - - (22,085,141) - (22,085,141)
At 31 March 2022 1,000,000 500,000 10,851,738 16,357,057 16,797,741 45,506,536

At 1 April 2022
Total comprehensive 1,000,000 500,000 10,851,738 16,357,057 16,797,741 45,506,536
loss for the year
Loss for the year - - - (7,658,378) - (7,658,378)
At 31 March 2023 1,000,000 500,000 10,851,738 8,698,679 16,797,741 37,848,158

The notes set out on pages 10 to 35 form an integral part of these combined financial statements.
 Berger Paints Emirates Limited Group
Notes
forming part of the combined financial statements
1. Reporting entity
The combined financial statements of Berger Paints
Emirates Limited Group (“the Group”) reflect the
combined operations of the following entities
(referred to as “Combined Entities”), which are under
common ownership and management control of
Asian Paints International Private Limited, Singapore
(“the Holding Company”):
Name of the entity Location
1) Berger Paints Emirates Dubai, UAE
Limited Co LLC (refer (i))
2) Berger Paints Emirates Abu Dhabi, UAE
Establishment (refer (ii))
(i) Berger Paints Emirates Limited Co LLC (“the
Company”) is registered as a Limited Liability
Company incorporated in the Emirate of Dubai,
United Arab Emirates (‘UAE’) on 1 August 1985 under
the UAE Commercial Companies Law.
The shareholding pattern of the Company is as
follows:
Shareholding %
Sultan Ahmad Sultan Bin 51
Sulayem*
Enterprise Paints Limited, Isle of 39
Man, United Kingdom*
Nirvana Investment Limited, Isle 10
of Man, United Kingdom*
*Held beneficially on behalf of the Holding Company.
(ii) Berger Paints Emirates Establishment (“the
Establishment”) is a sole proprietorship registered
with the Department of Planning and Economy
– Government of Abu Dhabi UAE on 5 July 1993.
The Establishment is owned beneficially by Sultan
Ahmad Sultan Bin Sulayem on behalf of the Holding
Company.
The registered address of the Group is P.O. Box
27524, Dubai, UAE.
The principal activities of the Group are
manufacturing, marketing and distribution of paints
and chemicals.
10
2. Basis of preparation
a) Combined financial statements
These combined financial statements have been
prepared to present the combined financial position,
combined operating results, combined cash flows
and combined statement of changes in equity of the
Combined Entities for the year ended 31 March 2023.
The combined financial statements are prepared
solely for providing the beneficial shareholder
(i.e. Asian Paints International Private Limited,
Singapore) of the Group with the combined financial
performance and position of the Combined Entities
as at 31 March 2023. As a result, the combined
financial statements may not be suitable for any
other purpose.
The financial statements have been combined solely
on the basis of the common beneficial control that
the Holding Company exercises on the Combined
Entities. This is judged on the basis of its exposure
to, or rights to, variable returns from its involvement
with the Group and its ability to affect those returns
through the power over the Group.
The financial performance and position of the
entities comprising the Combined Entities have
been combined on a line-by-line basis. Material
inter-company transactions and balances within the
Combined Entities have been eliminated.
b) Statement of compliance
The combined financial statements have been
prepared in accordance with International Financial
Reporting Standards (“IFRS”).
c) Basis of measurement
The combined financial statements have been
prepared on a historical cost basis.
d) Functional and presentation currency
These combined financial statements are presented
in United Arab Emirates Dirhams (“AED”), which
is the Group’s functional currency. All financial
information presented in AED has been rounded off
to the nearest thousand, unless otherwise indicated.
e) Use of estimates and judgements
In preparing these combined financial statements,
management has made judgements, estimates
and assumptions that affect the application of

Notes (Contd.)
the Group’s accounting policies and the reported
amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to estimates are
recognised prospectively.
Information about judgements, assumptions and
estimation uncertainties in applying accounting
policies that have the most significant effect on
the amounts recognised in the combined financial
statements is included in note 28 and certain other
notes cross referred to in note 28.
3. Significant accounting policies
The accounting policies set out below, which comply
with IFRS, have been applied consistently to all
periods presented in these combined financial
statements. Certain comparative figures have
been reclassified where necessary to conform
to the presentation adopted in the current year.
Such reclassifications did not affect the previously
reported net profit, other comprehensive income or
total equity.
Revenue recognition
Revenue is measured based on the consideration
specified in a contract with a customer. The Group
recognises revenue when it transfers control over a
good or service to a customer.
The nature and timing of the satisfaction of
performance obligations in contracts with
customers, including significant payment terms, and
the related revenue recognition principles are in
accordance with the policies as explained below.
i) Sale of goods
Revenue from the sale of goods is measured
at the fair value of the consideration received
or receivable, net of returns and discounts.
Revenue comprises amounts derived from
the sale of goods falling within the ordinary
activities of the Group and are recognised
when persuasive evidence exists that the
control passes from the Group to the customer
satisfying the performance obligation, and the
amount of revenue can be measured reliably.
Discounts are recognised as a reduction of
revenue as the sales are recognised.
11
Financial Statements
ii) Contract revenue
Contract revenue on construction contracts
is stated at contract cost plus estimated
attributable profits less any foreseeable
losses recognised during the year. Profit is
recognised only when the outcome of the
contract can be reliably estimated. When the
outcome of the contract cannot be estimated
reliably, contract revenue is recognised only
to the extent of contract costs incurred that
are likely to be recoverable. Under IFRS 15,
revenue is recognised over time by reference to
the stage of completion measured to value of
work certified. The related costs are recognised
in profit or loss on the same basis. Advances
received are included in contract liabilities.
Leases
At inception of a contract, the Group assesses
whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for
a period of time in exchange for consideration.
To assess whether a contract conveys the right to
control the use of an identified asset, the Group uses
the definition of a lease in IFRS 16.
As a lessee
At commencement or on modification of a contract
that contains a lease component, the Group
allocates the consideration in the contract to each
lease component on the basis of its relative stand-
alone prices.
The Group recognises a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any material initial
direct costs incurred and an estimate of material
costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the end of the lease
term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease
term or the cost of the right-of-use asset reflects
that the Group will exercise a purchase option. In
 Berger Paints Emirates Limited Group
Notes (Contd.)
that case the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is
determined on the same basis as those of property,
plant and equipment. In addition, the right-of-use
asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot
be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the
lease liability comprise the following:
- fixed payments, including in-substance fixed
payments;
- variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;
- amounts expected to be payable under a
residual value guarantee; and
- the exercise price under a purchase option that
the Group is reasonably certain to exercise,
lease payments in an optional renewal period
if the Group is reasonably certain to exercise
an extension option, and penalties for early
termination of a lease unless the Group is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost
using the effective interest method. It is remeasured
when there is a change in future lease payments
arising from a change in an index or rate, if there
is a change in the Group’s estimate of the amount
expected to be payable under a residual value
guarantee, if the Group changes its assessment
of whether it will exercise a purchase, extension
or termination option or if there is a revised in-
substance fixed lease payment.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.
12
The Group presents right-of-use assets and lease
liabilities separately in the combined statement of
financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use
assets and lease liabilities for leases of low-value
assets and short-term leases which are less than 12
months. The Group recognises the lease payments
associated with these leases as an expense on a
straight-line basis over the lease term.
As a lessor
At inception or on modification of a contract that
contains a lease component, the Group allocates
the consideration in the contract to each lease
component on the basis of their relative stand-alone
prices.
When the Group acts as a lessor, it determines at
lease inception whether each lease is a finance lease
or an operating lease.
To classify each lease, the Group makes an overall
assessment of whether the lease transfers
substantially all of the risks and rewards incidental
to ownership of the underlying asset. If this is the
case, then the lease is a finance lease; if not, then it
is an operating lease. As part of this assessment, the
Group considers certain indicators such as whether
the lease is for the major part of the economic life of
the asset.
When the Group is an intermediate lessor, it
accounts for its interests in the head lease and
the sub-lease separately. It assesses the lease
classification of a sub-lease with reference to the
right-of-use asset arising from the head lease, not
with reference to the underlying asset. If a head
lease is a short-term lease to which the Group
applies the exemption described above, then it
classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease
components, then the Group applies IFRS 15 to
allocate the consideration in the contract.
The Group applies the derecognition and impairment
requirements in IFRS 9 to the net investment in the
lease. The Group further regularly reviews estimated
unguaranteed residual values used in calculating the
gross investment in the lease.

Notes (Contd.)
The Group recognises lease payments received
under operating leases as income on a straight-line
basis over the lease term as part of ‘other revenue’.
Foreign currency transactions
Transactions in foreign currencies are translated to
the respective functional currencies of the Group
entities at the exchange rates at the respective
dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at
the reporting date are retranslated to the Group’s
functional currency at the exchange rates at that
date.
Non-monetary assets and liabilities that are
measured at fair value in a foreign currency are
translated to the functional currency at the
exchange rates at the date when the fair value
was determined. Foreign currency differences are
generally recognised in profit or loss. Non-monetary
items that are measured based on historical cost in a
foreign currency are not translated.
Employee benefits
i) Staff terminal benefits and retirement
benefits
Defined benefit plan
Terminal and retirement benefits for all staff,
other than those who are UAE nationals,
disclosed as a long-term liability, are payable in
accordance with the UAE Federal Labour Law.
The provision for such benefits is determined as
follows:
a) making a reliable estimate of the amount
of benefit that employees have earned
in return for their service in the current
and prior years. This requires estimating
the demographic variables and financial
variables that will influence the cost of the
benefit; and
b) discounting that benefit in order to
determine the present value of the defined
benefit obligation and the current service
cost.
Any gains or losses on terminal and retirement
benefits for the period are recognized in
profit or loss except to the extent these
relate to changes in financial variables (i.e.:
13
Financial Statements
discount rates, inflation rates and future salary
increase assumptions), which are immediately
recognized as other comprehensive income /
(loss).
ii) 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 under short term benefit plan if
the Group has a present legal or constructive
obligation to pay this amount as a result of past
service provided by the employees and the
obligation can be measured reliably.
Capital work-in-progress
Capital work in progress is stated at cost and not
depreciated until such time the assets are ready
for intended use and transferred to the respective
category under property, plant and equipment or
intangible assets.
Property, plant and equipment and depreciation
Recognition and measurement
Items of property, plant and equipment are
measured at cost less accumulated depreciation, and
impairment losses, if any. Cost includes expenditure
that is directly attributable to the acquisition of the
asset. The cost of self-constructed assets includes
the cost of materials and direct labour, any other
costs directly attributable to bringing the assets to
a working condition for their intended use, the costs
of dismantling and removing the items and restoring
the site on which they are located and capitalised
borrowing costs. Purchased software that is integral
to the functionality of the related equipment is
capitalised as part of that equipment.
If significant parts of an item of property, plant and
equipment have different useful lives, then they are
accounted for as separate items (major components)
of property, plant and equipment.
Any gain or loss on disposal of an item of property,
plant and equipment is recognised in profit or loss.
Subsequent costs
Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
 Berger Paints Emirates Limited Group
Notes (Contd.)
associated with the expenditure will flow to the
Group and that can be measure reliably. Ongoing
repairs and maintenance is expensed as incurred.
Depreciation
Items of property, plant and equipment are
depreciated from the date that they are available for
use or, in respect of self-constructed assets, from
the date that the asset is completed and ready for
use.
Depreciation is calculated to write off the cost
of items of property, plant and equipment less
their estimated residual values using the straight-
line basis over their estimated useful lives and is
recognised in profit or loss. Leasehold improvements
are depreciated over the shorter of the lease term
and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of
the lease term.
The estimated useful lives for the current and
comparative periods of significant items of property,
plant and equipment are as follows:
Assets Life (years)
Leasehold improvements 20 - 25
Plant and machinery 3 - 10
Motor vehicles 4-5
Fixtures and office equipment 5-8
Depreciation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate.
Intangible assets
Recognition and measurement
Intangible assets primarily include expenditure
incurred towards the Group’s enterprise resource
planning system and related software applications.
These intangible assets that are acquired /
developed by the Group, have finite useful lives and
are measured at cost less accumulated amortisation
and accumulated impairment losses (if any).
14
Research and development cost related to internally
developed software
Expenditure on research activities related to
intangible assets is recognised in profit or loss as
incurred.
Development expenditure is capitalised only if the
expenditure can be measured reliably, the product
or process is technically and commercially feasible,
future economic benefits are probable, and the
Group intends to and has sufficient resources
to complete development and to use or sell the
asset. Otherwise, it is recognised in profit or loss
as incurred. Subsequent to initial recognition,
development expenditure is measured at cost
less accumulated amortisation and accumulated
impairment losses (if any).
Subsequent expenditure
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied
in the specific asset to which it is related. All other
expenditure is recognised in profit or loss as
incurred.
Amortisation
Amortisation is based on the cost of an asset less its
residual value. Amortisation is recognised in profit or
loss on a straight-line basis over the estimated useful
lives of the intangible assets from the date that they
are available for use. The Group has estimated a
useful life of 5 years for these intangible assets.
Amortisation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted, if appropriate.
Impairment
Non-derivative financial assets
A financial asset not classified at fair value through
profit or loss (“FVTPL”) is assessed at each reporting
date to determine whether there is objective
evidence of impairment.
The Group measures loss allowances for its financial
assets measured at amortised cost at an amount
equal to lifetime expected credit losses (“ECLs”).
Lifetime ECLs are the ECLs that result from all
possible default events over the expected life of a
financial instrument.

Notes (Contd.)
Financial assets measured at amortised cost
At each reporting date, the Group 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.
The Group assumes that the credit risk on a financial
asset has increased significantly if it is more than 90
days past due.
Evidence that a financial asset is credit‑impaired
includes the following observable data:
- Significant financial difficulty of the borrower
or debtor;
- A breach of contract (such as a default);
- The restructuring of a loan or advance by the
Group on terms that the Group would not
consider otherwise; or
- It is probable that the borrower or debtor
will enter bankruptcy or other financial
reorganisation.
Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.
Impairment losses are assessed for trade
receivables, cash and cash equivalents, refundable
deposits, other receivables and balances due
from related parties and are presented separately
in the combined statement of profit or loss and
comprehensive income, if incurred.
Assets that are individually significant are
tested individually whereas others are grouped
together with financial assets of similar credit risk
characteristics and assessed collectively.
Impairment loss is reversed if the reversal can be
objectively related to an event that have occurred
after the impairment loss was recognised. For
financial assets that are measured at amortised cost,
the reversal is recognised in profit or loss account.
15
Financial Statements
Non-financial assets
The carrying amounts of the Group’s non-financial
assets, other than inventories are reviewed at each
reporting date to determine whether there is any
indication of impairment. If any such indication
exists, then the asset’s recoverable amount is
estimated.
For impairment testing, assets are grouped together
into the smallest group of assets that generate
cash inflows from continuing use that are largely
independent of the cash inflows of other assets or
cash-generating unit (“CGU”). All impairment losses
are recognised in profit or loss.
The recoverable amount of an asset or CGU is the
greater of its value in use and its fair value less
costs to sell. In assessing value in use, the estimated
future cash flows are discounted to their present
value using a pre-tax discount rate that reflects
current market assessments of the time value of
money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount.
An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed
the carrying amount that would have been
determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
Inventories
Inventories are measured at the lower of cost and
net realisable value. Net realisable value is the
estimated selling price in the ordinary course of
the business, less the estimated selling expenses.
Inventories are measured at the lower of cost and
net realisable value. The cost of inventories is based
on the weighted average cost (“WAC”) principle
and includes expenditure incurred in acquiring the
inventories and other costs incurred in bringing
them to their existing location and condition. Raw
materials held for use in the production of finished
goods is written down to net realisable value when
the decline in their prices indicates that cost of
finished goods will exceed net realisable value. The
net realisable value of raw materials in such cases is
determined by reference to its replacement cost.
 Berger Paints Emirates Limited Group
Notes (Contd.)
Raw materials
The cost of raw materials is determined on the
weighted average cost (“WAC”) and includes
insurance, freight and other incidental charges
incurred in bringing the inventories to their present
location and condition.
Finished goods and work in progress
The cost of finished goods and work in progress
is based on the WAC basis and includes costs of
direct materials and direct labour plus attributable
overheads based on normal operating capacity.
Provisions
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 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 a finance expense.
A provision for onerous contracts 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 a provision
is established, the Group recognises any impairment
loss on the assets associated with that contract.
Finance expenses
Finance expenses comprises of bank charges,
interest on bank borrowings and interest expense
accrued on lease liabilities.
Interest expense is recognised as they accrue, using
the effective interest method.
Other expenses and other income
Other expenses and other income comprise
commission expense from Qatar operation, loss /
gain on termination of leases, loss / gain on disposal
of property, plant and equipment and foreign
currency translation differences. When the Group
acts in the capacity of an agent rather than as the
principal in a transaction, the (expense) / income
recognised is the net amount of commission (paid)
/ earned by the Group. Foreign currency gains and
16
losses are reported on a net basis as either other
income or other expenses depending on whether
foreign currency movements are in a net gain or net
loss position.
Financial instruments
The Group classifies non-derivative financial assets
and liabilities into financial assets at fair value
through profit or loss (“FVTPL”), financial assets at
at fair value through other comprehensive income
(“FVOCI”), financial assets at amortised cost and
other financial liabilities category.
(i) Non-derivative financial assets and financial
liabilities – recognition and derecognition
Under IFRS 9, on initial recognition, a
financial asset is classified as measured at
amortised cost, FVOCI - debt instruments, at
FVOCI - equity instruments or at FVTPL. The
classification of financial assets under IFRS
9 is generally based on the business model
in which a financial asset is managed and its
contractual cash flow characteristics. Of the
aforementioned, only the ‘amortised cost’
category is relevant to the Group.
The Group derecognises a financial asset when
the contractual rights to the cash flows from
the asset expire, or it transfers the rights
to receive the contractual cash flows in a
transaction in which substantially all the risks
and rewards of ownership of the financial asset
are transferred, or it neither transfers nor
retains substantially all of the risks and rewards
of ownership and does not retain control over
the transferred asset. Any interest in such
derecognised financial assets that is created
or retained by the Group is recognised as a
separate asset or liability. Any gain or loss on
derecognition is recognised in profit or loss.
Non-derivative financial liabilities are
recognised initially at fair value less any directly
attributable transaction costs.
The Group derecognises a financial liability
when its contractual obligations are discharged
or cancelled or expire. The Group also
derecognises a financial liability when its terms
are modified and the cash flows of the modified
liability are substantially different, in which case

Notes (Contd.)
a new financial liability based on the modified
terms is recognised at fair value.
Financial assets and financial liabilities are
offset and the net amount presented in the
combined statement of financial position 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.
(ii) Non-derivative financial assets –
measurement
Financial assets at amortised cost
Financial asset is measured at amortised cost if
it meets both of the following conditions and is
not designated as at FVTPL:
- it is held within a business model whose
objective is to hold assets to collect
contractual cash flows; and
- its contractual terms give rise on specified
dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
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 profit or loss.
Financial assets at amortised cost comprise cash
and cash equivalents, trade receivables, other
financial assets, other receivables and balance
due from related parties.
Cash and cash equivalents
Cash and cash equivalents comprise cash in
hand and at banks in current accounts.
Non-derivative financial liabilities are
recognised initially at fair value less any directly
attributable transaction costs. Subsequent to
17
Financial Statements
initial recognition, these financial liabilities are
measured at amortised cost using the effective
interest method. Interest expense and foreign
exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition
is also recognised in profit or loss.
Other financial liabilities comprise trade and
other payables including provisions, related
party payables, bank borrowings and lease
liabilities.
Share capital – ordinary shares
Incremental costs directly attributable to
the issue of ordinary shares are recognised
as a deduction from equity, net of any tax
effects. Hybrid instruments are accounted as
equity instruments and there is no contractual
obligation to pay cash.
New standards and interpretations issued but not
yet effective
A number of new standards, amendments to
standards and interpretations are effective for
annual periods beginning after 1 April 2022 and
early adoption is permitted; however, the Group has
not early adopted the new or amended standards in
preparing these combined financial statements.
The following amended standards and
interpretations are not expected to have a
significant impact on the Group’s combined financial
statements in the period of initial application:
– Disclosure of accounting policies (Amendments
to IAS 1 and IFRS Practice Statement 2);
– Deferred tax related to assets and liabilities
arising from a single transaction (Amendments
to IAS 12)
– Definition of accounting estimates
(Amendments to IAS 8);
– Classification of liabilities as current or non-
current (Amendments to IAS 1); and
– IFRS 17 Insurance Contracts and amendments
to IFRS 17 Insurance Contracts.
 Berger Paints Emirates Limited Group

Notes (Contd.)

4. Financial risk management
Overview
The Group has exposure to the following risks from
its use of financial instruments:
- credit risk
- liquidity risk; and
- market risk
This note presents information about the Group’s
exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and
managing risk, and the Group’s management of capital.
Risk management framework
The Board of Directors of the Holding Company
has overall responsibility for the establishment
and oversight of the Group’s risk management
framework and is responsible for developing and
monitoring the Group’s risk management policies.
The Group’s senior management reports to the
Board of Directors on its activities.
The Group’s risk management policies are
established to identify and analyse 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 develop a disciplined and constructive control
environment in which all employees understand
their roles and obligations.
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. Credit risk
is mainly attributable to the Group’s trade and other
receivables, due from related parties, other financial
assets and cash placed with banks.
Trade and other receivables
The Group’s exposure to credit risk is influenced
mainly by the individual characteristics of each
customer. The demographics of the Group’s
customer base, including the default risk of the
industry and country, in which customers operate,
has less of an influence on credit risk.
The Group 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. Purchase limits are established for each
customer, which represents the maximum open
amount without requiring specific management
approval. These limits are reviewed on an ongoing
basis. Customers that fail to meet the Group’s
benchmark creditworthiness may transact with the
Group only on prepayment basis.
The Group establishes an allowance for impairment
that represents its estimate of expected credit
losses in respect of its trade and other receivables.
The main component of this allowance is a specific
loss component that relates to individual significant
exposures, and a collective loss component
established for groups of similar assets in respect
of losses that have been incurred but not yet
identified.
The Group seeks to limit its credit risk with respect
to customers by reviewing credit to individual
customers by tracking their historical business
relationship and default risk.
Due from related parties
The Group carries out business transaction with
related parties. The related parties are considered to
be fully recoverable by management as their credit
risk is expected to be significantly low.
Cash at banks
The Group limits its exposure to credit risk by
only dealing with banks of repute. The cash and
cash equivalents are held with bank and financial
institution counterparties, which are rated as A1,
based on Moody’s ratings.
Impairment on cash and cash equivalents has been
measured on a 12‑month expected loss basis and
reflects the short maturities of the exposures.
Liquidity risk
Liquidity risk is 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. Liquidity risk mainly
relates to trade and other payables, due to related
parties, lease liabilities and bank borrowings.

18
 19
Notes (Contd.)

Financial Statements
Management of liquidity risk In respect of other monetary assets and liabilities
denominated in foreign currencies, the Group
The Group’s approach to managing liquidity risk is
ensures that its net exposure is kept to an
to ensure, as far as possible, that it will always have
acceptable level by buying or selling foreign
sufficient liquidity to meet its liabilities when due,
currencies at spot rates when necessary to address
under both normal and stressed conditions, without
short term imbalances.
incurring unacceptable losses or risking damage to
the Group’s reputation. The Group’s overall liquidity
Interest rate risk
risks are monitored on an ongoing basis by the Board
of Directors of the Holding Company. The Group’s exposure to interest rate risk is primarily
on bank borrowings and lease liabilities. The interest
Market risk rate on the Group’s financial instruments is based
on market rates. Interest rate risk arises from the
Market risk is the risk that changes in market prices,
possibility that changes in interest rates will affect
such as equity prices, foreign exchange rates and
the interest expense / income of the Group.
interest rates will affect the Group’s income or the
value of its holding of financial instruments.
Capital management
The objective of market risk management is to The Board of the Holding Company’s policy is to
manage and control market risk exposures within maintain a strong capital base so as to maintain
acceptable parameters, while optimising returns. bankers, creditors and market confidence and to
sustain future development of the business. The
Currency risk Board of Directors of the Holding Company monitors
the return on capital through operating cash flow
The Group is mainly exposed to currency risk on
management. There was no change in the Group’s
purchases and payables that are denominated in
approach to capital management during the year.
a currency other than the respective functional
currencies of the Group entities, primarily Euro
(“EUR”), and Pound Sterling (“GBP”).
 Berger Paints Emirates Limited Group

Notes (Contd.)

5. Revenue
2023 2022
AED AED
Sale of goods 191,183,188 170,771,083
Export sales (refer note (i) below) 35,422,201 39,352,809
Less: discounts (15,246,797) (13,288,715)
211,358,592 196,835,177
Contract revenue 3,280,829 4,431,681
214,639,421 201,266,858

(i) Revenue by geographical segments is summarized below:

2023 2022
AED AED
Africa region 26,430,016 29,939,707
Gulf region 7,071,366 7,702,731
South Asia region 1,904,892 1,710,371
South East Asia & South Pacific region 15,927 -
35,422,201 39,352,809

6. Cost of sales
2023 2022
AED AED
Raw materials and work in progress at the beginning of the year 17,695,957 14,553,105
Add: Raw materials purchased during the year 112,854,843 132,778,177
Less: Cost of raw materials sold (4,075,495) (6,688,059)
Less: Raw materials and work in progress at the end of the year (12,450,464) (17,695,957)
Cost of raw materials consumed 114,024,841 122,947,266
Employees’ salaries and benefits 9,643,711 9,368,922
Depreciation of property, plant and equipment (refer note 11) 1,559,330 1,544,112
Rent and utilities 1,304,547 1,161,319
Depreciation of right-of-use assets (refer note 12) 1,249,881 1,180,890
Repairs and maintenance 704,039 429,452
Other direct expenses 3,863,438 2,111,586
Cost of goods manufactured 132,349,787 138,743,547
Movement in finished goods
Finished goods at the beginning of the year 12,809,071 9,230,167
Add: Finished goods purchased during the year 21,642,466 11,042,100
Less: Finished goods at the end of the year (13,413,120) (12,809,071)
Cost of sales 153,388,204 146,206,743
Cost of raw materials sold 4,075,495 6,688,059
Contract costs 3,280,008 4,479,906
160,743,707 157,374,708

20
 21
Notes (Contd.)

Financial Statements
7. Selling and distribution expenses
2023 2022
AED AED
Employees’ salaries and benefits 16,549,095 15,826,825
Advertising, promotion and marketing expenses 5,840,888 6,842,090
Royalties for technical expertise (refer note 16 and (i) below) 5,200,499 5,032,902
Freight and documentation charges 3,442,482 3,763,886
Depreciation of right-of-use assets (refer note 12) 3,383,624 3,947,655
Outsourced manpower expenses 3,374,190 4,634,948
Recharge by a related party (refer note (ii) below) 351,958 5,159,828
Depreciation of property, plant and equipment (refer note 11) 203,186 206,172
Other selling and distribution costs 5,150,743 6,955,546
43,496,665 52,369,852

(i) Royalty is charged at 3% of the Group’s revenue, based on a service agreement entered into between the
Group and the Holding Company.

(ii) This includes recharge by Asian Paints Middle East LLC (APME), Oman, a related party amounting to AED 0.35
million (2022: AED 5.2 million) in relation to provision of doubtful debts arising from sales to the Darwish
Trading (agency) in Qatar. This recharge is in lieu of an agreement entered between the Company and APME.

8. General and administrative expenses

2023 2022
AED AED
Employees’ salaries and benefits 3,260,942 2,435,973
Depreciation of right-of-use assets (refer note 12) 1,832,829 948,058
Legal and professional expenses 1,398,683 1,271,403
Travel and entertainment 754,274 904,960
Printing, stationery and office supplies 659,451 552,628
Depreciation of property, plant and equipment (refer note 11) 509,106 327,815
Communication expenses 391,729 691,906
Management fee 368,000 368,000
Insurance expense 240,689 208,964
Amortization of intangible assets (refer note 13) 105,834 108,335
Repairs and maintenance 104,675 228,833
Utilities 16,424 13,785
Other general and administrative expenses 276,714 206,648
9,919,350 8,267,308
 Berger Paints Emirates Limited Group

Notes (Contd.)

9. Other expenses - net

2023 2022
AED AED
Scrap sales 391,600 442,312
Gain / (loss) on disposal of property, plant and equipment 5,933 (32,035)
Gain/ (loss) on termination of lease contracts (168,616) -
Foreign exchange fluctuation (loss) / gain – net (133,928) 84,090
Commission expense (refer note (i) below) (1,026,290) (904,015)
Other miscellaneous (expenses) / income 34,225 18,113
(897,076) (391,535)

(i) Commission expense is payable to a related party and is calculated based on a mutually agreed mechanism in
relation to customer management services provided by the Group to related party.

10. Finance expenses

2023 2022
AED AED
Interest on bank borrowings 819,344 144,064
Interest expense accrued on lease liabilities (refer note 24) 669,365 803,658
Bank charges 531,501 355,717
2,020,210 1,303,439

22
11. Property, plant and equipment
Leasehold Plant and Motor Vehicles Fixtures Capital work-in- Total
improvements machinery and office progress
equipment
AED AED AED AED AED AED
Notes (Contd.)

Cost
At 1 April 2021 12,592,127 28,563,285 51,000 2,706,890 45,389 43,958,691
Additions - - - - 3,032,553 3,032,553
Transfers - 1,872,912 - 1,205,030 (3,077,942) -
Disposals / write offs - (443,681) - (180,051) - (623,732)
At 31 March 2022 12,592,127 29,992,516 51,000 3,731,869 - 46,367,512
At 1 April 2022 12,592,127 29,992,516 51,000 3,731,869 - 46,367,512
Additions - - - - 613,393 613,393
Transfers - 409,095 1,384 202,914 (613,393) -
Disposals / write offs - (185,750) - (7,955) - (193,705)
At 31 March 2023 12,592,127 30,215,861 52,384 3,926,828 - 46,787,200
Accumulated depreciation
At 1 April 2021 9,906,091 19,593,958 51,000 2,323,650 - 31,874,699
Charge for the year 206,172 1,731,415 - 140,512 - 2,078,099
On disposal/write offs - (428,372) - (163,326) - (591,698)
At 31 March 2022 10,112,263 20,897,001 51,000 2,300,836 - 33,361,100
At 1 April 2022 10,112,263 20,897,001 51,000 2,300,836 - 33,361,100
Charge for the year 203,186 1,710,706 921 356,810 - 2,271,623
On disposal / write offs - (185,748) - (5,461) - (191,209)
At 31 March 2023 10,315,449 22,421,959 51,921 2,652,185 - 35,441,514
Net book value
At 31 March 2023 2,276,678 7,793,902 463 1,274,643 - 11,345,686
At 31 March 2022 2,479,864 9,095,515 - 1,431,033 - 13,006,412

Depreciation charge for the year has been allocated as follows:

2023 2022
AED AED
Cost of sales (refer note 6) 1,559,330 1,544,112
General and administrative expenses (refer note 8) 509,107 327,815
Selling and distribution expenses (refer note 7) 203,186 206,172
2,271,623 2,078,099
23

Financial Statements
 Berger Paints Emirates Limited Group

Notes (Contd.)

12. Right-of-use assets

Factory land Warehouses, Motor Total
office and Vehicles
others
AED AED AED AED
Cost
At 1 April 2021 7,826,533 9,914,356 3,037,841 20,778,730
Additions (including lease renewals) - 4,040,178 853,794 4,893,972
Lease terminations / expiration - (2,523,843) (1,236,062) (3,759,905)
At 31 March 2022 7,826,533 11,430,691 2,655,573 21,912,797
At 1 April 2022 7,826,533 11,430,691 2,655,573 21,912,797
Additions (including lease renewals) - 4,273,605 874,633 5,148,238
Lease terminations / expiration - (3,950,488) (1,303,598) (5,254,086)
At 31 March 2023 7,826,533 11,753,808 2,226,608 21,806,949
Accumulated depreciation
At 1 April 2021 1,291,862 4,477,271 1,947,733 7,716,866
Charge for the year 389,795 4,849,538 837,270 6,076,603
On lease terminations / expiration - (2,495,525) (1,236,060) (3,731,585)
At 31 March 2022 1,681,657 6,831,284 1,548,943 10,061,884
At 1 April 2022 1,681,657 6,831,284 1,548,943 10,061,884
Charge for the year 389,795 5,371,999 704,540 6,466,334
On lease terminations / expiration - (3,723,486) (1,303,477) (5,026,963)
At 31 March 2023 2,071,452 8,479,797 950,006 11,501,255
Net book value
At 31 March 2023 5,755,081 3,274,011 1,276,602 10,305,694
At 31 March 2022 6,144,876 4,599,407 1,106,630 11,850,913

Depreciation charge for the year has been allocated as follows:

2023 2022
AED AED
Selling and distribution expenses (refer note 7) 3,383,624 3,947,655
Cost of sales (refer note 6) 1,249,881 1,180,890
General and administrative expenses (refer note 8) 1,832,829 948,058
6,466,334 6,076,603

24
 25
Notes (Contd.)

Financial Statements
13. Intangible assets
2023 2022
AED AED
Cost
Opening 528,374 536,697
Additions 27,285 2,677
Disposals - (11,000)
At 31 March 555,659 528,374
Amortisation
Opening 222,276 124,940
Charge for the year 105,834 108,335
On disposal - (11,000)
At 31 March 328,110 222,276
Net book value 227,549 306,098

Intangible assets primarily include expenditure incurred towards the Group’s enterprise resource planning system
and related software applications.

14. Inventories
2023 2022
AED AED
Raw materials 10,235,644 11,980,693
Finished goods 13,413,120 12,498,157
Work in progress 591,520 477,256
24,240,284 24,956,106
Less: allowance for stock obsolescence (1,389,944) (740,439)
22,850,340 24,215,667
Goods in transit 1,623,300 5,548,922
24,473,640 29,764,589

Movement in the allowance for stock obsolescence:

2023 2022
AED AED
Opening balance 740,439 644,686
Provision made during the year 649,505 118,094
Write-offs - (22,341)
Closing balance 1,389,944 740,439

The Group estimates allowance provision for stock obsolescence through a method based on ageing, rotation
and profitability of an item. Provision rates have been determined specific to the nature of ageing of the items.
Besides the above, specific provision is made on a case-to-case basis as deemed appropriate by management
based on analysis performed for slow-moving inventories.
 Berger Paints Emirates Limited Group

Notes (Contd.)

15. Trade and other receivables

2023 2022
AED AED
Trade receivables 117,897,914 103,615,998
Less: provision for impairment losses (31,968,330) (26,747,539)
85,929,584 76,868,459
Prepayments 2,315,869 3,635,283
Refundable deposits 973,289 805,479
Advances to suppliers 922,671 1,054,499
Other receivables 200,769 295,254
90,342,182 82,658,974

The Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit
losses (“ECL”). The ECL on trade receivables are estimated using a provision matrix by reference to past default
experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that
are specific to the debtors, general economic conditions of the industry in which the debtors operate and an
assessment of both the current as well as the forecast direction of conditions at the reporting date (also refer
note 27).

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of
the trade receivable from the date credit was initially granted up to the reporting date. The concentration of
credit risk is limited due to the customer base being large. Accordingly, the management believes that there is no
further expected credit loss required in excess of AED 32 million (2022: AED 26.7 million).

16. Related party transactions and balances

The Group, in the normal course of business, carries out transactions with other enterprises, which fall within
the definition of a related party contained in International Accounting Standard 24. Pricing policies and terms of
these transactions are approved by the Group’s management and are at mutually agreed rates.

The Group enters into transactions with its related parties mainly comprising the Ultimate Holding Company, the
Holding Company, its shareholders, entities under common control and with its key management personnel or
their close family members.

Compensation to key management personnel is as follows:

2023 2022
AED AED
Salaries and other short-term benefits 2,244,589 2,310,346
Post-employment benefits 66,303 73,694
Share based payment 72,691 -
2,383,583 2,384,040

26
 27
Notes (Contd.)

Financial Statements
16. Related party transactions and balances (contd.)

Other related party transactions during the year are as follows:

2023 2022
AED AED
Sales of raw materials and finished goods 6,068,371 9,361,050
Royalties for technical expertise paid to the Holding Company (refer 5,200,499 5,032,902
note 7)
Purchases of materials and recharge of expenses (net) 5,521,450 4,743,118
Management fees (refer note 8) 368,000 368,000
Recharges by a related party (refer note 7) 351,958 5,159,828
Rent paid 1,101,356 1,172,583
Commission expense (refer note 9) 1,026,290 904,015
Recharge of expenses to related parties (12,057,274) (5,580,170)

2023 2022
AED AED
Due from related parties
Asian Paints (Middle East) LLC, Sultanate of Oman 2,424,416 2,597,376
Asian Paints International Private Limited – Singapore 681,135 385,338
Berger Paints Bahrain WLL, Kingdom of Bahrain 411,510 419,921
Asian Paints Limited – India 322,841 338,606
Kadisco Paint and Adhesive Industry Share Company, Ethiopia 282,543 3,503,392
Asian Paints (Bangladesh) Limited 152,605 193,256
SCIB Chemicals, S.A.E., Egypt 96,999 1,291,966
Causeway Paints Lanka (Pvt) Ltd 21,696 833,867
Asian Paints (South Pacific) Limited, Fiji 18,167 -
PT Asian Paints Indonesia 15,927 -
Asian Paints (Nepal) Pvt. Ltd 548 221,940
4,428,387 9,785,662

2023 2022
AED AED
Due to related parties
Asian Paints (Middle East) LLC, Sultanate of Oman 7,688,994 6,127,756
Asian Paints International Private Limited, Singapore 6,511,566 5,329,666
Asian Paints Limited, India 1,192,107 1,003,779
Asian Paints (Bangladesh) Limited 53,969 1,465,718
SCIB Chemicals, S.A.E., Egypt 42,924 163,875
Kadisco Paint and Adhesive Industry Share Company, Ethiopia 27,725 27,725
Causeway Paints Lanka (Pvt) Ltd 26,813 116,413
PT Asian Paints Indonesia - 3,530
15,544,098 14,238,462

 Berger Paints Emirates Limited Group

Notes (Contd.)

16. Related party transactions and balances (contd.)

The above related party balances are unsecured, interest free and are to be settled within twelve months of the
reporting date. Management is of the view that these balances are repayable on demand.

Subordinated loan from a related party

2023 2022
AED AED
Asian Paints International Private Limited, Singapore 16,797,741 16,797,741

The Group has classified the subordinated loan from a related party as an equity instrument. The Group
considered the terms of loan agreement with the related party (i.e. the Holding Company) as per which the loan is
long term and interest-free and is subordinated to all other classes of instruments and will be settled only in the
event of liquidation. The holder of the instrument does not have the option of asking for liquidating the Group.

17. Other financial assets

2023 2022
AED AED
Other financial assets 1,857,488 41,000
1,857,488 41,000

During the year, an amount of AED 1.82 million was paid as a margin deposit against funded facility availed from
the bank in the form of short-term loan (also refer note 23). The other outstanding balance represent margin
deposits held by banks against letters of guarantee and labor deposits held by the Ministry of Labor, Government
of UAE.

18. Cash and cash equivalents

2023 2022
AED AED
Cash in hand 16,875 16,157
Cash at banks 6,272,940 5,897,285
6,289,815 5,913,442

19. Share capital

2023 2022
AED AED
Authorised, issued and fully paid up capital
1,000 ordinary shares of AED 1,000 each 1,000,000 1,000,000

28
 29
Notes (Contd.)

Financial Statements
20. Statutory reserve
In accordance with the Articles of Association of the companies in the Group and the relevant local laws in the
country in which the Group entities are domiciled, a percentage of the yearly net profits of the individual entities,
to which the law is applicable, has to be transferred to a statutory reserve. Such transfers may be discontinued
when the reserve equals the limit prescribed by the relevant laws applicable to individual entities. This reserve
can be utilised only in the manner specified under the relevant laws and is not available for distribution. No
transfers were made to the reserves of the individual entities during the period, as the reserves have reached the
limit prescribed by the relevant laws applicable to individual entities (2022: Nil).

21. General reserve

During 2011, Enterprise Paints Limited, a Shareholder of the Company, by way of a resolution of its Board of
Directors dated 22 January 2011, resolved to waive the loan given to the Company amounting to AED 14.85
million. Subsequent to this waiver, the loan amount was transferred to the General reserve without any
restrictions on withdrawals by the Shareholders of the Company. On 22 August 2011, the Board of Directors
declared and paid a dividend of AED 4 million (AED 4,000 per share) from the General reserve.

22. Provision for staff terminal benefits

2023 2022
AED AED
Opening balance 3,660,686 3,341,438
Add: provision made during the year 623,995 563,577
Less: payments made during the year (572,912) (244,329)
Closing balance 3,711,769 3,660,686

Provision for employees’ end of service indemnity qualifies as a defined benefit plan under International
Accounting Standard 19 Employee Benefits. A method, which measures the value of future benefits, has been
used to estimate the provision for staff terminal benefits.

The key assumptions used for calculation of the provision for staff terminal benefits at the reporting date are as
follows:

Discount rate 5% (2022: 3.5%)

Future salary increases 3.5% (2022: Nil)
Annual rate of employees expected to leave Based on the historical trend of attrition

23. Bank borrowings

The Group has a financing facility with banks for AED 26 million (2022: AED 11 million) in the form of short-term
loan, letters of credit, letters of guarantee and performance / bid bonds with commercial banks bearing interest
rates which vary with the market funds rate.

Bank borrowings are secured by subordination of loan from a related party of AED 16.8 million (2022: AED 16.8
million).

During the year, the Group has availed AED 17.14 million funded bank facility in the form of short-term loan (2022:
AED 8.26 million) and is repayable within 6 months.
 Berger Paints Emirates Limited Group

Notes (Contd.)

24. Lease liabilities

2023 2022
AED AED
Opening 12,555,590 13,441,899
Additions (including lease renewals) 5,146,822 4,885,048
Interest accrued 669,365 803,658
Lease terminations / expiration (88,798) (17,331)
Payments made against lease liabilities (7,490,749) (6,557,684)
At 31 March 10,792,230 12,555,590
Less: current maturity of lease liabilities (3,901,682) (4,231,429)
Carrying amount 6,890,548 8,324,161

Lease liabilities are payable as follows:

Future minimum lease Interest Present value of

payments minimum lease
2023 payments
AED AED AED
Less than one year 4,391,965 490,283 3,901,682
Between one and five years 3,094,624 1,366,198 1,728,426
More than five years 6,423,588 1,261,466 5,162,122
13,910,177 3,117,947 10,792,230

Future minimum lease Interest Present value of

2022 payments minimum lease payments
AED AED AED
Less than one year 4,835,658 604,229 4,231,429
Between one and five years 4,161,474 1,761,389 2,400,085
More than five years 7,087,721 1,163,645 5,924,076
16,084,853 3,529,263 12,555,590

Significant accounting estimates and judgements

Lease term
In determining the lease term, the Group applies the definition of a lease contract to determine the period for
which the contract is enforceable. The lease term is the non-cancellable period of the lease, together with:

- Optional renewable periods, if the lessee is reasonably certain to extend; and

- Periods after an optional termination date, if the lessee is reasonably certain not to terminate early.

A lease is no longer enforceable when the lessee and the lessor each has the right to terminate the lease without
permission from the other party, with no more than an insignificant penalty.

The management considers various facts and circumstances that create an economic incentive to exercise the
renewal option. Extension / renewal options (or periods after termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not terminated).

30
 31
Notes (Contd.)

Financial Statements
24. Lease liabilities (contd.)

The following factors are most relevant:

- If there are significant penalties (contractual) to terminate (or not extend), the Group is typically reasonably
certain to extend (or not terminate);

- If the lease improvements are expected to have a significant remaining value, the Group is typically
reasonably certain to extend (or not terminate); and

- The Group also considers other factors including current market conditions, historical impairments on
related CGUs, business strategy, etc.

In determining the lease term where the enforceability of the option solely rests with the Group, the
management considers all aforementioned facts and circumstances that create an economic incentive to exercise
the option. Extension / renewal options (or periods after termination options) are only included in the lease term
if the lease is reasonably certain to be extended (or not terminated).

Incremental borrowing rate

The Group has discounted lease liabilities using incremental borrowing rate of 6%.

25. Trade and other payables

2023 2022
AED AED
Trade payables 52,201,948 61,628,003
Accrued expenses and other payables 8,244,461 5,158,263
Bonus provision 2,384,427 1,058,492
Value added tax payable 1,136,630 971,010
Advances received from customers 264,474 283,211
64,231,940 69,098,979

26. Commitments and contingent liabilities

2023 2022
AED AED
Bank guarantees 3,226,553 1,754,843

Capital commitments at 31 March 2023 amounted to Nil (2022: Nil).

 Berger Paints Emirates Limited Group

Notes (Contd.)

27. Financial instruments

(a) Credit risk
Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date is as follows:

2023 2022
AED AED
Cash at banks 6,272,940 5,897,285
Trade receivables 85,929,584 76,868,459
Due from related parties (refer note 16) 4,428,387 9,785,662
Deposits and other receivables 1,174,058 1,100,733
Other financial assets 1,857,488 41,000
99,662,457 93,693,139

Impairment losses
The ageing of trade receivables by due date, at reporting date was:

2023 2022
Gross Impairment Gross Impairment
AED AED AED AED
0 – 90 days 53,630,769 1,859,813 72,536,491 2,054,980
91 – 360 days 32,397,608 2,425,931 8,127,527 3,728,504
More than one year 31,869,537 27,682,586 22,951,980 20,964,055
Total 117,897,914 31,968,330 103,615,998 26,747,539

The provision in respect of trade receivables is used to record impairment losses unless the Group is satisfied that
no recovery of the amount owing is possible; at that point the amounts considered irrecoverable are written off
against the financial asset directly. The movement in the provision for impairment in respect of trade receivables
during the year was as follows:

2023 2022
AED AED
Opening balance 26,747,539 23,102,382
Impairment loss recognised during the year 5,220,791 3,645,157
Balance at 31 March (refer note 15) 31,968,330 26,747,539

The exposure to credit risk on trade receivables is monitored on an ongoing basis by the management and these
are considered recoverable by the management.

32
 33
Notes (Contd.)

Financial Statements
27. Financial instruments (contd.)
Liquidity risk
The following are the contractual maturities of financial liabilities:

At 31 March 2023 Carrying Contractual Less than one Between one More than 5
amount cash flows year five years years
AED AED AED AED AED
Trade and other payables 63,967,466 63,967,466 63,967,466 - -
Bank borrowings 17,142,246 17,142,246 17,142,246 - -
Due to related parties 15,544,098 15,544,098 15,544,098 - -
Lease liabilities 10,792,230 13,910,177 4,391,965 3,094,624 6,423,588
Total 107,446,040 110,563,987 101,045,775 3,094,624 6,423,588

At 31 March 2022 Carrying Contractual Less than one Between one More than 5
amount cash flows year five years years
AED AED AED AED AED
Trade and other payables 68,815,768 68,815,768 68,815,768 - -
Due to related parties 14,238,462 14,238,462 14,238,462 - -
Lease liabilities 12,555,590 16,084,853 4,835,658 4,161,474 7,087,721
Bank borrowings 8,266,837 8,266,837 8,266,837 - -
Total 103,876,657 107,405,920 96,156,725 4,161,474 7,087,721

Market risk
(a) Currency risk
Exposure to currency risk
The Group’s exposure to foreign currency risk is as follows:

2023 2022
EUR EUR
Trade payables 76,581 131,534

The following significant exchange rates were applied during the year:

Average rate Reporting date spot rate

2023 2022 2023 2022
AED AED AED AED
Euro 4.2 4.32 3.99 4.09

Sensitivity analysis

A 10 percent strengthening of the AED against foreign currency mentioned above as at 31 March would have
reduced net loss by AED 0.04 million (2022: AED 0.05 million). This analysis assumes that all other variables, in
particular interest rates, remain constant.

A 10 percent weakening of the AED against foreign currency mentioned above as at 31 March would have had the
equal but opposite effect on the above, on the basis that all other variables remain constant.
 Berger Paints Emirates Limited Group

Notes (Contd.)

27. Financial instruments (contd.)

(b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates
primarily to the bank borrowings with variable interest rates.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates during the year would have (increased) / decreased net loss by AED
0.32 million (2022: AED 0.18 million). This analysis assumes that all other variables remain constant. The analysis is
performed on the same basis for 2021.

Fair values

The fair value of the Group’s financial assets and liabilities approximate their carrying amounts as all the financial
instruments are current in nature and mostly have contractual payment periods of less than twelve months.

28. Significant accounting estimates and judgements

a) Accounting classifications and fair values

The Group does not disclose the fair values of financial instruments such as trade and other receivables, other
financial assets, trade and other payables, due from / due to related parties and bank borrowings because
their fair values approximate their book values due to the current nature of these instruments as the effect of
discounting is immaterial. In case they are non-current in nature, the fair value is estimated based on the present
value of future cash flows, discounted at the market rate of interest at the reporting date.

b) Estimates and judgments

Judgements made by management in the application of IFRS that have significant effect on the combined
financial statements and estimates with a significant risk of material adjustment in the future years mainly
comprise the following:

Estimated useful life and residual values of property, plant and equipment and intangible assets
The Group’s management determines the estimated useful lives and related amortisation / depreciation charge
for its property, plant and equipment and intangible assets on an annual basis. The Group has carried out a review
of the residual values and useful lives of property, plant and equipment and intangible assets as at reporting
date. Management has not highlighted any requirement for an adjustment to the residual lives and remaining
useful lives of the assets for the current or future periods.

Impairment losses on property, plant and equipment, right-of-use assets and intangible assets
The Group reviews its property, plant and equipment, right-of-use assets, and intangible assets to assess if there
is an indication of impairment. In determining whether impairment losses should be reported in the profit or
loss, the Group makes judgments as to whether there is any observable data indicating that there is a reduction
in the carrying value of property, plant and equipment, right-of-use assets, and intangible assets. Accordingly, a
provision for impairment is made where there is an identified loss event or condition which, based on previous
experience, is evidence of a reduction in the carrying value of property, plant and equipment, right-of-use assets,
and intangible assets

34
 35
Notes (Contd.)

Financial Statements
Impairment losses on trade and other receivables
The Group reviews its trade and other receivables to assess impairment at least on an annual basis. The Group’s
credit risk is primarily attributable to its trade and other receivables. In determining whether impairment losses
should be recognised in profit or loss, the Group makes judgments as to whether there is any observable data
indicating that there is a measurable decrease in the estimated future cash flows. Accordingly, a provision for
impairment is made in accordance with ‘expected credit loss’ (ECL) model. This requires judgment about how the
changes in economic factors affect ECLs, which are determined on a probability-weighted basis.

Provision for obsolete inventory

The Group reviews its inventory to assess loss on account of obsolescence and net realisable value (NRV) on a
regular basis. In determining whether provision for obsolescence and write down of inventory to NRV should be
recorded in the profit or loss, the Group makes judgements as to whether there is any observable data indicating
that there are future adverse factors affecting the saleability of the product and the net realisable value for such
product. Accordingly, provision for impairment is made where the net realisable value is less than cost based on
best estimates by the management. The provision for obsolescence of inventory is based on the ageing and past
movement of the inventory.

Also refer to notes 14, 15, 22 and 24 for other key estimates used in preparing these combined financial
statements.

29. Corporate tax in UAE

On 9 December 2022, the UAE Ministry of Finance released the Federal Decree-Law No. 47 of 2022 on the
Taxation of Corporations and Businesses (the Law) to enact a Federal Corporate Tax (CT) regime in the UAE. The
CT regime will become effective for accounting periods beginning on or after 1 June 2023 (i.e. for the Group
would be effective from 1 April 2024).

During the year, the Cabinet of Ministers Decision No. 116/2022, has confirmed the threshold of income over
which the 9% tax rate would apply and accordingly the Law is now considered to be substantively enacted.

Based on the assessment performed in accordance with Article 61 Transition Rules of the Law, the management
has concluded that there are no deferred tax implications and accordingly no impact has been accounted for in
these combined financial statements.

30. Subsequent events

There have been no significant events subsequent to 31 March 2023 up to the date of authorisation of the
combined financial statements which would have a material effect on these combined financial statements.
Nirvana Investments Limited
Contents
Directors’ Report...........................................................................................................................................................................................4

Statement of Directors’ Responsibilities..................................................................................................................................................5

Independent Auditor’s Report...................................................................................................................................................................6

Income Statement ........................................................................................................................................................................................7

Balance Sheet................................................................................................................................................................................................8

Notes to the Audited financial statements....................................................................................................................................... 9-11

 Nirvana Investments Limited

Directors’ Report
For the year ended 31 March 2023

The directors present their annual report and the audited
financial statements for the year ended 31 March 2023
which show the state of the company’s affairs.
PRINCIPAL ACTIVITY
The principal activity of the company is an investment
holding company.
RESULTS AND DIVIDENDS
The company made a profit for the year of £nil (2022:
£nil) and dividends of £nil (2022: £nil) were paid.
DIRECTORS
The following directors held office during the period:
So far as each of the directors is aware at the time the
report and accounts are approved:
• there is no relevant information of which the
company’s auditors are unaware, and
• the directors have taken all steps that they ought
to have taken to make themselves aware of any
relevant audit information and to establish that the
auditors are aware of that information
This report has been prepared in accordance with the
provisions applicable to companies entitled to the small
companies exemption.

Phaedra Bird By Order of the Board

Diane Clarke – resigned 01 June 2022 Athol Secretaries Limited

Andrew John Michael McLarney – appointed 01 June Secretary
2022

4

Statement of Directors’ Responsibilities
For the year ended 31 March 2023
The directors are responsible for preparing the Directors’
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law
the directors have elected to prepare the financial
statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards) and applicable law.
Under company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for
that period. In preparing these financial statements, the
directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgments and accounting estimates that are
reasonable and prudent;
5
Statutory Reports
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the company and enable them to ensure that the financial
statements comply with the Companies Acts 1931 to
2004. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
In determining how amounts are presented within items
in the profit and loss account and the balance sheet,
the directors have had regard to the substance of the
reported transaction or arrangement, in accordance with
generally accepted accounting principles or practice.
 Nirvana Investments Limited
Independent Auditors’ Report
We have audited the financial statements as set out
on pages 5 to 9 which have been prepared under the
historical cost convention and the accounting policies set
out therein.
The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
This report is made solely to the company’s members,
as a body, in accordance with the Companies Acts 1931
to 2004. Our audit work has been undertaken so that we
might state to the company’s members those matters we
are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members
as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective Responsibilities of Directors and Auditors
As explained more fully in the statement of directors’
responsibilities, the directors are responsible for
the preparation of the financial statements and for
being satisfied that they give a true and fair view.
Our responsibility is to audit the financial statements
in accordance with applicable law and international
standards on auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether
the accounting policies are appropriate to the company’s
circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the
overall presentation of the financial statements.
We read all the financial and non-financial information in
the Directors’ Report to identify material inconsistencies
with the audited financial statements and to identify
any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements
6
or inconsistencies we consider the implications for our
report.
Opinion on financial statements
In our opinion, the financial statements:
• give a true and fair view of the state of the
company’s affairs as at 31 March 2023 and of its
profit for the year then ended;
• have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
• have been prepared in accordance with the
requirements of the Companies Acts 1931 to 2004.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters where the Companies Acts 1931 to 2004 require
us to report to you if, in our opinion:
• adequate accounting records have not been kept,
or returns adequate for our audit have not been
received from branches not visited by us; or
• the financial statements are not in agreement with
the accounting records and returns; or
• certain disclosures of directors’ loans and
remuneration specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Mark Hjertzen (Senior Statutory Auditor)
For and on behalf of
HW Associates Limited
Portmill House
Portmill Lane
Hitchin
Hertfordshire
SG5 1DJ
Date 27th April 2023
 7
Income Statement

Financial Statements
For the year ended 31 March 2023

2023 2022
£ £
INCOME
Dividends received - -
Administrative expenses - -
Foreign exchange gain - -
OPERATING PROFIT - -
Interest receivable and similar income - -
Profit before taxation - -
Taxation - -
PROFIT FOR THE FINANCIAL YEAR - -

In the current and preceding financial periods there were no recognised gains or losses, other than those dealt with in
the profit and loss account.

The notes on pages 9 to 11 form part of these audited financial statements.

 Nirvana Investments Limited

Balance Sheet
As at 31 March 2023

Note 2023 2022

£ £
FIXED ASSETS
Investments 3 - -
DEBTORS: amounts due after more than one year
Loan 4 74,202 74,202
DEBTORS: amounts due within one year 5 114,832 114,832
CURRENT ASSETS 114,832 114,832
TOTAL ASSETS 189,034 189,034
CAPITAL AND RESERVES
Called up share capital 7 2 2
Profit and loss account 9 189,032 189,032
EQUITY SHAREHOLDERS’ FUNDS 10 189,034 189,034

The accounts have been prepared in accordance with the provisions applicable to companies subject to the small
companies’ regime and in accordance with the provisions of FRS 102 Section 1A –small entities.

These financial statements were approved by the board of directors on 26 April 2023

and signed on their behalf by:

__________________
Phaedra Bird
Directors

__________________
Andrew John Michael McLarney
Directors

Company Registration No. 45691C

The notes on pages 9 to 11 form part of these audited financial statements.

8
 9
Notes to the Audited Financial Statements

Financial Statements
for the year ended 31st March 2023

Company information 3. INVESTMENTS

Nirvana Investments Limited is a private company, limited
by shares, domiciled in Isle of Man, registration number
45691C. The registered office is 6th Floor, Victory house,
Prospect Hill, Douglas, Isle of man / IM1 1EQ.
1. ACCOUNTING POLICIES
a) Accounting convention
The financial statements are prepared under the
historical cost convention and in accordance with
United Kingdom Accounting Standards and the Isle
of Man Companies Acts.
The company owns 10% of the issued shares of
Berger Paints Emirates Limited (BPEL) and has
a beneficial ownership of a further 51% of the
shares. It is entitled to receive 30% of its profits.
BPEL is a company engaged in the manufacturing
and distribution of paints and related products.
The net profit for the period ended 31 March 2023
was £1,730,070 loss (2022: £3,372,426 loss) and at
that date BPEL had net assets of £4,646,314 (2022:
£7,021,204).

b) Dividend income
Dividend income is recognised when the
shareholders’ rights to receive payment have been
established.

c) Investments
Investments are stated at cost less provision for
impairment in value.

d) Group financial statements

Group financial statements have not been prepared
under Financial Reporting Standard 102, “Accounting
for Subsidiary Undertakings”, as it has taken
advantage of the exemption afforded for small and
medium sized companies.

Group financial statements have also not been

prepared as required by Isle of Man Company Law as
the directors are of the opinion that the preparation
of consolidated financial statements would involve
expense and delay out of proportion to the benefit
derived.

Accordingly, these financial statements present only

the results of the company.

2. EXPENSES
A related undertaking Asian Paints International
Private Limited has agreed to bear the cost of
administering the company and will not seek
recovery of such expenses.
 Nirvana Investments Limited

Notes to the Audited Financial Statements (Contd.)

4. DEBTORS: Amounts due after more than one year

2023 2022
£ £
Loan:
Sultan Bin Sulayem 74,202 74,202

5. DEBTORS: Amounts due within one year

2023 2022
£ £
Asian Paints International Private Limited 3,673 3,673
Enterprise Paints Limited 111,159 111,159
114,832 114,832

These loans are unsecured interest free and will only be called for repayment when the related undertakings have
sufficient funds.

6. TAXATION
The company is taxed at 0% under Income Tax (Amendment) (No. 2) Act 2006.

7. CALLED UP SHARE CAPITAL

2023 2022
£ £
Authorised:
2,000 Ordinary shares of £1 each 2,000 2,000
Issued:
2 Ordinary shares of £1 each 2 2

8. PARENT COMPANY
The directors have taken advantage of the reduced disclosure exemptions provided in FRS 102, related party
disclosures, not to disclose transactions with other group companies on the grounds that it is a wholly owned
subsidiary.

The company is a wholly-owned subsidiary company of Asian Paints International Private Limited, a company
incorporated in the Republic Of Singapore. The directors have therefore taken advantage of the exemption in
FRS102 not to include the disclosures on related party transactions between group companies.

The company’s ultimate parent company is Asian Paints Limited, a company incorporated in India.

The consolidated financial statements of Asian Paints International Private Limited are available from Asian

10
 11
Notes to the Audited Financial Statements (Contd.)

Financial Statements
8. PARENT COMPANY (Contd.)
Paints International Private Limited, 140 Robinson Road, #11-05, Singapore 068907.

The consolidated accounts of the smallest group in which the results of the company are included are those
prepared by Asian Paints International Private Limited and are available from 140 Robinson Road, #11-05,
Singapore 068907.

The consolidated accounts of the largest group in which the results of the company are included are those of
Asian Paints Limited and are available from 6A Shantinagar, Santacruz ( E ), Mumbai – 400 055.

9. PROFIT AND LOSS ACCOUNT

2023 2022
£ £
At beginning of the period 189,032 189,032
Profit for the period - -
Dividend paid - -
At end of the period 189,032 189,032

10. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS

2023 2022
£ £
Opening shareholders’ funds 189,034 189,034
Profit for the period - -
Divided paid - -
Closing shareholders’ funds 189,034 189,034

11. AVERAGE NUMBER OF EMPLOYEES

During the year the average number of employees was 2. (2022: 2).
Enterprise Paints Limited
Contents
Directors’ Report...........................................................................................................................................................................................4

Statement of Directors’ Responsibilities..................................................................................................................................................5

Independent Auditor’s Report...................................................................................................................................................................6

Income Statement.........................................................................................................................................................................................7

Balance Sheet................................................................................................................................................................................................8

Notes to the Audited financial statements....................................................................................................................................... 9-11

 Enterprise Paints Limited

Directors’ Report
For the year ended 31 March 2023

The directors present their annual report and the audited
financial statements for the year ended 31 March 2023,
which show the state of the company’s affairs.
PRINCIPAL ACTIVITY
The principal activity of the company is an investment
holding company.
RESULTS AND DIVIDENDS
The company made a profit for the year of £nil (2022:
£nil) and dividends of £nil
(2022: £nil) were paid.
DIRECTORS
The following directors held office during the year:
Andrew John Michael McLarney – appointed 01 June
2022
So far as each of the directors is aware at the time the
report and accounts are approved:
• there is no relevant information of which the
company’s auditors are unaware, and
• the directors have taken all steps that they ought
to have taken to make themselves aware of any
relevant audit information and to establish that the
auditors are aware of that information
This report has been prepared in accordance with the
provisions applicable to companies entitled to the small
companies exemption.

Phaedra Bird

By Order of the Board

Diane Clarke – resigned 01 June 2022

Athol Secretaries Limited

Secretary

4

Statement of Directors’ Responsibilities
For the year ended 31 March 2023
The directors are responsible for preparing the Directors’
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law
the directors have elected to prepare the financial
statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards) and applicable law.
Under company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for
that period. In preparing these financial statements, the
directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgments and accounting estimates that are
reasonable and prudent;
5
Statutory Reports
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the company and enable them to ensure that the financial
statements comply with the Companies Acts 1931 to
2004. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
In determining how amounts are presented within items
in the profit and loss account and the balance sheet,
the directors have had regard to the substance of the
reported transaction or arrangement, in accordance with
generally accepted accounting principles or practice.
 Enterprise Paints Limited

Independent Auditor’s Report

We have audited the financial statements as set out Opinion on financial statements
on pages 5 to 9 which have been prepared under the In our opinion, the financial statements:
historical cost convention and the accounting policies set
out therein. • give a true and fair view of the state of the
company’s affairs as at 31 March 2023 and of its
The financial reporting framework that has been applied profit for the year then ended;
in their preparation is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally • have been properly prepared in accordance with
Accepted Accounting Practice). United Kingdom Generally Accepted Accounting
Practice; and
This report is made solely to the company’s members,
as a body, in accordance with the Companies Acts 1931 • have been prepared in accordance with the
to 2004. Our audit work has been undertaken so that we requirements of the Companies Acts 1931 to 2004.
might state to the company’s members those matters we
are required to state to them in an auditor’s report and Matters on which we are required to report by
for no other purpose. To the fullest extent permitted by exception
law, we do not accept or assume responsibility to anyone
We have nothing to report in respect of the following
other than the company and the company’s members
matters where the Companies Acts 1931 to 2004 require
as a body, for our audit work, for this report, or for the
us to report to you if, in our opinion:
opinions we have formed.
• adequate accounting records have not been kept,
Respective Responsibilities of Directors and Auditors
or returns adequate for our audit have not been
As explained more fully in the statement of directors’ received from branches not visited by us; or
responsibilities, the directors are responsible for
the preparation of the financial statements and for • the financial statements are not in agreement with
being satisfied that they give a true and fair view. the accounting records and returns; or
Our responsibility is to audit the financial statements
in accordance with applicable law and international • certain disclosures of directors’ loans and
standards on auditing (UK and Ireland). Those standards remuneration specified by law are not made; or
require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors. • we have not received all the information and
explanations we require for our audit.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements Mark Hjertzen (Senior Statutory Auditor)
are free from material misstatement, whether caused by
For and on behalf of
fraud or error. This includes an assessment of: whether
the accounting policies are appropriate to the company’s HW Associates Limited
circumstances and have been consistently applied and Portmill House
adequately disclosed; the reasonableness of significant Portmill Lane
accounting estimates made by the directors; and the Hitchin
overall presentation of the financial statements. Hertfordshire
SG5 1DJ
We read all the financial and non-financial information in
the Directors’ Report to identify material inconsistencies
with the audited financial statements and to identify
any information that is apparently materially incorrect Date 27th April 2023
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements
or inconsistencies we consider the implications for our
report.
6
 7
Income Statement

Financial Statements
For the year ended 31 March 2023

2023 2022
£ £
INCOME
Dividend received - -
Admin expenses - -
Foreign exchange gain/(loss) - -
OPERATING PROFIT/(LOSS) - -
Interest receivable and similar income - -
Profit before taxation - -
Taxation - -
PROFIT/(LOSS) FOR FINANCIAL PERIOD - -

In the current and preceding financial periods there were no recognised gains or losses, other than those dealt with in
the profit and loss account.

The notes on pages 9 to 11 form part of these audited financial statements.

 Enterprise Paints Limited

Balance Sheet
As at 31 March 2023

Notes 2023 2022

£ £
FIXED ASSETS 4 - -
Investments
DEBTORS: amounts due within one year
Loan 5 344 344
CASH AT BANK - -
CREDITORS: amounts falling due within one year
Loans 6 (1,550,469) (1,550,469)
NET CURRENT LIABILITIES (1,550,125) (1,550,125)
NET LIABILITIES (1,550,125) (1,550,125)
CAPITAL AND RESERVES
Called up share capital 7 145,504 145,504
Profit and loss account 9 (1,695,629) (1,695,629)
EQUITY SHAREHOLDERS’ DEFICIT 10 (1,550,125) (1,550,125)

The accounts have been prepared in accordance with the provisions applicable to companies subject to the small
companies’ regime and in accordance with the provisions of FRS 102 Section 1A –small entities.

These financial statements were approved by the board of directors on 26 April 2023

and were signed on their behalf by:

__________________
Phaedra Bird
Directors

__________________
Andrew John Michael McLarney
Directors

Company Registration No. 43644C

The notes on pages 9 to 11 form part of these audited financial statements.

8
 9
Notes to the Audited Financial Statements

Financial Statements
for the year ended 31 March 2023

Company information e) Foreign exchange

Enterprise Paints Limited is a private company, limited Transactions in foreign currencies are recorded
by shares, domiciled in Isle of Man, registration number using the rate of exchange ruling at the date of
43644C. The registered office is 6th Floor , Victory house, the transaction. Monetary assets and liabilities
Prospect Hill, Douglas, Isle of man / IM1 1EQ. denominated in foreign currencies are translated
using the rate of exchange ruling at the balance
1. ACCOUNTING POLICIES sheet date and the gains or losses on translation are
included in the profit and loss account.
a) Accounting convention
The financial statements are prepared under the f) Going Concern
historical cost convention and in accordance with At the balance sheet date the company had net
United Kingdom Accounting Standards and the Isle liabilities of £1,550,525 and its reliant upon the
of Man Companies Acts. continued support of the ultimate parent company
APIPL. The accounts have been prepared on a going
b) Dividend income concern basis on the assumption that the support
Dividend income is recognized when the will ontinue into the foreseeable future.
shareholders’ rights to receive payment have been
established. 2. EXPENSES
A related undertaking Asian Paints International
c) Investments
Private Limited has agreed to bear the cost of
Investments are stated at cost less provision for administering the company and will not seek
impairment in value. recovery of such expenses.

d) Group financial statements 3. TAXATION

Group financial statements have not been prepared
The company is taxed at 0% under Income Tax
under Financial Reporting Standard 102, “Accounting
(Amendment) (No. 2) Act 2006
for Subsidiary Undertakings”, as it has taken
advantage of the exemption afforded for small and
medium sized companies.

Group financial statements have also not been

prepared as required by Isle of Man Company Law as
the directors are of the opinion that the preparation
of consolidated financial statements would involve
expense and delay out of proportion to the benefit
derived.

Accordingly, these financial statements present only

the results of the company.
 Enterprise Paints Limited

Notes to the Audited Financial Statements (Contd.)

4. INVESTMENTS
2023 2022
£ £
i) Investment in Berger Paints Emirates Limited (“BPEL”) - -
ii) Investment in Nirvana Investments Limited (“NIL”) - -
- -

i) The company owns 39% of the issued shares of Berger Paints Emirates Limited (BPEL), a company engaged in
the manufacturing of paints and related products but is entitled to receive 70% of its profits. The net profit
for the period ended 31 March 2023 was £1,730,070 loss (2022: £3,372,426 loss), and at that date BPEL had
net assets of £4,646,314 (2022: £7,021,204).

ii) The company owns the entire issued share capital of NIL comprising two ordinary shares of £1 each. NIL is an
investment holding company, incorporated in the Isle of Man. NIL is dormant and has net assets/(liabilities)
of £189,034 (2022: £189,034).

5. LOAN
2023 2022
£ £
Loan to Asian Paints International Limited (See note 8) 344 344

The loan is unsecured, interest free and will only be called for repayment when the related undertakings have
sufficient funds.

6. LOANS
2023 2022
£ £
Loan from Universal Paints Limited1 1,439,310 1,439,310
Loan from Nirvana Investments Limited1 111,159 111,159
1,550,469 1,550,469

These loans are unsecured, interest free and will only be called for repayment when the company has sufficient
funds.

1
The controlling interests of Universal Paints Limited and Nirvana Investments Limited are fully held by Asian
Paints International Private Limited.

7. CALLED UP SHARE CAPITAL

2023 2022
£ £
Authorised:
146,000 Ordinary shares of £1 each 146,000 146,000
Issued:
145,504 Ordinary shares of £1 each 145,504 145,504

10
 11
Notes to the Audited Financial Statements (Contd.)

Financial Statements
8. PARENT COMPANY
The directors have taken advantage of the reduced disclosure exemptions provided in FRS 102, related party
disclosures not to disclose transactions with group undertakings and wholly owned subsidiaries.

The company is a wholly-owned subsidiary company of Asian Paints International Private Limited, a company
incorporated in the Republic Of Singapore. The directors have therefore taken advantage of the exemption in
FRS102 not to include the disclosures on related party transactions between group companies.

The company’s ultimate parent company is Asian Paints Limited, a company incorporated in India.

The consolidated financial statements of Asian Paints International Private Limited are available from Asian
Paints International Private Limited, 140 Robinson Road, #11-05, Singapore 068907.

The consolidated accounts of the smallest group in which the results of the company are included are those
prepared by Asian Paints International Private Limited and are available from 140 Robinson Road, #11-05,
Singapore 068907.

The consolidated accounts of the largest group in which the results of the company are included are those of
Asian Paints Limited and are available from 6A Shantinagar, Santacruz ( E ), Mumbai – 400 055.

9. PROFIT AND LOSS ACCOUNT

2023 2022
£ £
At beginning of the period
Profit / (Loss) for the period (1,695,629) (1,695,629)
Dividend paid - -
At end of the period (1,695,629) (1,695,629)

10. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ DEFICIT

2023 2022
£ £
Opening shareholders’ deficit
Profit / (Loss) for the period (1,550,125) (1,550,125)
Dividend paid - -
Closing shareholders’ deficit (1,550,125) (1,550,125)

11. AVERAGE NUMBER OF EMPLOYEES

During the year the average number of employees was 2. (2022: 2)
Universal Paints Limited
Contents
Directors’ Report...........................................................................................................................................................................................4

Statement Directors’ Responsibilities......................................................................................................................................................5

Independent Auditor’s Report...................................................................................................................................................................6

Income Statement.........................................................................................................................................................................................7

Balance Sheet................................................................................................................................................................................................8

Notes to and forming part of the financial statements.................................................................................................................. 9-11

 Universal Paints Limited

Directors’ Report
For the year ended 31 March 2023

The directors present their annual report and the audited So far as each of the directors is aware at the time the
financial statements for the year ended 31 March 2023 report and accounts are approved:
which show the state of the company’s affairs.
• there is no relevant information of which the
PRINCIPAL ACTIVITY company’s auditors are unaware, and
The principal activity of the company is an investment
• the directors have taken all steps that they ought
holding company.
to have taken to make themselves aware of any
relevant audit information and to establish that the
RESULTS AND DIVIDENDS
auditors are aware of that information
The company made a profit for the period after taxation
of £1,380,767 (2022: £1,450,110) and dividends of This report has been prepared in accordance with the
£1,380,767 (2022: £1,450,110) were paid. provisions applicable to companies entitled to the small
companies exemption.
DIRECTORS
By Order of the Board
The following directors held office during the period:
Athol Secretaries Limited
Phaedra Bird
Secretary
Diane Jane – resigned 01 June 2022
Andrew John Michael McLarney – appointed 01 June
2022

4

Statement of Directors’ Responsibilities
For the year ended 31 March 2023
The directors are responsible for preparing the Directors’
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law
the directors have elected to prepare the financial
statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards) and applicable law.
Under company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for
that period. In preparing these financial statements, the
directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgments and accounting estimates that are
reasonable and prudent;
5
Statutory Reports
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the company and enable them to ensure that the financial
statements comply with the Companies Acts 1931 to
2004. They are also responsible for safeguarding the
assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
In determining how amounts are presented within items
in the profit and loss account and the balance sheet,
the directors have had regard to the substance of the
reported transaction or arrangement, in accordance with
generally accepted accounting principles or practice.
 Universal Paints Limited

Independent Auditor’s Report

We have audited the financial statements as set out
on pages 5 to 9 which have been prepared under the
historical cost convention and the accounting policies set
out therein.
The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).
This report is made solely to the company’s members,
as a body, in accordance with the Companies Acts 1931
to 2004. Our audit work has been undertaken so that we
might state to the company’s members those matters we
are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members
as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective Responsibilities of Directors and Auditors
As explained more fully in the statement of directors’
responsibilities, the directors are responsible for
the preparation of the financial statements and for
being satisfied that they give a true and fair view.
Our responsibility is to audit the financial statements
in accordance with applicable law and international
standards on auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether
the accounting policies are appropriate to the company’s
circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant
accounting estimates made by the directors; and the
overall presentation of the financial statements.
We read all the financial and non-financial information in
the Directors’ Report to identify material inconsistencies
with the audited financial statements and to identify
any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements
or inconsistencies we consider the implications for our
report.
6
Opinion on financial statements
In our opinion, the financial statements:
• give a true and fair view of the state of the
company’s affairs as at 31 March 2023 and of its
profit for the year then ended;
• have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
• have been prepared in accordance with the
requirements of the Companies Acts 1931 to 2004.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following
matters where the Companies Acts 1931 to 2004 require
us to report to you if, in our opinion:
• adequate accounting records have not been kept,
or returns adequate for our audit have not been
received from branches not visited by us; or
• the financial statements are not in agreement with
the accounting records and returns; or
• certain disclosures of directors’ loans and
remuneration specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Mark Hjertzen (Senior Statutory Auditor)
For and on behalf of
HW Associates Limited
Portmill House
Portmill Lane
Hitchin
Hertfordshire
SG5 1DJ
Date 27th April 2023
 7

Income Statement

Financial Statements
For the year ended 31 March 2023

Note 2023 2022

£ £
INCOME
Dividends received 1,380,767 1,450,110
Admin expenses - -
Exchange gain/(loss) - -
OPERATING PROFIT 1,380,767 1,450,110
Interest receivable and similar income - -
Profit before taxation
1,380,767 1,450,110
Taxation 3 - -
PROFIT FOR THE FINANCIAL PERIOD 1,380,767 1,450,110

In the current and preceding financial periods there were no recognised gains or losses, other than those dealt with in
the profit and loss accounts.

The notes on pages 9 to 11 form part of these audited financial statements.

 Universal Paints Limited

Balance Sheet
As at 31 March 2023

Note 2023 2022

£ £
FIXED ASSETS
Investment in subsidiary 4 398,787 398,787
CURRENT ASSETS
Bank and cash - -
Loans 5 1,440,841 1,440,841
TOTAL ASSETS 1,839,628 1,839,628
CAPITAL AND RESERVES
Called up share capital 6 429,232 429,232
Profit and loss account 9 1,410,396 1,410,396
EQUITY SHAREHOLDERS’ FUNDS 8 1,839,628 1,839,628

The accounts have been prepared in accordance with the provisions applicable to companies subject to the small
companies’ regime and in accordance with the provisions of FRS 102 Section 1A –small entities.

These financial statements were approved by the board of directors on 26 April 2023

and were signed on their behalf by:

__________________
Phaedra Bird
Directors

__________________
Andrew John Michael McLarney
Directors

Company registration No. 39647C

The notes on pages 7 to 9 form part of these audited financial statements.

8
 9
Notes

Financial Statements
to and forming part of the Audited Financial Statements for the year ended 31 March 2023

Company information e) Foreign exchange

Universal Paints Limited is a private company, limited
by shares, domiciled in Isle of Man, registration number
39647C. The registered office is 6th Floor, Victory house,
Prospect Hill, Douglas, Isle of man / IM1 1EQ.
1. ACCOUNTING POLICIES
a) Accounting convention
The financial statements are prepared under the
historical cost convention and in accordance with
United Kingdom Accounting Standards and the Isle
of Man Companies Acts.
b) Dividend income
Dividend income is recognized when the
shareholders’ rights to receive payment have been
established.
Transactions in foreign currencies are recorded
using the rate of exchange ruling at the date of
the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated
using the rate of exchange ruling at the balance
sheet date and the gains or losses on translation are
included in the profit and loss account.
2. EXPENSES
A related undertaking Asian Paints International
Private Limited has agreed to bear the cost of
administering the company and will not seek
recovery of such expenses.
3. TAXATION
The company is taxed at 0% under Income Tax
(Amendment) (No.2) 2006.

c) Investments
Investments are stated at cost less provision for
permanent diminution in value.

d) Group financial statements

Group financial statements have not been prepared
under Financial Reporting Standard 102, “Accounting
for Subsidiary Undertakings”, as it has taken
advantage of the exemption afforded for small and
medium sized companies.

Group financial statements have also not been

prepared as required by Isle of Man Company Law as
the directors are of the opinion that the preparation
of consolidated financial statements would involve
expense and delay out of proportion to the benefit
derived.

Accordingly, these financial statements present only

the results of the company.
 Universal Paints Limited

Notes to the Financial Statements (Contd.)

4. INVESTMENT IN SUBSIDIARY
2023 2022
£ £
Investment in Berger Paints Bahrain WLL 398,787 398,787

The company owns 100% of the issued share capital of Berger Paints Bahrain WLL, a company engaged in the
manufacturing and distribution of paints and related products. The net assets of value for the period ended on
31 March 2023 was £4,523,663 (2022: £4,215,186), and the net income for the period end was £1,349,777 (2022:
£1,349,777)

5. DEBTORS: Amounts due within one year

2023 2022
£ £
Amounts due from group undertakings
i) Asian Paints International Private Limited 1,531 1,531
ii) Enterprise Paints Limited 1,439,310 1,439,310
1,440,841 1,440,841

These loans are unsecured, interest free and will only be called for repayment when the related undertakings
have sufficient funds.

6. CALLED UP SHARE CAPITAL

2023 2022
£ £
Authorized:
430,000 Ordinary shares of £1 each 430,000 430,000
Issued:
429,232 Ordinary shares of £1 each 429,232 429,232

7. PARENT COMPANY
The directors have taken advantage of the reduced disclosure exemptions provided in FRS 102, related party
disclosures, not to disclose transactions with other group companies on the grounds that it is a wholly owned
subsidiary.

The company is a wholly-owned subsidiary company of Asian Paints International Private Limited, a company
incorporated in the Republic Of Singapore. The directors have therefore taken advantage of the exemption in
FRS102 not to include the disclosures on related party transactions between group companies.

The company’s ultimate parent company is Asian Paints Limited, a company incorporated in India.

10
 11
Notes to the Financial Statements (Contd.)

Financial Statements
7. PARENT COMPANY (Contd.)
The consolidated financial statements of Asian Paints International Private Limited are available from Asian
Paints International Private Limited, 140 Robinson Road, #11-05, Singapore 068907.

The consolidated accounts of the smallest group in which the results of the company are included are those
prepared by Asian Paints International Private Limited and are available from 140 Robinson Road, #11-05,
Singapore 068907.

The consolidated accounts of the largest group in which the results of the company are included are those of
Asian Paints Limited and are available from 6A Shantinagar, Santacruz ( E ), Mumbai – 400 055.

8. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS

2023 2022
£ £
Opening shareholders’ funds 1,839,628 1,839,628
Profit for the period 1,380,767 1,450,110
Dividends paid (1,380,767) (1,450,110)
Closing shareholders’ funds 1,839,628 1,839,628

9. PROFIT AND LOSS ACCOUNT

2023 2022
£ £
At beginning of the period 1,410,396 1,410,396
Profit for the period 1,380,767 1,450,110
Dividends paid (1,380,767) (1,450,110)
At end of the period 1,410,396 1,410,396

10. AVERAGE NUMBER OF EMPLOYEES

During the year the average number of employees was 2. (2022: 2).
Kadisco Paint and Adhesive
Industry S.C.
Country of incorporation and
domicile
Nature of business and principal
activities
Directors and key management
Registered office
Ethiopia
Kadisco Paint and Adhesive Industry Share Company (the Company) is
incorporated in Ethiopia under the Commercial Code of Ethiopia and is
domiciled in Ethiopia.
Kadisco Paint and Adhesive Industry Share Company manufactures full
range of paints for the construction, industrial and automotive sectors.
It also produces wood and concrete lacquers as well as adhesives for the
wood and leather industry.
Parag Rane
Director
Joseph Eapen
Director
Salahadin Khalifa
Director
A M Prashant
Director and General Manager
Eng. Seifudin Khalifa
Director and Deputy General Manager
Fauzia Khalifa (Dr.)
Senior Deputy General Manager
Frewoyni B/Meskel
Deputy General Manager
Prem Nayak
Financial Manager
Akaki/Kality Sub City
Wereda 05, Addis Ababa, Ethiopia

Holding company Asian Paints International Private Limited incorporated in Singapore

Ultimate holding company Asian Paints Limited incorporated in India

Bankers Commercial Bank of Ethiopia

P.O. Box 255, Addis Ababa, Ethiopia
Dashen Bank Share Company
P.O. Box 12752, Addis Ababa, Ethiopia
Berhan International Bank Share Company
P.O. Box 387 Code 1110, Addis Ababa, Ethiopia
Bank of Abyssinia Share Company
P.O. Box 12947, Addis Ababa, Ethiopia
Awash International Bank Share Company
P.O. Box 12638, Addis Ababa, Ethiopia
NIB International Bank Share Company
P.O. Box: 2439, Addis Ababa, Ethiopia
Zemen Bank Share Company
P.O. Box: 1212, Addis Ababa, Ethiopia
Oromia Bank Share Company
P.O. Box: 27530, Addis Ababa, Ethiopia
Auditors HST General Partnership, Chartered Certified Accountants and Authorized
Auditors
5th Floor, Mina Building, Wollo Sefer Addis Ababa, Ethiopia P.O. Box 1608

Legal advisors Tesfaye Deresse

tesfayelawoffice@gmail.com

Tax identification number 0000015683

Contents
Statement of Directors’ Responsibilities..................................................................................................................................................4

Directors’ Report...........................................................................................................................................................................................5

Independent Auditor’s Report............................................................................................................................................................... 6-7

Statement of Profit or Loss and Other Comprehensive Income.........................................................................................................8

Statement of Financial Position.................................................................................................................................................................9

Statement of Changes in Equity...............................................................................................................................................................10

Statement of Cash Flows...........................................................................................................................................................................11

Accounting Policies............................................................................................................................................................................... 12-25

Notes to the financial statements.....................................................................................................................................................26-53

Annex-I property, plant and equipment Tax written-down value.................................................................................................... 54

 Kadisco Paint and Adhesive Industry S.C.
Statement Of Directors’ Responsibilities
For the year ended March 31, 2023
The Commercial Code of Ethiopia requires the directors
to prepare financial statements for each financial year
which give a true and fair view of the state of affairs of
the company as at the end of the financial year and of
the operating results of the company for that year. It
also requires the directors to ensure that the company
keeps proper accounting records which disclose, with
reasonable accuracy, at any time, the financial position of
the company. They are also responsible for safeguarding
the assets of the company.
The directors are responsible for the preparation of
financial statements that give a true and fair view in
accordance with the International Financial Reporting
Standards and in the manner required by the Commercial
Code of Ethiopia and for such internal controls as
the Directors determine are necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
The directors accept responsibility for the annual
financial statements, which have been prepared using
appropriate accounting policies supported by reasonable
and prudent judgments and estimates, in conformity with
the International Financial Reporting Standards and in
the manner required by the Commercial Code of Ethiopia.
The directors are of the opinion that the financial
statements give a true and fair view of the state of the
financial affairs of the Company and of its operating
results. The directors further accept responsibility for the
maintenance of accounting records which may be relied
upon in the preparation of financial statements, as well
as adequate systems of internal financial control. The
responsibilities include;
4
• Designing, implementing and maintaining such
internal control as directors determines necessary to
enable the presentation of financial statements that
are free from material misstatement, whether due
to error or fraud;
• Selecting suitable accounting policies supported by
reasonable and prudent judgments and estimates,
that are consistently applied; and
• Keeping proper accounting records that disclose,
with reasonable accuracy, the financial position of
the Company.
The external auditors are responsible for independently
auditing and reporting on the company’s financial
statements. The financial statements have been
examined by the company’s external auditors and their
report is presented on pages 5 to 6.
The financial statements set out on pages 7 to 48, which
have been prepared on the going concern basis, were
approved by the directors on April 29, 2023 and were
signed on their behalf by:
A M Prashant
Director and General Manager
Eng. Seifudin Khalifa
Director and Deputy General Manager

Directors’ Report
For the year ended March 31, 2023
The directors have pleasure in submitting their report on
the financial statements of Kadisco Paint and Adhesive
Industry Share Company for the year ended March 31,
2023.
1. Incorporation
Kadisco Paint and Adhesive Industry Share Company
(the Company) is incorporated in Ethiopia under the
Commercial Code of Ethiopia.
In 2014, the former Kadisco Chemical Industry Pvt.
Ltd. Co. was converted to a share Company named
Kadisco Paint and Adhesive Industry Share Company
under Articles 536 and 547 of the Commercial Code
of Ethiopia.
The company is domiciled in Ethiopia where it is
incorporated as a private company limited by shares
under the Commercial Code of Ethiopia. The address
of the registered office is set out on page 2.
2. Nature of business
Kadisco Paint and Adhesive Industry Share Company
was incorporated in Ethiopia with interests in the
4. Share capital
2023
ETB
Issued
Ordinary shares 364,000,000
The Company has registered and paid up capital of ETB 364,000,000 divided in to 364,000 ordinary shares of
par value ETB 1000. During the year, additional capital of ETB 35,000,000 injected by the shareholders of the
Company by transferring dividend to capital. This has not resulted in any change in the Company’s shareholding
structure.
5. Ultimate holding company
The company’s ultimate holding company is Asian
Paints Limited which is incorporated in India.
6. Date of authorisation for issue of
financial statements
The financial statements have been authorised
for issue by the directors on April 29, 2023. No
authority was given to anyone to amend the financial
statements after the date of issue.
5
Statutory Reports
Manufacturing industry. The company operates in
Ethiopia.
There have been no material changes to the nature
of the company’s business from the prior year.
3. Review of financial results and
activities
The financial statements have been prepared in
accordance with International Financial Reporting
Standards and the requirements of the Commercial
Code of Ethiopia. The accounting policies have been
applied consistently compared to the prior year.
The company recorded a net profit after tax for the
year ended March 31, 2023 of ETB 115,860,803. This
represented an increase of ETB 78,484,675 from
the net profit after tax of the prior year of ETB
37,376,128.
Company revenue has increased by ETB 508,436,635
from ETB 689,541,198 in the prior year to ETB
1,197,977,833 for the year ended March 31, 2023
2022 2023 2022
Number of shares
329,000,000 364,000 329,000
The financial statements set out on pages 8 to 53,
which have been prepared on the going concern
basis, were approved by the directors on April 29,
2023, and were signed on its behalf by:
A M Prashant
Director and General Manager
April 29,2023
Eng. Seifudin Khalifa
Director and Deputy General Manager
April 29,2023
 Kadisco Paint and Adhesive Industry S.C.
Independent Auditor’s Report
TO THE SHAREHOLDERS OF KADISCO PAINT AND
ADHESIVE INDUSTRY SHARE COMPANY
Report On The Audit Of The Financial Statements
Opinion
We have audited the financial statements of Kadisco
Paint and Adhesive Industry Share Company (the
company) set out on pages 8 to 53, which comprise the
statement of financial position as at March 31, 2023,
statement of profit or loss and other comprehensive
income, statement of changes in equity and statement
of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies.
In our opinion, the financial statements present fairly,
in all material respects, the financial position of Kadisco
Paint and Adhesive Industry Share Company as at March
31, 2023, and its financial performance and cash flows
for the year then ended in accordance with International
Financial Reporting Standards and the requirements of
the Commercial Code of Ethiopia.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing. Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the
company in accordance with the International Ethics
Standards Board for Accountants’ International Code
of Ethics for Professional Accountants (including
International Independence Standards) (Parts 1 and 3)
(IESBA Code) and other independence requirements
applicable to performing audits of financial statements
in Ethiopia. We have fulfilled our other ethical
responsibilities in accordance with the IESBA Code and in
accordance with other ethical requirements applicable to
performing audits in Ethiopia. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Other Information
The directors are responsible for the other information
contained in the Directors’ Report as required by
the Commercial Code of Ethiopia. Our opinion on
the financial statements does not cover the other
information and we do not express an audit opinion or
any form of assurance conclusion thereon.
6
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the 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 on the other information obtained,
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 the Directors for the Financial
Statements
The directors are responsible for the preparation and fair
presentation of the financial statements in accordance
with International Financial Reporting Standards, and
for such internal control as the directors determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors
are 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 the directors either
intend to liquidate the company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole are
free from material misstatement, whether due to fraud
or error, and to issue an auditors’ 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 International Standards on Auditing
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
financial statements.
As part of an audit in accordance with International
Standards on Auditing, we exercise professional
judgement and maintain professional scepticism
throughout the audit. We also:
 7
Independent Auditor’s Report (Contd.)

Financial Statements
a) Identify and assess the risks of material Report on Other Legal and Regulatory Requirements
misstatement of the financial statements, whether As required by the Commercial Code of Ethiopia and
due to fraud or error, design and perform audit based on our audit, we report as follows:
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate (i) Pursuant to Article 349 (1) of the Commercial Code
to provide a basis for our opinion. The risk of not of Ethiopia, and based on our reviews of the board of
detecting a material misstatement resulting from directors’ report, we have not noted any matter that
fraud is higher than for one resulting from error, we may wish to bring to your attention.
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of (ii) Pursuant to Article 349 (2) of the Commercial Code
internal control. of Ethiopia we recommend the financial statements
for approval.
b) Obtain an understanding of internal control relevant
to the audit in order to design audit procedures The engagement partner responsible for the audit
that are appropriate in the circumstances, but not resulting in this independent auditors’ report is Yonas
for the purpose of expressing an opinion on the Harun.
effectiveness of the company’s internal control.
Yonas Harun
c) Evaluate the appropriateness of accounting Partner
policies used and the reasonableness of accounting
estimates and related disclosures made by the HST General Partnership, Chartered Certified
directors. Accountants and Authorized Auditors (Auditors’ of
Kadisco Paint and Adhesive Industry Share Company)
d) Conclude on the appropriateness of the directors’
use of the going concern basis of accounting and Addis Ababa, Ethiopia
based on the audit evidence obtained, whether a
April 29, 2023
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 auditors’ 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 auditors’
report. However, future events or conditions may
cause the company to cease to continue as a going
concern.

e) Evaluate the overall presentation, structure and

content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.

We communicate with the directors 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.
 Kadisco Paint and Adhesive Industry S.C.

Statement of Profit and Loss and Other Comprehensive Income

For the year ended 31 March 2023

Figures in Ethiopian Birr Note(s) 2023 2022

Revenue from contract with customers 4 1,197,977,833 689,541,198
Cost of sales 5 (882,638,752) (547,362,399)
Gross profit 315,339,081 142,178,799
Other income 6 2,966,395 2,146,119
Impairment allowance on trade receivables 18 (600,417) (4,996,054)
Selling and administration expenses 7 (128,274,703) (78,599,386)
Operating profit 189,430,356 60,729,478
Finance costs, net 9 (22,021,651) (10,665,419)
Profit before tax 167,408,705 50,064,059
Tax expense 10 (51,547,902) (12,687,931)
Profit after tax for the year 115,860,803 37,376,128
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Remeasurements on net defined benefit (asset)/liability 23 (2,503,275) (587,781)
Deferred tax asset/(liability) on remeasurement gain or loss 12 750,983 176,334
Other comprehensive (loss)/income for the year net of tax (1,752,292) (411,447)
expense
Total comprehensive income for the year 114,108,511 36,964,681

The accounting policies on pages 12 to 25 and the notes on pages 26 to 53 form an integral part of the financial
statements.

8
 9
Statement of Financial Position

Financial Statements
As at 31 March 2023

Figures in Ethiopian Birr Note(s) 2023 2022

Assets
Non-Current Assets
Property, plant and equipment 13 52,731,719 54,956,660
Right-of-use assets 14 15,371,508 8,249,152
Intangible assets 15 485,783 1,117,598
Deferred tax 12 16,038,086 6,435,931
Investment securities 16 5,500,000 7,000,000
90,127,096 77,759,341
Current Assets
Inventories 17 320,457,006 243,772,393
Trade and other receivables 18 132,261,708 83,271,920
Investment securities 16 2,500,000 -
Cash and cash equivalents 19 764,009,360 407,955,458
1,219,228,074 734,999,771
Total Assets 1,309,355,170 812,759,112
Equity and Liabilities
Equity
Share capital 20 364,000,000 329,000,000
Retained income 110,067,764 35,116,448
Legal reserve 21 49,106,298 43,313,258
Reserve for remeasurement of retirement benefit obligation 22 (1,752,292) -
521,421,770 407,429,706
Liabilities
Non-Current Liabilities
Provision for retirement benefit obligation and leave pay 23 11,458,014 7,992,487
Lease liabilities 24 6,023,981 1,278,832
17,481,995 9,271,319
Current Liabilities
Trade and other payables 25 354,833,544 282,548,561
Borrowings 26 362,245,016 98,376,726
Current tax payable 11 46,639,647 10,621,834
Provision for retirement benefit obligation and leave pay - 23 2,189,134 1,153,332
current portion
Lease liabilities - current portion 24 4,544,064 3,357,634
770,451,405 396,058,087
Total Liabilities 787,933,400 405,329,406
Total Equity and Liabilities 1,309,355,170 812,759,112

The financial statements and the notes on pages 7 to 48, were approved by the directors on April 29, 2023 and were
signed on its behalf by:

_____________ _____________
A M Prashant Eng. Seifudin Khalifa
Director and General Manager Director and Deputy General Manager

The accounting policies on pages 12 to 25 and the notes on pages 26 to 53 form an integral part of the financial
statements.
 Kadisco Paint and Adhesive Industry S.C.

Statement Of Changes In Equity

For the year ended 31 March 2023

Figures in Ethiopian Birr Share capital Reserve for Legal Reserve Retained Total equity
remeasurement income
of retirement
benefit
obligation
Balance at April 1, 2021 250,000,000 - 41,465,024 80,042,992 371,508,016
Profit for the year - - - 37,376,128 37,376,128
Other comprehensive - - - (411,447) (411,447)
income
Total comprehensive - - - 36,964,681 36,964,681
income for the year
Transfer to legal reserve - - 1,848,234 (1,848,234) -
Dividend capitalised 79,000,000 - - (79,000,000) -
Dividend distributed to
shareholders
- - - (1,042,991) (1,042,991)
79,000,000 - 1,848,234 (81,891,225) (1,042,991)
Balance at April 1, 2022 329,000,000 - 43,313,258 35,116,448 407,429,706
Profit for the year - - - 115,860,803 115,860,803
Other comprehensive - (1,752,292) - - (1,752,292)
income
Total comprehensive - (1,752,292) - 115,860,803 114,108,511
income for the year
Transfer to legal reserve - - 5,793,040 (5,793,040) -
Dividend capitalised 35,000,000 - - (35,000,000) -
Dividend distributed to
shareholders
- - - (116,447) (116,447)
35,000,000 - 5,793,040 (40,909,487) (116,447)
Balance at March 31, 364,000,000 (1,752,292) 49,106,298 110,067,764 521,421,770
2023
Note(s) 20 22 21

The accounting policies on pages 12 to 25 and the notes on pages 26 to 53 form an integral part of the financial
statements.

10
 11
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

Figures in Ethiopian Birr Note(s) 2023 2022

Cash flows from operating activities
Cash generated from/(used in) operations 27 156,014,394 (7,655,126)
Tax paid 28 (20,254,387) (40,420,332)
Employee benefit paid 23 (378,039) (2,648,931)
Prior year profit tax expenses 10 (4,126,874) (496,924)
Net cash from/(used in) operating activities 131,255,094 (51,221,313)
Cash flows from investing activities
Acqusition of property, plant and equipment 13 (6,322,262) (3,003,684)
Proceed from disposal of property, plant and equipment 13 - 36,510
Purchase of investment securities 16 (1,000,000) -
Net cash used in investing activities (7,322,262) (2,967,174)
Cash flows from financing activities
Proceeds from borrowings 26 300,478,500 96,835,590
Repayment of borrowings 26 (48,509,213) (28,990,809)
Interest paid 26 (8,255,808) (3,922,659)
Settlement of lease liability 24 (9,042,724) (7,760,407)
Dividend and dividend tax paid 25 (2,549,685) (26,646,461)
Net cash from financing activities 232,121,070 29,515,254
Total cash movement for the year 356,053,902 (24,673,233)
Cash at the beginning of the year 407,955,458 432,628,691
Total cash at end of the year 19 764,009,360 407,955,458

The accounting policies on pages 12 to 25 and the notes on pages 26 to 53 form an integral part of the financial
statements.
 Kadisco Paint and Adhesive Industry S.C.
Accounting Policies
1. Significant accounting policies
The principal accounting policies applied in the
preparation of these financial statements are set out
below.
1.1 Basis of preparation
The financial statements have been prepared on the
going concern basis in accordance with International
Financial Reporting Standards (“IFRS”) and
International Financial Reporting Interpretations
Committee (“IFRIC”) interpretations issued and
effective at the time of preparing these financial
statements.
The financial statements have been prepared on the
historic cost convention, unless otherwise stated in
the accounting policies which follow and incorporate
the principal accounting policies set out below. They
are presented in Ethiopian Birrs (ETB), which is the
company’s functional currency.
These accounting policies are consistent with the
previous period.
1.2 Significant judgements and sources of estimation
uncertainty
The preparation of financial statements in
conformity with IFRS requires directors, from
time to time, to make judgements, estimates and
assumptions that affect the application of policies
and reported amounts of assets, liabilities, income
and expenses. These estimates and associated
assumptions are based on experience and various
other factors that are believed to be reasonable
under the circumstances. Actual results may differ
from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in
any future periods affected.
Critical judgements in applying accounting
policies
Directors did not make critical judgements in the
application of accounting policies, apart from those
involving estimations, which would significantly
affect the financial statements.
Critical judgement in business model assessment
Classification and measurement of financial assets
depends on the results of the solely payments of
12
principal and interest (the “SPPI”) and the business
model test. The Company determines the business
model at a level that reflects how groups of financial
assets are managed together to achieve a particular
business objective. This assessment includes
judgement reflecting all relevant evidence including
how the performance of the assets is evaluated and
their performance measured, the risks that affect
the performance of the assets and how these are
managed and how the managers of the assets are
compensated.
The Company monitors financial assets measured at
amortised cost that are derecognised prior to their
maturity to understand the reason for their disposal
and whether the reasons are consistent with the
objective of the business for which the asset was
held. Monitoring is part of the Company’s continuous
assessment of whether the business model for which
the remaining financial assets are held continues to
be appropriate and if it is not appropriate whether
there has been a change in business model and so
a prospective change to the classification of those
assets. No such changes were required during the
periods presented.
Critical judgements in determining the lease term
In determining the lease term, management
considers all facts and circumstances that create
an economic incentive to exercise an extension
option: or not exercise a termination option.
Extension options (or periods after termination
options) are only included in the lease term if the
lease is reasonably certain to be extended (or not
terminated). Potential future cash outflows of ETB -
have not been included in the lease liability because
it is not reasonably certain that the leases will be
extended (or not terminated).
The assessment is reviewed if a significant event or
a significant change in circumstances occurs which
affects this assessment and that is within the control
of the lessee. During the current financial year, the
financial effect of revising lease terms to reflect
the effect of exercising extension and termination
options was not material.
Critical judgement in recognising deferred tax
assets
The extent to which deferred tax assets can be
recognised is based on an assessment of the
probability that future taxable income will be
available against which the deductible temporary

Accounting Policies (Contd.)
differences and tax loss carry-forwards can be
utilised. In addition, significant judgement is
required in assessing the impact of any legal or
economic limits or uncertainties in various tax
jurisdictions.
Key Sources of estimation uncertainty
Impairment of financial assets
The impairment provisions for financial assets are
based on assumptions about risk of default and
expected loss rates. The company uses judgement
in making these assumptions and selecting the
inputs to the impairment calculation, based on the
company’s past history, existing market conditions
as well as forward looking estimates at the end
of each reporting period. For details of the key
assumptions and inputs used, refer to the individual
notes addressing financial assets.
Allowance for slow moving, damaged and
obsolete inventory
Management assesses whether inventory is impaired
by comparing its cost to its estimated net realisable
value. Where an impairment is necessary, inventory
items are written down to net realisable value. The
write down is included in cost of sales.
Impairment testing
The company reviews and tests the carrying value
of assets when events or changes in circumstances
suggest that the carrying amount may not be
recoverable. When such indicators exist, directors
determine the recoverable amount by performing
value in use and fair value calculations. These
1.3 Revenue from contracts with customers
calculations require the use of estimates and
assumptions. When it is not possible to determine
the recoverable amount for an individual asset,
directors assesses the recoverable amount for the
cash generating unit to which the asset belongs.
Useful lives of property, plant and equipment
The directors assess the appropriateness of the
useful lives of property, plant and equipment at the
end of each reporting period. The useful lives of
motor vehicles, furniture and computer equipment
are determined based on company replacement
policies for the various assets. Individual assets
within these classes, which have a significant
carrying amount are assessed separately to consider
whether replacement will be necessary outside of
normal replacement parameters. The useful life of
13
Financial Statements
manufacturing equipment is assessed annually based
on factors including wear and tear, technological
obsolescence and usage requirements.
When the estimated useful life of an asset
differs from previous estimates, the change is
applied prospectively in the determination of the
depreciation charge.
Provisions
Provisions are inherently based on assumptions and
estimates using the best information available.
Retirement benefit obligation (RBO)
Management’s estimate of the RBO is based on
a number of critical underlying assumptions such
as standard rates of inflation, mortality, discount
rate and anticipation of future salary increases.
For instance, the discount rate used in RBO is set
by reference to the highest interest rate available
to the Company on long-term loans from the
Commercial Bank of Ethiopia and salary increment is
set by reference to the average increase in salaries
over the previous five years. These and other related
assumptions are considered to be a key source of
estimation uncertainty as relatively small changes in
the assumptions used may have a significant effect
on the Company financial statements within the next
year.
Further information on the carrying amounts of
the Company retirement benefit obligation and the
sensitivity of those amounts to changes in discount
rate are provided in note 23.
The company’s revenue arises mainly from the sale
of paint and other related products.
Revenue is measured based on the consideration
specified in a contract with a customer and excludes
amounts collected on behalf of third parties. The
company recognises revenue when it transfers
control of a product or service to a customer.
To determine whether to recognize revenue, the
Company follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the
performance obligations
5. Recognizing revenue when/as performance
obligation(s) are satisfied
 Kadisco Paint and Adhesive Industry S.C.
Accounting Policies (Contd.)
Sales of goods and services
Almost all sale contracts have a single performance
obligation and thus transaction price is not allocated
to performance obligations. The amount of revenue
recognized is the amount the Company expects to
receive in accordance with the terms of the contract,
and excludes amounts collected on behalf of third
parties, such as Value Added Tax.
Revenue is recognized either at a point in time
or over time, when (or as) the Company satisfies
performance obligations by transferring the
promised goods or services to its customers.
The Company recognizes contract liabilities for
consideration received in respect of unsatisfied
performance obligations and reports these amounts
as trade and other payables in the statement of
financial position. Similarly, if the Company satisfies
a performance obligation before it receives the
consideration, the Company recognizes either a
contract asset or a receivable in its statement of
financial position, depending on whether something
other than the passage of time is required before
the consideration is due.
As the period of time between customer payment
and performance for its products and services will
always be one year or less, the Company applies
the practical expedient in IFRS 15.63 and does not
adjust the promised amount of consideration for the
effects of financing.
1.4 Cost of sales and expenses
When inventories are sold, the carrying amount of
those inventories is recognised as an expense in the
period in which the related revenue is recognised.
The amount of any write-down of inventories to
net realisable value and all losses of inventories are
recognised as an expense in the period the write-
down or loss occurs. The amount of any reversal
of any write-down of inventories, arising from an
increase in net realisable value, is recognised as a
reduction in the amount of inventories recognised
as an expense in the period in which the reversal
occurs.
The related cost of providing services recognised as
revenue in the current period is included in cost of
sales.
Contract costs comprise:
• costs that relate directly to the specific
contract;
14
• costs that are attributable to contract activity
in general and can be allocated to the contract;
and
• such other costs as are specifically chargeable
to the customer under the terms of the
contract.
Cost of sales is reduced by the amount recognised in
inventory as a “right to returned goods asset” which
represents the company right to recover products
from customers where customers exercise their
right of return under the company returns policy.
Expenses are recognised based on accrual
accounting. This means that expenses are recognised
when a product is received or a service is provided to
the Company regardless of when the cash outflow
takes place.
1.5 Other income
Other income is comprised of income generated
from actvities which are not part of the Company’s
primary business operations. The income is
recognised when it is probable that the economic
benefits associated with a transaction will flow
to the Company and the amount of income, and
associated costs incurred or to be incurred can be
measured reliably.The recorded income is the fair
value of the consideration received or receivable
from the transactions and excludes amounts
collected on behalf of third parties.
1.6 Employee benefits
Short-term employee benefits
The cost of short-term employee benefits, (those
payable within 12 months after the service is
rendered, such as paid vacation leave and sick leave,
bonuses, and non-monetary benefits such as medical
care), are recognised in the period in which the
service is rendered and are not discounted.
The expected cost of compensated absences is
recognised as an expense as the employees render
services that increase their entitlement or, in the
case of non-accumulating absences, when the
absence occurs.
The expected cost of profit sharing and bonus
payments is recognised as an expense when there
is a legal or constructive obligation to make such
payments as a result of past performance.

Accounting Policies (Contd.)
1.6 Employee benefits (continued)
Defined contribution plans
The Company operates one defined contribution
plans which is a pension scheme in line with the
provision of Ethiopia pension of Private Organization
Employees Proclamation no. 715/2011. Funding
under the scheme is 7% and 11% by employees and
the Company respectively;
Once the contributions have been paid, the
Company retains no legal or constructive obligation
to pay further contributions if the Fund doses not
hold enough assets to finance benefits accruing
under the retirement benefit plan. The Company’s
obligations are recognised in the profit or loss
account.
Defined benefit plans
For severance pay, which is a termination benefit
with characterstics of defined benefit plans, the cost
of providing the benefits is determined by actuarial
valuation and the resulting remeasurement gain/loss
is reported under Other Comprehensive Income.
Actuarial valuations are conducted on an annual
basis by independent actuaries.
Consideration is given to any event that could impact
the funds up to the end of the reporting period
where the interim valuation is performed at an
earlier date.
Past service costs are recognised immediately to the
extent that the benefits are already vested, and are
otherwise amortised on a straight line basis over the
average period until the amended benefits become
vested.
1.7 Translation of foreign currencies
Foreign currency transactions
A foreign currency transaction is recorded, on initial
1.8 Borrowing costs
recognition in Ethiopian Birr, 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 the reporting period:
• foreign currency monetary items are translated
using the closing rate;
• 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
15
Financial Statements
• 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 determined.
In circumstances where the company receives or
pays an amount in foreign currency in advance of
a transaction, the transaction date for purposes
of determining the exchange rate to use on initial
recognition of the related asset, income or expense
is the date on which the company initially recognised
the non-monetary item arising on payment or
receipt of the advance consideration.
If there are multiple payments or receipts
in advance, company determines a date of
transaction for each payment or receipt of advance
consideration.
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
profit or loss in the period in which they arise.
When a gain or loss on a non-monetary item
is recognised to other comprehensive income
and accumulated in equity, any exchange
component of that gain or loss is recognised to
other comprehensive income and accumulated
in equity. When a gain or loss on a non-monetary
item is recognised in profit or loss, any exchange
component of that gain or loss is recognised in profit
or loss.
Cash flows arising from transactions in a foreign
currency are recorded in Ethiopian Birr by applying
to the foreign currency amount the exchange rate
between the Ethiopian Birr and the foreign currency
at the date of the cash flow.
Borrowing costs that are directly attributable to
the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost
of that asset until such time as the asset is ready for
its intended use. The amount of borrowing costs
eligible for capitalisation is determined as follows:
• Actual borrowing costs on funds specifically
borrowed for the purpose of obtaining a
qualifying asset less any temporary investment
of those borrowings.
 Kadisco Paint and Adhesive Industry S.C.
Accounting Policies (Contd.)
1.8 Borrowing costs (continued)
• Weighted average of the borrowing costs
applicable to the entity on funds generally
borrowed for the purpose of obtaining
a qualifying asset. The borrowing costs
capitalised do not exceed the total borrowing
costs incurred.
The capitalisation of borrowing costs commences
when:
• expenditures for the asset have occurred;
• borrowing costs have been incurred; and
• activities that are necessary to prepare
the asset for its intended use or sale are in
progress.
Capitalisation is suspended during extended periods
in which active development is interrupted.
Capitalisation ceases when substantially all the
activities necessary to prepare the qualifying asset
for its intended use or sale are complete.
All other borrowing costs are recognised as an
expense in the period in which they are incurred.
1.9 Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the
extent unpaid, recognised as a liability. If the amount
already paid in respect of current and prior periods
exceeds the amount due for those periods, the
excess is recognised as an asset.
Current tax liabilities (assets) for the current and
prior periods are measured at the amount expected
to be paid to (recovered from) the tax authorities,
using the tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.
1.10 Property, plant and equipment
Deferred tax assets and liabilities
A deferred tax liability is recognised for all taxable
temporary differences, except to the extent that
the deferred tax liability arises from the initial
recognition of an asset or liability in a transaction
which at the time of the transaction, affects neither
accounting profit nor taxable profit (tax loss).
16
A deferred tax asset is recognised for all deductible
temporary differences to the extent that it is
probable that taxable profit will be available against
which the deductible temporary difference can
be utilised. A deferred tax asset is not recognised
when it arises from the initial recognition of an
asset or liability in a transaction at the time of the
transaction, affects neither accounting profit nor
taxable profit (tax loss).
A deferred tax asset is recognised for the carry
forward of unused tax losses and to the extent
that it is probable that future taxable profit will be
available against which the unused tax losses can be
utilised.
Deferred tax assets and liabilities are 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 tax rates (and tax laws) that have
been enacted or substantively enacted by the end of
the reporting period.
Tax expenses
Current and deferred taxes are recognised as income
or an expense and included in profit or loss for the
period, except to the extent that the tax arises from:
• a transaction or event which is recognised,
in the same or a different period, to other
comprehensive income; or
• a business combination.
Current tax and deferred taxes are charged or
credited to other comprehensive income if the tax
relates to items that are credited or charged, in the
same or a different period, to other comprehensive
income.
Current tax and deferred taxes are charged or
credited directly to equity if the tax relates to
items that are credited or charged, in the same or a
different period, directly in equity.
Property, plant and equipment are tangible assets
which the company holds for its own use or for
rental to others and which are expected to be used
for more than one year.
An item of property, plant and equipment is
recognised as an asset when it is probable that
 17
Accounting Policies (Contd.)

Financial Statements
future economic benefits associated with the item Depreciation is calculated using the methods and
will flow to the company, and the cost of the item rates per annum as follows:
can be measured reliably.
Item Depreciation Depreciation
Property, plant and equipment is initially measured method rates
at cost. Cost includes all of the expenditure
Buildings Straight line 3%
which is directly attributable to the acquisition
or construction of the asset, including the Plant and Straight line 7%
capitalisation of borrowing costs on qualifying machinery
assets and adjustments in respect of hedge Furniture and Straight line 13%
accounting, where appropriate. fixtures
Motor vehicles Straight line 20%
Expenditure incurred subsequently for major
Office equipment Straight line 20%
services, additions to or replacements of parts of
property, plant and equipment are capitalised if it is Computers and Straight line 25%
probable that future economic benefits associated accessories
with the expenditure will flow to the company
and the cost can be measured reliably. Day to day Each part of an item of property, plant and
servicing costs are included in profit or loss in the equipment with a cost that is significant in relation
year in which they are incurred. to the total cost of the item is depreciated
separately.
Major inspection costs which are a condition of
continuing use of an item of property, plant and The depreciation charge for each year is recognised
equipment and which meet the recognition criteria in profit or loss unless it is included in the carrying
are included as a replacement in the cost of the item amount of another asset.
of property, plant and equipment. Any remaining
inspection costs from the previous inspection are Impairment tests are performed on property, plant
derecognised. and equipment when there is an indicator that they
may be impaired. When the carrying amount of an
Major spare parts and stand by equipment which item of property, plant and equipment is assessed to
are expected to be used for more than one year are be higher than the estimated recoverable amount,
included in property, plant and equipment. an impairment loss is recognised immediately in
profit or loss to bring the carrying amount in line
Subsequent to initial recognition, property, plant with the recoverable amount.
and equipment is measured at cost less accumulated
depreciation and any accumulated impairment An item of property, plant and equipment is
losses. derecognised upon disposal or when no future
economic benefits are expected from its continued
Depreciation of an asset commences when the asset use or disposal. Any gain or loss arising from the
is available for use as intended by management. derecognition of an item of property, plant and
Depreciation is charged to write off the asset’s equipment, determined as the difference between
carrying amount over its estimated useful life to its the net disposal proceeds, if any, and the carrying
estimated residual value, using a method that best amount of the item, is included in profit or loss when
reflects the pattern in which the asset’s economic the item is derecognised.
benefits are consumed by the company. Leased
assets are depreciated in a consistent manner over 1.11 Leases
the shorter of their expected useful lives and the
lease term. Depreciation is not charged to an asset if The company assesses whether a contract is, or
its estimated residual value exceeds or is equal to its contains a lease, at the inception of the contract.
carrying amount. Depreciation of an asset ceases at
the earlier of the date that the asset is classified as A contract is, or contains a lease if the contract
held for sale or derecognised. conveys the right to control the use of an identified
asset for a period of time in exchange for
consideration.
 Kadisco Paint and Adhesive Industry S.C.

Accounting Policies (Contd.)

In order to assess whether a contract is, or contains
a lease, management determine whether the asset
under consideration is “identified”, which means that
the asset is either explicitly or implicitly specified
in the contract and that the supplier does not have
a substantial right of substitution throughout the
period of use.
Once management has concluded that the contract
deals with an identified asset, the right to control
the use thereof is considered. To this end, control
over the use of an identified asset only exists when
the company has the right to substantially all of the
economic benefits from the use of the asset as well
as the right to direct the use of the asset.
determined, the company uses its incremental
borrowing rate.
Lease payments included in the measurement of the
lease liability comprise the following:
• fixed lease payments, including in-substance
fixed payments, less any lease incentives;
• variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
• the amount expected to be payable by the
company under residual value guarantees;

In circumstances where the determination of • the exercise price of purchase options, if the
whether the contract is or contains a lease requires company is reasonably certain to exercise the
significant judgement, the relevant disclosures are option;
provided in the significant judgments and sources of
estimation uncertainty section of these accounting • lease payments in an optional renewal period if
policies. the company is reasonably certain to exercise an
extension option; and
Company as lessee
• penalties for early termination of a lease, if the
A lease liability and corresponding right-of-use asset
lease term reflects the exercise of an option to
are recognised at the lease commencement date,
terminate the lease.
for all lease agreements for which the company is a
lessee, except for short-term leases of 12 months or
The lease liability is presented as a separate line item
less, or leases of low value assets. For these leases,
on the Statement of Financial Position.
the company recognises the lease payments as
an operating expense on a straight-line basis over
The lease liability is subsequently measured by
the term of the lease unless another systematic
increasing the carrying amount to reflect interest
basis is more representative of the time pattern in
on the lease liability (using the effective interest
which economic benefits from the leased asset are
method) and by reducing the carrying amount to
consumed.
reflect lease payments made. Interest charged on
the lease liability is included in finance costs (note 9).
The various lease and non-lease components of
contracts containing leases are accounted for
The company remeasures the lease liability (and
separately, with consideration being allocated to
makes a corresponding adjustment to the related
each lease component on the basis of the relative
right-of-use asset) when:
stand-alone prices of the lease components and
the aggregate stand-alone price of the non-lease
• there has been a change to the lease term, in
components (where non-lease components exist).
which case the lease liability is remeasured by
discounting the revised lease payments using a
Details of leasing arrangements where the company
revised discount rate;
is a lessee are presented in note 14 Leases (company
as lessee).
• there has been a change in the assessment of
whether the company will exercise a purchase,
Lease liability
termination or extension option, in which case
The lease liability is initially measured at the present the lease liability is remeasured by discounting
value of the lease payments that are not paid at the the revised lease payments using a revised
commencement date, discounted by using the rate discount rate;
implicit in the lease. If this rate cannot be readily
18

Accounting Policies (Contd.)
• there has been a change to the lease payments
due to a change in an index or a rate, in
which case the lease liability is remeasured
by discounting the revised lease payments
using the initial discount rate (unless the
lease payments change is due to a change in a
floating interest rate, in which case a revised
discount rate is used);
• there has been a change in expected payment
under a residual value guarantee, in which case
the lease liability is remeasured by discounting
the revised lease payments using the initial
discount rate;
• a lease contract has been modified and the
lease modification is not accounted for as a
separate lease, in which case the lease liability
is remeasured by discounting the revised
payments using a revised discount rate.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right- of-use asset, or is recognised in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.
Right-of-use assets
Lease payments included in the measurement of the
lease liability comprise the following:
1.12 Intangible assets
• the initial amount of the corresponding lease
liability;
• any lease payments made at or before the
commencement date;
• any initial direct costs incurred;
• any estimated costs to dismantle and
remove the underlying asset or to restore
the underlying asset or the site on which it is
located, when the company incurs an obligation
to do so, unless these costs are incurred to
produce inventories; and
• less any lease incentives received.
When the company incurs an obligation for the costs
to dismantle and remove a leased asset, restore the
site on which it is located or restore the underlying
assets to the condition required by the terms and
conditions of the lease, a provision is recognised
in the Statement of Financial Position in note
Provisions.
19
Financial Statements
Right-of-use assets are subsequently measured at
cost less accumulated depreciation and impairment
losses.
Right-of-use assets are depreciated over the lease
term of the underlying asset using straight line
item. However, if a lease transfers ownership of
the underlying asset or the cost of the right-of-use
asset reflects that the company expects to exercise
a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying
asset. Depreciation starts at the commencement
date of a lease.
Right-of-use assets are depreciated over the lease
periods, which is the lower of the useful life of the
underlying leased asset.
The useful life and depreciation method of each
asset are reviewed at the end of each reporting
year. If the expectations differ from previous
estimates, the change is accounted for prospectively
as a change in accounting estimate. Each part of a
right-of-use asset with a cost that is significant in
relation to the total cost of the asset is depreciated
separately.
The depreciation charge for each year is recognised
in profit or loss unless it is included in the carrying
amount of another asset.
An intangible asset is recognised when:
• it is probable that the expected future
economic benefits that are attributable to the
asset will flow to the entity; and
• the cost of the asset can be measured reliably.
Intangible assets are initially recognised at cost.
Intangible assets are carried at cost less any
accumulated amortisation and any impairment
losses.
The amortisation period and the amortisation
method for intangible assets are reviewed every
period-end.
The Company has computer software and
amortisation is provided to write down these
intangible assets, on a straight line basis over their
useful lives, ranging from two to seven years.
 Kadisco Paint and Adhesive Industry S.C.
Accounting Policies (Contd.)
1.13 Impairment of assets
The company assesses at each end of the reporting
period whether there is any indication that an asset
may be impaired. If any such indication exists, the
company estimates the recoverable amount of the
asset.
Irrespective of whether there is any indication of
impairment, the company also:
• tests intangible assets with an indefinite useful
life or intangible assets not yet available for
use for impairment annually by comparing its
carrying amount with its recoverable amount.
This impairment test is performed during the
annual period and at the same time every
period.
• tests goodwill acquired in a business
combination for impairment annually.
If there is any indication that an asset may be
impaired, the recoverable amount is estimated for
the individual asset. If it is not possible to estimate
the recoverable amount of the individual asset, the
recoverable amount of the cash-generating unit to
which the asset belongs is determined.
The recoverable amount of an asset or a cash-
generating unit is the higher of its fair value less
costs to sell and its value in use.
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. That reduction is
an impairment loss.
An impairment loss of assets carried at cost less
any accumulated depreciation or amortisation
is recognised immediately in profit or loss. Any
impairment loss of a revalued asset is treated as a
revaluation decrease.
An entity assesses at each reporting date whether
there is any indication that an impairment loss
recognised in prior periods for assets other than
goodwill may no longer exist or may have decreased.
If any such indication exists, the recoverable
amounts of those assets are estimated.
The increased carrying amount of an asset other
than goodwill attributable to a reversal of an
impairment loss does not exceed the carrying
20
amount that would have been determined had no
impairment loss been recognised for the asset in
prior periods.
A reversal of an impairment loss of assets carried at
cost less accumulated depreciation or amortisation
other than goodwill is recognised immediately in
profit or loss. Any reversal of an impairment loss of a
revalued asset is treated as a revaluation increase.
1.14 Inventories
Inventories are measured at the lower of cost and
net realisable value on weighted average basis.
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.
The cost of inventories comprises of all costs of
purchase, costs of conversion and other costs
incurred in bringing the inventories to their present
location and condition.
The cost of inventories of items that are not
ordinarily interchangeable and goods or services
produced and segregated for specific projects
is assigned using specific identification of the
individual costs.
The cost of inventories is assigned using the
weighted average cost formula. The same cost
formula is used for all inventories having a similar
nature and use to the entity.
When inventories are sold, the carrying amount
of those inventories are recognised as an expense
in the period in which the related revenue is
recognised. The amount of any write-down of
inventories to net realisable value and all losses
of inventories are recognised as an expense in the
period the write-down or loss occurs. The amount
of any reversal of any write-down of inventories,
arising from an increase in net realisable value,
are recognised as a reduction in the amount of
inventories recognised as an expense in the period in
which the reversal occurs.
1.15 Financial instruments
Financial instruments held by the company are
classified in accordance with the provisions of IFRS 9
Financial Instruments.

Accounting Policies (Contd.)
Broadly, the classification possibilities, which are
adopted by the company ,as applicable, are as
follows:
Financial assets which are debt instruments:
• Amortised cost. (This category applies only
when the contractual terms of the instrument
give rise, on specified dates, to cash flows that
are solely payments of principal and interest
on principal, and where the instrument is held
under a business model whose objective is met
by holding the instrument to collect contractual
cash flows); or
Financial liabilities:
• Amortised cost; or
Note 3 Financial instruments and risk management
presents the financial instruments held by the
company based on their specific classifications.
All regular way purchases or sales of financial assets
are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases
or sales of financial assets that require delivery
of assets within the time frame established by
regulation or convention in the marketplace.
The specific accounting policies for the
classification, recognition and measurement of each
type of financial instrument held by the company are
presented below:
Trade and other receivables
Classification
Trade and other receivables, excluding, when
applicable, VAT and prepayments, are classified as
financial assets subsequently measured at amortised
cost (note 18).
They have been classified in this manner because
their contractual terms give rise, on specified
dates to cash flows that are solely payments of
principal and interest on the principal outstanding,
and the company’s business model is to collect
the contractual cash flows on trade and other
receivables.
Recognition and measurement
Trade and other receivables are recognised when
the company becomes a party to the contractual
21
Financial Statements
provisions of the receivables. They are measured,
at initial recognition, at fair value plus transaction
costs, if any.
They are subsequently measured at amortised cost.
The amortised cost is the amount recognised on
the receivable initially, minus principal repayments,
plus cumulative amortisation (interest) using the
effective interest method of any difference between
the initial amount and the maturity amount,
adjusted for any loss allowance.
Application of the effective interest method
For receivables which contain a significant financing
component, interest income is calculated using the
effective interest method, and is included in profit or
loss in finance income.
The application of the effective interest method
to calculate interest income on trade receivables
is dependent on the credit risk of the receivable as
follows:
• The effective interest rate is applied to the
gross carrying amount of the receivable,
provided the receivable is not credit impaired.
The gross carrying amount is the amortised cost
before adjusting for a loss allowance.
• If a receivable is a purchased or originated as
credit-impaired, then a credit-adjusted effective
interest rate is applied to the amortised cost in
the determination of interest. This treatment
does not change over the life of the receivable,
even if it is no longer credit-impaired.
• If a receivable was not purchased or originally
credit-impaired, but it has subsequently become
credit-impaired, then the effective interest
rate is applied to the amortised cost of the
receivable in the determination of interest. If, in
subsequent periods, the receivable is no longer
credit impaired, then the interest calculation
reverts to applying the effective interest rate to
the gross carrying amount.
Trade and other receivables denominated in
foreign currencies
When trade and other receivables are denominated
in a foreign currency, the carrying amount of the
receivables are determined in the foreign currency.
The carrying amount is then translated to the
 Kadisco Paint and Adhesive Industry S.C.

Accounting Policies (Contd.)

Ethiopian Birr equivalent using the spot rate at the Write off policy
end of each reporting period. Any resulting foreign
The company writes off a receivable when there is
exchange gains or losses are recognised in profit or
information indicating that the counterparty is in
loss in selling and administrative expenses (note 7).
severe financial difficulty and there is no realistic
prospect of recovery, e.g. when the counterparty
Details of foreign currency risk exposure and the
has been placed under liquidation or has entered
management thereof are provided in the financial
into bankruptcy proceedings. Receivables written
instruments and risk management (note 3).
off may still be subject to enforcement activities
under the company recovery procedures, taking
Impairment
into account legal advice where appropriate. Any
The company recognises a loss allowance for recoveries made are recognised in profit or loss.
expected credit losses on trade and other
receivables, excluding VAT and prepayments. The Credit risk
amount of expected credit losses is updated at each
Details of credit risk are included in the trade
reporting date.
and other receivables (note 18) and the financial
instruments and risk management note (note 3).
The company measures the loss allowance for
trade and other receivables at an amount equal to
Derecognition
lifetime expected credit losses (lifetime ECL), which
represents the expected credit losses that will result Refer to the derecognition section of the accounting
from all possible default events over the expected policy for the policies and processes related to
life of the receivable. derecognition.

Measurement and recognition of expected credit
losses
The company makes use of a provision matrix
as a practical expedient to the determination
of expected credit losses on trade and other
receivables. The provision matrix is based on
historic credit loss experience, adjusted for factors
that are specific to the debtors, general economic
conditions and an assessment of both the current
and forecast direction of conditions at the reporting
date, including the time value of money, where
appropriate.
The customer base is widespread and does not show
significantly different loss patterns for different
customer segments. The loss allowance is calculated
on a collective basis for all trade and other
receivables in totality. Details of the provision matrix
is presented in note 18.
An impairment gain or loss is recognised in profit or
loss with a corresponding adjustment to the carrying
amount of trade and other receivables, through use
of a loss allowance account. The impairment loss is
included in selling and administration expenses in
profit or loss as a movement in credit loss allowance
(note 7).
22
Any gains or losses arising on the derecognition of
trade and other receivables is included in profit or
loss in the derecognition gains (losses) on financial
assets at amortised cost.
Borrowings and loans from related parties
Classification
Loans from group companies, loans from
shareholders and borrowings, if any, are classified
as financial liabilities subsequently measured at
amortised cost.
Recognition and measurement
Borrowings and loans from related parties are
recognised when the company becomes a party to
the contractual provisions of the loan. The loans are
measured, at initial recognition, at fair value plus
transaction costs, if any.
They are subsequently measured at amortised cost
using the effective interest method.
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,

Accounting Policies (Contd.)
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the
amortised cost of a financial liability.
Interest expense, calculated on the effective
interest method, is included in profit or loss in
finance costs, net (note 9.)
Borrowings expose the company to liquidity risk and
interest rate risk. Refer to note 3 for details of risk
exposure and management thereof.
Loans denominated in foreign currencies
When borrowings are denominated in a foreign
currency, the carrying amount of the loan is
determined in the foreign currency. The carrying
amount is then translated to the Ethiopian Birr
equivalent using the spot rate at the end of each
reporting period. Any resulting foreign exchange
gains or losses are recognised in profit or loss in the
selling and administrative expenses (note 7).
Details of foreign currency risk exposure and the
management thereof are provided in the specific
loan notes and in the financial instruments and risk
management (note 3).
Derecognition
Refer to the derecognition section of the accounting
policy for the policies and processes related to
derecognition.
Trade and other payables
Classification
Trade and other payables (note 25), excluding VAT
and amounts received in advance, are classified
as financial liabilities subsequently measured at
amortised cost.
Recognition and measurement
They are recognised when the company becomes
a party to the contractual provisions, and are
measured, at initial recognition, at fair value plus
transaction costs, if any.
They are subsequently measured at amortised cost
using the effective interest method.
The effective interest method is a method of
calculating the amortised cost of a financial liability
23
Financial Statements
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the
amortised cost of a financial liability.
If trade and other payables contain a significant
financing component, and the effective interest
method results in the recognition of interest
expense, then it is included in profit or loss in finance
costs, net (note 9).
Trade and other payables expose the company
to liquidity risk and possibly to interest rate risk.
Refer to note 3 for details of risk exposure and
management thereof.
Trade and other payables denominated in foreign
currencies
When trade payables are denominated in a foreign
currency, the carrying amount of the payables are
determined in the foreign currency. The carrying
amount is then translated to the Ethiopian Birr
equivalent using the spot rate at the end of each
reporting period. Any resulting foreign exchange
gains or losses are recognised in profit or loss in the
selling and administrative expenses (note 7).
Details of foreign currency risk exposure and the
management thereof are provided in the financial
instruments and risk management note (note 3).
Derecognition
Refer to the “derecognition” section of the
accounting policy for the policies and processes
related to derecognition.
Cash and cash equivalents
Cash and cash equivalents comprise balances with
less than three months’ maturity from the date of
acquisition, including cash in hand, deposits held at
call with Banks and other short-term highly liquid
investments with original maturities of three months
or less.
For the purposes of the cash flow statement, cash
and cash equivalents include cash and balances with
banks.
 Kadisco Paint and Adhesive Industry S.C.

Accounting Policies (Contd.)

Bank overdrafts 1.16 Share capital and equity

Bank overdrafts are initially measured at fair value,
and are subsequently measured at amortised cost,
using the effective interest rate method.
Derecognition
Financial assets
The company derecognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards
of ownership of the asset to another party. If the
company neither transfers nor retains substantially
all the risks and rewards of ownership and continues
to control the transferred asset, the company
recognises its retained interest in the asset and an
associated liability for amounts it may have to pay.
If the company retains substantially all the risks
and rewards of ownership of a transferred financial
asset, the company continues to recognise the
financial asset and also recognises a collateralised
borrowing for the proceeds received.
Financial liabilities
The company derecognises financial liabilities
when, and only when, the company obligations are
discharged, cancelled or they expire. The difference
between the carrying amount of the financial
liability derecognised and the consideration paid and
payable, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss.
Reclassification
Financial assets
The company only reclassifies affected financial
assets if there is a change in the business model
for managing financial assets. If a reclassification
is necessary, it is applied prospectively from the
reclassification date. Any previously stated gains,
losses or interest are not restated.
The reclassification date is the beginning of the first
reporting period following the change in business
model which necessitates a reclassification.
Financial liabilities
Financial liabilities are not reclassified.
Ordinary shares are recognised at par value and
classified as ‘share capital’ in equity. Any amounts
received from the issue of shares in excess of par
value is classified as ‘share premium’ in equity.
Dividends are recognised as a liability in the
company in which they are declared.
1.17 Legal reserve
In accordance with article 434 of the Commercial
Code of Ethiopia 2021, a Share Company each year
is required to transfers one-twentieth (5%) of
its net profit to the legal reserve fund until such
fund amount to one-twentieth (5%) of the capital.
However, the Company has a policy to transfer
one-twentieth (5%) of its net profit to legal reserve
fund, beyond the legally required limit of (5%) of the
capital.
1.18 Reserve for remeasurement of retirement benefit
obligation
Gains and losses resulting from remeasurements of
the net defined benefit liability are included in other
comprehensive income and are not reclassified to
profit or loss in subsequent periods.
Reserve for remeasurement of retirement benefit
obligation includes remeasurement of net defined
benefit liabilit, which comprises the actuarial
losses arises as a result of change in demographic
assumptions, financial assumptions and loss arises as
a result of experience differs from the assumptions
made at the previous valuation.
1.19 Provisions and contingencies
Provisions are recognised when:
• the company has a present obligation as a result
of a past event;
• it is probable that an outflow of resources
embodying economic benefits will be required
to settle the obligation; and
• a reliable estimate can be made of the
obligation.
The amount of a provision is the present value
of the expenditure expected to be required to
settle the obligation. Where some or all of the

24

Accounting Policies (Contd.)
expenditure required to settle a provision is
expected to be reimbursed by another party, the
reimbursement shall be recognised when, and only
when, it is virtually certain that reimbursement will
be received if the entity settles the obligation. The
reimbursement shall be treated as a separate asset.
The amount recognised for the reimbursement shall
not exceed the amount of the provision. Provisions
are not recognised for future operating losses.
If an entity has a contract that is onerous, the
present obligation under the contract shall be
recognised and measured as a provision.
A constructive obligation to restructure arises only
when an entity:
• has a detailed formal plan for the restructuring,
identifying at least:
- the business or part of a business
concerned;
- the principal locations affected;
- the location, function, and approximate
number of employees who will be
25
Financial Statements
compensated for terminating their
services;
- the expenditures that will be undertaken;
and
- when the plan will be implemented; and
• has raised a valid expectation in those affected
that it will carry out the restructuring by
starting to implement that plan or announcing
its main features to those affected by it.
After their initial recognition contingent
liabilities recognised in business combinations
that are recognised separately are subsequently
measured at the higher of:
• the amount that would be recognised as a
provision; and
• the amount initially recognised less cumulative
amortisation.
Contingent assets and contingent liabilities are not
recognised. Contingencies are disclosed in note 30.
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements

for the year ended 31 March 2023

2. New Standards and Interpretations

2.1 Standards and interpretations effective and adopted in the current year

In the current year, the company has adopted the following standards and interpretations that are effective for
the current financial year and that are relevant to its operations:

Standard/ Interpretation: Effective date: Years Expected impact:

beginning on or after
• Annual Improvement to IFRS Standards 2018- January 1, 2022 The impact of the amendments is
2020: Amendments to IFRS 1 not material.
• Reference to the Conceptual Framework: January 1, 2022 The impact of the amendments is
Amendments to IFRS 3 not material.
• Annual Improvement to IFRS Standards January 1, 2022 The impact of the amendments is
2018-2020: Amendments to IFRS 9 not material.
• Property, Plant and Equipment: Proceeds January 1, 2022 The impact of the amendments is
before Intended Use: Amendments to IAS 16 not material.
• Annual Improvement to IFRS Standards 2018- January 1, 2022 The impact of the amendments is
2020: Amendments to IAS 41 not material.

2.2 Standards and Interpretations early adopted

The company has not chosen to early adopt any new and revised standards and interpretations.

2.3 Standards and interpretations not yet effective

The company has chosen not to early adopt the following standards and interpretations, which have been
published and are mandatory for the company’s accounting periods beginning on or after April 1, 2023 or later
periods:

Standard/ Interpretation: Effective date: Expected impact:

Years beginning on
or after
• Amendments to IFRS 10 and IAS 28: Sale or Not yet determined Unlikely there will be a material impact
Contribution of Assets between an Investor
and its Associate or Joint Venture
• Deferred tax related to assets and January 1, 2023 Unlikely there will be a material impact
liabilities arising from a single transaction -
Amendments to IAS 12
• Disclosure of accounting policies: January 1, 2023 Unlikely there will be a material impact
Amendments to IAS 1 and IFRS Practice
Statement 2.
• Definition of accounting estimates: January 1, 2023 Unlikely there will be a material impact
Amendments to IAS 8
• Classification of Liabilities as Current or Non- January 1, 2023 Unlikely there will be a material impact
Current - Amendment to IAS 1

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
3. Financial instruments and risk management

Categories of financial instruments

Categories of financial assets
2023
Note(s) Amortised cost Total
Trade and other receivables 18 40,934,086 40,934,086
Cash and cash equivalents 19 764,009,360 764,009,360
804,943,446 804,943,446

2022
Note(s) Amortised cost Total
Trade and other receivables 18 25,144,297 25,144,297
Cash and cash equivalents 19 407,955,458 407,955,458
433,099,755 433,099,755

Categories of financial liabilities

2023
Note(s) Amortised cost Leases Total
Trade and other payables 25 329,455,156 - 329,455,156
Borrowings 26 362,245,016 - 362,245,016
Lease obligations 24 - 10,568,045 10,568,045
691,700,172 10,568,045 702,268,217

2022
Note(s) Amortised cost Leases Total
Trade and other payables 25 267,099,489 - 267,099,489
Borrowings 26 98,376,726 - 98,376,726
Lease obligations 24 - 4,636,466 4,636,466
365,476,215 4,636,466 370,112,681

Capital risk management

The company’s objective when managing capital (which includes share capital, borrowings, working capital
and cash and cash equivalents) is to maintain a flexible capital structure that reduces the cost of capital to an
acceptable level of risk and to safeguard the company’s ability to continue as a going concern while taking
advantage of strategic opportunities in order to maximise stakeholder returns sustainably.

The company manages capital structure and makes adjustments to it in light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to maintain the capital structure, the company may
adjust the amount of dividends paid to the shareholders, issue new shares, issue new debt to replace existing
debt with different characteristics and/or sell assets to reduce debt.

The company monitors capital utilising a number of measures, including the gearing ratio. The gearing ratio is
calculated as net borrowings (total borrowings less cash) divided by shareholders’ equity.
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

The Company is subject to thin capitalization as required on the new tax proclamation 979/2016, which requires
foreign controlled entities to have an average debt to equity ratio not to be in excess of 1:2 for a tax year,
otherwise a deduction will not be allowable for interest paid determined according to the formula stated in the
proclamation. Accordingly, the management reviews the capital structure of the Company on an annual basis with
a view to ensuring that the company’s net gearing ratio is optimal and is also in compliance with the regulatory
requirements set by the Ethiopian Government.

The capital structure and gearing ratio of the company at the reporting date was as follow.

Figures in Ethiopian Birr Note(s) 2023 2022

Borrowings 26 362,245,016 98,376,726
Lease liabilities 24 10,568,045 4,636,466
Total borrowings 372,813,061 103,013,192
Cash and cash equivalents 19 (764,009,360) (407,955,458)
Net borrowings (391,196,299) (304,942,266)
Equity 521,421,770 407,429,705
Gearing ratio (75)% (75)%

Financial risk management

Overview
The company is exposed to the following risks from its use of financial instruments:

• Credit risk;
• Liquidity risk; and
• Market risk (currency risk, price risk and legal risk)

The directors has overall responsibility for the establishment and oversight of the company’s risk management
framework.

The company’s risk management policies are established to identify and analyse 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.

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.

The company is exposed to credit risk on loans receivable (at amortised cost), debt instruments at fair value
through oci, trade and other receivables, cash and cash equivalents, and financial guarantees.

Credit risk for exposures other than those arising on cash and cash equivalents, are managed by making use of
credit approvals, limits and monitoring. The company only deals with reputable counterparties with consistent
payment histories. Sufficient collateral or guarantees are also obtained when necessary. Each counterparty
is analysed individually for creditworthiness before terms and conditions are offered. The analysis involves
making use of information submitted by the counterparties as well as external bureau data (where available).
Counterparty credit limits are in place and are reviewed and approved by management. The exposure to credit
risk and the creditworthiness of counterparties is continuously monitored.

Credit risk exposure arising on cash and cash equivalents is managed by the Company through dealing with well-
established financial institutions.
28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
Credit loss allowances for expected credit losses are recognised for all debt instruments, but excluding those
measured at fair value through profit or loss. Credit loss allowances are also recognised for loan commitments
and financial guarantee contracts.

In order to calculate credit loss allowances, management determine whether the loss allowances should be
calculated on a 12 month or on a lifetime expected credit loss basis. This determination depends on whether
there has been a significant increase in the credit risk since initial recognition. If there has been a significant
increase in credit risk, then the loss allowance is calculated based on lifetime expected credit losses. If not, then
the loss allowance is based on 12 month expected credit losses. This determination is made at the end of each
financial period. Thus the basis of the loss allowance for a specific financial asset could change year on year.

Management apply the principle that if a financial asset’s credit risk is low at year end, then, by implication, the
credit risk has not increased significantly since initial recognition. In all such cases, the loss allowance is based
on 12 month expected credit losses. Credit risk is assessed as low if there is a low risk of default (where default
is defined as occurring when amounts are 90 days past due). When determining the risk of default, management
consider information such as payment history to date, industry in which the customer is employed, period for
which the customer has been employed, external credit references etc. In any event, if amounts are 30 days
past due, then the credit risk is assumed to have increased significantly since initial recognition. Credit risk is
not assessed to be low simply because of the value of collateral associated with a financial instrument. If the
instrument would not have a low credit risk in the absence of collateral, then the credit risk is not considered low
when taking the collateral into account. Trade receivable and contract assets which do not contain a significant
financing component are the exceptions and are discussed below.

Where necessary, the assessment for a significant increase in credit risk is made on a collective basis.
Management typically adopt this approach when information relevant to the determination of credit risk is
not available on an individual instrument level. Often, the only information available on individual instruments
which could indicate an increase in credit risk, is “past due” information. It is typical that more forward-looking
information is generally more readily available on a collective basis. Therefore, making the determination on
a collective basis, helps to ensure that credit loss allowances are determined on the basis of lifetime expected
credit losses before they reach the point of being past due. Forward looking, macro-economic information is
applied on a collective basis when it is readily available without undue cost or effort. When loss allowances are
determined on a collective basis, management determines the loss allowances by grouping financial instruments
on the basis of shared credit risk characteristics.

For trade receivables and contract assets which do not contain a significant financing component, the loss
allowance is determined as the lifetime expected credit losses of the instruments. For all other trade receivables,
contract assets and lease receivables, IFRS 9 permits the determination of the credit loss allowance by either
determining whether there was a significant increase in credit risk since initial recognition or by always making
use of lifetime expected credit losses. Management have chosen as an accounting policy, to make use of lifetime
expected credit losses. Management does therefore not make the annual assessment of whether the credit risk
has increased significantly since initial recognition for trade receivables, contract assets or lease receivables.

The maximum exposure to credit risk is presented in the table below:

2023 2022
Gross Credit loss Amortised Gross Credit loss Amortised
carrying allowance cost / fair carrying allowance cost / fair
amount value amount value
Trade receivables 18 41,587,717 (6,766,770) 34,820,947 27,381,988 (6,166,354) 21,215,634
Cash and cash 19 764,009,360 - 764,009,360 407,955,458 - 407,955,458
equivalents
805,597,077 (6,766,770) 798,830,307 435,337,446 (6,166,354) 429,171,092
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

Liquidity risk
The company is exposed to liquidity risk, which is the risk that the company will encounter difficulties in meeting
its obligations as they become due.

The company manages its liquidity risk by effectively managing its working capital, capital expenditure and cash
flows. The financing requirements are met through a mixture of cash generated from operations and long and
short term borrowings. Committed borrowing facilities are available for meeting liquidity requirements and
deposits are held at reputable banking institutions.

There have been no significant changes in the liquidity risk management policies and processes since the prior
reporting period.

The maturity profile of contractual cash flows of non-derivative financial liabilities, and financial assets held to
mitigate the risk, are presented in the following table. The cash flows are undiscounted contractual amounts.

2023
Notes Less than 1 1 to 2 years Total Carrying
year amount
Non-current liabilities
Lease liabilities 24 - 9,453,227 9,453,227 6,023,981
Current liabilities
Trade and other payables 25 329,455,156 - 329,455,156 329,455,156
Borrowings 26 362,245,016 - 362,245,016 362,245,016
Lease liabilities 24 4,986,256 - 4,986,256 4,544,064
696,686,428 9,453,227 706,139,655 702,268,217

2022
Notes Less than 1 2 to 5 years Total Carrying
year amount
Non-current liabilities
Lease liabilities 24 - 2,400,000 2,400,000 1,278,832
Current liabilities
Trade and other payables 25 267,099,489 - 267,099,489 267,099,489
Borrowings 26 98,376,726 - 98,376,726 98,376,726
Lease liabilities 24 4,100,000 - 4,100,000 3,357,634
369,576,215 2,400,000 371,976,215 370,112,681

Foreign currency risk

The company is exposed to foreign currency risk as a result of certain transactions, mainly foreign purchases,
which are denominated in foreign currencies mainly USD. Foreign currency exchange risk arises from future
commercial transactions, recognized assets and liabilities. Monetary assets and liabilities held in foreign
currencies are closely monitored to ensure that the risk of being materially affected by adverse foreign currency
fluctuations is effectively managed and minimized.

There have been no significant changes in the foreign currency risk management policies and processes since the
prior reporting period.

Detail of the Company’s exposure to currency risk is included under cash and cash equivalent (note 19).

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
4. Revenue from contracts with customers
Figures in Ethiopian Birr Note(s) 2023 2022
Sales of goods 1,197,977,833 689,541,198
Disaggregation of revenue from contracts with
customers
The company disaggregates revenue by products as
follows:
Sale of goods
Construction products 936,226,098 510,083,879
Industrial products 112,510,276 61,626,227
Automotive products 75,361,454 39,459,800
Wood work products 71,481,741 26,168,465
Adhesive products 61,173,731 85,931,605
Universal paste 3,583,176 1,059,056
1,260,336,476 724,329,032
Sales discount and return (62,358,643) (34,787,834)
1,197,977,833 689,541,198
Timing of revenue recognition
At a point in time
Sale of goods 1,197,977,833 689,541,198

5. Cost of sales
Figures in Ethiopian Birr Note(s) 2023 2022
Material consumption of goods sold 857,010,777 527,407,263
Employee costs 8 12,718,458 10,781,513
Manufacturing expenses 7,632,442 3,962,913
Depreciation and amortisation 5,277,075 5,210,710
Total 882,638,752 547,362,399
Material consumption of goods sold
Work in progress, beginning 5,549,830 5,070,386
Material consumption 860,670,371 557,201,876
Work in progress, ending (4,799,195) (5,549,830)
Cost of production 861,421,006 556,722,432
Finished goods, beginning 43,066,167 13,750,998
Finished goods, ending (47,476,396) (43,066,167)
857,010,777 527,407,263
Manufacturing - Depreciation and amortisation
Depreciation of property, plant, and equipment 5,200,050 5,133,685
Amortization of right-of-use assets 77,025 77,025
5,277,075 5,210,710
Manufacturing expenses:
Utilities 4,853,954 1,222,610
Insurance-machinery 2,034,848 2,039,259
Repairs and maintenance-machinery 743,640 701,044
7,632,442 3,962,913

6. Other income
Figures in Ethiopian Birr Note(s) 2023 2022
Sales of used empty drums 2,966,395 2,146,119
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

7. Selling and administrative expenses

Figures in Ethiopian Birr Note(s) 2023 2022

Employee costs 8 48,335,170 40,300,011
Impairment loss on inventory 20,568,279 1,671,062
Royalty/TSF-group 21,383,011 7,113,143
Depreciation, amortisation and impairments 11,148,538 9,937,718
Advertisement and promotion 4,373,319 610,090
Canteen expense 4,422,566 2,678,969
Systems expenses 2,190,241 2,683,629
Legal and professional fees 3,654,945 1,125,264
Donations 3,097,000 352,716
Travel 1,837,345 1,346,621
Repairs and maintenance 1,242,236 2,148,524
Security charges 1,088,483 1,088,999
Fuel 1,023,663 792,693
Miscellaneous 565,686 108,315
Communications 702,632 1,110,313
Hotel lodging and boarding 686,827 320,953
Stationery and office supplies 664,182 326,709
Cleaning and sanitation 491,079 601,537
Sundry 385,970 101,421
Membership fees 183,520 23,101
Demurrage charges 108,774 570,958
Entertainment 79,260 2,166
Additional prior periods tax expenses 30,593 1,553,259
Fines and penalties 11,384 907,881
Training and workshop expenses - 1,002,790
Bad debts write off and other allowances - 120,544
128,274,703 78,599,386
Royalty
The Company pays 3% royalty to Asian Paints Limited, the ultimate holding Company. The payment is on the
incremental net sales over base sales of all products excluding adhesives products manufactured and sold by
the Company.

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
8. Employee costs

Figures in Ethiopian Birr Note(s) 2023 2022

Direct employee costs (Cost of sales)
Basic 10,172,824 8,699,562
Pension and provident fund contribution 912,282 929,240
Overtime 791,021 484,890
Uniform expense 842,331 667,821
12,718,458 10,781,513
Indirect employee costs (Selling and administrative
expenses)
Basic 32,962,836 29,211,998
Other benefits 5,234,166 5,118,383
Bonus 7,094,298 3,169,241
Medical aid - company contributions 1,024,249 261,353
Pension and provident fund contribution 1,074,289 1,943,118
Personal protective equipment 319,050 136,104
Overtime 430,642 310,462
Employee share option plan 195,640 149,352
48,335,170 40,300,011
Total employee costs
Direct employee costs 12,718,458 10,781,513
Indirect employee costs 48,335,170 40,300,011
61,053,628 51,081,524

9. Finance costs, net

Figures in Ethiopian Birr 2023 2022

Finance income:
Interest income (27,392,200) (18,505,720)
Unrealized foreign currency exchange gain (16,629,923) (2,161,202)
Other interest (income)/expense - (5,458)
Finance costs: (44,022,123) (20,672,380)
Bank charges 30,765,118 4,234,788
Interest on borrowings 13,234,816 1,189,165
Realized foreign currency exchange loss 9,707,361 16,597,401
Exchange loss on parent company loan accounted as borrowing cost to 6,919,995 4,274,630
the extent of market interest rate
Unrealized foreign currency exchange loss 4,687,280 3,319,462
Interest on building lease liability 729,204 380,465
Interest on prior period tax obligations - 1,341,888
22,021,651 10,665,419
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

10. Tax expense

Figures in Ethiopian Birr Note(s) 2023 2022

Major components of the tax expense
Current
Current tax expense 56,272,200 15,095,532
Prior year profit tax expenses 4,126,874 496,924
60,399,074 15,592,456
Deferred
Deferred income tax charge/(credit) to profit or loss 12 (8,851,172) (2,904,525)
51,547,902 12,687,931
Current tax expense
Profit before tax 167,408,705 50,064,059
Tax effect of adjustments on taxable income
Provision for bank charges 22,589,013 -
Impairment loss on inventory 7 20,568,279 1,671,062
Depreciation per Company policy 13&15 9,179,018 8,797,003
Interest on prior period tax obligations 7,267,082 1,341,888
Depreciation of right of use asset 14 7,246,595 6,351,425
Exchange loss on parent company loan accounted as 9 6,919,995 4,274,630
borrowing cost to the extent of market interest rate
Provision for employee benefits (retirement benefit and 23 2,376,093 3,164,042
annual leave)
Provision for employee benefits 1,008,850 -
Interest on building lease liability 7 729,204 380,465
Impairment allowance on trade receivables 18 600,417 4,996,054
Education fees 408,570 372,031
Demurrage charges 218,590 570,958
Donation 7 97,000 -
Entertainment 7 79,260 -
Additional prior periods tax expenses 7 30,593 1,553,259
Fines and penalties - non-deductable 7 11,384 907,881
Bad debts written off 7 - 120,544
Additional Custom duty paid for prior period - 7,561,064
Interest on prior year VAT payment - 5,458
Unrealized foreign currency exchange loss 9 4,687,280 3,319,462
Provision for discount (158,006) (1,099,559)
Less:
Retirement benefit and annual leave paid 23 (378,039) (2,648,931)
Tax allowed rent, lease interest, and leasehold land (4,184,384) (3,579,359)
amortisation expense
Tax holiday on in-house emulsion production (4,371,533) (7,612,500)

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
10. Tax expense (contd.)

Figures in Ethiopian Birr Note(s) 2023 2022

Depreciation as per Tax Law (Annex I) (10,737,843) (9,525,570)
Unrealized foreign currency exchange gain 9 (16,629,923) (2,161,202)
Interest income taxed at source 9 (27,392,200) (18,505,720)
Taxable profit 187,574,000 50,318,444
Tax expense at 30% 56,272,200 15,095,532

The income tax rate was 30% in 2023 (2022: 30%).

Tax assessment
The Company was under comprehensive tax assessment for the period from 2018/19 to 2019/20. The assessment
is finalized and an assessment report was communicated to the Company in 2021/22. The assessment resulted in
an additional payment request of ETB 11.4m, containing principal tax amount, interest and penalty. Out of this
balance, the Company has settled ETB 2.1m and got Covid amnesty for ETB 4.3M. The Company has submitted an
appeal for the remaining balance.

Tax holiday on In-house emulsion production

As an incentive for emulsion production facility expansion, which started operation in May 2019, the Ethiopian
Revenue and Customs Authority, through letter number 3.1.1/151/12 dated 1 November 2019 granted the
Company a five-year tax holiday on profit generated from the expansion starting from September 2019.

The Company has not sold its products to external user yet. The profit on the expansion project is calculated
by adding a twenty percent (20%) margin on internally used products. The twenty percent margin is charged
assuming the profit that would have been earned had the products been sold to third parties.

11. Current tax payable (receivable)

Figures in Ethiopian Birr 2023 2022

Balance at the begining of the year 10,621,834 35,946,634
Taxes paid (10,621,834) (35,946,634)
Current year tax-trading 56,272,200 15,095,532
Advance profit tax paid during the year (9,632,553) (4,473,698)
46,639,647 10,621,834
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

12. Deferred tax

Figures in Ethiopian Birr 2023 2022

Deferred tax assets
Provision for stock obsolescence 9,792,235 3,621,751
Provision for bank charges on group loan repayment 6,776,704 -
Provision for retirement obligation and leave pay 4,094,144 2,743,745
Provision for doubtful debtors 2,030,031 1,849,906
Right of use assets (946,525) 135,177
Unrealised foreign exchange loss (gain) (1,506,794) 1,629,867
Property pant and equipment (4,201,709) (3,544,515)
Total deferred tax liability 16,038,086 6,435,931

Deferred tax asset has been recognized in these financial statements as result of difference in accounting and
tax treatment of PPEs, employment benefit and other temporary differences. The balance is composed of the
following:

Figures in Ethiopian Birr Note(s) 2023 2022

Reconciliation of deferred tax asset / (liability)
At beginning of year 6,435,931 3,355,070
Provision for stock obsolescence 6,170,484 501,318
Provision for bank charges on group loan repayment 6,776,704 -
Provision for retirement obligation and leave pay charged 599,416 154,534
to profit or loss
Provision for doubtful debtors 180,125 1,498,816
Right of use assets (1,081,702) (203,031)
Unrealised foreign exchange loss (gain) (3,136,663) 1,629,868
Property, plant and equipment (657,192) (676,978)
Deferred tax expense (income) charged to profit or noss 8,851,172 2,904,525
Provision for retirement obligation and leave pay charged 750,983 176,334
to OCI
16,038,086 6,435,931
Deferred tax asset/(liability) on provision for stock
obsolescence
Provision for stock obsolescence Note(s) 17 32,640,783 12,072,504
Less: Tax written-down value - -
Total timing difference 32,640,783 12,072,504
Deferred tax asset 9,792,235 3,621,751

Deferred tax asset/(liability) on provision for bank charges

Provision for bank charges 22,589,013 -
Less: Tax written-down value - -
Total timing difference 22,589,013 -
Deferred tax asset 6,776,704 -

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
12. Deferred tax (contd.)

Figures in Ethiopian Birr Note(s) 2023 2022

Deferred tax asset/(liability) on provision for
retirement obligation and leave pay
Retirement benefit obligation and leave pay 23 14,025,187 11,794,750
Less: Benefit paid 378,039 2,648,931
Total timing difference 13,647,148 9,145,819
Deferred tax asset 4,094,144 2,743,745
Deferred tax asset/(liability) on provision for doubtful
debtors
Provision for doubtful debtors 18 6,766,770 6,166,354
Less: Tax written-down value - -
Total timing difference 6,766,770 6,166,354
Deferred tax asset 2,030,031 1,849,906
Deferred tax asset/(liability) on right of use assets
Prepayments made in respect of right of use assets 1,648,380 8,699,742
Less: Carrying amount less lease liability 14&24 4,803,463 8,249,152
Total timing difference (3,155,083) 450,590
Deferred tax liability (asset) (946,525) 135,177
Deferred tax asset/(liability) on unrealised foreign
exchange loss (gain)
Provision for unrealised foreign exchange loss (gain) (5,022,648) 5,432,891
Less: Tax written-down value - -
Total timing difference (5,022,648) 5,432,891
Deferred tax liability (asset) (1,506,794) 1,629,867
Deferred tax asset/(liability) on property, plant and
equipment
Carrying amount 13 51,049,473 53,596,825
Less: Tax written-down value (Annex-I) 37,043,776 41,781,769
Total timing difference 14,005,697 11,815,056
Deferred tax asset 4,201,709 3,544,515

13. Property, plant and equipment

2023 2022
Cost or Accumulated Carrying Cost or Accumulated Carrying
revaluation depreciation value revaluation depreciation value
Buildings 25,554,128 (15,854,522) 9,699,606 24,964,784 (14,607,829) 10,356,955
Plant and machinery 62,409,981 (33,529,136) 28,880,845 62,409,981 (29,575,780) 32,834,201
Furniture and fixtures 1,227,083 (985,714) 241,369 1,227,083 (918,521) 308,562
Motor vehicles 22,801,335 (15,686,410) 7,114,925 18,800,935 (13,253,346) 5,547,589
Office equipment 288,034 (285,326) 2,708 288,034 (280,013) 8,021
Computers and 10,091,482 (4,981,462) 5,110,020 8,681,376 (4,139,878) 4,541,498
accessories
Machinery under 1,682,246 - 1,682,246 1,359,834 - 1,359,834
installation and other
property in transit
Total 124,054,289 (71,322,570) 52,731,719 117,732,027 (62,775,367) 54,956,660
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

13. Property, plant and equipment (contd.)

Reconciliation of property, plant and equipment - 2023

Opening Additions Transfers Depreciation Total

balance
Buildings 10,356,955 - 589,345 (1,246,694) 9,699,606
Plant and machinery 32,834,201 - - (3,953,356) 28,880,845
Furniture and fixtures 308,562 - - (67,193) 241,369
Motor vehicles 5,547,589 - 4,000,400 (2,433,064) 7,114,925
Office equipment 8,021 - - (5,313) 2,708
Computers and accessories 4,541,498 1,410,105 - (841,583) 5,110,020
Machinery under 1,359,834 4,912,157 (4,589,745) - 1,682,246
installation and other
property in transit
54,956,660 6,322,262 - (8,547,203) 52,731,719

Reconciliation of property, plant and equipment - 2022

Opening Additions Disposals Transfers Depreciation Total

balance
Buildings 8,985,465 - - 2,517,664 (1,146,174) 10,356,955
Plant and machinery 36,734,712 87,000 - - (3,987,511) 32,834,201
Furniture and fixtures 240,525 146,602 - - (78,565) 308,562
Motor vehicles 7,717,462 - - - (2,169,873) 5,547,589
Office equipment 14,603 - - - (6,582) 8,021
Computers and 4,836,553 523,809 (42,382) - (776,482) 4,541,498
accessories

Machinery under 1,631,225 2,246,273 - (2,517,664) - 1,359,834

installation and other
property in transit
60,160,545 3,003,684 (42,382) - (8,165,187) 54,956,660

Upon impairment review, the net book value of property, plant and equipment does not exceed its recoverable
value as at the end of the reporting period. Thus, the Directors are of the opinion that allowance for impairment
is not required.

Included in property, plant and equipment are fully depreciated assets having historical cost of 17,406,008 (2021:
ETB 13,063,442).

Machinery under installation and other property in transit relate to machinery and equipment that have not been
operational and ready for use.

38
 39
Notes to the Financial Statements (Contd.)

Financial Statements
14. Right of use assets
Right of use assets - Land
The Company has leased land in various locations. The lease contracts are for fixed period and both parties have
the right to terminate the contract with prior notice. The Directors believe neither party will terminate the lease
contracts before the end of the lease period.

Right of use assets - Building

The Company also has leased various residential buildings and warehouses in Addis Ababa that have a lease term
ranging from one to four years.

Figures in Ethiopian Birr 2023 2022

Cost:
At the beginning of the year 21,057,634 18,422,172
Addition 15,053,590 6,176,658
Lease contracts elapsed (15,315,197) (3,541,196)
20,796,027 21,057,634
Accumulated amortization:
At the beginning of the year 12,808,483 9,852,425
Charge for the year 7,246,595 6,351,425
Accumulated depreciation on lease contracts elapsed (14,630,559) (3,395,367)
At the end of the year 5,424,519 12,808,483
15,371,508 8,249,152

15. Intangible assets

2023 2022
Cost / Accumulated Carrying Cost / Accumulated Carrying
Valuation amortisation value Valuation amortisation value
Computer software 2,526,837 (2,041,054) 485,783 2,526,837 (1,409,239) 1,117,598

Reconciliation of intangible assets - 2023

Opening balance Amortisation Total
Computer software 1,117,598 (631,815) 485,783

Reconciliation of intangible assets - 2022

Opening balance Amortisation Total
Computer software 1,749,414 (631,816) 1,117,598

Intangible assets are in respect of the Company’s purchased Management Information Systems which are
currently in use. There are no internally developed intangible assets accounted as intangible assets.
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

16. Investment securities

Figures in Ethiopian Birr 2023 2022
Held to maturity
Bonds 8,000,000 7,000,000
Non-current assets
Held to maturity 5,500,000 7,000,000
Current assets
Held to maturity 2,500,000 -
8,000,000 7,000,000

This represents three Ethiopian Government Saving Bonds with a face value of ETB 2,500,000 bearing interest
rate of 5.5% with maturity date on March 7, 2022, ETB 2,500,000 bearing interest rate of 5.5% with maturity
date on March 13, 2023, ETB 2,000,000 bearing interest rate of 8% with maturity date on June 22, 2025 and
ETB 1,000,000 bearing interest rate of 8% with maturity date on August 31, 2027. Interest income from the
investments is exempted from income tax and is collected annually. There is no active trading for the saving
bonds.

The company has not reclassified any financial assets from cost or amortised cost to fair value, or from fair value
to cost or amortised cost during the current or prior year.

There were no gains or losses realised on the disposal of held to maturity financial assets in 2023 and 2022, as
there were no financial assets disposed.

17. Inventories
Figures in Ethiopian Birr 2023 2022
Raw materials 236,314,725 163,675,992
Finished goods 47,476,396 43,066,167
Packing materials 16,978,844 9,056,260
300,769,965 215,798,419
Inventories (write-downs) (32,640,783) (12,072,505)
268,129,182 203,725,914
Goods in transit 47,528,629 34,496,649
Work in progress 4,799,195 5,549,830
320,457,006 243,772,393
Reconciliation inventories (write-downs)
Balance at the begenning of the year 12,072,505 10,401,443
Impairment loss recognised 20,568,279 1,671,062
Closing balance 32,640,783 12,072,505

40
 41
Notes to the Financial Statements (Contd.)

Financial Statements
18. Trade and other receivables
Figures in Ethiopian Birr 2023 2022
Financial instruments:
Trade receivables 34,331,767 25,691,692
Related party trade receivables 7,255,950 1,690,296
Loss allowance (6,766,770) (6,166,354)
Trade receivables at amortised cost 34,820,947 21,215,634
Interest receivable 1,751,952 1,428,619
Staff receivables 3,968,940 2,115,545
Other related party receivables 392,247 384,499
Non-financial instruments:
Advance and prepayments 91,327,622 58,127,623
132,261,708 83,271,920
Split between non-current and current portions
Current assets 132,261,708 83,271,920
Financial instrument and non-financial instrument components of
trade and other receivables
Financial instruments 40,934,086 25,144,297
Non-financial instruments 91,327,622 58,127,623
132,261,708 83,271,920

Exposure to credit risk

Trade receivables inherently expose the company to credit risk, being the risk that the company will incur financial
loss if customers fail to make payments as they fall due.

In order to mitigate the risk of financial loss from defaults, the company only deals with reputable customers
with consistent payment histories. Sufficient collateral or guarantees are also obtained when appropriate.
Each customer is analysed individually for creditworthiness before terms and conditions are offered. Statistical
credit scoring models are used to analyse customers. These models make use of information submitted by the
customers as well as external bureau data (where available). Customer credit limits are in place and are reviewed
and approved by credit management committees. The exposure to credit risk and the creditworthiness of
customers, is continuously monitored.

There have been no significant changes in the credit risk management policies and processes since the prior
reporting period.

The average credit period on trade receivables is 30 days (2022: 30 days). No interest is charged on outstanding
trade receivables.

A loss allowance is recognised for all trade receivables, in accordance with IFRS 9 Financial Instruments, and is
monitored at the end of each reporting period. In addition to the loss allowance, trade receivables are written
off when there is no reasonable expectation of recovery, for example, when a debtor has been placed under
liquidation. Trade receivables which have been written off are not subject to enforcement activities.

The company measures the loss allowance for trade receivables by applying the simplified approach which is
prescribed by IFRS 9. In accordance with this approach, the loss allowance on trade receivables is determined
as the lifetime expected credit losses on trade receivables. These lifetime expected credit losses are estimated
using a provision matrix, which is presented below. The provision matrix has been developed by making use of
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

18. Trade and other receivables (contd.)

past default experience of debtors but also incorporates forward looking information and general economic
conditions of the industry as at the reporting date.

The estimation techniques explained have been applied for the first time in the current financial period, as
a result of the adoption of IFRS 9. Trade receivables were previously impaired only when there was objective
evidence that the asset was impaired. The impairment was calculated as the difference between the carrying
amount and the present value of the expected future cash flows.

There has been no change in the estimation techniques or significant assumptions made during the current
reporting period.

Age of trade and related party receivables

Figures in Ethiopian Birr 2023 2022
0-90 days past due 24,376,059 14,615,700
91-180 days past due 9,359,215 2,167,528
181-270 days past due 1,788,588 3,960,938
271-365 days past due 177,322 471,468
More than 365 days past due 5,886,533 6,166,354
41,587,717 27,381,988

Reconciliation of loss allowances

The following table shows the movement in the loss allowance (lifetime expected credit losses) for lease
receivables:

Figures in Ethiopian Birr 2023 2022

Opening balance in accordance with IFRS 9 (6,166,354) (1,170,300)
Remeasurement of loss allowance (600,417) (4,996,054)
Closing balance (6,766,770) (6,166,354)

Exposure to currency risk

Refer to note 3 for details of currency risk management for trade receivables.

Fair value of trade and other receivables

The fair value of trade and other receivables approximates their carrying amounts.

19. Cash and cash equivalents

Figures in Ethiopian Birr 2023 2022
Cash and cash equivalents consist of:
Bank balances 716,743,583 358,219,160
Restricted cash at bank 47,265,777 49,736,298
764,009,360 407,955,458

42
 43
Notes to the Financial Statements (Contd.)

Financial Statements
19. Cash and cash equivalents (contd.)

Restricted cash at bank balance represents blocked amount by the company’s bank for the purchase of foreign
currency for importation of raw materials as at the year end.

As the Company deals only with reputable banks, the directors do not believe that there is a risk of impairment on
bank balances.

Exposure to currency risk

The company is exposed to currency risk related to certain bank accounts which are denominated in a foreign
currency.

The net carrying amounts, in Ethiopian Birr, of cash and cash equivalents, are denominated in the following
currencies. The amounts have been presented in Ethiopian Birr by converting the foreign currency amount at the
closing rate at the reporting date.

Figures in Ethiopian Birr 2023 2022

Ethiopian Birr 4,325,220 32,697,397
The net carrying amounts, in foreign currency of the above exposure was
as follows:
Foreign currency amount
US Dollar 79,211 641,552
The following closing exchange rates were applied at reporting date:
Ethiopian Birr per unit of foreign currency:
US Dollar 54.604 50.966

20. Share capital

Figures in Ethiopian Birr 2023 2022

Authorised and Issued
364,000 (2022:329,000) Ordinary shares with par value of ETB 1,000 each 364,000,000 329,000,000
The Company has paid up capital of ETB 364,000,000 which is fully paid
(2021:ETB 329,000,000). Each share has a par value of ETB 1,000.
Shares have equal voting rights and share equally in the distribution of
profit.
Reconciliation of number of shares issued:
At the beginning of the year 329,000 250,000
Dividend capitalised 35,000 79,000
364,000 329,000

This additional capital injected by the shareholders of the Company is by transferring dividend to capital. This has
not resulted in any change in the Company’s shareholding structuret
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

21. Legal reserve

The legal reserve is a statutory reserve to which no less than one-twentieth (5%) of the annual net profit of the
Company is transferred until such fund amounts to one-twentieth (5%) of the capital of the Company.

Figures in Ethiopian Birr 2023 2022

At the beginning of the year 43,313,258 41,465,024
Transfer from retained earnings 5,793,040 1,848,234
49,106,298 43,313,258

22. Reserve for remeasurement of retirement benefit obligation

Gains and losses resulting from remeasurements of the net defined benefit liability are included in other
comprehensive income and are not reclassified to profit or loss in subsequent periods.

Reserve for remeasurement of retirement benefit obligation includes remeasurement of net defined benefit
liability – comprises the actuarial losses arises as a result of change in demographic assumptions, financial
assumptions and loss arises as a result of experience differs from the assumptions made at the previous
valuation.

The total loss to be recognised for the year ending March 31, 2023 was calculated to be ETB 1,752,292 as shown
below:

Figures in Ethiopian Birr 2023 2022

Balance at the beginning of the year - -
Remeasurement loss on retirement benefit obligation (2,503,275) -
Deferred tax on retirement benefit gain or loss 750,983 -
(1,752,292) -

23. Provision for retirement benefit obligation and leave pay

Figures in Ethiopian Birr 2023 2022

Retirement benefit obligations 8,004,367 4,649,621
Leave pay 5,642,781 4,496,198
13,647,148 9,145,819
Non-current liabilities 11,458,014 7,992,487
Current liabilities 2,189,134 1,153,332
13,647,148 9,145,819

Defined benefit plan

The severance benefit plan is an unfunded defined benefit scheme. The Company does not maintain any assets
for the schemes but ensures that it has sufficient funds for the obligations as they crystallize.
The key financial assumptions are the discount rate and the rate of salary increases. The provision was based
on an independent actuarial valuation performed by Trans Value Consultants using the projected unit credit
method.

44
 45
Notes to the Financial Statements (Contd.)

Financial Statements
22. Reserve for remeasurement of retirement benefit obligation (contd.)

The severance benefits are based on the statutory severance benefit as set out in Labour Proclamation No.
1156/2019. Employees who have served the Company for 5 years and above and are below the retirement age
(i.e. has not met the requirement to access the pension fund) are entitled for the benefit. The final pay-out is
determined by reference to final monthly salary and number of years in service computed as one month salary
of the first year in employment plus one- third of monthly salary for subsequent years to a maximum of twelve
months salary.
Figures in Ethiopian Birr 2023 2022
Carrying value
Retirement benefit obligations 8,004,367 4,649,621
Non-current liabilities 6,472,018 3,792,171
Current liabilities 1,532,349 857,450
8,004,367 4,649,621
Movements for the year
At the beginning of the year 4,649,621 4,429,337
Current service cost 733,794 495,175
Interest cost 431,253 335,602
Remeasurement (gain)/loss 2,503,275 587,781
Benefit paid (313,576) (1,198,274)
8,004,367 4,649,621
Net expense recognised in profit or loss
Current service cost 733,794 495,175
Interest cost 431,253 335,602
1,165,047 830,777
Net expense recognised in other comprehensive income
(Gains)/losses due to change in Demographic assumptions 1,415,515 (133,595)
(Gains)/losses due to change in Financial assumptions 1,029,982 (226,588)
Experience (gains)/losses on Projected Benefit Obligation 57,778 947,964
2,503,275 587,781
Key assumptions used
Assumptions used on last valuation on March 31, 2023.
Economic assumption
The discount rate and salary increases assumed are the key financial assumptions and should be considered
together; it is the difference or ‘gap’ between these rates which is more important than the individual rates in
isolation.
i. Discount rate
The discounting rate should be based on the gross redemption yield on medium to long term risk free
investments. The estimated term of the benefit obligations works out to 10.34 years. For the current
valuation a discount rate of 8 % p.a. compound, has been used.
ii. Salary escalation rate
The salary escalation rate usually consists of at least three components, viz. Regular increments, price
inflation and promotional increases. In addition to this any commitments by the management regarding
future salary increases and the company’s philosophy towards employee remuneration are also to be
taken into account. Again a long-term view as to the trend in salary increase rates has to be taken rather
than be guided by the escalation rates experienced in the immediate past, if they have been influenced by
unusual factors.The assumptions used are summarized in the following table.
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

22. Reserve for remeasurement of retirement benefit obligation (contd.)

Details of interest rate and salary increment assumptions are as follows:

Discount rates used 8.00 % 9.40 %
Basic salary increases allowing for regular increases/price inflation/ 15.00 % 13.00 %
promotional increases

Demographic assumptions
Mortality As per WHO As per WHO
2012 study 2012 study
Disability None None
Employee turnover Management Non-
Category : 16.7% management
Category : 12.5%
Management Non-
Category : 11.1% management
Category : 5%
Normal retirement age 60 years 60 years

Leave pay provision

The annual leave liability is based on the statutory annual leave entitlement as set out in Labour Proclamation
No. 1156/2019. Workers are entitled to 16 working days of paid annual leave on completion of one year of
service plus one working day for every additional year of service. For a worker with 5 years of service, the
period of paid annual leave is 18 working days (one day extra for every two additional years of service).

The income statement charge, in respect change in annual leave liability, included within personnel expenses
includes current service cost, interest cost, and changes in the liability balance because of assumptions used to
calculate the total leave liability payable.

The key financial assumptions used in the calculation of annual live liability are the discount rate and the rate
of salary increases.
Figures in Ethiopian Birr 2023 2022
Carrying value
Annual leave liability 5,642,781 4,496,198
Non-current liabilities 4,985,996 4,200,316
Current liabilities 656,785 295,882
5,642,781 4,496,198
Movements for the year
At the beginning of the year 4,496,198 3,613,590
Current service cost 465,136 1,700,813
Interest cost 324,670 197,816
Remeasurement (gain)/loss 421,240 434,636
Benefits paid (64,463) (1,450,657)
5,642,781 4,496,198

46
 47
Notes to the Financial Statements (Contd.)

Financial Statements
22. Reserve for remeasurement of retirement benefit obligation (contd.)

Figures in Ethiopian Birr 2023 2022

Net expense recognised in profit or loss
Current service cost 465,136 1,700,813
Interest cost 324,670 197,816
Remeasurement (gain)/loss 421,240 434,636
1,211,046 2,333,265

Key assumptions used

Assumptions used on last valuation on March 31, 2023.

Economic assumption
The discount rate and salary increase rate are the key financial assumptions and should be considered
together; it is the difference or ‘gap’ between these rates which is more important than the individual rates in
isolation.

i. Discount rate
The discounting rate is based on the gross redemption yield on medium to long term risk free investments.
The term of the risk free investments has to be consistent with the estimated term of benefit obligations.
The estimated term of the benefit obligations works out to 10.02 years. For the current valuation a
discount rate of 9.4 % p.a. compound has been used.

ii. Salary escalation rate

The salary escalation rate/s usually consists of at least three components, viz. regular increments, price
inflation and promotional increases. In addition to this any commitments by the management regarding
future salary increases and the Company’s philosophy towards employee remuneration are also to be
taken into account. Again a long-term view as to the trend in salary escalation rates has to be taken rather
than guided by the escalation rates experienced in the immediate past, if they have been influenced by
unusual factors.The assumptions used are summarized in the following table.

Details of interest rate and salary increment assumptions are presented in the below table.
Discount rates used 8.00 % 9.40 %
Basic salary increases allowing for regular increases/price inflation/ 15.00 % 13.00 %
promotional increases
Demographic assumptions
Mortality As per WHO As per WHO
2012 study 2012 study
Disability None None
Employee turnover Management Non-
Category : 16.7% management
Category : 12.5%
Management Non-
Category : 11.1% management
Category : 5%
Normal retirement age 60 years 60 years
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

22. Reserve for remeasurement of retirement benefit obligation (contd.)

Leave availment pattern

To estimate liabilities towards leaves availment, an assumption towards leave availment is needed. It is
assumed that 5% of leaves balance as on the valuation date and each subsequent year after the valuation
date will be availed. The balance will be encashed at termination. As per the proclaimation, the leaves can be
postponed only for two years. But since this will become a continuous process, it is assumed that the valuation
day leave balance is consumed at a slower pace.

24. Lease liabilities

Figures in Ethiopian Birr 2023 2022

At beginning of the year 4,636,466 5,846,124
Addition during the year 15,053,590 6,176,658
Interest accrued during the year 729,204 380,465
Termination/reassessment of lease (808,491) (6,374)
Settlement during the year (9,042,724) (7,760,407)
Present value of minimum lease payments 10,568,045 4,636,466
Non-current liabilities 6,023,981 1,278,832
Current liabilities 4,544,064 3,357,634
10,568,045 4,636,466

The company lease obligation is in respect of outstanding lease obligation towards the right of use asset of
residential building, warehouses, and land. The outstanding obligation is repayable in accordance to the term
stipulated in the lease agreements. The obligation is discounted at a rate of 11.5%.

25. Trade and other payables

Figures in Ethiopian Birr 2023 2022

Financial instruments:
Dividend payable 104,751,019 107,184,261
Trade payables 98,006,257 96,187,435
Accruals 51,902,388 9,995,231
Royalty 50,505,369 29,478,015
Related party 21,605,965 20,320,898
Staff payables 1,383,661 403,132
Sundry payables 1,300,497 3,530,517
Non-financial instruments:
Provisions 12,419,440 8,347,780
VAT 9,049,258 5,553,727
Withholding tax 2,244,648 515,311
Personal income tax 1,255,052 1,032,254
Custom duty 398,345 -
Dividend tax payable 11,645 -
354,833,544 282,548,561

48
 49
Notes to the Financial Statements (Contd.)

Financial Statements
25. Trade and other payables (contd.)

Figures in Ethiopian Birr 2023 2022

Financial instrument and non-financial instrument components of
trade and other payables
At amortised cost 329,455,156 267,099,489
Non-financial instruments 25,378,388 15,449,072
354,833,544 282,548,561

The average credit period on purchases of goods is 30 days (2021: 30 days). Normally, no interest is charged on
trade payables. The Company has financial risk management policies in place to ensure that all payables are paid
within the pre- agreed credit terms.

The balance for royalty is payable to Asian Paints Limited.

Exposure to currency risk

Refer to note 3 Financial instruments and financial risk management for details of currency risk management for
trade payables.

The fair value of trade and other payables approximates their carrying amounts.

Dividend payable
As per the double tax treaty agreement signed between the Federal Democratic Republic of Ethiopia and the
Republic of Singapore, where the 51% shareholder (Asian Paint International Private Limited) resides, a 5%
dividend tax is charged on dividend paid/payable to Asian Paint International Private Limited.

Figures in Ethiopian Birr 2023 2022

At beginning of the year 107,184,261 132,787,731
Dividend declared during the year 116,443 1,042,991
Dividend tax (11,644) (77,703)
Paid during the year (2,538,041) (26,568,758)
104,751,019 107,184,261

26. Borrowings
Figures in Ethiopian Birr 2023 2022
Held at amortised cost
Borrowings 362,245,016 98,376,726
Split between non-current and current portions
Current liabilities 362,245,016 98,376,726

The Company has signed three separate loan facility agreements, for an amount equal to USD 2.5m, USD 2m and
USD 3m, with its Parent Company, Asian Paint International Private Limited. The loans bear interest of LIBOR +2%
on drawn balances. No commission or commitment fees are charged on unutilized facility balance. The Company
has fully drawn all the three loans and repaid USD 1,000,000 from the USD 2.5m loan during the accounting
period. The outstanding loan balance, USD 6,500,000, is repayable within one year from the date of receipt. The
loan is obtained without any collateral.
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

26. BORROWINGS (contd.)

Figures in Ethiopian Birr 2023 2022

Movement
Balance at the beginning of the year 98,376,726 28,990,809
Received during the year 300,478,500 96,835,590
Settlement (48,509,213) (28,990,809)
Accrued expense 20,154,811 5,463,795
(8,255,808) (3,922,659)
362,245,016 98,376,726

Exposure to liquidity risk

Refer to note 3 Financial instruments and financial risk management for details of liquidity risk exposure and
management.
Exposure to currency risk
The company is exposed to currency risk related to certain investments in debt instruments which are
denominated in a foreign currency. Management has decided not to make use of foreign exchange contracts to
hedge the risk.
There have been no significant changes in the foreign currency risk management policies and processes since the
prior reporting period.

27. Cash generated from/(used in) operations

Figures in Ethiopian Birr 2023 2022
Profit before taxation 167,408,705 50,064,059
Adjustments for:
Interest on borrowing 9 13,234,816 1,189,165
Depreciation of property, plant and equipment 13 8,547,203 8,165,187
Amortization of right of use asset 14 7,246,595 6,351,425
Exchange loss on parent company loan accounted as 9 6,919,995 4,274,630
borrowing cost to the extent of market interest rate
Amortization of intangible assets 15 631,815 631,816
Net movement in right of use asset due to termination of 14 684,638 145,829
lease contract
Loss on disposal of fixed asset - 5,869
Interest on lease liability 9 729,204 380,465
Provision for retirement benefit obligation and leave pay 23 2,376,093 3,164,042
Termination/reassessment of lease 24 (808,491) (6,374)
Changes in working capital:
Inventories 17 (76,684,613) (81,146,392)
Trade and other receivables 18 (48,989,789) (17,306,813)
Trade and other payables, excluding dividend payable 25 74,718,223 16,431,966
156,014,394 (7,655,126)

50
 51
Notes to the Financial Statements (Contd.)

Financial Statements
28. Tax paid
Figures in Ethiopian Birr 2023 2022
Balance at beginning of the year (10,621,834) (35,946,634)
Current tax for the year recognised in profit or loss (56,272,200) (15,095,532)
Balance at end of the year 46,639,647 10,621,834
(20,254,387) (40,420,332)

29. Related parties

Relationships Related Company

Controls the Company
Controls the Company
Ultimate Holding Company
Holding Company
Controlled by Holding Company
Controlled by Directors
Controlled by Directors
Controlled by Directors
Controlled by Directors
Controlled by Directors
Controlled by Directors
Controlled by Directors
Close family member
Close family member
Close family member
Close family member
Close family member
Close family member
Close family member
Close family member
Close family member
Board of Directors and senior executives
Shareholders
Asian Paints International Private Limited
Asian Paints International Pvt. Ltd
Berger Paints Emirates Ltd Co LL
Samatra P.L.C
Kadisco General Hospital P.L.C
Skytex General Trading LLC
MCC Import Enterprise
Kadco Group PBDA P.L.C.
KADISCO General Hospital PLC
KADCO Group
Afatco Trading PLC
Elham Abdela
Azeb Mohammed
Yesuf Abdulhamid Zeidi T/Haimanot
Abdulrezack Ibrahim Abdulkadir
ASAMCO Trading and Industry P.L.C
Anhar Seid
Nesredin Mohammed Adem
Ismael Khalifa
 Kadisco Paint and Adhesive Industry S.C.

Notes to the Financial Statements (Contd.)

29. Related parties (contd.)

Related party balances

Openning Advance Closing balance
balance (Settlement)
Due to related parties reported in trade and other
payables, excluding dividend and royalty payable
Berger Paints Emirates Ltd Co LL (47,102,337) (14,602,253) (61,704,590)
Asian Paints Limited (10,007,741) 3,772,104 (6,235,637)
Asian Paints International Pvt. Ltd (9,274,657) 2,220,189 (7,054,468)
Berger Paints Bahrain W.L.L (1,026,683) - (1,026,683)
Elham Abdela (1,447,698) 375,198 (1,072,500)
Samatra PLC (671,523) - (671,523)
Skytex General Trading LLC (2,520) - (2,520)
Kadisco General Hospital PLC 41,993 - 41,993
(69,491,166) (8,234,762) (77,725,928)

Related party loan and royalty payable balances

i. As disclosed in note 26, the Company received loan from its parent company at rate and terms comparable to
the average commercial rate of interest terms prevailing in the market. The loan is unsecured.
ii. As disclosed in note 7 and 25, the Company pays 3% royalty to Asian Paints Limited, the ultimate holding
Company. The payment is on the incremental net sales over base sales of all products excluding adhesives
products manufactured and sold by the Company. The royalty payable balance as at March, 31 2023 is ETB
50,505,369 (2022: ETB 29,478,015).

Opening Advance Closing

balance (Settlement) balance
Due from related parties reported in trade and other
receivables
Frewoini B/Meskel 2,271,467 2,713,714 4,985,181
Azeb Mohammed 1,438,339 791,474 2,229,813
Kadisco General Hospital PLC 98,234 59,743 157,977
KADCO Group 50,925 96,467 147,392
Ismael Khalifa 2,488 - 2,488
MCC Import Enterprise 470 1,648 2,118
Salahadin Khalifa - 5,066 5,066
Anhar Seid (2,053,565) 2,053,565 -
Yesuf Abdulhamid Zeidi T/Haimanot (115,286) (159,380) (274,666)
ASAMCO Trading and Industry PLC (1,462) 3,483 2,021
Nesredin Mohammed Adem (1,314) - (1,314)
Alamin Mohammed - (126) (126)
1,690,296 5,565,654 7,255,950

Related party transactions

Compensation to directors and other key management
2023 2022
Salary and other employment benefits 11,956,174 11,854,170

52
 53
Notes to the Financial Statements (Contd.)

Financial Statements
30. Contingencies
The Company was under comprehensive tax audit for the years ended March 31, 2016 to March 31, 2018 and
for import duty tax audit for the years ended August 12, 2015 to August 12, 2020 and from August 13, 2020 to
July 2, 2022. The assessments have resulted in additional tax demand of ETB 76.35 million. The cases are under
discussion with the Tax Authority and the Directors strongly believe that the case will result in a favorable
outcome for the Company.

31. Commitments
Authorised capital expenditure
As at March 31, 2023, the company is committed to ETB 1,682,246 for future capital expenditure.

32. Events after the reporting period

As at the date of authorization of these financial statements for issue, there were no major events that would
impact on the amounts and/or disclosures in these financial statements. (2022: none).

33. Comparative figures

When necessary, comparative figures have been adjusted to conform with changes in the current year.
54
Buildings Machinery Motor Furniture and Office Computers Total
vehicles fixtures Equipment and
accessories
ETB ETB ETB ETB ETB ETB ETB
Cost:
At 1 April 2021 22,447,120 62,322,982 18,800,935 1,080,481 288,034 8,202,051 113,141,603
Additions 2,517,664 87,000 - 146,602 - 523,809 3,275,075
Adjustment - - - - - (44,484) -
At 31 March 2022 24,964,784 62,409,982 18,800,935 1,227,083 288,034 8,681,376 116,372,194
At 1 April 2022 24,964,784 62,409,982 18,800,935 1,227,083 288,034 8,681,376 116,372,194
Kadisco Paint and Adhesive Industry S.C.

For the year ended 31 March 2023

Additions 589,345 - 4,000,400 - - 1,410,105 5,999,850

At 31 March 2023 25,554,129 62,409,982 22,801,335 1,227,083 288,034 10,091,481 122,372,044
Accumulated depreciation
At 1 April 2021 14,357,623 34,795,983 9,368,688 842,210 248,198 4,558,041 64,170,745
Charge for the year 1,157,487 5,660,234 1,744,365 68,551 9,379 1,779,664 10,419,680
At 31 March 2022 15,515,110 40,456,216 11,113,053 910,761 257,577 6,337,705 74,590,425
At 1 April 2022 15,515,110 40,456,216 11,113,053 910,761 257,577 6,337,705 74,590,425
Charge for the year 1,258,008 5,539,550 2,041,296 65,143 8,438 1,825,408 10,737,843
At 31 March 2023 16,773,118 45,995,766 13,154,349 975,904 266,016 8,163,113 85,328,267
Net book value
At 31 March 2022 9,449,674 21,953,766 7,687,882 316,323 30,457 2,343,670 41,781,769
At 31 March 2023 8,781,011 16,414,216 9,646,985 251,179 22,019 1,928,368 37,043,776
Annex-I Property, Plant and Equipment Tax Written-Down Value
PT Asian Paints Indonesia
Contents
Directors’ Statement Letter........................................................................................................................................................................4

Independent Auditor’s Report............................................................................................................................................................... 5-6

Statement of Financial Position............................................................................................................................................................. 7-8

Statement of Profit and Loss......................................................................................................................................................................9

Statement of Changes in Equity...............................................................................................................................................................10

Statement of Cash Flows......................................................................................................................................................................11-12

Notes to The Financial Statements...................................................................................................................................................13-44

 PT Asian Paints Indonesia

DIRECTORS’ STATEMENT LETTER

REGARDING RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
AS OF MARCH 31,2023 AND FOR THE YEAR THE YEAR ENDED

I am, the undersigned:

Name : Abhilasha Kannan

Office Address : Palma Tower 16th Floor,

Jl R.A Kartini II-S Kav.6 Sektor II Pondok Pinang,
Kebayoran Lama- Jakarta Selatan 12310.

Domicille as stated in ID card : Pondok Indah Golf Apartment Jasmine Tower,

Jl Metro Pondok Indah Jakarta Selatan No. 1075.
Pondok Pinang, Kebayoran Lama

Phone Number : 0811-1252-7872

Position : President Director

Declare that:

1. I am responsible for the preparation and representation of the Company’s financial statements;

2. The Company’s financial statements have been prepared and presented in accordance with Indonesian Financial
Accounting Standards;

3. a. All information in the Company’s financial statements have been disclosed in a complete and truthful
manner;

b. The Company’s financial statements do not contain misleading material information or facts, nor do they
omit material information and facts;

4. I am responsible for the Company’s internal control system.

Thus, this statement letter is made truthfully.

For and on behalf of the Board of Directors,

Jakarta, May 2, 2023

Abhilasha Kannan
President Director

4

Independent Auditor’s Report
The Shareholders, Boards of Commissioners and
Directors
PT Asian Paints Indonesia
Opinion
We have audited the financial statements of PT Asian
Paints Indonesia (the “Company”), which comprise the
statement of financial position as of March 31, 2023, and
the statement of profit or loss and other comprehensive
income, statement of changes in equity and statement
of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant
accounting policies.
In our opinion, the accompanying financial statements
present fairly, in all material respects, the financial
position of the Company as of March 31, 2023, and its
financial performance and its cash flows for the year
then ended in accordance with Indonesian Financial
Accounting Standards.
Basis for Opinion
We conducted our audit in accordance with Standards
on Auditing established by the Indonesian Institute of
Certified Public Accountants. Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements
paragraph of our report. We are independent of the
Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements
in Indonesia, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation and fair
presentation of the financial statements in accordance
with Indonesian Financial Accounting Standards, and
for such internal control as management determines
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management
is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
5
Financial Statements
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.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 Standards on Auditing 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
financial statements.
As part of an audit in accordance with Standard on
Auditing, we exercise professional judgment and
maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material
misstatement of the 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
 PT Asian Paints Indonesia
Independent Auditor’s Report (Contd.)
• 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.
6
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the 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.
Kantor Akuntan Publik
TANUBRATA SUTANTO FAHMI BAMBANG & Rekan
May 2, 2023
 7
Statement of Financial Position

Financial Statements
March 31, 2023

Notes March 31, 2023 March 31, 2022

Rp Rp
ASSETS
CURRENT ASSETS
Cash and cash equivalents 5 20,445,864,058 81,683,850,768
Trade accounts receivable 6
Related parties 307,779,210 11,189,880
Third parties 58,615,411,863 58,686,650,767
Other accounts receivable 7
Related parties 721,923,804 626,986,315
Third parties - 160,274,000
Inventories 8 35,488,843,957 39,898,130,655
Prepaid expenses 1,155,278,521 1,206,813,750
Prepaid taxes 9 24,737,966,043 26,094,868,660
Deposits and advance payments 2,051,783,497 2,803,617,853
Other current asset 231,297,000 460,425,000
Total Current Assets 143,756,147,953 211,632,807,648
NON-CURRENT ASSETS
Estimated claim for tax refund 25 3,757,663,684 3,516,518,536
Right of use assets – net 10 3,169,581,852 2,327,878,854
Property, plant and equipment – net 11 231,182,525,652 238,716,939,586
Intangible asset – net 210,000,514 513,319,963
Other non-current asset 944,751,960 616,255,408
Total Non-Current Assets 239,264,523,662 245,690,912,347
TOTAL ASSETS 383,020,671,615 457,323,719,995

See accompanying Notes to the Financial Statements on Exhibit E which are an integral part of the Financial
Statements taken as a whole
 PT Asian Paints Indonesia

Statement of Financial Position (Contd.)

March 31, 2023

Notes March 31, 2023 March 31, 2022

Rp Rp
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable 12
Related parties 1,306,720,239 615,389,824
Third parties 21,748,086,367 22,613,258,331
Other accounts payable 13
Related parties 1,576,531,426 3,010,498,072
Third parties 3,736,028,396 12,307,351,284
Advance receipt 644,246,103 574,213,700
Taxes payable 14 996,017,300 1,481,089,818
Accrued expenses 15 45,473,489,199 52,362,870,645
Lease liabilities 16 1,700,270,760 1,113,231,569
Total Current Liabilities 77,181,389,790 94,077,903,243
NON-CURRENT LIABILITIES
Post-employment benefits liability 17 2,017,147,795 1,743,382,429
Lease liabilities 16 777,192,480 100,542,281
Other non-current liabilities 2,855,327,000 -
Total Non-Current Liabilities 5,649,667,275 1,843,924,710
TOTAL LIABILITIES 82,831,057,065 95,921,827,953
EQUITY
Capital stock – Rp 11,985,000 par value per share
Authorized 100,000 shares at March 31, 2023 and March 31,
2022
Subscribed and paid-up – 82,985 shares at March 31, 2023 18 994,575,225,000 937,071,195,000
(March 31, 2022: 78,187 shares)
Other comprehensive income 651,898,148 144,762,857
Deficit (695,037,508,598) (575,814,065,815)
TOTAL EQUITY 300,189,614,550 361,401,892,042
TOTAL LIABILITIES AND EQUITY 383,020,671,615 457,323,719,995

See accompanying Notes to the Financial Statements on Exhibit E which are an integral part of the Financial
Statements taken as a whole

For and on behalf of the Board of Directors

Jakarta, May 2, 2023

Mrs. Abhilasha Kannan

President Director

8
 9
Statement of Profit or Loss and Other Comprehensive Income

Financial Statements
For the year ended March 31, 2023

Notes Year 2022-23 Year 2021-22

Rp Rp
INCOME
Net sales 19,26 135,847,813,591 138,339,027,708
Other income 20 3,429,558,011 7,380,053,828
Total Income 139,277,371,602 145,719,081,536
COST OF SALES
Material consumptions 21 99,764,639,593 104,006,501,129
GROSS PROFIT 39,512,732,009 41,712,580,407
EXPENSES
Selling and marketing expenses 22 60,459,701,971 87,883,231,480
Salaries and benefits 54,038,332,929 54,969,284,559
General and administrative expenses 23 22,656,647,300 36,067,254,864
Depreciation expenses 11 13,324,260,013 13,985,990,519
Depreciation from right-of-use of assets 10 4,143,321,002 4,665,999,076
Manufacturing expenses 24 3,184,772,298 3,326,366,369
Amortization expenses 303,319,449 290,364,554
Interest expense - 180,917,654
Interest expense from lease liabilities 184,227,071 163,961,823
Foreign exchange loss (gain) – net 441,592,759 (692,729,624)
Total Expenses 158,736,174,792 200,840,641,274
LOSS BEFORE INCOME TAX EXPENSE (119,223,442,783) (159,128,060,867)
INCOME TAX EXPENSE 25 - -
NET LOSS FOR THE YEAR (119,223,442,783) (159,128,060,867)
OTHER COMPREHENSIVE INCOME
Gain on remeasurement of defined benefits obligation 17 507,135,291 109,399,000
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (118,716,307,492) (159,018,661,867)

See accompanying Notes to the Financial Statements on Exhibit E which are an integral part of the Financial
Statements taken as a whole

For and on behalf of the Board of Directors

Jakarta, May 2, 2023

Mrs. Abhilasha Kannan

President Director
 PT Asian Paints Indonesia

Statement Of Changes In Equity

For the year ended March 31, 2023

Note Paid-up Capital Other Deficit Total Equity

Comprehensive
Income
Rp Rp Rp Rp
Balances as of 592,059,000,000 35,363,857 (416,686,004,948) 175,408,358,909
March 31, 2021
Increase in capital stock 18 345,012,195,000 - - 345,012,195,000
Other comprehensive - 109,399,000 - 109,399,000
income for the year
Net loss for the year - - (159,128,060,867) (159,128,060,867)
Balances as of 937,071,195,000 144,762,857 (575,814,065,815) 361,401,892,042
March 31, 2022
Increase in capital stock 18 57,504,030,000 - - 57,504,030,000
Other comprehensive loss - 507,135,291 - 507,135,291
for the year
Net loss for the year - (119,223,442,783) (119,223,442,783)
Balances as of 994,575,225,000 651,898,148 (695,037,508,598) 300,189,614,550
March 31, 2023

See accompanying Notes to the Financial Statements on Exhibit E

which are an integral part of the Financial Statements taken as a whole

10
 11
Statement of Cash Flows

Financial Statements
For the year ended March 31, 2023

Year 2022-23 Year 2021-22

Rp Rp
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before income tax expense (119,223,442,783) (159,128,060,867)
Adjustments for:
Depreciation and amortization 13,627,579,462 14,276,355,073
Depreciation of right-of-use of assets 4,143,321,002 4,665,999,076
Impairment of inventories 1,453,779,000 2,130,990,000
Employee benefits expense 797,939,491 569,567,000
Interest expense 184,227,071 344,879,477
Loss on disposal of property, plant and equipment 11,018,836 -
Loss on the derecognition of right of use assets - 54,365,036
Interest income (872,796,275) (7,172,326,426)
(Reversal of impairment) impairment loss on trade accounts receivable (2,654,668,485) 24,437,783
Operating cash flows before changes in working capital (102,533,042,681) (144,233,793,848)
Changes in working capital:
Trade and other account receivables 2,334,380,570 (14,590,311,754)
Inventories 2,955,507,698 (8,681,636,641)
Prepaid expenses 51,535,229 61,352,344
Prepaid taxes 1,356,902,617 (5,667,402,807)
Deposits and advance payments 751,834,356 (1,428,530,434)
Other current asset 229,128,000 562,793,789
Estimated claim for tax refund (45,912,782) (870,382,536)
Other non-current asset (328,496,552) (546,505,408)
Trade and other account payables (10,342,162,323) (8,751,825,384)
Advance receipt 70,032,403 574,213,700
Taxes payable (485,072,518) 884,706,039
Accrued expenses (6,889,381,446) 22,025,900,388
Other non-current liabilities 2,855,327,000 -
Cash used in operations (110,019,420,429) (160,661,422,552)
Receipt of tax refund 783,006,824 260,625,796
Payment for post-employment benefit (17,038,834) -
Payment of corporate income tax (978,239,190) (1,548,010,000)
Net Cash Used in Operating Activities (110,231,691,629) (161,948,806,756)
 PT Asian Paints Indonesia

Statement of Cash Flows (Contd.)

Year 2022-23 Year 2021-22

Rp Rp
CASH FLOW FROM INVESTING ACTIVITIES
Interest income received 1,033,070,275 7,012,052,426
Acquisition of intangible asset - (173,648,868)
Acquisition of right-of-use assets (1,895,879,997) (865,292,674)
Acquisition of property, plant and equipment (5,637,833,675) (9,694,940,295)
Net Cash Used in Investing Activities (6,500,643,397) (3,721,829,411)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of shares 57,504,030,000 345,012,195,000
Proceeds loan from a shareholder - 17,873,900,000
Intercompany interest paid - (180,917,654)
Repayment of loan from a shareholder - (120,046,370,000)
Payment of lease liabilities and the related interest (2,009,681,684) (4,435,742,385)
Net Cash Provided by Financing Activities 55,494,348,316 238,223,064,961
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (61,237,986,710) 72,552,428,794
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 81,683,850,768 9,131,421,974
CASH AND CASH EQUIVALENTS AT END OF THE YEAR 20,445,864,058 81,683,850,768

See accompanying Notes to the Financial Statements on Exhibit E which are an integral part of the Financial
Statements taken as a whole

12
 13
Notes to the Financial Statements

Financial Statements
March 31, 2023 and for the year then ended

1. GENERAL Notarial Deed No. 20 dated December 7, 2022 of

Establishment and General Information
PT Asian Paints Indonesia (the “Company”) was
established within the framework of the Foreign
Capital Investment Law No. 25 year 2007 and 2665/1/
IP/PMA/2014 Year 2014 based on the Notarial
Deed No. 8 dated December 19, 2014 of Novita
Puspitarini, SH. The Deed of Establishment was
approved by Ministry of Law and Human Rights of
the Republic of Indonesia in its Decision Letter No.
AHU-41108.40.10.2014 dated December 23, 2014.
The Company is domiciled in South Jakarta and its
registered office address is at Gedung Palma Tower,
Lantai 16, Unit C,D,E, Jl. RA Kartini II-S Kaveling 6
Sektor II, Kec. Kebayoran Lama, Kel. Pondok Pinang,
Jakarta Selatan 12310, Indonesia.
RA Mahyasari A. Notonagoro, S.H., public notary
in Jakarta, to increase the Company’s issued and
paid-up capital, and to change the Company’s
Board of Directors. These changes have been
approved by Ministry of Law and Human Rights
of the Republic of Indonesia in its Decision Letter
No. AHU-AH.01.03-0324062 Year 2022 dated
December 7, 2022, and Decision Letter No. AHU-
AH.01.09-0085183 Year 2022 dated December 7,
2022.
In accordance with Article 3 of the Company’s
Articles of Association (AoA), the scope of its
activities comprises manufacturing of paint. The
Company has started commercial operations in
August 2017.

The Company’s Articles of Association have The Company has 222 employees as of March 31,
been amended several times, most recently by 2023 (March 31, 2022: 237 employees).

The Company’s management, as per AoA, as of March 31, 2023 and 2022 consisted of the following:

March 31, 2023 March 31, 2022

President Commissioner Mr. Pragyan Kumar** Mr. Rahul Bhatnagar*
Commissioners Mr. Aashish Kshetry Mr. Aashish Kshetry
Mr. Jeyamurugan Ramalingam Mr. Jeyamurugan Ramalingam
Jeyapandiyan Jeyapandiyan
President Director Mrs. Abhilasha Kannan Mrs. Abhilasha Kannan
Directors Mr. Abhishek Mohnot Mr. Abhishek Mohnot
Mr. Sparsh Vijay Dwivedi Mr. Prashant Shekhar
Mr. Chandramouly Venkata Subramanian Mr. Chandramouly Venkata
Subramanian
Mr. Gurunath Sadhanandan***

* Mr. Rahul Bhatnagar resigned as Commissioner of the Company effective from 25th May 2022.
** Mr. Pragyan Kumar appointed as Commissioner of the Company effective from 25th May 2022.
*** Mr. Gurunath Sadhanandan resigned as Director of the Company effective from 22nd July 2022.

The changes in the Company’s Board of Directors and Commissioners has been stated in the amendment of the
Company’s Articles of Association in Notarial Deed No. 20 dated December 7, 2022 of Raden Ayu Mahyasari Arizza
Notonagoro, S.H., public notary in Jakarta. This amendment was received and registered by Ministry of Law and
Human Rights of the Republic of Indonesia in its Decision Letter No. AHU-AH.01.09-0085183 Year 2022 dated
December 9, 2022.
 PT Asian Paints Indonesia
Notes to the Financial Statements (Contd.)
2. ADOPTION OF NEW AND REVISED
STATEMENTS OF FINANCIAL ACCOUNTING
STANDARDS (“PSAK”)
a. Amendments and improvements to standards
effective in the current year
The following amendments and improvements to
PSAK have no material impact to the disclosures
or on the amounts recognized in the financial
statements:
• Amendments to PSAK 22: Business Combination
Regarding Reference to The Conceptual
Framework;
• Amendments to PSAK 57: Provisions,
Contingent Liabilities and Contingent Assets
Regarding Onerous Contracts - Cost of Fulfilling
a Contract;
• PSAK 69 (Improvements 2020): Agriculture;
• PSAK 71 (Improvements 2020): Financial
Instruments; and
• PSAK 73 (Improvements 2020): Leases.
b. Standards, amendments and interpretation to
standards issued not yet adopted
The following amendments to standards are
effective for periods beginning on or after January
1, 2023, with early application permitted are:
• Amendment to PSAK 1: Presentation of
Financial Statements regarding Classification of
Liabilities as Current or Non-current;
• Amendment to PSAK 1: Presentation of
Financial Statements regarding Disclosure of
Accounting Policies;
• Amendment to PSAK 16: Property, Plant and
Equipment regarding Proceeds Before Intended
Use;
• Amendment to PSAK 25: Accounting Policies,
Changes in Accounting Estimates and Errors
regarding Definition of Accounting Estimates;
and
• Amendment to PSAK 46: Income Taxes related
to Assets and Liabilities arising from a Single
Transaction.
14
The following new standard is effective for
periods beginning on or after January 1, 2025,
with early application permitted is:
• PSAK 74: Insurance Contract
As of the issuance date of the financial statements,
the Company is still evaluating the possible impact
of the implementation of these PSAKs to its
financial statements.
3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The accounting policies set out below have been
applied consistently to all periods presented in these
financial statements.
a. Statement of compliance
The financial statements of the Company have been
prepared in accordance with Indonesian Financial
Accounting Standards (“SAK”).
b. Basis of preparation
The Company’s financial statements have been
prepared on an accrual basis and under the historical
cost convention except for certain accounts
measured at fair values at the end of each reporting
period.
Historical cost is generally based on the fair value of
the consideration given in exchange for goods and
services.
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.
The statements of cash flows are prepared using
the indirect method by classifying cash flows into
operating and financing activities.
c. Foreign Currency Transactions and Balances
The financial statements of the Company are
presented in Indonesian Rupiah, which is the
functional currency and the presentation currency
for the financial statements.
In preparing the financial statements, transactions
in currencies other than the Company’s functional
currency (foreign currencies) are recognized at the
rates of exchange prevailing at the dates of the

Notes to the Financial Statements (Contd.)
transactions. At the end of each reporting period,
monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated
at the rates prevailing at the date when the fair
value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences on monetary items are
recognized in profit or loss in the period in which
they arise.
d. Transaction with Related Parties
A related party is a person or entity that is related to
the Company:
a. A person or a close member of that person’s
family is related to the reporting entity if that
person:
i. has control or joint control over 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 the 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
15
Financial Statements
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 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.
e. Financial Instruments
Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities are added
to or deducted from the fair value of the financial
assets and financial liabilities, as appropriate,
on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss
are recognized immediately in profit or loss.
Classification of financial assets
Except for those trade receivable that do not certain
a significant financing component and are measured
at the transaction price in accordance with PSAK 72,
all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
The Company’s financial assets comprise of cash and
cash equivalents, trade receivable, other receivables
and refundable deposit.
For the purpose of subsequent measurement
the Company’s financial assets are classified as
amortized cost.
The classification is determined by basis of both:
 PT Asian Paints Indonesia
Notes to the Financial Statements (Contd.)
• the entity’s business model for managing the
financial asset and
• the contractual cash flow characteristics of the
financial asset.
All the financial assets are reviewed for impairment
at least at each reporting date to identify whether
there is any objective evidence that a financial
asset or a group of financial assets is impaired and
recognise a loss allowance for expected credit losses
on those financial assets.
All income and expenses relating to financial
assets that are recognised in profit or loss are
presented within finance costs, finance income
or other financial items, except for impairment of
trade receivables which is presented within other
expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if
the assets meet the following conditions (and are
not designated as FVTPL):
• they are held within a business model whose
objective is to hold the financial assets and
collect its contractual cash flows
• the contractual terms of the financial assets
give rise to cash flows that are solely payments
of principal and interest on the principal
amount outstanding
After initial recognition, these are measured
at amortised cost using the effective interest
method. Discounting is omitted where the effect
of discounting is immaterial. The cash and cash
equivalent, trade receivable, other receivables and
refundable deposit fall into this category of financial
instruments.
The method that is used in the calculation of
the amortised cost of a financial asset and in the
allocation and recognition of the interest revenue in
profit or loss over the relevant period. The rate that
exactly discounts estimated future cash payments
or receipts through the expected life of the financial
asset to the gross carrying amount of a financial
asset. When calculating the effective interest rate,
an entity shall estimate the expected cash flows by
16
considering all the contractual terms of the financial
instrument (for example, prepayment, extension,
call and similar options) but shall not consider the
expected credit losses. The calculation includes all
fees and points paid or received between parties
to the contract that are an integral part of the
effective interest rate, transaction costs, and all
other premiums or discounts. There is a presumption
that the cash flows and the expected life of a group
of similar financial instruments can be estimated
reliably. However, in those rare cases when it is not
possible to reliably estimate the cash flows or the
expected life of a financial instrument (or group
of financial instruments), the entity shall use the
contractual cash flows over the full contractual term
of the financial instrument (or group of financial
instruments).
Classification and subsequent measurement of
financial liabilities
The Company’s financial liabilities include accrued
expenses and lease liability.
Financial liabilities are initially measured at
fair value, and, where applicable, adjusted for
transaction costs unless the Company designated a
financial liability at fair value through profit or loss.
Financial liabilities are measured subsequently at
amortised cost using the effective interest method.
Effective interest method
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period to the net
carrying amount on initial recognition.
Impairment of financial assets
PSAK 71’s impairment requirements use more
forward - looking information to recognise expected
credit losses – the ‘expected credit loss (ECL)
model’. Instruments within the scope of the new
requirements included loans and other debt - type
financial assets measured at amortised cost and
FVOCI, trade receivables, contract assets recognised

Notes to the Financial Statements (Contd.)
and measured under PSAK 72 and loan commitments
and some financial guarantee contracts (for the
issuer) that are not measured at fair value through
profit or loss.
Recognition of credit losses is no longer dependent
on the Company first identifying a credit loss
event. Instead the Company considers a broader
range of information when assessing credit risk
and measuring expected credit losses, including
past events, current conditions, reasonable and
supportable forecasts that affect the expected
collectability of the future cash flows of the
instrument.
In applying this forward-looking approach, a
distinction is made between:
a. financial instruments that have not
deteriorated significantly in credit quality since
initial recognition or that have low credit risk
(‘Stage 1’) and
b. financial instruments that have deteriorated
significantly in credit quality since initial
recognition and whose credit risk is not low
(‘Stage 2’).
‘Stage 3’ would cover financial assets that have
objective evidence of impairment at the reporting
date. ‘12-month expected credit losses’ are
recognised for Stage 1 while ‘lifetime expected
credit losses’ are recognised for Stage 2 and Stage 3.
Credit loss are the difference between all
contractual cash flows that are due to an entity
in accordance with the contract and all the cash
flows that the entity expects to receive (i.e. all cash
shortfalls), discounted at the original effective
interest rate (or credit adjusted effective interest
rate for purchased or originated credit-impaired
financial assets). An entity shall estimate cash flows
by considering all contractual terms of the financial
instrument (for example, prepayment, extension,
call and similar options) through the expected life
of that financial instrument. The cash flows that are
considered shall include cash flows from the sale of
collateral held or other credit enhancements that
are integral to the contractual terms.
There is a presumption that the expected life of
a financial instrument can be estimated reliably.
However, in those rare cases when it is not possible
17
Financial Statements
to reliably estimate the expected life of a financial
instrument, the entity shall use the remaining
contractual term of the financial instrument.
Expected credit losses are the weighted average of
credit losses with the respective risks of a default
occurring as the weights.
12‑month expected credit losses are the portion
of lifetime expected credit losses that represent
the expected credit losses that result from default
events on a financial instrument that are possible
within the 12 months after the reporting date.
Lifetime expected credit losses are the expected
credit losses that result from all possible default
events over the expected life of a financial
instrument.
Measurement of the expected credit losses is
determined by a probability-weighted estimate of
credit losses over the expected life of the financial
instrument.
For all other financial assets, objective evidence of
impairment could include:
• significant financial difficulty of the issuer or
counterparty; or
• breach of contract, such as default or
delinquency in interest or principal payments;
or
• it becoming probable that the borrower will
enter bankruptcy or financial re-organisation;
or
• the disappearance of an active market for that
financial asset because of financial difficulties.
For financial assets carried at amortised cost, the
amount of the impairment loss is measured as the
difference between the asset’s carrying amount and
the present value of estimated future cash flows,
discounted at the financial asset’s original effective
interest rate.
Trade and other receivables
The Company makes use of a simplified approach
in accounting for trade and other receivables and
records the loss allowance as lifetime expected
credit losses. These are the expected shortfalls in
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

contractual cash flows, considering the potential financial liability. Similarly, the Company accounts
for default at any point during the life of the for substantial modification of terms of an existing
financial instrument. In calculating, the Company liability or part of it as an extinguishment of the
uses its historical experience, external indicators original financial liability and the recognition of
and forward-looking information to calculate the a new liability. It is assumed that the terms are
expected credit losses using a provision matrix. substantially different if the discounted present
value of the cash flows under the new terms,
Derecognition of financial assets including any fees paid net of any fees received
and discounted using the original effective rate is
On derecognition of a financial asset measured at
at least 10 percent different from the discounted
amortised cost, the difference between the asset’s
present value of the remaining cash flows of the
carrying amount and the sum of the consideration
original financial liability. If the modification is not
received and receivable is recognised in profit or
substantial, the difference between: (1) the carrying
loss.
amount of the liability before the modification;
On derecognition of financial asset in its entirety, and (2) the present value of the cash flows after
the difference between the asset’s carrying amount modification is recognised in profit or loss as the
(measured at the date of derecognition) and the modification gain or loss within other gains and
consideration received (including any new asset losses.
obtained less any new liability assumed) shall be
f. Netting of Financial Assets and Financial
recognised in profit or loss.
Liabilities
If the transferred asset is part of a larger financial
Financial assets and financial liabilities are offset
asset (e.g. when an entity transfers interest cash
and the net amount presented in the statement
flows that are part of a debt instrument) and the
of financial position when the Company has a
part transferred qualifies for derecognition in its
legally enforceable right to set off the recognized
entirety, the previous carrying amount of the larger
amounts; and intends either to settle on a net
financial asset shall be allocated between the part
basis, or to realize the asset and settle the
that continues to be recognised and the part that is
liability simultaneously. A right to set-off must be
derecognised, on the basis of the relative fair values
available today rather than being contingent on
of those parts on the date of the transfer. For this
a future event and must be exercisable by any of
purpose, a retained servicing asset shall be treated
the counterparties, both in the normal course of
as a part that continues to be recognised. The
business and in the event of default, insolvency or
difference between the carrying amount (measured
bankruptcy.
at the date of derecognition) allocated to the part
derecognised and the consideration received for the
g. Cash and Cash Equivalents
part derecognised (including any new asset obtained
less any new liability assumed) shall be recognised in
For cash flow presentation purposes, cash consist
profit or loss.
of cash on hand and in bank and all unrestricted
investment with maturities of three months or less
Derecognition of financial liabilities
from the date of placement.
The Company derecognises financial liabilities
when, and only when, the Company obligations h. Inventories
are discharged, cancelled or have expired. The
Inventories are stated at cost or net realizable value,
difference between the carrying amount of the
whichever is lower. The cost of inventories shall
financial liability derecognised and the consideration
comprise all costs of purchase, costs of conversion
paid and payable is recognised in profit or loss.
and other costs incurred in bringing the inventories
to their present location and condition. Cost of
When the Company exchanges with the existing
finished goods is determined using the weighted
lender one debt instrument into another one with
average method and cost of material is determined
the substantially different terms, such exchange is
using the moving average method. Net realizable
accounted for as an extinguishment of the original
value represents the estimated selling price for
financial liability and the recognition of a new
inventories less all estimated costs of completion
18

Notes to the Financial Statements (Contd.)
and costs necessary to make the sale. A provision for
obsolete and slow-moving inventories is determined
on the basis of estimated future usage or sale of
individual inventory items.
i. Prepaid Expense
Prepaid expenses are amortized over their beneficial
periods using the straight-line method.
j. Property, plant and equipment
Land is stated at cost and is not depreciated.
Property, plant and equipment held for use in the
production or supply of goods or for administrative
purposes are stated at cost less accumulated
depreciation and accumulated impairment losses.
Depreciation is recognized so as to write-off the cost
of assets less residual value using the straight-line
method based on the estimated useful lives of the
assets as follows:
Years
Buildings 20 - 30
k.
Plant and machineries 2 - 20
Office equipment 2 - 20
Furniture and fixtures 4 - 12
Computers 3-4
The estimated useful lives, residual values and
depreciation method are reviewed at each year end,
with the effect of any changes in estimate accounted
for on a prospective basis.
The accumulated costs of the construction of
buildings, plant and machineries, office equipment,
furniture and fixtures, and computers are capitalized
as construction in progress and are presented as
part of property, plant and equipment. These costs
are reclassified to the appropriate property, plant
and equipment account when the construction or
installation is completed and the assets are ready
for their intended use. Depreciation is charged from
such date.
The legal cost of land right when the land was
acquired initially are recognized as part of the
cost of the land under the “Property, Plant and
Equipment” account and not amortized. Meanwhile,
the extension or the legal renewal costs of land
rights are recognized as deferred charges and are
19
Financial Statements
amortized over the shorter of the right’s legal life
and land’s economic life.
The cost of maintenance and repairs is charged
to operations as incurred. Other costs incurred
subsequently to add to, replace part of, or service
an item of property, plant and equipment, are
recognized as asset if, and only if, it is probable that
future economic benefits associated with the item
will flow to the entity and the cost of the item can be
measured reliably.
An item of property, plant and equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on disposal or retirement of an item of property,
plant and equipment is determined as the difference
between the sales proceeds and the carrying
amounts of the asset and is recognized in profit or
loss.
Fully depreciated assets still in use are retained in
the financial statements.
Impairment of Non-Financial Asset
At the end of each reporting period, the Company
reviews the carrying amount of non-financial assets
to determine whether there is any indication that
those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount
of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is
not possible to estimate the recoverable amount
of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to
which the asset belongs.
Estimated recoverable amount is the higher of fair
value less cost to sell and value in use. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and risks
specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of the non-financial
asset (cash generating unit) is less than its carrying
amount, the carrying amount of the asset (cash
generating unit) is reduced to its recoverable
amount and an impairment loss is recognized
immediately in profit or loss.
 PT Asian Paints Indonesia
Notes to the Financial Statements (Contd.)
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognized for the asset (or
cash-generating unit) in prior years. A reversal of an
impairment loss is recognized immediately in profit
or loss.
Accounting policy for impairment of financial assets
is discussed in Note 3e.
l. Intangible Assets
Intangible assets acquired separately are reported
at cost less accumulated amortization (where they
have finite useful lives) and accumulated impairment
losses. Intangible assets with finite useful lives
are amortized on a straight-line basis over their
estimated useful lives. The estimated useful life
amortization method are reviewed at the end of
each annual reporting period, with the effect of
any changes in estimate being accounted for on a
prospective basis. Intangible assets with indefinite
useful lives are not amortized. Each period, the
useful lives of such assets are reviewed to determine
whether events and circumstances continue to
support an indefinite useful life assessment for
the asset. Such assets are tested for impairment in
accordance with the policy below. The useful life of
software has been considered as four years.
m. Leases
The Company as lessee
The Company assesses whether a contract is or
contains a lease, at the inception of the contract.
The Company recognizes a right-of-use asset and
a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except
for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value
assets. For these leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease unless
another systematic basis is more representative of
the time pattern in which economic benefits from
the leased assets are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
20
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Company uses its incremental
borrowing rate.
Lease payments included in the measurement of the
lease liability comprise:
• fixed lease payments (including in-substance
fixed payments), less any lease incentives;
• variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
• the amount expected to be payable by the
lessee under residual value guarantees;
• the exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and
• payments of penalties for terminating the
lease, if the lease term reflects the exercise of
an option to terminate the lease.
The lease liabilities is presented as a separate line in
the statement of financial position.
The lease liability is subsequently measured by
increasing the carrying amount to reflect the
interest on the lease liability (using the effective
interest method) and by reducing the carrying
amount to reflect the lease payments made.
The Company remeasures the lease liability (and
makes a corresponding adjustment to the related
right-of-use assets) whenever:
• the lease term has changed or there is a change
in the assessment of the exercise of a purchase
option, in which case the lease liability is
remeasured by discounting the revised lease
payments using a revised discount rate;
• the lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual value,
in which cases the lease liability is remeasured
by discounting the revised lease payments
using the initial discount rate (unless the
lease payments change is due to a change in a
floating interest rate, in which case a revised
discount rate is used); and
 21
Notes to the Financial Statements (Contd.)

• a lease contract is modified and the lease
modification is not accounted for as a separate
lease, in which case the lease liability is
remeasured by discounting the revised lease
payments using a revised discount rate.
Financial Statements
As a practical expedient, PSAK 73 permits a lessee
not to separate non-lease components, and instead
account for any lease and associated non-lease
components as a single arrangement. The Company
has not used this practical expedient

The Company did not make any such adjustments n. Provisions

during the periods presented.
Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result
The right-of-use assets comprise the initial
of a past event, it is probable that the Company
measurements of the corresponding lease
will be required to settle the obligation, and a
liability, lease payments made at or before the
reliable estimate can be made of the amount of the
commencement day and any initial direct costs. They
obligation.
are subsequently measured at cost less accumulated
depreciation and impairment losses.
Restructuring provisions are recognized only if a
detailed formal plan for the restructuring exists
Whenever the Company incurs an obligation for
and management has either communicated the
costs to dismantle and remove a leased asset,
plan’s main features to those affected or started
restore the site on which it is located or restore the
implementation. Provisions are not recognized for
underlying assets to the conditions required by the
future operating losses.
terms and conditions of the lease, a provision is
recognized and measured under PSAK 57. The costs
The amount recognized as a provision is the
are included in the related right-of-use asset, unless
best estimate of the consideration required to
those costs are incurred to produce inventories.
settle the present obligation at the end of the
reporting period, taking into account the risks and
Right-of-use assets are depreciated over the
uncertainties surrounding the obligation. Where a
shorter period of lease term and useful life of the
provision is measured using the cash flows estimated
underlying assets. If a lease transfers ownership
to settle the present obligation, its carrying amount
of the underlying assets or the cost of the right-of-
is the present value of those cash flows.
use assets reflects that of the Company expects
to exercise a purchase option, the related right-of-
When some or all of the economic benefits required
use asset is depreciated over the useful life of the
to settle a provision are expected to be recovered
underlying assets. The depreciation starts at the
from a third party, a receivable is recognized as an
commencement date of the lease.
asset if it is virtually certain that reimbursement will
be received, and the amount of the receivable can be
The right-of-use assets are presented as a separate
measured reliably.
line in the statement of financial position.
o. Borrowing Cost
The Company applies PSAK 48 to determine whether
a right-of-use asset is impaired and accounts for Borrowing costs directly attributable to the
any identified impairment loss as described in the acquisition, construction or production of qualifying
impairment of assets policy. assets, which are assets that necessarily take a
substantial period of time to get ready for their
Variable rents that do not depend on an index or intended use or sale, are added to the cost of those
rate are not included in the measurements of the assets, until such time as the assets are substantially
lease liability and the right-of-use asset. The related ready for their intended use or sale.
payments are recognized as an expense in the period
in which the event or condition that triggers those All other borrowing costs are recognized in profit or
payments occur and are included in the line ‘Other loss in the period in which they are incurred.
expenses’ in the statement of profit or loss and
other comprehensive income.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

p. Revenue and Expense Recognition comprising actuarial gains and losses, the effect of
the changes to the asset ceiling (if applicable) and
The Company recognizes revenue from sale
the return on plan assets (excluding interest), is
of goods. Revenue is measured based on the
reflected immediately in the statement of financial
consideration specified in a contract with a customer
position with a charge or credit recognized in other
and excludes amounts collected on behalf of third
comprehensive income in the period in which
parties. The Company recognizes revenue when
they occur. Remeasurement recognized in other
it transfers control of a product or service to a
comprehensive income is reflected immediately
customer. The Company has generally concluded
in retained earnings and will not be reclassified
that it is the principal in its revenue arrangements
to profit or loss. Past service cost is recognized in
and records revenue on a gross basis because it
profit or loss in the period of a plan amendment. Net
typically controls the goods or services before
interest is calculated by applying the discount rate
transferring them to the customer.
at the beginning of the period to the net defined
benefit liability or asset. Defined benefit costs are
Sale of Goods
categorized as follows:
The Company sells goods directly to customers
through direct sales. Revenue is recognized at the • Service cost (including current service cost,
point in time when control of the asset is transferred past service cost, as well as gains and losses on
to the customer, generally on delivery of the curtailments and settlements);
components. The normal credit term is 10 to 120
days upon delivery. • Net interest expense or income; and

Interest Income • Remeasurement.

Interest income from a financial asset was
recognized when was probable that the economic The Company presents the first two components of
benefits would flow to the Company and the defined benefit costs in profit or loss. Curtailment
amount of income could be measured reliably. gains and losses are accounted for as past service
Interest income was accrued on a time basis, by costs.
reference to the principal outstanding and at the
The retirement benefit obligation recognized in the
effective interest rate applicable, which was the
statement of financial position represents the actual
rate that exactly discounts estimated future cash
deficit in the Company’s defined benefit plans.
receipts through the expected life of the financial
asset to that asset’s net carrying amount on initial
r. Share Capital
recognition.
Share capital represents the total par value of the
Expenses shares issued.
Expenses are recognized when incurred (accrual
s. Income Tax
basis).
Income tax expense represents the sum of the tax
q. Employee Benefit currently payable and deferred tax.

Defined Benefit Plan The tax currently payable is based on taxable profit
to the year. Taxable profit differs from profit before
The Company calculates defined post-employment
tax as reported in the statement of profit or loss
benefits to their employees in accordance with
and other comprehensive income because of items
Company Regulation Law No. 11/2020 and
of income or expense that are taxable or deductible
Government Regulation No. 35/2021. No funding has
in other years and items that are never taxable or
been made to this defined benefit plan
deductible.
The cost of providing benefits is determined
Current tax expense is determined based on the
using the projected unit credit method, with
taxable income for the year computed by using the
actuarial valuations being carried out at the end
prevailing tax rates. A provision is recognized for
of each annual reporting period. Remeasurement,
22

Notes to the Financial Statements (Contd.)
those matters for which the tax determination is
uncertain, but it is considered probable that there
will be a future outflow of funds to a tax authority.
The provisions are measured at the best estimate
of the amount expected to become payable. The
assessment is based on the judgement of tax
professionals within the Company supported by
previous experience in respect of such activities and
in certain cases based on specialist independent tax
advice.
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences.
Deferred tax assets are generally recognized
for all deductible temporary differences to the
extent that is probable that taxable profits will be
available against which those deductible temporary
differences can be utilized. Such deferred tax assets
and liabilities are not recognized if the temporary
differences arise from the initial recognition (other
than in a business combination) of assets and
liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized,
based on the tax rates (and tax laws) that have been
enacted, or substantively enacted, by the end of the
reporting period.
The measurement of deferred tax assets and
liabilities reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period, to
recover or settle the carrying amount of their assets
and liabilities.
The carrying amount of deferred tax asset is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Current and deferred tax are recognized as an
expense or income in profit or loss, except when
they relate to items that are recognized outside
of profit or loss (whether in other comprehensive
23
Financial Statements
income or directly in equity), in which case the tax is
also recognized outside of profit or loss, or where
they arise from the initial accounting for a business
combination. In the case of a business combination,
the tax effect is included in the accounting for the
business combination.
Deferred tax assets and liabilities are offset when
there is legally enforceable right to set off current
tax assets against current tax liabilities and when
they relate to income taxes levied by the same
taxation authority on either the same taxable
entity or different taxable entities when there is
an intention to settle its current tax assets and
current tax liabilities on a net basis, or to realize the
assets and settle the liabilities simultaneously, in
each future period in which significant amounts of
deferred tax liabilities or assets are expected to be
settled or recovered.
t. Events After the Reporting Period
Post year-end events that provide additional
information about the Company’s position at the end
of reporting period (adjusting events) are reflected
in the financial statements.
Post year-end events that are non-adjusting events
are disclosed in the notes to the financial statements
when material.
4. CRITICAL ACCOUNTING JUDGMENTS AND
ESTIMATES
In the application of the Company’s accounting
policies, which are described in Note 3, the Directors
are required to make judgments, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from
other sources. 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.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period
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.
 PT Asian Paints Indonesia
Notes to the Financial Statements (Contd.)
Critical Judgments in Applying Accounting
Policies
Below are the critical judgments, apart from those
involving estimations, that the directors have made
in the process of applying the Company accounting
policies and that have the most significant effect on
the amounts recognized in the financial statements.
Income Taxes
The Company has exposure to income taxes.
Significant judgment is involved in determining
the provision for income taxes. There are certain
transactions and computations for which the
ultimate tax determination is uncertain during
the ordinary course of business. The Company
recognizes liabilities for expected tax issues based
on estimates of whether additional taxes will be
due. Where the final tax outcome of these matters
is different from the amounts that were initially
recognized, such differences will impact the current
income tax and deferred tax provisions in the period
in which such determination is made.
Claims for Tax Refund and Tax Assessments Under
Appeal
Based on the tax regulations currently enacted,
the management judged if the amounts recorded
under the above account are recoverable and
refundable by the Tax Office. The carrying amount
of the Company’s claims for tax refund and tax
assessments under appeal as of March 31, 2023 was
Rp 3,757,663,684. Further explanations regarding
this account are provided in Note 25.
Classification of Financial Assets and Financial
Liabilities
The Company determines the classifications of
financial assets and financial liabilities by judging
if they meet the definition asset forth in PSAK
71. Accordingly, the financial assets and financial
liabilities are classified and accounted for in
accordance with the Company’s accounting policies
disclosed in Note 3e.
Determination of Leases
Determination whether an arrangement is or
contains a lease requires careful to assess whether
the arrangement conveys a right to obtain
substantially all the economic benefits from use of
the asset throughout the period of use and right to
direct the use of the asset, even if the right is not
24 explicitly specified in the arrangement.
Key Sources of Estimation Uncertainty
The key assumptions concerning 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:
Calculation of Loss Allowance
When measuring ECL the Company uses reasonable
and supportable forward-looking information, which
is based on assumptions for the future movement
of different economic drivers and how these drivers
will affect each other.
Loss given default is an estimate of the loss arising
on default. It is based on the difference between
the contractual cash flows due and those that the
lender would expect to receive, taking into account
cash flows from collateral and integral credit
enhancements.
Probability of default constitutes a key input in
measuring ECL. Probability of default is an estimate
of the likelihood of default over a given time
horizon, the calculation of which includes historical
data, assumptions and expectations of future
conditions.
Allowance for Decline in Value of Inventories
The Company provides allowance for decline in
value of inventories based on estimated future
usage of such inventories. While it is believed that
the assumptions used in the estimation of the
allowance for decline in value of inventories are
appropriate and reasonable, significant changes
in these assumptions may materially affect the
assessment of the allowance for decline in value of
inventories, which ultimately will impact the result
of the Company’s operations. The carrying amounts
of inventories are disclosed in Note 8 to the financial
statements.
Estimated Useful Lives of Property, Plant and
Equipment
The useful life of each item of the Company’s
property, plant and equipment are estimated based
on the period over which the asset is expected to
be available for use. Such estimation is based on
internal technical evaluation and experience with
similar assets.

Notes to the Financial Statements (Contd.)
The estimated useful life of each asset is reviewed
periodically and updated if expectations differ from
previous estimates due to physical wear and tear,
technical or commercial obsolescence and legal or
other limits on the use of the asset. It is possible,
however, that future results of operations could
be materially affected by changes in the amounts
and timing of recorded expenses brought about by
changes in the factors mentioned above.
A change in the estimated useful life of any item
of property, plant and equipment would affect the
recorded depreciation expense and decrease in the
carrying values of these assets.
The estimated useful lives is mentioned in Note
3j. The carrying values of property, plant and
equipment is disclosed in Note 11.
Evaluation of Impairment of Non-Financial Assets
Internal and external sources of information
are reviewed at each reporting date to identify
indications that the non-financial assets which
consist of property, plant and equipment and
bearer plants may be impaired or an impairment
loss previously recognized no longer exists or
may be decreased. If any such indication exists,
the recoverable amount of the asset is estimated.
An impairment loss is recognized whenever the
carrying amount of an asset exceeds its recoverable
amount.
The Company assesses the impairment of non-
financial assets whenever events or changes in
circumstances indicate that the carrying amount
of an asset may not be reasonable. The factors
that the Company considers important which could
trigger an impairment review include significant
underperformance relative to expected historical or
projected future operating results, and significant
negative industry or economic trends. There is no
indication of impairment on the Company’s non-
financial assets as of March 31, 2023 and 2022.
Pension and Employee Benefits
The present value of the post-employment
benefits liability depends on a number of factors
that are determined on an actuarial basis using a
number of assumptions. These assumptions used
in determining the net cost/(income) for pensions
include the discount rate and future salary increase
rate. Any change in these assumptions will have
25
Financial Statements
an impact on the carrying amount of the post-
employment benefits liability.
The Company determines the appropriate discount
rate and future salary increase rate at the end of
each reporting period. The discount rate is the
interest rate that should be used to determine the
present value of estimated future cash outflows
expected to be required to settle the post-
employment benefits liability. In determining the
appropriate discount rate, the Company considers
the interest rates of government bonds that are
denominated in the currency in which the benefits
will be paid and that have terms to maturity
approximating the terms of the related post-
employment benefits liability.
For the future salary increase rate, the Company
collects all historical data related to the changes in
salary base and adjusts it for future business plans.
While the Company believes that their assumptions
are reasonable and appropriate, significant
differences in the Company’s actual experiences or
significant changes in the Company’s assumptions
may materially affect their estimated post-
employment benefits liability and net employee
benefit expense.
Measurement of Fair Values
A number of the Company accounting policies and
disclosures require the measurement of fair values,
for both financial and non-financial assets and
liabilities. When measuring the fair value of an asset
or liability, the Company uses market observable
data as far as possible. Fair values are categorized
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
that can be accessed by the Company at
measurement date;
• Level 2: Inputs other than quoted prices
included within Level 1 that are observable for
the asset or liability, either directly (i.e. prices)
or indirectly (i.e. derived from prices); and
• Level 3: Unobservable inputs for assets or
liabilities.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

The Company carries certain financial assets at

fair values, which require the use of accounting
estimates. While significant components of fair value
measurement were determined using verifiable
objective evidences, the amount of changes in fair
values would differ if the Company utilized different
valuation methodology.

Any changes in fair values of these financial assets

would affect directly the Company’s profit or loss.
The Company had financial instruments which are
presented at carrying amounts as either these are
reasonable approximation of their fair values or their
fair values cannot be reliably measured.

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
5. CASH AND CASH EQUIVALENTS
March 31, 2023 March 31, 2022
Rp Rp
Cash on hand - 100,000
Cash in banks
Rupiah
State Bank of India - Indonesia 15,490,572,155 200,876,353
PT Bank Central Asia, Tbk 2,796,096,614 2,986,021,668
Citibank N.A. - Indonesia 1,004,380,094 2,892,364,285
PT Bank Mandiri, Tbk 530,818,220 351,781,520
U.S. Dollar
Citibank N.A. - Indonesia 330,709,530 237,050,865
PT Bank Mandiri, Tbk 115,375,182 -
State Bank of India - Indonesia 177,912,263 15,656,077
Subtotal 20,445,864,058 6,683,850,768
Time deposits
Rupiah
State Bank of India - Indonesia - 75,000,000,000

TOTAL 20,445,864,058 81,683,850,768

The time deposits have a maturity period of less than three months and bear annual interest rate of 3.25% for the
year ended March 31, 2022. There are no time deposits as on March 31, 2023.

6. TRADE ACCOUNTS RECEIVABLE

March 31, 2023 March 31, 2022
Rp Rp
Third Parties
Local customers 6,604,038,6102 68,766,293,491
Less: Allowance for credit losses (7,424,974,239) (10,079,642,724)
Sub-total 58,615,411,863 58,686,650,767
Related Parties
Asian Paints (Nepal) Pvt. Ltd. 185,484,960 11,189,880
Asian Paints (Bangladesh) Limited 122,294,250 -
Sub-total 307,779,210 11,189,880
TOTAL 58,923,191,073 58,697,840,647

The average credit period on sales of goods is 115 days in 2022-23 (2021-22: 102 days). No interest is being
charged on trade accounts receivable.

Allowance for credit losses for trade accounts receivable has been measured at an amount equal to lifetime
ECL. The ECL on trade accounts receivable is estimated using a provision matrix by reference to past default
experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are
specific to the debtors, general economic conditions of the industry in which the debtors operate.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

6. TRADE ACCOUNTS RECEIVABLE (contd.)

The following table details the risk profile of trade accounts receivable from contracts with customers based on
the Company’s provision matrix. As the Company’s historical credit loss experience does not show significantly
different loss patterns for different customer segments, the provision for loss allowance based on past due
status is not further distinguished between the Company’s different customer base.
Trade Accounts Receivable – Days Past Due
March 31, 2023

Past due

< 90 91 – 180 181 – 270 271 – 365 366-455 456 - 545 546 - 635 636 - 730 > 730
Not past due Total
days days days days days days days days days
Rp Rp Rp Rp Rp Rp Rp Rp Rp Rp Rp
Expected
credit loss 0% 4% 20% 42% 63% 94% 96% 98% 100% 100%
rate
Estimated
total gross
carrying 51,812,205,230 5,533,831,001 806,478,171 347,223,215 1,588,962,107 641,922,483 108,070,417 59,413,166 16,637,149 5,125,643,163 66,040,386,102
amount at
default
Lifetime ECL - (206,608,214) (163,969,990) (145,055,575) (1,000,872,111) (604,172,306) (103,790,828) (58,224,903) (16,637,149) (5,125,643,163) (7,424,974,239)
Total 58,615,411,863

The movements in allowance for credit losses are as follows:

March 31, 2023 March 31, 2022
Rp Rp
Balance at beginning of year (10,079,642,724) (10,055,204,941)
Gain on reversal of (loss) allowance recognized in profit or loss during
the year on:
- Amounts written off 152,371,324 -
- Changes in credit risk 2,502,297,161 (24,437,783)
Balance at end of year (7,424,974,239) (10,079,642,724)

Management believes that trade accounts receivable that were neither past due nor impaired were with
creditworthy counterparties.
Management believes that the above allowance for impairment loss is sufficient to cover the losses which might
arise from uncollectible receivables.

7. OTHER ACCOUNTS RECEIVABLE

March 31, 2023 March 31, 2022
Rp Rp
Third Parties - 160,274,000
Related Parties
Asian Paints Ltd (APL) 444,803,238 54,106,733
Asian Paints International Private Ltd (APIPL) 145,085,773 287,335,460
Asian Paints (South Pacific) Ltd., 132,034,793 -
SCIB Chemicals, S.A.E. (SCIB) - 285,544,122
Sub-total 721,923,804 626,986,315
TOTAL 721,923,804 787,260,315

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
8. INVENTORIES
March 31, 2023 March 31, 2022
Rp Rp
Finished goods 26,804,599,899 24,642,891,025
Raw materials 12,779,603,879 17,817,779,318
Packaging materials 2,756,176,179 2,835,217,312

Total 42,340,379,957 45,295,887,655

Allowance for decline in value of inventories (6,851,536,000) (5,397,757,000)
Net 35,488,843,957 39,898,130,655

Management believes that the above allowance for decline in value of inventories is sufficient to cover the losses
which might arise from damage, defective and past validity of inventories.

9. PREPAID TAXES
March 31, 2023 March 31, 2022
Rp Rp
Value-added tax (VAT) - Input 24,737,966,043 26,094,868,660

10. RIGHT-OF-USE ASSETS

April 1, 2022 Additions Deductions March 31, 2023
Rp Rp Rp Rp
Cost:
Building 4,388,888,176 4,920,239,130 (4,388,888,176) 4,920,239,130
Vehicle 1,397,988,278 64,784,871 (321,053,151) 1,141,719,998
Total 5,786,876,454 4,985,024,001 (4,709,941,327) 6,061,959,128
Accumulated depreciation:
Building 254,429,8574 3,698,863,136 (4,388,888,175) 1,854,273,535
Vehicle 914,699,026 44,4457,866 (321,053,151) 1,038,103,741
Total 3,458,997,600 4,143,321,002 (4,709,941,326) 2,892,377,276
Net Carrying Value 2,327,878,854 3,169,581,852

April 1, 2021 Additions Deductions March 31, 2022
Rp Rp Rp Rp
Cost:
Building 3,442,517,131 4,579,477,502 (3,633,106,457) 4,388,888,176
Vehicle 1,271,775,040 126,213,238 - 1,397,988,278
Total 4,714,292,171 4,705,690,740 (3,633,106,457) 5,786,876,454
Accumulated depreciation:
Building 1,817,999,186 4,305,040,809 (3,578,741,421) 2,544,298,574
Vehicle 553,740,759 360,958,267 - 914,699,026
Total 2,371,739,945 4,665,999,076 (3,578,741,421) 3,458,997,600
Net Carrying Value 2,342,552,226 2,327,878,854

The average lease term is 1-3 years. The Company has no options to purchase certain equipment at the end of the
lease term.
Depreciation charged to statement of profit or loss and other comprehensive income amounted to Rp
4,143,321,002 in 2022-23 (2021-22: Rp 4,665,999,076), included in depreciation from right-of-use assets account.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

11. PROPERTY, PLANT AND EQUIPMENT

April 1, 2022 Additions Deductions Reclassifications March 31, 2023
Rp Rp Rp Rp Rp
Acquisition cost:
Land 116,409,556,728 - - - 116,409,556,728
Buildings 62,352,624,616 - - 1,094,909,555 63,447,534,171
Plant and machineries 96,216,477,476 - - 3,775,556,222 99,992,033,698
Office equipment 3,328,906,603 - - 208,801,103 3,537,707,706
Furniture and fixtures 1,683,151,355 - - 40,246,757 1,723,398,112
Computers 6,989,078,834 - (19,500,000) 504,550,000 7,474,128,834
TOTAL 286,979,795,612 - (19,500,000) 5,624,063,637 292,584,359,249
Construction in- 1,534,666,849 5,800,864,915 - (5,624,063,637) 1,711,468,127
progress
Accumulated
depreciation:
Buildings 7,279,006,236 2,175,717,704 - - 9,454,723,940
Plant and machineries 33,998,690,532 9,374,325,203 - - 43,373,015,735
Office equipment 2,054,075,181 530,704,548 - - 2,584,779,729
Furniture and fixtures 1,445,363,503 109,009,352 - - 1,554,372,855
Computers 5,020,387,423 1,134,503,206 (8,481,164) - 6,146,409,465
TOTAL 49,797,522,875 13,324,260,013 (8,481,164) - 63,113,301,724
Net Carrying Value 238,716,939,586 231,182,525,652

April 1, 2021 Additions Deductions Reclassifications March 31, 2022

Rp Rp Rp Rp Rp
Acquisition cost:
Land 116,409,556,728 - - - 116,409,556,728
Buildings 60,484,814,972 - - 1,867,809,644 62,352,624,616
Plant and machineries 74,024,860,057 - (108,351,179) 22,299,968,598 96,216,477,476
Office equipment 2,569,214,230 - (19,309,313) 779,001,686 3,328,906,603
Furniture and fixtures 1,666,320,803 - (20,799,448) 37,630,000 1,683,151,355
Computers 6,240,088,763 - (78,610,000) 827,600,071 6,989,078,834
TOTAL 261,394,855,553 - (227,069,940) 25,812,009,999 286,979,795,612
Construction in- 11,389,462,059 15,957,214,789 - (25,812,009,999) 1,534,666,849
progress
Accumulated
depreciation:
Buildings 5,203,468,259 2,075,537,977 - - 7,279,006,236
Plant and machineries 24,316,838,626 9,790,203,085 (108,351,179) - 33,998,690,532
Office equipment 1,548,955,266 524,429,228 (19,309,313) - 2,054,075,181
Furniture and fixtures 1,266,719,783 199,443,168 (20,799,448) - 1,445,363,503
Computers 3,702,620,362 1,396,377,061 (78,610,000) - 5,020,387,423
TOTAL 36,038,602,296 13,985,990,519 (227,069,940) - 49,797,522,875
Net Carrying Value 236,745,715,316 238,716,939,586
30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
11. PROPERTY, PLANT AND EQUIPMENT (contd.)
Depreciation charged to statement of profit or loss and other comprehensive income amounted to Rp
13,324,260,013 in 2022-23 (2021-22: Rp 13,985,990,519), included in depreciation expenses account.
Land is registered under “Hak Guna Bangunan” certificates, which will expire between 2028 and 2044.
Management has no reason to believe that the usage rights granted under these certificates will not be renewed/
extended by the relevant government authorities.
Reclassification denotes assets capitalized during the year.
Properties in the course of construction (“construction in progress”) for production, supply or administrative
purposes, or for purposes not yet determined, are carried at cost, less any recognized impairment loss. Cost
includes professional fees, equipment, labor cost, freight charges, etc. in accordance with the Company’s
accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the
assets are ready or put for their intended use.
Based on the review of the individual asset at end of the year, the Company’s management is of the opinion that
there is no indication of impairment on the property, plant and equipment as of March 31, 2023 and 2022.

12. TRADE ACCOUNTS PAYABLE

March 31, 2023 March 31, 2022
Rp Rp
Third Parties 21,748,086,367 22,613,258,331
Related Parties
Asian Paints Ltd (APL) 801,980,557 480,308,230
Asian Paints (Middle East) SPC 504,739,682 -
Berger Paints Emirates Limited Co - 135,081,594
Sub-total 1,306,720,239 615,389,824
Total 23,054,806,606 23,228,648,155
This account represents purchases of raw materials and packaging materials from local and foreign suppliers
and have credit terms of 30 to 120 days.

13. OTHER ACCOUNTS PAYABLE

March 31, 2023 March 31, 2022
Rp Rp
Third Parties
Local suppliers 3,384,140,663 11,689,886,533
Foreign suppliers 351,887,733 617,464,751
Sub-total 3,736,028,396 12,307,351,284
Related Parties
Asian Paints Ltd (APL) 819,745,743 796,412,598
Asian Paints International Private Ltd (APIPL) 691,506,975 1,442,045,980
Berger Paints Emirates Limited Co 65,278,708 716,187,600
SCIB Chemicals, S.A.E. (SCIB) - 55,851,894
Sub-total 1,576,531,426 3,010,498,072
Total 5,312,559,822 15,317,849,356

Other accounts payable to related parties represents expenses made by the related parties on behalf of the
Company and payable for various services. These other accounts payable are not subject to interest, have no
collateral and are payable on demand.
Other accounts payable to third parties includes outstanding balances related to services or goods from local or
foreign third-party suppliers, which normally have credit terms of 10 to 60 days.
No interest is charged to other accounts payable.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

14. TAXES PAYABLE

March 31, 2023 March 31, 2022
Rp Rp
Income taxes
Article 4(2) 1,319,723 169,832,633
Article 21 637,905,996 508,933,593
Article 23 183,042,672 358,382,539
Article 26 173,748,909 443,941,053
TOTAL 996,017,300 1,481,089,818

15. ACCRUED EXPENSES

March 31, 2023 March 31, 2022
Rp Rp
Marketing and sales promotion 31,079,424,000 36,619,562,229
Royalty 4,102,829,000 4,078,494,000
Freight and handling 2,143,945,000 1,692,350,000
Actuarial Leave Balance - Expatriate 1,774,608,601 1,699,816,000
Salary and benefits 1,725,447,078 3,926,104,078
Others 4,647,235,520 4,346,544,338
TOTAL 45,473,489,199 52,362,870,645

16. LEASE LIABILITIES

Maturity analysis from remaining lease liabilities are as follow:

March 31, 2023 March 31, 2022

Rp Rp
Year 2022-23 - 1,113,231,569
Year 2023-24 1,700,270,760 100,542,281
Year 2024-25 614,683,268 -
Year 2025-26 162,509,212 -
TOTAL 2,477,463,240 1,213,773,850

The Company does not face a significant liquidity risk with regard to its lease liabilities.

32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
17. POST-EMPLOYMENT BENEFITS LIABILITY
The net employee benefits expense recognized in the statements of profit and loss and other comprehensive
income and the post-employment benefits liability recognized in the statements of financial position as of and
for the years ended March 31, 2023 and 2022 were determined by Actuarial Consulting Office Riana & Rekan
(formerly PT Padma Radya Aktuaria), an independent actuary, in its reports dated April 4, 2023 and April 5, 2022,
respectively.
The significant assumptions used in determining the estimated post-employment benefits liability and net
employee benefits expense as of and for the years ended March 31, 2023 and 2022 are as follows:

Year 2022-2023 Year 2021-2022

Discount rate
Salary increment rate
Mortality rate
Disability rate
Resignation rate
Early retirement rate
Proportion of normal retirement
Normal retirement age
: 7.00% 7.50%
: 5.00% 5.00%
: 100% TMI4 100% TMI4
: 5% TMI4 5% TMI4
: 23% p.a until age 35 then decrease 23% p.a until age 35 then decrease
linearly to 0% at age 55 linearly to 0% at age 55
: N/A N/A
: 100% 100%
: 58 years 58 years

Amounts recognized in the statements of profit or loss and other comprehensive income in respect of the post-
employment benefits liability are as follows:

Year 2022-23 Year 2021-22

Current service cost 747,905,764 589,655,554
Past service cost (48,807,025) (115,570,633)
Interest cost 127,703,768 95,482,079
Adjustment due to Change in Attribution Method (28,863,016) -
Total employee benefits expense 797,939,491 569,567,000

Remeasurements recognized in other comprehensive income are as follows:

Year 2022-23 Year 2021-22

Experience adjustment (591,736,569) (109,399,000)
Change on financial assumptions 84,601,278 -
Remeasurements recognized in other comprehensive income (507,135,291) (109,399,000)

The movements in present value of defined benefits liability are as follows:

Year 2022-23 Year 2022-22

Beginning balance 1,743,382,429 1,283,214,429
Current service cost 747,905,764 589,655,554
Past service cost (48,807,025) (115,570,633)
Interest cost 127,703,768 95,482,079
Adjustment due to change in attribution method (28,863,016) -
Benefits paid (17,038,834) -
Actuarial gain recognized in the other comprehensive income (507,135,291) (109,399,000)
Ending balance 2,017,147,795 1,743,382,429
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

17. POST-EMPLOYMENT BENEFITS LIABILITY (contd.)

Movements in the liability recognized in the statement of financial position are as follows:

Year 2022-23 Year 2021-22

Beginning balance 1,743,382,429 1,283,214,429
Employee benefits expense 797,939,491 569,567,000
Remeasurements recognized in other comprehensive income (507,135,291) (109,399,000)
Benefits paid (17,038,834) -
Ending balance 2,017,147,795 1,743,382,429

Sensitivity analysis on significant actuarial assumptions are as follows:

March 31, 2023 March 31, 2022

Initial Discount Rate 2,017,147,795 1,743,382,364
Discount Rate + 1% 1,852,935,733 1,591,571,363
Discount Rate - 1% 2,202,900,108 1,915,613,157

Initial Salary Rate 2,017,147,795 1,743,382,364

Salary Rate + 1% 2,213,062,453 1,925,584,523
Salary Rate - 1% 1,841,638,738 1,580,787,184

The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating
the sensitivity of the post-employment benefits liability to principal assumptions, the same method (present
value of the post-employment benefits liability calculated with the Projected Unit Credit method at the end of
the reporting period) has been applied.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the
previous period.

The weighted average duration of the defined benefits liability as of March 31, 2023 and 2022 are 12.59 and 12.98
years, respectively.

Expected maturity analysis of undiscounted pension benefits are as follows:

March 31, 2023 March 31, 2022

Less than a year 46,468,386 39,383,313
Between two and five years 956,530,093 925,081,421
Between six and ten years 4,426,233,546 3,389,176,877
Beyond ten years 17,733,170,511 18,369,868,899

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
18. CAPITAL STOCK
The composition of the Company’s shareholders as of March 31, 2023 and 2022 is as follows:

March 31, 2023

Name of Shareholders Number of Shares Percentage of Ownership Total Paid-up Capital
Rp
APIPL 82,984 99.999% 9,945,632,40,000
Mr. Rahul Bhatnagar 1 0.001% 11,985,000
TOTAL 82,985 100.000% 994,575,225,000

March 31, 2022

Name of Shareholders Number of Shares Percentage of Ownership Total Paid-up Capital
Rp
APIPL 78,186 99.999% 937,059,210,000
Mr. Rahul Bhatnagar 1 0.001% 11,985,000
TOTAL 78,187 100.000% 937,071,195,000

Based on decision of the stockholders as stated in Notarial Deed No. 20 dated December 7, 2022 of RA Mahyasari
A. Notonagoro, S.H., public notary in Jakarta, the stockholders agreed to increase the Company’s issued and paid
up capital stock, from Rp 937,071,195,000 for 78,187 shares to Rp 994,575,225,000 for 82,985 shares. The increase
in issued and paid-up capital stock amounting to Rp 57,504,030,000 were fully subscribed and paid on November
18, 2022. The Notarial Deed was approved by Ministry of Law and Human Rights of the Republic of Indonesia in its
Decision Letter No. AHU-AH.01.03-0324062 Year 2022 dated December 07, 2022.

Previously, based on decision of the stockholders as stated in Notarial Deed No. 27 dated October 22, 2021 of
RA Mahyasari A. Notonagoro, S.H., public notary in Jakarta, the stockholders agreed to increase the Company’s
issued and paid up capital stock, from Rp 812,067,645,000 for 67,757 shares to Rp 937,071,195,000 for 78,187
shares. The increase in issued and paid-up capital stock amounting to Rp 125,003,550,000 were fully subscribed
and paid on October 25, 2021. The Notarial Deed was approved by Ministry of Law and Human Rights of the
Republic of Indonesia in its Decision Letter No. AHU-0190813.AH.01.11.Year 2021 dated November 02, 2021.

Also, based on decision of the stockholders as stated in Notarial Deed No. 01 dated May 3, 2021 of RA. Mahyasari
A. Notonagoro, S.H, public notary in Jakarta, the stockholders agreed to increase the Company’s authorized
shares into 100,000 shares, and issued and paid up capital stock from Rp 592,059,000,000 for 49,400 shares
to Rp 812,067,645,000 for 67,757 shares. The increase in issued and paid-up capital stock amounting to Rp
220,008,645,000 were fully subscribed and paid on May 05, 2021. Notarial Deed was approved by Ministry of Law
and Human Rights of the Republic of Indonesia in its Decision Letter No. AHU-0084368.AH.01.11.Year 2021 dated
May 06, 2021 for the increase on the issued and paid up capital stock, and in its Decision Letter No. AHU-01.03-
0293561.Year 2021 dated May 06, 2021 for the increase on authorized shares.

19. NET SALES

Year 2022-23 Year 2021-22
Rp Rp
Sales 187,170,431,217 175,699,008,073
Rebates and discounts (51,322,617,626) (37,359,980,365)
Net sales 135,847,813,591 138,339,027,708
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

20. OTHER INCOME

Year 2022-23 Year 2021-22
Rp Rp
Service charges (Note 26) 23,156,76,881 -
Interest income 872,796,275 1,882,877,709
Scrap sales 186,202,793 172,215,124
Interest income on tax refunds - 5,289,448,717
Others 54,882,062 35,512,278
TOTAL 3,429,558,011 7,380,053,828

21. MATERIAL CONSUMPTIONS

Year 2022-23 Year 2021-22
Rp Rp
Opening balance of inventories (Note 8) 39,898,130,655 33,347,484,014
Add: purchases during the year
Raw materials 74,040,892,772 88,261,681,952
Packaging materials 17,971,441,976 18,808,458,470
Finished goods 3,343,018,147 3,487,007,348
Less: inventories at the end of the year (Note 8)
Raw materials (12,503,123,879) (17,564,767,318)
Packaging materials (2,204,093,179) (2,512,728,312)
Finished goods (20,781,626,899) (19,820,635,025)
TOTAL 99,764,639,593 104,006,501,129

22. SELLING AND MARKETING EXPENSES

Year 2022-23 Year 2021-22
Rp Rp
Sales promotion 26,938,015,517 32,054,182,812
Advertisement 15,999,433,921 40,236,719,091
Freight and handling 11,758,971,474 10,446,924,564
Marketing 5,763,281,059 5,145,405,013
TOTAL 60,459,701,971 87,883,231,480

23. GENERAL AND ADMINISTRATIVE EXPENSES

Year 2022-23 Year 2021-22
Rp Rp
Travel 7,123,481,473 4,965,546,444
Legal and professional fees 4,332,604,233 13,147,339,699
Royalty expense (Note 26) 4,102,829,000 4,078,494,000
Repairs and maintenance 1,431,198,131 4,307,103,436
Courier and postage 1,395,949,795 1,730,214,000
Security 963,558,977 1,000,191,931
Recruitment 492,716,565 1,965,252,040
Expected credit losses (Note 6) (2,654,668,485) 24,437,783
Others (each below Rp 1,000,000,000) 5,468,977,611 4,848,675,531
TOTAL 22,656,647,300 36,067,254,864

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
24. MANUFACTURING EXPENSES
Year 2022-23 Year 2021-22
Rp Rp
Processing charges 1,010,386,956 1,772,453,423
Power and electricity 714,699,217 638,879,081
Research and development 455,875,810 338,471,192
Stores and spares consumption 373,001,432 214,892,157
Others (each below Rp 200,000,000) 630,808,883 361,670,516
TOTAL 3,184,772,298 3,326,366,369

25. INCOME TAX

Current Tax
No current tax income expense was recognized in 2022-23 and 2021-22 as the Company incurred fiscal losses.

Deferred Tax
The fiscal losses can be utilized against the taxable income for a period of five years subsequent to the year the
fiscal loss was incurred. Management believes there is no probable future taxable profits which will be available
to utilize against accumulated fiscal losses. Hence, no deferred tax was recognized on such fiscal losses.

Estimated Claim for Tax Refund

March 31, 2023 March 31, 2022

Corporate Income Tax
2018-2019 861,811,350 862,650,868 i)

2019-2020 44,236,476 780,491,000 ii)

2020-2021 317,635,000 317,635,000 iii)

2021-2022 1,548,010,000 1,548,010,000 iv)

2022-2023 978,239,190 - v)

Withholding Tax Article 21 Year 2022 7,731,668 7,731,668 vi)

TOTAL 3,757,663,684 3,516,518,536

i) The amount was applied for refund as per Corporate Income Tax report submitted to Tax Authorities.
Subsequently, on October 7, 2022, the Company had received accepted objection decree with total amount
Rp 48,535,493, and the Company had also received refund for the same on November 16, 2022. However,
remaining amount was adjusted partially to expense amounting to Rp 92,264,328 for amount that rejected
by the tax authorities for tax assessment FY 18-19 and the Company has decided not to pursue the dispute
and filed for tax appeal and tax accusation to tax court for partial retained amount as per objection decree.
Additional Rp 139,960,303 tax penalties was added from FY 18-19 in FY 22-23 for double billing by the tax
authorities for tax penalties that was already paid through SPMKP in FY 21-22. The Company will request of
refund for this overpayment.
ii) Based on the Corporate Income Tax report submitted to Tax Authorities for the year ended March 31,
2020, the Company applied for refund. Subsequently, on March 28, 2023, the Company has received Tax
Overpayment Order Letter (SPMKP) amounting to Rp 734,471,331 and the Company has also received
the refund for the same on March 30, 2023. However, remaining Rp 46,019,669 was adjusted against tax
assessment due and tax penalty issued by tax authority for FY 19-20 in FY 2022-23. The Company will file
objection and cancellation letters with Tax Authorities for Rp 44,236,476.
iii) Based on the estimated Corporate Income Tax calculation for the year ended March 31, 2021, the Company
reported an overpayment of Rp 317,635,000 from Article 22. Until the date of the independent auditors’
report, this matter is still waiting for inspection from the Tax Authority.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

iv) Based on the Corporate Income Tax calculation for the year ended March 31, 2022, the Company reported an
overpayment of Rp 1,548,010,000 from Article 22. Until the date of the independent auditors’ report, this
matter is in process of reporting to the Tax Authority.
v) Based on the Corporate Income Tax calculation for the year ended March 31, 2023, the Company reported
an overpayment of Rp 978,239,190 from Article 22. Until the date of the independent auditors report, this
matter is in process of reporting to the Tax Authority.

vi) On March 31, 2022, the Company reported to the Tax Authority an overpayment of Witholding Tax Article 21
amounting to Rp 7,731,668 for the period of October 2021 and decided to restitute the overpayment. Until
the date of the independent auditors’ report, this matter is still in process in the Tax Authority.

26. NATURE OF RELATIONSHIPS AND TRANSACTIONS WITH RELATED PARTIES

Nature of Relationships
a. Asian Paints International Private Limited (“APIPL”), immediate parent, and Mr. Rahul Bhatnagar, are the
Company’s shareholders.

b. Asian Paints Limited (“APL”) is the ultimate parent of the Company.

c. SCIB Chemicals, S.A.E. (“SCIB”), Berger Paints (Emirates) Limited Co (“BPEL”), Asian Paints (Bangladesh)
Limited (“APBL”), Asian Paints (Middle East) LLC (“APME”), Causeway Paints Lanka (Pvt.) Limited, Berger
Paints Bahrain WLL, Asian Paints (Nepal) Pvt. Ltd. and Asian Paints (South Pacific) Ltd. are related parties
which have the same shareholders or ultimate shareholders of the Company.

Transactions with Related Parties

In the normal course of business, the Company entered into certain transactions with related parties, including
the following:

a. The Company has sales to related parties. The details of sales to related parties are as follows:

Year 2022-23 Year 2021-22

Rp Rp
Asian Paints (Nepal) Pvt. Ltd. 232,168,910 11,189,880
Causeway Paints Lanka (Pvt) Limited. 184,776,351 -
Asian Paints (Bangladesh) Limited. 123,901,920 348,279,653
Asian Paints (South Pacific) Ltd., 35,088,380 -
TOTAL 575,935,561 359,469,533

b. The Company has purchases of raw materials from related parties. The details of purchases of raw materials
from related parties are as follows:

Year 2022-23 Year 2021-22

Rp Rp
Asian Paints Limited. 2,838,176,767 2,446,345,306
Asian Paints (Middle East ) LLC. 515,211,600 -
Berger Paints (Emriates) Limited Co. 65,278,708 365,304,594
TOTAL 3,418,667,075 2,811,649,900

38
 39
Notes to the Financial Statements (Contd.)

Financial Statements
26. NATURE OF RELATIONSHIPS AND TRANSACTIONS WITH RELATED PARTIES (contd.)
c. The Company accrued royalty expense to Asian Paints Limited amounted to Rp 4,102,829,000 in 2022-23
(2021-22: Rp 4,078,494,000) which were recorded as general and administrative expenses (Note 23).

d. The Company accrued other service expense to Asian Paints Limited amounted to Rp 87,172,356 in 2022-
23 (2021-22: Rp 1,024,983,617) which were recorded as part of construction in-progress and general and
administrative expenses.

e. The Company accrued service charges from Asian Paints International Private Limited amounted to
Rp 1,576,660,068 in 2022-23 (2021-22: Nil) and from Asian Paints (South Pacific) Ltd. amounted to Rp
739,016,813 in 2022-23 (2021-22: Nil) which were recorded as part of other income (Note 20).

f. The Company also has reimbursement transactions with related parties. The details of reimbursement
transactions with related parties are as follows:

Year 2022-23 Year 2021-22

Rp Rp
Reimbursement received:
Asian Paints Limited 441,375,220 401,293,598
Asian Paints (South Pacific) Ltd., 25,158,584 -
Asian Paints International Private Ltd (APIPL) 3,532,039 193,168,765
Asian Paints (Bangladesh) Limited 399,929 -
SCIB Chemicals, S.A.E. (SCIB) - 285,544,122
TOTAL 470,465,772 880,006,485
Reimbursement paid:
Asian Paints Limited 1,111,508,300 1,220,234,067
Asian Paints International Private Ltd (APIPL) 945,741,829 1,152,172,311
Berger Paints (Emirates) Limited Co 90,185,712 716,355,790
SCIB Chemicals, S.A.E. (SCIB) - 55,851,894
Berger Paints Bahrain WLL - 15,078,060
TOTAL 2,147,435,841 3,159,692,122

g. The Company provides remuneration to the key management personnel amounting to Rp 3,643,592,912 in
2022-23 (2021-22: Rp 5,516,544,946).

h. Some of the Company’s transactions and arrangements are with related parties and effect of these on the
basis determined between the parties is reflected in these financial statements. Transactions with related
parties are disclosed in Notes 6, 7, 12 and 13.

27. RECONCILIATION OF LIABILITIES ARISINGS FROM FINANCING ACTIVITIES

The table below detail changes in the Company’s liabilities arising from financing activities, including both cash
and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future
cash flows will be, classified in the Company’s statement of cash flows as cash flows from financing activities.

Non-cash changes
Financing cash Interest Addition to right of
April 1, 2022 flows expenses use assets March 31, 2023
Rp Rp Rp Rp Rp
Lease liabilities 1,213,773,850 (2,009,681,684) 184,227,071 3,089,144,003 2,477,463,240
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

Non-cash changes
Financing cash Addition to right of
April 1, 2021 flows Interest expenses use assets March 31, 2022
Rp Rp Rp Rp Rp
Lease liabilities 1,645,156,346 (4,435,742,385) 163,961,823 3,840,398,066 1,213,773,850
Loan from a related
party 102,172,470,000 (102,353,387,654) 180,917,654 - -
103,817,626,346 (106,789,130,039) 344,879,477 3,840,398,066 1,213,773,850

28. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT

The following table sets out the financial instruments as at the end of the reporting period:

March 31, 2023 March 31, 2022

Rp Rp
Financial assets - at amortized cost
Cash and cash equivalents 20,445,864,058 81,683,850,768
Trade accounts receivable 58,923,191,073 58,697,840,647
Other accounts receivable 721,923,804 787,260,315
Deposits and advance payments * 726,694,438 617,281,658
Total Financial Assets 80,817,673,373 141,786,233,388
Financial liabilities - at amortized cost
Trade accounts payable 23,054,806,606 23,228,648,155
Other accounts payable 5,312,559,822 15,317,849,356
Accrued expenses 45,473,489,199 52,362,870,645
Other non-current liabilities 2,855,327,000 -
Lease liabilities 2,477,463,240 1,213,773,850
Total Financial Liabilities 79,173,645,867 92,123,142,006

*excluding advance payments

Credit risk
The Company develops and maintains its credit risk gradings to categorize exposures according to their degree of
risk of default. The Company uses its own trading records to rate its major customers and other debtors.

The Company’s current credit risk grading framework comprises the following categories:

Category Description Basis for recognizing ECL

Performing The counterparty has a low risk of default and does not 12-month ECL
have any past-due amounts.
Doubtful Amount is >30 days past due or there has been a significant Lifetime ECL – not credit-impaired
increase in credit risk since initial recognition.
In default Amount is >90 days past due or there is evidence indicating Lifetime ECL – credit-impaired
the asset is credit-impaired.
Write-off Amount is > 2 years and there is evidence indicating that Amount is written off
the debtor is in severe financial difficulty and the Company
has no realistic prospect of recovery.
40
 41
Notes to the Financial Statements (Contd.)

Financial Statements
28. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT (contd.)

The table below details the credit quality of the Company’s financial assets as well as maximum exposure to
credit risk by credit risk rating grades as of March 31, 2023:

Internal Credit 12-month or Gross carrying Net carrying

Rating lifetime ECL amount Loss allowance amount
Rp Rp Rp
Cash and cash
equivalents (Note 5) Performing 12-month ECL 20,445,864,058 - 20,445,864,058
Lifetime ECL
Trade accounts (simplified
receivable (Note 6) (i) approach) 66,348,165,312 (7,424,974,239) 58,923,191,073
Other accounts
receivable Performing 12-month ECL 721,923,804 - 721,923,804
(7,424,974,239)

(i) The Company determines the ECL on these items by using a provision matrix, estimated based on historical
credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current
conditions and estimates of future economic conditions.

The Company has adopted procedures in extending credit terms to customers and in monitoring its credit risk.
The Company only grants credit to creditworthy counterparties. Cash is held with creditworthy institutions and is
subject to immaterial credit loss.

Although the Company’s credit exposure is concentrated mainly in Indonesia, it has no significant concentration
of credit risk with any single customer or corporate customers.

Further details of credit risks on trade accounts receivable are disclosed in Notes 6.

Interest rate risk

The Company is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and
assets.

The Company’s exposures to interest rates of financial assets and financial liabilities are detailed in the liquidity
risk management section of this note.

Foreign currency risk management

The Company is exposed to the effect of foreign currency exchange rate fluctuation mainly because of foreign
currency denominated balances and transactions such as cash and cash equivalents and certain expenses.

The Company manages the exposure to currency other than Rupiah by matching, as far as possible receipts and
payments in each individual currency. The Company’s net exposure as of reporting date is disclosed in below
table.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

28. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT (contd.)

Foreign currency sensitivity analysis

As of the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities
denominated in foreign currencies are as follows:

March 31, 2023 March 31, 2022

Foreign Equivalent in Foreign Equivalent in
Currency Rp Currency Rp
Monetary Asset
Cash in bank US$ 41,628 623,996,975 17,615 252,706,942
Trade accounts receivable
Related parties US$ 20,532 307,779,210 780 11,189,880
Other accounts receivable
Related parties US$ 48,160 721,923,804 43,705 626,986,315
Monetary Liabilities
Trade accounts payable
Related parties US$ 87,173 1,306,720,239 42,896 615,389,824
Third parties US$ 284,267 4,261,157,451 255,014 3,658,426,689
Other accounts payable
Related parties US$ 105,172 1,576,531,426 209,849 3,010,498,072
Third parties US$ 23,475 351,887,733 43,041 617,464,751
Net Monetary (Liabilities) Assets (5,842,596,860) (7,010,896,199)

The Company is mainly exposed to the U.S Dollar.

The conversion rates used by the Company on March 31, 2023 and 2022 are as follows:

March 31, 2023 March 31, 2022

Rp Rp
Foreign currency
US$ 1 14,990 14,346

The sensitivity rate used when reporting foreign currency risk to key management personnel is 1%, which is the
change in foreign exchange rate that management deems reasonably possible which will affect outstanding
foreign currency denominated monetary items at period end.

If the U.S. Dollar were to weaken/strengthen by 1% against Indonesian Rupiah, profit before tax will increase/
decrease by Rp 58,425,969.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Directors, which have built an appropriate
liquidity risk management framework for the management of the Company’s short, medium and long-term
funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate
reserves and matching the maturity profiles of financial assets and liabilities.

The Company maintains sufficient funds to finance its on-going working capital requirements.

42
 43
Notes to the Financial Statements (Contd.)

Financial Statements
28. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT (contd.)
Liquidity and interest risk tables
The following table details the Company’s remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Company can be required to pay. The table includes
principal cash flows. The contractual maturity is based on the earliest date on which the Company may be
required to pay.

March 31, 2023 March 31, 2022

Interest rate <1 year Interest rate <1 year
% Rp % Rp
Non-interest bearing
Trade accounts payable
Related parties - 1,306,720,239 - 615,389,824
Third parties - 21,748,086,367 - 22,613,258,331
Other accounts payable
Related parties - 1,576,531,426 - 3,010,498,072
Third parties - 3,736,028,396 - 12,307,351,284
Accrued expenses - 45,473,489,199 - 52,362,870,645
Other non-current liabilities - 2,855,327,000 - -
Interest bearing
Lease liability 9% 2,477,463,240 9% 1,213,773,850
TOTAL 79,173,645,867 92,123,142,006

The following table details the Company’s expected maturity for its non-derivative financial assets. The table
has been drawn up based on the undiscounted contractual maturities of the financial assets including interest
that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary
in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and
liability basis.
March 31, 2023 March 31, 2022

Interest rate <1 year Interest rate <1 year

% Rp % Rp
Non-interest bearing
Trade accounts receivable
Related parties - 307,779,210 - 11,189,880
Third parties - 58,615,411,863 - 58,686,650,767
Other accounts receivable
Related parties - 721,923,804 - 626,986,315
Third parties - - - 160,274,000
Interest bearing
Cash in banks (Citibank - IDR) 0.75% - 1.25% 1,014,423,895 0.75% - 1.25% 2,921,287,928
Cash in banks (Citibank - USD) 0.25% - 0.50% 332,032,368 0.25% - 0.50% 237,999,068
Cash in banks (BCA - IDR) 0.50% - 0.75% 2,812,873,194 0.50% - 0.75% 3,003,937,798
Cash in banks (State Bank of India - IDR) 0.00% - 2.00% 15,738,421,310 0.00% 200,876,353
Cash in banks (State Bank of India - USD) 0.00% - 0.25% 178,268,087 0.00% - 0.25% 15,687,389
Cash in banks (PT Bank Mandiri, Tbk - IDR) 0.00% - 0.80% 534,215,457 0.00% - 1.90% 357,128,599
Cash in banks (PT Bank Mandiri, Tbk - USD) - 115,375,182 - -
Time deposit - - 3.25% 77,437,500,000
TOTAL 80,370,724,370 - 143,659,518,097

*)The basis of interest rates calculation are using the percentage before 20% final tax deduction.
 PT Asian Paints Indonesia

Notes to the Financial Statements (Contd.)

28. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT (contd.)

Fair values of financial assets and financial liabilities

The carrying amounts of cash and cash equivalents, trade and other accounts receivable, deposits, trade and
other accounts payable, accrued expenses, lease liabilities and loan from a shareholder approximate their
respective fair values due to the relatively short-term maturity of these financial instruments.

Capital management policies and objectives

The Company reviews its capital structure at least annually to ensure that the Company will be able to continue
as a going concern. The capital structure of the Company comprises only of issued capital. The Company’s overall
strategy remains unchanged from 2021-22.

29. NON-CASH TRANSACTIONS

During the current year, the Company entered into the following non-cash investing and financing activities which
are not reflected in the statements of cash flows:

• The Company acquired right of use assets under leases in 2022-23 by Rp 3,089,144,003
(2021-22: Rp 3,840,398,066).

• The Company acquired property, plant and equipment through other accounts payable to third parties in
2022-2023 by Rp 163,031,240 (2021-22: Rp 5,905,506,494).

• The Company acquired property, plant and equipment through accrued expense in 2022-2023 by nil
(2021-22: Rp 356,768,000).

30. MANAGEMENT RESPONSIBILITY AND APPROVAL OF FINANCIAL STATEMENTS

The preparation and fair presentation of the financial statements on pages 1 to 39 were the responsibilities of
the management and were approved by the Directors and authorized for issue on May 2, 2023.

44
PT Asian Paints Color Indonesia
Contents
Directors’ Statement Letter........................................................................................................................................................................4

Independent Auditor’s Report............................................................................................................................................................... 5-6

Statement of Financial Position.................................................................................................................................................................7

Statement of Profit or Loss and other comprehensive income...........................................................................................................8

Statement of Changes in Equity.................................................................................................................................................................9

Statement of Cash Flows...........................................................................................................................................................................10

Notes to the financial statements..................................................................................................................................................... 11-29

 PT Asian Paints Color Indonesia

DIRECTORS’ STATEMENT LETTER REGARDING

RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
AS OF MARCH 31,2023 AND FOR THE YEAR ENDED
PT ASIAN PAINTS COLOR INDONESIA (“THE COMPANY”)

I, the undersigned:

Name : Abhilasha Kannan

Office address : Palma Tower 16th Floor,

Jl R.A Kartini II-S Kav.6 Sektor II Pondok Pinang,
Kebayoran Lama- Jakarta Selatan 12310.

Domicille as : Pondok Indah Golf Apartment Jasmine Tower,

stated in ID card Jl Metro Pondok Indah Jakarta Selatan No. 1075.
Pondok Pinang, Kebayoran Lama

Phone Number : 0811-1252-7872

Position : President Director

Declare that:

1. I am responsible for the preparation and representation of the Company’s financial statements;

2. The Company’s financial statements have been prepared and presented in accordance with Indonesian
Financial Accounting Standards;

3. a. All information in the Company’s financial statements have been disclosed in a complete and
truthful manner;

b. The Company’s financial statements do not contain misleading material information or facts, nor
do they omit material information and facts;

4. I am responsible for the Company’s internal control system.

Thus, this statement letter is made truthfully.

For and on behalf of the Board of Directors,

Jakarta, May 2, 2023

Abhilasha Kannan
President Director

4

Independent Auditor’s Report
The Shareholders, Boards of Commissioners and
Directors
PT Asian Paints Color Indonesia
Opinion
We have audited the financial statements of PT Asian
Paints Color Indonesia (the “Company”), which comprise
the statement of financial position as of March 31,
2023, and the statement of profit or loss and other
comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements
present fairly, in all material respects, the financial
position of the Company as of March 31, 2023, and its
financial performance and its cash flows for the year
then ended in accordance with Indonesian Financial
Accounting Standards.
Basis for Opinion
We conducted our audit in accordance with Standards
on Auditing established by the Indonesian Institute of
Certified Public Accountants. Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements
paragraph of our report. We are independent of the
Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements
in Indonesia, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Other Matter
The financial statements of the Company as of March 31,
2022 and for the year then ended were audited by other
independent auditors who expressed an unmodified
opinion on such financial statements on April 26, 2022.
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation and fair
presentation of the financial statements in accordance
with Indonesian Financial Accounting Standards, and
for such internal control as management determines
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
5
Financial Statements
In preparing the 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.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 Standards on Auditing 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
financial statements.
As part of an audit in accordance with Standard on
Auditing, we exercise professional judgment and
maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material
misstatement of the 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, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
 PT Asian Paints Color Indonesia

Independent Auditor’s Report (Contd.)

• Conclude on the appropriateness of management’s We communicate with those charged with governance
use of the going concern basis of accounting and, regarding, among other matters, the planned scope
based on the audit evidence obtained, whether a and timing of the audit and significant audit findings,
material uncertainty exists related to events or including any significant deficiencies in internal control
conditions that may cast significant doubt on the that we identify during our audit.
Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we Kantor Akuntan Publik
are required to draw attention in our auditor’s report
TANUBRATA SUTANTO FAHMI BAMBANG & Rekan
to the related disclosures in the financial statements
Tjhai Wiherman, SE., Ak., M.Ak., CPA., CA
or, if such disclosures are inadequate, to modify
License No. AP.0135
our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s May 2, 2023
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 financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.

6
 7
Statement of Financial Position

Financial Statements
As of 31 March 2023
(Expressed in Rupiah, unless otherwise stated)

Notes March 31, 2023 March 31, 2022

Rp Rp
ASSETS
CURRENT ASSETS
Cash and cash equivalent 5 538,252,369 445,454,440
Other receivables 1,056,000 -
Prepaid taxes 7 1,115,548,766 1,094,481,195
Other current assets 8 3,645,001 44,959,909
TOTAL CURRENT ASSETS 1,658,502,136 1,584,895,544
NON-CURRENT ASSETS
Right of use of assets - net 9 124,619,804 75,735,874
Property and equipment – net 10 - 1,880,176
TOTAL NON-CURRENT ASSETS 124,619,804 77,616,050
TOTAL ASSETS 1,783,121,940 1,662,511,594

LIABILITIES AND EQUITY

LIABILITIES
Lease liability 114,972,961 15,486,494
Taxes payable 11 - 1,750,000
Accrued expenses 12 43,768,000 36,103,000
TOTAL LIABILITIES 158,740,961 53,339,494
EQUITY
Capital stock - Rp 12,617,000 par value per share
Authorized - 2,800 shares
Subscribed and paid-up – 2,509 and
2,470 shares as at March 31, 2023 and 2022, respectively 13 31,656,053,000 31,163,990,000
Deficit (30,031,672,021) (29,554,817,900)
TOTAL EQUITY 1,624,380,979 1,609,172,100
TOTAL LIABILITIES AND EQUITY 1,783,121,940 1,662,511,594

For and on behalf of the Board of Directors

Jakarta, May 2, 2023

___________________
Mrs. Abhilasha Kannan
President Director
 PT Asian Paints Color Indonesia

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 March 2023
(Expressed in Rupiah, unless otherwise stated)

Notes 2023 2022

Rp Rp
INCOME
Other income 19,147,717 35,484,290
EXPENSES
General and administrative expenses 14 61,452,592 46,789,408
Salaries and benefits 247,867,790 230,900,810
Depreciation from right of use of asset 9 177,163,409 183,207,397
Interest expense from lease liability 9,006,850 8,036,586
Interest expense 16 - 918,398
Foreign exchange loss (gain) – net 511,197 (5,257,021)
Total Expenses 496,001,838 464,595,578
LOSS BEFORE INCOME TAX EXPENSE (476,854,121) (429,111,288)
INCOME TAX EXPENSE 15 -
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (476,854,121) (429,111,288)

For and on behalf of the Board of Directors

Jakarta, May 2, 2023

___________________
Mrs. Abhilasha Kannan
President Director

8
 9
Statement of Changes In Equity

Financial Statements
For the year ended 31 March 2023
(Expressed in Rupiah, unless otherwise stated)

Notes Share Capital Deficit Total Equity

Rp Rp Rp
Balance as of March 31, 2021 29,649,950,000 (29,125,706,612) 524,243,388
Additional paid in capital 13 1,514,040,000 - 1,514,040,000
Total comprehensive loss for the year - (429,111,288) (429,111,288)
Balance as of March 31, 2022 31,163,990,000 (29,554,817,900) 1,609,172,100
Additional paid in capital 13 492,063,000 - 492,063,000
Total comprehensive loss for the year - (476,854,121) (476,854,121)
Balance as of March 31, 2023 31,656,053,000 (30,031,672,021) 1,624,380,979
 PT Asian Paints Color Indonesia

Statement of Cash Flows

For the year ended 31 March 2023
(Expressed in Rupiah, unless otherwise stated)

2023 2022
Rp Rp
CASH FLOW FROM OPERATING ACTIVITIES
Loss before income tax (476,854,121) (429,111,288)
Adjustment for :
Interest expense 9,006,850 8,954,984
Depreciation of property and equipment 1,880,176 3,206,843
Depreciation of right of use of assets 177,163,409 183,207,397
Operating cash flows before changes in working capital (288,803,686) (233,742,064)
Changes in working capital:
Other receivables (1,056,000) -
Prepaid taxes (21,067,571) (28,587,756)
Other current assets 41,314,908 47,121,622
Trade and other payables - (75,075,541)
Accrued expenses 7,665,000 (114,628,000)
Taxes payable (1,750,000) (2,543,665)
Net Cash Used in Operating Activities (263,697,349) (407,455,404)
CASH FLOW FROM FINANCING ACTIVITIES
Proceed from issuance of shares 492,063,000 1,514,040,000
Payment of lease liabilities and related interest (135,567,722) (233,559,290)
Proceed from loan to related party - 220,935,000
Payment loan to related party - (730,535,000)
Intercompany interest paid - (918,398)
Net Cash Provided by Financing Activities 356,495,278 769,962,312
NET INCREASE IN CASH AND CASH EQUIVALENT 92,797,929 362,506,908
CASH AND CASH EQUIVALENT AT BEGINNING OF THE YEAR 445,454,440 82,947,532
CASH AND CASH EQUIVALENT AT THE END OF THE YEAR 538,252,369 445,454,440

10

Notes to the Financial Statements
for the year ended 31 March 2023
(Expreseed in Rupiah, unless otherwise stated)
1. GENERAL
a. Establishment and General Information
PT Asian Paints Color Indonesia (the “Company”)
was established within the framework of the Foreign
Capital Investment Law No. 25 year 2007 and 114/1/
IP/PMA/2015 year 2015 based on the Notarial Deed
No. 01 dated March 2, 2015 of Novita Puspitarini,
SH. The Deed of Establishment was approved by
Ministry of Law and Human Rights of the Republic
of Indonesia in its Decision Letter No. AHU-0015356.
AH.01.01.Year 2015 dated April 7, 2015. The Company
is domiciled in South Jakarta and its registered
office address is at Gedung Palma Tower, Lantai
16, Unit C,D,E Jl. RA Kartini II-S Kaveling 6 Sektor II
Kec. Kebayoran Lama, Kel. Pondok Pinang, Jakarta
Selatan 12310, Indonesia.
The Company’s Articles of Association have been
amended several times, most recently by Notarial
Deed No. 19 dated December 7, 2022 of Raden Ayu
Mahyasari Arizza Notonagoro, S.H., public notary in
The Company’s management consisted of the following:
March 31, 2023
President Commissioner : Pragyan Kumar
Commissioners : Aashish Kshetry
Jeyamurugan Ramalingam
Jeyapandiyan
President Director : Abhilasha Kannan
Directors : Abhishek Mohnot
Sparsh Vijay Dwivedi
The changes in the Company’s Board of Directors b.
and Commissioners has been stated in the most
recent amendment of the Company’s Articles of
Association in Notarial Deed No. 19 dated
December 7, 2022 of Raden Ayu Mahyasari Arizza
Notonagoro, S.H., public notary in Jakarta. This
amendment was received and registered by
Ministry of Law and Human Rights of the Republic
of Indonesia in its Decision Letter No. AHU-
AH.01.09-0085172 Year 2022 dated December 9,
2022.
11
Financial Statements
Jakarta, regarding increase in the Company’s issued
and paid-up capital and change in the composition of
the Company’s management. This amendment was
approved by Ministry of Law and Human Rights of
the Republic of Indonesia in its Decision Letter No.
AHU-AH.01.03-0324033 Year 2022 dated December
9, 2022 and No. AHU-AH.01.09-0085172 Year 2022
dated December 9, 2022, respectively.
In accordance with Article 3 of the Company’s
Articles of Association (AoA), the purpose and
objective of the Company is doing business in
wholesale in paint and wallpaper industry. In 2017,
the Company sold all inventories and property and
equipment to PT Asian Paints Indonesia (API). The
Company did not make any sale transaction after
August 2017.
The Company has 2 employees as of March 31, 2023
(2022; 2). The Company will continue the operations
as importer and distributor of paints, coatings and
wallpaper in the future.
March 31, 2022
Rahul Bhatnagar
Aashish Kshetry
Jeyamurugan Ramalingam
Jeyapandiyan
Abhilasha Kannan
Abhishek Mohnot
Sparsh Vijay Dwivedi
Gurunath Sadhanandan
Management Responsibility and Approval of
Financial Statements
The preparation and fair presentation of the
financial statements were the responsibilities of the
management, and were approved by the Board of
Directors and authorized for issue on May 2, 2023.
 PT Asian Paints Color Indonesia
Notes to the Financial Statements (Contd.)
2. ADOPTION OF NEW AND REVISED •
STATEMENTS OF FINANCIAL ACCOUNTING
STANDARDS (“PSAK”) AND the Company is still evaluating the possible impact
INTERPRETATION OF PSAK (“ISAK”)
a. Amendments and improvements to standards
effective in the current year
3.
The following amendments and improvements to
PSAK have no material impact to the disclosures
or on the amounts recognized in the financial
statements:
• Amendments to PSAK 22: Business Combination
Regarding Reference to The Conceptual a.
Framework;
• Amendments to PSAK 57: Provisions,
Contingent Liabilities and Contingent Assets
Regarding Onerous Contracts - Cost of Fulfilling
a Contract; b.
• PSAK 69 (Improvements 2020): Agriculture;
• PSAK 71 (Improvements 2020): Financial
Instruments; and
• PSAK 73 (Improvements 2020): Leases.
b. Standards, amendments and interpretation to
standards issued not yet adopted
The following amendments to standards are
effective for periods beginning on or after
January 1, 2023, with early application permitted
are:
• Amendment to PSAK 1: Presentation of
Financial Statements regarding Classification of
Liabilities as Current or Non-current;
• Amendment to PSAK 1: Presentation of
Financial Statements regarding Disclosure of
Accounting Policies; c.
• Amendment to PSAK 16: Property, Plant and
Equipment regarding Proceeds Before Intended
Use;
• Amendment to PSAK 25: Accounting Policies,
Changes in Accounting Estimates and Errors
regarding Definition of Accounting Estimates;
and
• Amendment to PSAK 46: Income Taxes related
to Assets and Liabilities arising from a Single
Transaction.
The following new standard is effective for periods
beginning on or after January 1, 2025, with early
application permitted is:
12
PSAK 74: Insurance Contract
As of the issuance date of the financial statements,
of the implementation of these PSAKs to its
financial statements.
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The accounting policies set out below have been
applied consistently to all periods presented in these
financial statements.
Statement of compliance
The financial statements of the Company have been
prepared in accordance with Indonesian Financial
Accounting Standards (“SAK”).
Basis of preparation
The Company’s financial statements have been
prepared on an accrual basis and under the historical
cost convention except for certain accounts
measured at fair values at the end of each reporting
period.
Historical cost is generally based on the fair value of
the consideration given in exchange for goods and
services.
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.
The statements of cash flows are prepared using
the indirect method by classifying cash flows into
operating and financing activities.
Foreign Currency Transactions and Balances
The financial statements of the Company are
presented in Indonesian Rupiah, which is the
functional currency and the presentation currency
for the financial statements.
In preparing the financial statements, transactions
in currencies other than the Company’s functional
currency (foreign currencies) are recognized at the
rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period,
monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are

Notes to the Financial Statements (Contd.)
denominated in foreign currencies are retranslated
at the rates prevailing at the date when the fair
value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences on monetary items are
recognized in profit or loss in the period in which
they arise.
d. Transaction with Related Parties
A related party is a person or entity that is related to
the Company:
a. A person or a close member of that person’s
family is related to the reporting entity if that
person:
e.
i. has control or joint control over 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 the 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
13
Financial Statements
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 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.
Financial instruments
Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities are added
to or deducted from the fair value of the financial
assets and financial liabilities, as appropriate,
on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss
are recognized immediately in profit or loss.
Classification of financial assets
Except for those trade receivables that do not
certain a significant financing component and are
measured at the transaction price in accordance with
PSAK 72, all financial assets are initially measured
at fair value adjusted for transaction costs (where
applicable).
The Company’s financial assets comprise of cash
and cash equivalents, trade receivables, other
receivables and refundable deposit.
For the purpose of subsequent measurement
the company’s financial assets are classified as
amortized cost.
The classification is determined by basis of both:
• the entity’s business model for managing the
financial asset and
 PT Asian Paints Color Indonesia
Notes to the Financial Statements (Contd.)
• the contractual cash flow characteristics of the
financial asset.
All the financial assets are reviewed for impairment
at least at each reporting date to identify whether
there is any objective evidence that a financial
asset or a group of financial assets is impaired and
recognise a loss allowance for expected credit losses
on those financial assets.
All income and expenses relating to financial
assets that are recognised in profit or loss are
presented within finance costs, finance income
or other financial items, except for impairment of
trade receivables which is presented within other
expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if
the assets meet the following conditions (and are
not designated as FVTPL):
• they are held within a business model whose
objective is to hold the financial assets and
collect its contractual cash flows
• the contractual terms of the financial assets
give rise to cash flows that are solely payments
of principal and interest on the principal
amount outstanding
After initial recognition, these are measured
at amortised cost using the effective interest
method. Discounting is omitted where the effect
of discounting is immaterial. The cash and cash
equivalent, trade receivable, other receivables and
refundable deposit fall into this category of financial
instruments.
The method that is used in the calculation of
the amortised cost of a financial asset and in the
allocation and recognition of the interest revenue in
profit or loss over the relevant period. The rate that
exactly discounts estimated future cash payments
or receipts through the expected life of the financial
asset to the gross carrying amount of a financial
asset. When calculating the effective interest rate,
an entity shall estimate the expected cash flows by
considering all the contractual terms of the financial
instrument (for example, prepayment, extension,
call and similar options) but shall not consider the
14
expected credit losses. The calculation includes all
fees and points paid or received between parties
to the contract that are an integral part of the
effective interest rate, transaction costs, and all
other premiums or discounts. There is a presumption
that the cash flows and the expected life of a group
of similar financial instruments can be estimated
reliably. However, in those rare cases when it is not
possible to reliably estimate the cash flows or the
expected life of a financial instrument (or group
of financial instruments), the entity shall use the
contractual cash flows over the full contractual term
of the financial instrument (or group of financial
instruments).
Classification and subsequent measurement of
financial liabilities
The Company’s financial liabilities include accrued
expenses and lease liability.
Financial liabilities are initially measured at
fair value, and, where applicable, adjusted for
transaction costs unless the Company designated a
financial liability at fair value through profit or loss.
Financial liabilities are measured subsequently at
amortised cost using the effective interest method.
Effective interest method
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period to the net
carrying amount on initial recognition.
Impairment of financial assets
PSAK 71’s impairment requirements use more
forward - looking information to recognise expected
credit losses – the ‘expected credit loss (ECL)
model’. Instruments within the scope of the new
requirements included loans and other debt - type
financial assets measured at amortised cost and
FVOCI, trade receivables, contract assets recognised
and measured under PSAK 72 and loan commitments
and some financial guarantee contracts (for the
issuer) that are not measured at fair value through
profit or loss.

Notes to the Financial Statements (Contd.)
Recognition of credit losses is no longer dependent
on the Company first identifying a credit loss
event. Instead the Company considers a broader
range of information when assessing credit risk
and measuring expected credit losses, including
past events, current conditions, reasonable and
supportable forecasts that affect the expected
collectability of the future cash flows of the
instrument.
In applying this forward-looking approach, a
distinction is made between:
a. financial instruments that have not
deteriorated significantly in credit quality since
initial recognition or that have low credit risk
(‘Stage 1’) and
b. financial instruments that have deteriorated
significantly in credit quality since initial
recognition and whose credit risk is not low
(‘Stage 2’).
‘Stage 3’ would cover financial assets that have
objective evidence of impairment at the reporting
date. ‘12-month expected credit losses’ are
recognised for Stage 1 while ‘lifetime expected
credit losses’ are recognised for Stage 2 and Stage 3.
Credit loss are the difference between all
contractual cash flows that are due to an entity
in accordance with the contract and all the cash
flows that the entity expects to receive (ie all cash
shortfalls), discounted at the original effective
interest rate (or credit adjusted effective interest
rate for purchased or originated credit-impaired
financial assets). An entity shall estimate cash flows
by considering all contractual terms of the financial
instrument (for example, prepayment, extension,
call and similar options) through the expected life
of that financial instrument. The cash flows that are
considered shall include cash flows from the sale of
collateral held or other credit enhancements that
are integral to the contractual terms.
There is a presumption that the expected life of
a financial instrument can be estimated reliably.
However, in those rare cases when it is not possible
to reliably estimate the expected life of a financial
instrument, the entity shall use the remaining
contractual term of the financial instrument.
Expected credit losses are the weighted average of
credit losses with the respective risks of a default
occurring as the weights.
15
Financial Statements
12‑month expected credit losses are the portion
of lifetime expected credit losses that represent
the expected credit losses that result from default
events on a financial instrument that are possible
within the 12 months after the reporting date.
Lifetime expected credit losses are the expected
credit losses that result from all possible default
events over the expected life of a financial
instrument.
Measurement of the expected credit losses is
determined by a probability-weighted estimate of
credit losses over the expected life of the financial
instrument.
For all other financial assets, objective evidence of
impairment could include:
• significant financial difficulty of the issuer or
counterparty; or
• breach of contract, such as default or
delinquency in interest or principal payments;
or
• it becoming probable that the borrower will
enter bankruptcy or financial re-organisation;
or
• the disappearance of an active market for that
financial asset because of financial difficulties.
For financial assets carried at amortised cost, the
amount of the impairment loss is measured as the
difference between the asset’s carrying amount and
the present value of estimated future cash flows,
discounted at the financial asset’s original effective
interest rate.
Trade and other receivables
The Company makes use of a simplified approach
in accounting for trade and other receivables and
records the loss allowance as lifetime expected
credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential
for default at any point during the life of the
financial instrument. In calculating, the Company
uses its historical experience, external indicators
and forward-looking information to calculate the
expected credit losses using a provision matrix.
 PT Asian Paints Color Indonesia

Notes to the Financial Statements (Contd.)

Derecognition of financial assets including any fees paid net of any fees received
and discounted using the original effective rate is
On derecognition of a financial asset measured at
at least 10 percent different from the discounted
amortised cost, the difference between the asset’s
present value of the remaining cash flows of the
carrying amount and the sum of the consideration
original financial liability. If the modification is not
received and receivable is recognised in profit or
substantial, the difference between: (1) the carrying
loss.
amount of the liability before the modification;
and (2) the present value of the cash flows after
On derecognition of financial asset in its entirety,
modification is recognised in profit or loss as the
the difference between the asset’s carrying amount
modification gain or loss within other gains and
(measured at the date of derecognition) and the
losses.
consideration received (including any new asset
obtained less any new liability assumed) shall be
f. Netting of Financial Assets and Financial
recognised in profit or loss.
Liabilities
If the transferred asset is part of a larger financial Financial assets and financial liabilities are offset
asset (eg when an entity transfers interest cash and the net amount presented in the statement
flows that are part of a debt instrument) and the of financial position when the company has a
part transferred qualifies for derecognition in its legally enforceable right to set off the recognized
entirety, the previous carrying amount of the larger amounts; and intends either to settle on a net
financial asset shall be allocated between the part basis, or to realize the asset and settle the
that continues to be recognised and the part that is liability simultaneously. A right to set-off must be
derecognised, on the basis of the relative fair values available today rather than being contingent on
of those parts on the date of the transfer. For this a future event and must be exercisable by any of
purpose, a retained servicing asset shall be treated the counterparties, both in the normal course of
as a part that continues to be recognised. The business and in the event of default, insolvency or
difference between the carrying amount (measured bankruptcy.
at the date of derecognition) allocated to the part
derecognised and the consideration received for the g. Cash and Cash Equivalents
part derecognised (including any new asset obtained
For cash flow presentation purposes, cash and cash
less any new liability assumed) shall be recognised in
equivalents consist of cash on hand and in banks and
profit or loss.
all unrestricted investments with maturities of three
months or less from the date of placement.
Derecognition of financial liabilities
The Company derecognises financial liabilities h. Prepaid Expense
when, and only when, the Company obligations
Prepaid expenses are amortized over their beneficial
are discharged, cancelled or have expired. The
periods using the straight line method.
difference between the carrying amount of the
financial liability derecognised and the consideration
i. Property and Equipment
paid and payable is recognised in profit or loss.
Property and equipment held for use in
When the Company exchanges with the existing
the production or supply of goods or for
lender one debt instrument into another one with
administrative purposes are stated at cost less
the substantially different terms, such exchange is
accumulated depreciation and accumulated
accounted for as an extinguishment of the original
impairment losses.
financial liability and the recognition of a new
financial liability. Similarly, the Company accounts
Depreciation is recognized so as to write-off
for substantial modification of terms of an existing
the cost of assets less residual value using the
liability or part of it as an extinguishment of the
straight-line method based on the estimated
original financial liability and the recognition of
useful lives of the assets as follows:
a new liability. It is assumed that the terms are
substantially different if the discounted present
value of the cash flows under the new terms, Years
Computers 4
16

Notes to the Financial Statements (Contd.)
The estimated useful lives, residual values and
depreciation method are reviewed at each year
end, with the effect of any changes in estimate
accounted for on a prospective basis.
The cost of maintenance and repairs is charged
to operations as incurred. Other costs incurred
subsequently to add to, replace part of, or service
an item of property and equipment, are recognized
as asset if, and only if, it is probable that future
economic benefits associated with the item will
flow to the entity and the cost of the item can
be measured reliably. When assets are retired or
otherwise disposed off, their carrying values are
removed from the accounts and any resulting gain or
loss is reflected in the current operations.
j. Impairment of Non-Financial Asset
At the end of each reporting period, the Company
reviews the carrying amount of non-financial assets
to determine whether there is any indication that
those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount
of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is
not possible to estimate the recoverable amount
of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to
which the asset belongs.
Estimated recoverable amount is the higher of fair
value less cost to sell and value in use. In assessing
value in use, the estimated future cash flows are
discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and risks
specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of the non-financial
asset (cash generating unit) is less than its carrying
amount, the carrying amount of the asset (cash
generating unit) is reduced to its recoverable
amount and an impairment loss is recognized
immediately in profit or loss.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognized for the asset (or
17
Financial Statements
cash-generating unit) in prior years. A reversal of an
impairment loss is recognized immediately in profit
or loss.
Accounting policy for impairment of financial assets
is discussed in Note 3e.
k. Leases
The Company as lessee
The Company assesses whether a contract is or
contains a lease, at the inception of the contract.
The Company recognizes a right-of-use asset and
a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except
for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value
assets. For these leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease unless
another systematic basis is more representative of
the time pattern in which economic benefits from
the leased assets are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, the Company uses its incremental
borrowing rate.
Lease payments included in the measurement of the
lease liability comprise:
• fixed lease payments (including in-substance
fixed payments), less any lease incentives;
• variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
• the amount expected to be payable by the
lessee under residual value guarantees;
• the exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and
• payments of penalties for terminating the
lease, if the lease term reflects the exercise of
an option to terminate the lease.
The lease liability is presented as a separate line in
the statement of financial position.
 PT Asian Paints Color Indonesia
Notes to the Financial Statements (Contd.)
The lease liability is subsequently measured by
increasing the carrying amount to reflect the
interest on the lease liability (using the effective
interest method) and by reducing the carrying
amount to reflect the lease payments made.
The Company remeasures the lease liability (and
makes a corresponding adjustment to the related
right-of-use assets) whenever:
• the lease term has changed or there is a change
in the assessment of the exercise of a purchase
option, in which case the lease liability is
remeasured by discounting the revised lease
payments using a revised discount rate.
• the lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual value,
in which cases the lease liability is remeasured
by discounting the revised lease payments
using the initial discount rate (unless the
lease payments change is due to a change in a
floating interest rate, in which case a revised
discount rate is used).
• a lease contract is modified and the lease
modification is not accounted for as a separate
lease, in which case the lease liability is
remeasured by discounting the revised lease
payments using a revised discount rate.
The Company did not make any such adjustments
during the periods presented.
The right-of-use assets comprise the initial
measurements of the corresponding lease
liability, lease payments made at or before the
commencement day and any initial direct costs. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.
Whenever the Company incurs an obligation for
costs to dismantle and remove a leased asset,
restore the site on which it is located or restore the
underlying assets to the conditions required by the
terms and conditions of the lease, a provision is
recognized and measured under PSAK 57. The costs
are included in the related right- of-use asset, unless
those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the
shorter period of lease term and useful life of the
underlying assets. If a lease transfers ownership
18
of the underlying assets or the cost of the right-of-
use assets reflects that of the Company expects
to exercise a purchase option, the related right-of-
use asset is depreciated over the useful life of the
underlying assets. The depreciation starts at the
commencement date of the lease.
The right-of-use assets are presented as a separate
line in the statement of financial position.
The Company applies PSAK 48 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the
impairment of assets policy.
Variable rents that do not depend on an index or
rate are not included in the measurements of the
lease liability and the right-of-use asset. The related
payments are recognized as an expense in the period
in which the event or condition that triggers those
payments occur and are included in the line ‘Other
expenses’ in the statement of profit or loss and
other comprehensive income.
l. Provisions
Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company
will be required to settle the obligation, and a
reliable estimate can be made of the amount of the
obligation.
Restructuring provisions are recognised only if a
detailed formal plan for the restructuring exists
and management has either communicated the
plan’s main features to those affected or started
implementation. Provisions are not recognised for
future operating losses.
The amount recognized as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account the risks and
uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount
is the present value of those cash flows.
When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, a receivable is recognized as an
asset if it is virtually certain that reimbursement will
be received, and the amount of the receivable can be
measured reliably.

Notes to the Financial Statements (Contd.)
m. Revenue and Expense Recognition
Revenue is measured at the fair value of the
consideration received or receivable. Revenue is
reduced for estimated customer returns, rebates
and other similar allowance.
Interest Income
Interest income from a financial asset is recognized
when is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash
receipts through the expected life of the financial
asset to that asset’s net carrying amount on initial
recognition.
Expenses
Expenses are recognized when incurred.
n. Income Tax
Income tax expense represents the sum of the tax
currently payable and deferred tax.
The tax currently payable is based on taxable profit
to the year. Taxable profit differs from profit before
tax as reported in the statement of profit or loss
and other comprehensive income because of items
of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible.
Current tax expense is determined based on the
taxable income for the year computed by using the
prevailing tax rates.
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and
liabilities in the financial statements and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences.
Deferred tax assets are generally recognized
for all deductible temporary differences to the
extent that is probable that taxable profits will be
available against which those deductible temporary
19
Financial Statements
differences can be utilized. Such deferred tax assets
and liabilities are not recognized if the temporary
differences arise from the initial recognition (other
than in a business combination) of assets and
liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized,
based on the tax rates (and tax laws) that have been
enacted, or substantively enacted, by the end of the
reporting period.
The measurement of deferred tax assets and
liabilities reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period, to
recover or settle the carrying amount of their assets
and liabilities.
The carrying amount of deferred tax asset is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Current and deferred tax are recognized as an
expense or income in profit or loss, except when
they relate to items that are recognized outside
of profit or loss (whether in other comprehensive
income or directly in equity), in which case the tax is
also recognized outside of profit or loss, or where
they arise from the initial accounting for a business
combination. In the case of a business combination,
the tax effect is included in the accounting for the
business combination.
Deferred tax assets and liabilities are offset when
there is legally enforceable right to set off current
tax assets against current tax liabilities and when
they relate to income taxes levied by the same
taxation authority on either the same taxable
entity or different taxable entities when there is
an intention to settle its current tax assets and
current tax liabilities on a net basis, or to realize the
assets and settle the liabilities simultaneously, in
each future period in which significant amounts of
deferred tax liabilities or assets are expected to be
settled or recovered.
 PT Asian Paints Color Indonesia
Notes to the Financial Statements (Contd.)
4. CRITICAL ACCOUNTING JUDGMENTS AND
ESTIMATES
In the application of the Company’s accounting
policies, which are described in Note 3, the directors
are required to make judgments, estimates and
assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from
other sources. 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.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period
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.
Critical Judgments in Applying Accounting
Policies
Below are the critical judgments, apart from those
involving estimations, that the directors have made
in the process of applying the Company accounting
policies and that have the most significant effect on
the amounts recognised in the financial statements.
Classification of Financial Assets and Financial
Liabilities
The Company determines the classifications of
financial assets and financial liabilities by judging
if they meet the definition set forth in PSAK 71.
Accordingly, the financial assets and financial
liabilities are classified and accounted for in
accordance with the Company’s accounting policies
disclosed in Note 3e.
Determination of Leases
Determination whether an arrangement is or
contains a lease requires careful to assess whether
the arrangement conveys a right to obtain
substantially all the economic benefits from use of
the asset throughout the period of use and right to
direct the use of the asset, even if the right is not
explicitly specified in the arrangement.
20
Key Sources of Estimation Uncertainty
The key assumptions concerning 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:
Calculation of Loss Allowance
When measuring ECL, the Company uses reasonable
and supportable forward-looking information, which
is based on assumptions for the future movement
of different economic drivers and how these drivers
will affect each other.
Loss on default is an estimate of the loss arising
on default. It is based on the difference between
the contractual cash flows due and those that the
lender would expect to receive, taking into account
cash flows from collateral and integral credit
enhancements.
Probability of default constitutes a key input in
measuring ECL. Probability of default is an estimate
of the likelihood of default over a given time
horizon, the calculation of which includes historical
data, assumptions and expectations of future
conditions.
The determination of the incremental borrowing
rate used to measure lease liability
In determining the Company’s incremental
borrowing rate, there are number of factors
to consider, many of which need estimate and
judgment in order to reliably quantify any necessary
adjustments to arrive at the final discount rate. The
Company considers the following main factors: the
Company corporate credit risk, the lease term, the
lease payment term, the economic environment,
the time at which the lease is entered into, and
the currency in which the lease payments are
denominated.

Notes to the Financial Statements (Contd.)
Estimated Useful Lives of Property and Equipment
The useful life of each item of the Company’s
property and equipment are estimated based on
the period over which the asset is expected to
be available for use. Such estimation is based on
internal technical evaluation and experience with
similar assets. The estimated useful life of each asset
is reviewed periodically and updated if expectations
differ from previous estimates due to physical wear
and tear, technical or commercial obsolescence and
legal or other limits on the use of the asset. It is
possible, however, that future results of operations
21
Financial Statements
could be materially affected by changes in the
amounts and timing of recorded expenses brought
about by changes in the factors mentioned above.
A change in the estimated useful life of any item of
property and equipment would affect the recorded
depreciation expense and decrease in the carrying
values of these assets.
Estimated useful lives is mentioned in Note 3i.
The carrying values of property and equipment is
disclosed in Note 10.
 PT Asian Paints Color Indonesia

Notes to the Financial Statements (Contd.)

5. CASH AND CASH EQUIVALENT

March 31, 2023 March 31, 2022
Rp Rp
Cash in banks
Rupiah
Citibank N.A. 129,405,872 442,923,806
U.S. Dollar
Citibank N.A. 8,846,497 2,530,634

Time deposit
Rupiah
Citibank N.A. 400,000,000 -
Total 538,252,369 445,454,440

The time deposit have a maturity period of less than three months and bear annual interest rate of 4.3% for the
year ended March 31, 2023.

6. TRADE RECEIVABLE
March 31, 2023 March 31, 2022
Rp Rp
Third parties
Local customers 55,270,196 55,270,196
Less: expected credit loss (55,270,196) (55,270,196)

Total - -
The average credit period on sales of goods is 75 days. No interest is being charged on trade receivable. All
amounts are denominated in Rupiah.

7. PREPAID TAXES
March 31, 2023 March 31, 2022
Rp Rp
Value-added tax (VAT) - in 1,115,548,766 1,094,277,929
Prepaid tax - Article 23 - 203,266

Total 1,115,548,766 1,094,481,195

8. OTHER CURRENT ASSETS

March 31, 2023 March 31, 2022
Rp Rp
Prepaid expenses 3,235,001 2,545,684
Refundable deposits 410,000 28,750,000
Others - 13,664,225
Total 3,645,001 44,959,909

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
9. RIGHT OF USE OF ASSETS
April 1, 2022 Additions Deductions March 31, 2023
Acquisition cost:
Building 226,824,675 226,047,339 226,824,676 226,047,338
Accumulated depreciation:
Building 151,088,801 177,163,409 226,824,676 101,427,534
Net carrying value 75,735,874 124,619,804

April 1, 2021 Additions Deductions March 31, 2022

Acquisition cost:
Building 262,039,585 164,659,651 199,874,561 226,824,675
Accumulated depreciation:
Building 167,755,965 183,207,397 199,874,561 151,088,801
Net carrying value 94,283,620 75,735,874

Depreciation expense amounted to Rp 177,163,409 in 2023 and Rp 183,207,397 in 2022 were charged to profit
or loss.

10. PROPERTY AND EQUIPMENT

April 1, 2022 Additions Deductions March 31, 2023
Acquisition cost:
Computers 12,827,391 - - 12,827,391
Accumulated depreciation:
Computers 10,947,215 1,880,176 - 12,827,391
Net carrying value 1,880,176 -

April 1, 2021 Additions Deductions March 31, 2022

Acquisition cost:
Computers 12,827,391 - - 12,827,391
Accumulated depreciation:
Computers 7,740,372 3,206,843 - 10,947,215
Net carrying value 5,087,019 1,880,176

Depreciation expense was charged to general and administrative expenses amounted to Rp 1,880,176 and Rp
3,206,843 in 2023 and 2022 (Note 14), respectively.
 PT Asian Paints Color Indonesia

Notes to the Financial Statements (Contd.)

11. TAXES PAYABLE

March 31, 2023 March 31, 2022
Rp Rp
Income taxes
Article 4(2) - 1,437,500
Article 21 - 312,500
Total - 1,750,000

12. ACCRUED EXPENSES

March 31, 2023 March 31, 2022
Rp Rp
Legal and professional fees 43,768,000 21,400,000
Others - 14,703,000
Total 43,768,000 36,103,000

13. SHARE CAPITAL

The composition of the Company’s shareholders as of March 31, 2023 and 2022 was as follows:

March 31, 2023

Name of Shareholders Number of Percentage of Total Paid-up
Shares Ownership Capital
Rp
Asian Paints International Private Limited (APIPL) 2,508 99.96% 31,643,436,000
Mr. Rahul Bhatnagar 1 0.04% 12,617,000
Total 2,509 100.00% 31,656,053,000

March 31, 2022

Name of Shareholders Number of Percentage of Total Paid-up
Shares Ownership Capital
Rp
Asian Paints International Private Limited (APIPL) 2,469 99.96% 31,151,373,000
Mr. Rahul Bhatnagar 1 0.04% 12,617,000
Total 2,470 100.00% 31,163,990,000

Based on Notarial Deed No. 19 dated December 7, 2022 of RA. Mahyasari A. Notonagoro, S.H., public notary in
Jakarta, the shareholders agreed to increase the capital from 2,470 shares to 2,509 shares, which all increase
in shares were taken by APIPL. The amended deed was approved by Ministry of Law and Human Rights of the
Republic of Indonesia in its Decision Letter AHU-AH.01.03-0324033.Year 2022 dated December 9, 2022.
Based on Notarial Deed No. 2 dated May 3, 2021 of RA. Mahyasari A. Notonagoro, S.H., public notary in Jakarta,
the shareholders agreed to increase the capital from 2,350 shares to 2,470 shares, which all increase in shares
were taken by APIPL. The amended deed was approved by Ministry of Law and Human Rights of the Republic of
Indonesia in its Decision Letter No. AHU-0087391.AH.01.11.Year 2021 dated May 11, 2021.
Based on circular resolutions of shareholders dated March 31, 2021, which as stated in Notarial Deed No. 22
dated April 14, 2021 of RA. Mahyasari A. Notonagoro, S.H., public notary in Jakarta, the shareholders agreed the
transfer of 1 (one) share from Mr. Jalaj Ashwin Dani to Mr. Rahul Bhatnagar. The amended deed was approved by
Ministry of Law and Human Rights of the Republic of Indonesia in its Decision Letter No. AHU-0073411.AH.01.11.
24 Year 2021 dated April 22, 2021.
 25
Notes to the Financial Statements (Contd.)

Financial Statements
14. GENERAL AND ADMINISTRATIVE EXPENSES
March 31, 2023 March 31, 2022
Rp Rp
Legal and professional fees 72,500,206 37,028,991
Depreciation (Note 10) 1,880,176 3,206,843
Others (12,927,790) 6,553,574
Total 61,452,592 46,789,408

15. INCOME TAX

Current Tax
No current tax expense was recognized in 2023 and 2022 as the Company incurred fiscal losses.

Deferred Tax
The fiscal loss can be utilized against the taxable income for a period of five years subsequent to the year the
fiscal loss was incurred. Management believes there is no probable future taxable profits which will be available
to utilize against accumulated fiscal losses. Hence, no deferred tax was recognized on such fiscal losses.

16. NATURE OF RELATIONSHIPS AND TRANSACTIONS WITH RELATED PARTIES

Nature of Relationships

a. Asian Paints International Private Limited and Mr. Rahul Bhatnagar are the Company’s shareholders.

b. Asian Paints Ltd is the ultimate parent of the Company.

c. PT Asian Paints Indonesia is related party which has the same shareholders or ultimate shareholders as the
Company.

Transactions with Related Parties

On October 20, 2020 and December 18, 2020, the Company entered into loan agreement with Asian Paints
International Private Limited amounting to US$ 35,000 with interest of LIBOR rate + 1.40% due on repayable on
demand within maximum 10 working days. Such loan is used to fund the Company’s operation. On May 10, 2021,
the loan has been settled.

On April 27, 2021, the Company entered into loan agreement with Asian Paints International Private Limited
amounting to US$ 15,000 with interest of LIBOR rate + 1.40% due on repayable on demand within maximum 10
working days. Such loan is used to fund the Company’s operation. On May 10, 2021, the loan has been settled.

The Company incurred interest expense amounted to Rp 918,398 in 2022.

 PT Asian Paints Color Indonesia

Notes to the Financial Statements (Contd.)

17. FINANCIAL INSTRUMENTS, FINANCIAL RISK AND CAPITAL RISK MANAGEMENT

a. Categories and Classes of Financial Instruments

March 31, 2023 March 31, 2022

Rp Rp
Financial Assets
Assets at amortized cost
Cash and cash equivalent 538,252,369 445,454,440
Other receivables 1,056,000 -
Other current assets 410,000 28,750,000
Total 539,718,369 474,204,440

March 31, 2023 March 31, 2022

Rp Rp
Financial Liabilities
Liabilities at amortized cost
Lease liability 114,972,961 15,486,494
Accrued expenses 43,768,000 36,103,000
Total 158,740,961 51,589,494

b. Financial Risk Management Objectives and Policies

The Company’s overall financial risk management and policies seek to ensure that adequate financial resources
are available for operation and development of its business, at the same time managing exposure to financial
risks. These risks include foreign currency risk, interest rate risk, credit risk and liquidity risk.

The management guided by approved policies and procedures is generally responsible to manage the financial
risks related to the operations of the Company. The Company’s risk management program mainly focuses on its
liquidity risk and credit risk to minimize exposure that will adversely affect the performance of the Company.

The Company does not engage into trading of financial instruments, including derivative financial instruments for
speculative purpose. Accordingly, management considers that the Company’s exposure to current market risk is
very minimal.

i. Foreign currency risk management

The Company is exposed to the effect of foreign currency exchange rate fluctuation mainly because of
foreign currency denominated balances and transactions such as cash in bank.

The Company manages the exposure to currency other than Rupiah by matching, as far as possible receipts
and payments in each individual currency. As of March 31, 2023, the Company foreign monetary asset only
has in cash in bank.

ii. Interest rate risk management

The Company’s exposures to interest rates of financial assets and financial liabilities are detailed in the
liquidity risk management section of this note.

26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
17. Financial Instruments, Financial Risk And Capital Risk Management (Contd.)
iii. Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligation resulting in a loss to
the Company.

The Company’s credit risk is primarily attributed to its cash and cash equivalent and refundable deposit. The
Company places its bank balances with credit worthy financial institutions. The Company’s exposure and
its counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed
and approved by the risk management committee annually.

The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses
represents the Company’s exposure to credit risk.

The credit risk on liquid funds is limited because the counterparty are banks with high credit-ratings assigned
by international credit-rating agencies.

iv. Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Directors, which have built an
appropriate liquidity risk management framework for the management of the Company’s short, medium
and long-term funding and liquidity management requirements. The Company manages liquidity risk by
maintaining adequate reserves, and matching the maturity profiles of financial assets and liabilities.

Liquidity and interest risk tables

The following table details the Company’s remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash
flows of financial liabilities based on the earliest date on which the Company can be required to pay. The
table includes principal cash flows. The contractual maturity is based on the earliest date on which the
Company may be required to pay.

March 31, 2023 March 31, 2022

Interest rate <1 year Interest rate <1 year
% Rp % Rp
Non-interest bearing
Accrued expenses - 43,768,000 - 36,103,000
Fixed interest rate instrument
Lease liability 9 114,972,961 9 15,486,494
Total 158,740,961 51,589,494

The following table details the Company’s expected maturity for its non-derivative financial assets. The
table has been drawn up based on the undiscounted contractual maturities of the financial assets including
interest that will be earned on those assets. The inclusion of information on non-derivative financial assets
is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a
net asset and liability basis.
 PT Asian Paints Color Indonesia

Notes to the Financial Statements (Contd.)

17. Financial Instruments, Financial Risk And Capital Risk Management (Contd.)

March 31, 2023 March 31, 2022

Interest rate <1 year Interest rate <1 year
% Rp % Rp
Non-Interest Bearing
Cash and cash equivalent 4.3 538,252,369 - 445,454,440
Other receivables - 1,056,000 -
Other current assets - 410,000 - 28,750,000
Total 539,718,369 474,204,440

c. Capital Risk Management

The Company manages capital risk to ensure that they will continue as a going concern by acquiring from the
parent company financial support for starting its operations. The Company’s capital structure consists of cash and
cash equivalent (Note 5) and shareholders’ equity consist of capitals stock (Note 13) and deficit.

The management of the Company periodically reviews the Company’s capital structure. As part of this review, the
management considers the cost of capital and related risk.

d. Fair Value Measurements

The Directors consider that the carrying amounts of financial assets and financial liabilities recognized in the
financial statements approximate their fair values due to short term maturity and they carry market rate interest.

18. SUPPLEMENTAL DISCLOSURE ON NON-CASH INVESTING AND FINANCING ACTIVITIES

In 2023 and 2022, the Company had non-cash investing and financing transactions which were excluded from the
statements of cash flows as follows:

March 31, March 31,

2023 2022
Rp Rp
Additions to right on use assets through lease liabilities 226,047,339 164,659,651

Reconciliation of liabilities arising from financing activities

March 31, March 31,
2023 2022
Rp Rp
Lease liabilities
Beginning (15,486,494) (76,349,547)
Addition in current period (226,047,339) (164,659,651)
Finance cost accrued during the period (9,006,850) (8,036,586)
Cash flow : Repayment 135,567,722 233,559,290
Ending (114,972,961) (15,486,494)

28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
19. OTHER SIGNIFICANT MATTERS
The accompanying financial statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course of business. As of March 31, 2023, the
Company’s has accumulated deficit of (Rp 30,031,672,021) (March 31, 2022: Rp 29,554,817,900).

The Company did not make any sales transactions after August 2017. As the operations in Indonesia are relatively
new, the Company will keep looking at various import opportunities and if need be, start importing as per
business requirements. Stockholders of the Company keep infusing money as and when deemed necessary.
Causeway Paints Lanka (Pvt) Ltd
Contents
Independent Auditor’s Report............................................................................................................................................................... 4-5

Statement of Profit or Loss and Other Comprehensive Income ........................................................................................................6

Statement of Financial Position.................................................................................................................................................................7

Statement of Changes in Equity.................................................................................................................................................................8

Statement of Cash Flows.............................................................................................................................................................................9

Notes to the financial statements.....................................................................................................................................................10-38

 Causeway Paints Lanka (Pvt) Ltd
Independent Auditor’s Report
To The Shareholders Of Causeway Paints Lanka (Pvt)
Ltd.
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Causeway
Paints Lanka (Pvt) Ltd (“the Company”), which comprise
the statement of financial position as at 31 March
2023, and the statement profit or loss and other
comprehensive income, statement of changes in equity
and statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of
significant accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of
the Company as at 31 March 2023, and of its financial
performance and its cash flows for the year then ended in
accordance with Sri Lanka Accounting Standards.
Basis for Opinion
We conducted our audit in accordance with Sri Lanka
Auditing Standards (SLAuSs). Our responsibilities under
those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the
Company in accordance with the ethical requirements of
the Code of Ethics issued by CA Sri Lanka Code of Ethics
that are relevant to our audit of the financial statements,
and we have fulfilled our other ethical responsibilities
in accordance with the Code of Ethics. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other Information
Management is responsible for the other information.
The other information comprises the information
included in the Directors report, but does not include the
financial statements and our auditor’s report thereon.
Our opinion on the 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 financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise
4
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. As the management does not present
any other information and we were not provided with
any, we have nothing to report in this regard.
Responsibilities of Management and Those Charged
with Governance for the Financial Statements
Management is responsible for the preparation of
financial statements that give a true and fair view in
accordance with Sri Lanka Accounting Standards, and
for such internal control as the management determines
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the 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.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Financial Statements
Our objectives are to obtain reasonable assurance
about whether the 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 SLAuSs 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 financial statements.
As part of an audit in accordance with SLAuSs, we
exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• I dentify and assess the risks of material
misstatement of the financial statements, whether
 5
Independent Auditor’s Report (Contd.)

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.
•  btain an understanding of internal control relevant
O that we identify during our audit.
to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
•  valuate the appropriateness of accounting
E far as appears from our examination, proper accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by
management.
Financial Statements
•  valuate the overall presentation, structure and
E
content of the financial statements, including the
disclosures, and whether the 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
Report on Other Legal and Regulatory Requirements
As required by Section 163 (2) of the Companies Act No.
07 of 2007, we have obtained all the information and
explanations that were required for the audit and, as
records have been kept by the Company.

•  onclude on the appropriateness of management’s

C
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 SJMS ASSOCIATES
Company’s ability to continue as a going concern. If Chartered Accountants
we conclude that a material uncertainty exists, we
Colombo
are required to draw attention in our auditor’s report
to the related disclosures in the financial statements 28 April 2023
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.
 Causeway Paints Lanka (Pvt) Ltd

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 March 2023

Note 2022/2023 2021/2022

LKR LKR
Revenue 5 13,868,417,030 1,373,7884,919
Cost of materials consumed (6,972,322,682) (9,563,636,247)
Gross Profit 6,896,094,349 4,174,248,672
Other income 6 281,475,684 63,746,668
Employee benefits expenses (1,560,806,102) (1,342,799,915)
Other expenses (1,673,217,846) (1,323,828,879)
Depreciation and amortization (181,476,052) (136,377,224)
Finance and other costs (236,157,704) (137,747,653)
Profit before exchange loss 3,525,912,329 129,724,1670
Exchange loss (872,978,910) (1,320,871,549)
Profit / (loss) before taxation 7 2,652,933,419 (23,629,879)
Income tax (expense) / income 8 (594,012,237) 168,6251
Profit / (loss) for the year 2,058,921,182 (21,943,627)
Other comprehensive income, net of tax
Items that will not be reclassified subsequently to profit or loss:
Re-measurement gain / (loss) on defined benefit plans, net of tax (8,348,974) 11,789,588
Total comprehensive income /(expense) for the year 2,050,572,208 (10,154,040)
Earnings / (loss) per share 9 48.48 (0.52)
Dividend per share 10 10.60 -

Accounting policies and notes from 1 to 29 form an integral part of these financial statements.

6
 7
Statement of Financial Position

Financial Statements
As at 31 March 2023

Note 31.03.2023 31.03.2022

LKR LKR
Assets
Non current assets
Property, plant and equipment 11 1,431,528,529 1,417,996,034
Intangible assets 11.1 3,213,231 12,763,615
Right of use assets 11.2 68,503,088 71,966,795
Deferred tax asset 8.4 171,196,678 65,774,843
1,674,441,524 1,568,501,286
Current assets
Inventory 12 3,642,562,134 3,778,684,690
Trade and other receivables 13 4,087,702,691 4,684,244,386
Income tax receivable 19 - 26,422,518
Other financial investments 14 1,514,588,807 1,031,415,223
Cash in hand and at bank 15 1,504,183,421 1,804,184,930
10,749,037,053 11,324,951,747
Total assets 12,423,478,577 12,893,453,033
Equity and liabilities
Shareholders’ equity
Stated capital 16 2,101,449,061 210,1449,061
Retained earnings 4,345,810,693 2,745,424,989
Total equity 644,725,9754 4,846,874,050
Non current liabilities
Retirement benefit obligations 17 233,878,956 190,346,974
Lease liability 20 12,455,183 4,768,959
Interest bearing loan 29 2,039,625,000 1,906,125,000
2,285,959,139 2,101,240,933
Current liabilities
Trade and other payables 18 1,842,290,157 5,428,497,256
Interest bearing loan 29 1,415,250,000 498,906,130
Income tax payable 19 428,991,460 -
Lease liability 20 3,728,066 17,698,310
Bank overdrafts 21 - 236,354
3,690,259,683 5,945,338,050
Total liabilities 5,976,218,822 8,046,578,983
Total equity and liabilities 12,423,478,577 12,893,453,033

I certify that these financial statements have been prepared in compliance with the requirements of the Companies
Act No. 07 of 2007.

………………………..

Amit Kumar Khemka

Financial Controller

The Board of Directors is responsible for the preparation and presentation of these financial statements. Signed for
and on behalf of the Board by the following on 28 April 2023.

……………………….. ………………………..

Sireesh Rao Parag Rane

Director Director

Accounting policies and notes from 1 to 29 form an integral part of these financial statements.
 Causeway Paints Lanka (Pvt) Ltd

Statement Of Changes In Equity

For the year ended 31 March 2023

Stated Retained Total

capital earnings
LKR LKR LKR
Balance as at 31 March 2021 1,365,002,710 2,755,579,029 4,120,581,739
Adjustment due to merger 736,446,351 - 736,446,351
Loss for the year - (21,943,627) (21,943,627)
Other comprehensive income - 11,789,588 11,789,588
Total comprehensive expense for the year - (10,154,040) (10,154,040)
Balance as at 31 March 2022 2,101,449,061 2,745,424,989 4,846,874,050
Profit for the year - 2,058,921,182 2,058,921,182
Other comprehensive gain - (8,348,974) (8,348,974)
Total comprehensive income for the year - 2,050,572,208 2,050,572,208
Payment of dividend for 2022 (interim) - (450,186,505) (450,186,505)
Balance as at 31 March 2023 2,101,449,061 4,345,810,693 6,447,259,754

Accounting policies and notes from 1 to 29 form an integral part of these financial statements.

8
 9
Statement of Cash Flows

Financial Statements
For the year ended 31 March 2023

Note 2022/2023 2021/2022

LKR LKR
Cash flows from operating activities
Profit / (loss) before taxation 2,652,933,419 (23,629,879)
Adjustments for:
Interest income 6 (243,074,429) (26,733,243)
Interest expense 170,271,511 99,284,712
Profit on disposal of PPE (177,649) (449,998)
Loss on disposal of PPE 3,037,057 -
Retirement benefit obligations 17 42,744,353 31,758,799
Provision for accumulated leave balance 6,848,266 1,511,353
Provision for sick leave 137,818 340,101
Depreciation and amortisation of property plant and equipment 181,476,052 136,377,224
Profit on termination/remeasurement of lease asset (108,881) (489,661)
Allowance for impairment of inventory 170,661,833 42,768,291
Provision for doubtful debts 52,780,114 89,363,738
Write off for bad debts 38,069,552 -
Operating cash flows before working capital changes 3,075,599,016 350,101,438
Changes in working capital
Decrease / (increase) in inventories (34,539,278) (1,588,848,854)
Decrease / (increase) in trade and other receivables 527,396,414 (1,184,585,008)
(Increase) / decrease in trade and other payables (3,592,734,636) 2,835,676,866
Cash flows from operating activities (24,278,483) 412,344,441
Interest paid (167,991,932) (96,179,477)
Gratuity paid 17 (11,139,477) (15,005,363)
Annual leave payment (458,547) (1,023,585)
Income tax paid 19 (240,441,964) (131,220,693)
Net cash flows generated from operating activities (444,310,404) 168,915,324
Cash flows from investing activities
Purchase of property, plant and equipment and intangibles (171,871,726) (664,211,256)
Disposal of property, plant and equipment 5,544,915 2,454,450
Investing in other financial assets (483,173,584) (489,478,914)
Interest income received 221,370,045 2,5048,393
Net cash used in investing activities (428,130,351) (1,126,187,328)
Cash flows from financing activities
Consideration for AP Lanka minority shareholders - (7,323,294)
Dividend paid (450,186,505) -
Settlement of lease liability 20 (26,981,766) (21,347,082)
Obtained of long term loan 1,622,347,871 2,400,027,129
Payments of long term loan (572,504,000) (9,996,000)
Net cash used in financing activities 572,675,600 2,361,360,753
Net increase / (decrease) in cash and cash equivalents during the (299,765,155) 1,404,088,749
year
Cash and cash equivalents acquired due to merger - (1,449,339)
Cash and cash equivalents at the beginning of the year 1,803,948,576 401,309,167
Cash and cash equivalents at the end of the year (Note 22) 1,504,183,421 1,803,948,576

Accounting policies and notes from 1 to 29 form an integral part of these financial statements.
 Causeway Paints Lanka (Pvt) Ltd

Notes to the financial statements

For the year ended 31 March 2023

1. Reporting entity 2.2 Going concern

1.1 Domicile and legal form In determining the basis of preparing the financial
statements for the year ended 31 March 2023,
Causeway Paints Lanka (Pvt) Limited, (“the
the management has assessed the existing and
Company”) is a limited liability Company
anticipated effects of COVID-19 on the Company
incorporated and domiciled in Sri Lanka. The
and the appropriateness of the use of the going
Company’s registered office and the principal place
concern basis based on available information. The
of business is located at. 15, Noel Mendis Mawatha,
management evaluated the resilience of its business
Modarawila Industrial Estate, Panadura.
considering a wide range of factors such as current
1.2 Principal activities and nature of operations and expected profitability, the ability to defer
capital expenditure, repayment schedule of trade
The principal activities of the Company are
creditors, if any, cash reserves and potential sources
manufacturing and selling of paints and related
of financing facilities, if required, and the ability to
products. There have been no significant changes to
continue manufacturing products.
these principal activities during the financial year.

The management is satisfied that the Company

1.3 Parent entity and ultimate parent
has adequate resources to continue in operational
Asian Paints International Private Limited (APIPL)
existence for the foreseeable future and no
(formerly known as Berger International Private
significant impact was assessed on carrying amounts
Limited) is the immediate parent of the company
of assets and liabilities thereby justifying adoption
and Asian Paints Limited, India is the ultimate parent
of the going concern basis in preparing these
undertaking.
financial statements.

1.4 Date of authorization for issue

The financial statements were authorized for issue
by the Board of Directors on 28 April 2023.
1.5 Amalgamation of Asian Paints Lanka Limited
(APLL) with Causeway Paints Lanka (Pvt) Limited
Asian Paints Lanka Limited (APLL) amalgamated with
Causeway Paints Lanka (Pvt) Ltd (CPLL) with effect
from 1st April 2021 and continued its operations
under the name Causeway Paints Lanka (Pvt) Ltd.
The amalgamation was effective by way of an agreed
share swap, whereby the shareholders of APLL were
offered ordinary voting shares in CPLL in accordance
with the amalgamation proposal.
2. Basis of preparation
2.1 Statement of compliance
The financial statements of the company (statement
of financial position, statement of profit or loss
and other comprehensive income, statement of
changes in equity, statement of cash flows together
with accounting policies and notes) are prepared
in accordance with Sri Lanka Accounting Standards
(LKASs and SLFRSs) as issued by The Institute
of Chartered Accountants of Sri Lanka and in
compliance with the requirements of the Companies
10 Act No.07 of 2007.
2.3 Basis of measurement
The financial statements have been prepared on
historical cost basis except where appropriate
disclosures are made with regard to fair value under
relevant notes. Assets and liabilities are grouped
by nature and is an order that reflect their relative
liquidity. The financial statements have been
prepared on the assumption that the company will
continue as a going concern for the foreseeable
future.
2.4 Functional and presentation currency
The financial statements of the Company presented
in Sri Lankan Rupees, which is the Company’s
functional currency. All financial information
presented in Sri Lankan Rupees have been rounded
to the nearest rupee.
2.5 Use of estimates and judgments
The preparation of the financial statements
in conformity with the Sri Lankan Accounting
Standards requires management to make
judgements, estimates and assumptions than effect
the application of accounting policies and the
reported amounts of assets, liabilities, income and
expenses. Judgments and estimates are based on

Notes to the Financial Statements (Contd.)
historical experience and other factors, including
expectations that are believed to be reasonable
under the circumstances and assumptions based on
such knowledge and expectation of future events.
Hence, actual experience and results may differ from
these judgments and estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which
the estimates are revised and in any future periods
affected. Information about critical judgements
in applying accounting policies that have the most
significant effect on the amounts recognized in the
Company’s financial statements is included in the
respective notes.
Deferred taxes
Deferred tax assets are recognised for all deductible
temporary differences, unused tax losses and tax
credits to the extent it is probable that taxable
profits will be available against which these credits/
losses can be utilised. Significant management
judgments are required to determine the amount of
deferred tax assets that can be recognised, based on
the likely timing and level of future taxable profits
together with future tax planning strategies.
Employee benefit liability
The cost of defined benefit obligations and other
post-employment benefit plans are determined
using actuarial valuation. Actuarial valuation
involves making various assumptions, determining
discount rates and future salary increases. Due to
the complexity of the valuation, the underlying
assumptions and their long-term nature, such
estimates are subject to significant uncertainty.
In determining the appropriate discount rate, the
management considers the interest rates of Sri
Lanka Government Bonds. The mortality rate is
based on publicly available mortality tables. Future
salary increase is based on expected future inflation
rates and expected future salary increase rate of the
company.
11
Financial Statements
Provision for slow moving inventories and
impairment for trade receivables
The Company assesses at each reporting date
whether there is an impairment of inventory and
trade receivables. To determine impairment of
inventories, the Company reviews the movement of
inventory balances. For the trade receivables, the
company uses a simplified approach to determine
the recoverability of the debtors by using a provision
matrix.
Useful lifetime of the property, plant and
equipment
The Company reviews the residual values, useful
lives and methods of depreciation of assets as at
each reporting date. Judgment of the management
is exercised in the estimation of these values, rates,
methods and hence they are subject to uncertainty.
2.6 Foreign currency transactions
Transactions in foreign currencies are translated
to the functional currency at exchange rates at the
dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the
reporting date are retranslated to the functional
currency at the exchange rate at that date. The
foreign currency gain or loss on monetary items
is the difference between amortized cost in the
functional currency at the beginning of the period,
adjusted for effective interest and payments
during the period, and the amortized cost in foreign
currency translated at the exchange rate at the end
of the reporting period. Non-monetary assets and
liabilities denominated in foreign currencies that
are measured at fair value are retranslated to the
functional currency at the exchange rate at the date
that the fair value was determined. Foreign currency
differences arising on retranslation are recognized in
profit or loss.
2.7 Comparative information
The comparative information is re-classified
wherever necessary to conform with the current
year’s presentation in order to provide a better
presentation.
 Causeway Paints Lanka (Pvt) Ltd
Notes to the Financial Statements (Contd.)
3. Significant accounting policies
The accounting policies set out below have been
applied consistently to all periods presented in these
financial statements unless otherwise indicated.
The preparation of financial statements in
conformity with Sri Lanka Accounting Standards
(SLFRS/ LKAS) requires management to make
judgments, estimates, and assumptions that
influence the application of accounting policies and
the reported amounts of assets, liabilities, income,
and expenses.
The judgement, estimates and underlying
assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in
the period in which the estimates are revised, if the
revision affects only that period or in the period of
the revision and future periods as well, if the revision
affects both current and future periods.
3.1 Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the
contractual rights to the cash flows from the
financial asset expire, or when the financial asset
and substantially all the risks and rewards are
transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or
expires.
3.1.1 Financial assets
Classification and initial measurement of financial
assets
Except for those trade receivables that do not
contain a significant financing component and are
measured at the transaction price in accordance with
SLFRS 15, all financial assets are initially measured
at fair value adjusted for transaction costs (where
applicable).
Financial assets, other than those designated and
effective as hedging instruments, are classified into
the following categories:
12
• Amortised cost
• Fair value through profit or loss (FVTPL)
•  air value through other comprehensive income
F
(FVOCI).
In the periods presented the Company does not
have any financial assets categorized as FVOCI. The
classification is determined by both:
•  he entity’s business model for managing the
T
financial asset
•  he contractual cash flow characteristics of the
T
financial asset.
All income and expenses relating to financial
assets that are recognised in profit or loss are
presented within finance costs, finance income
or other financial items, except for impairment of
trade receivables which is presented within other
expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if
the assets meet the following conditions (and are
not designated as FVTPL):
•  hey are held within a business model whose
T
objective is to hold the financial assets and
collect its contractual cash flows.
•  he contractual terms of the financial assets
T
give rise to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.
After initial recognition, these are measured at
amortised cost using the effective interest method.
Discounting is omitted where the effect of
discounting is immaterial. The Company’s cash and
cash equivalents, trade and most other receivables
fall into this category of financial instruments.

Notes to the Financial Statements (Contd.)
Financial assets at fair value through profit or
loss (FVTPL)
Financial assets that are held within a different
business model other than ‘hold to collect’ or ‘hold
to collect and sell’ are categorised at fair value
through profit and loss. Further, irrespective of
business model financial assets whose contractual
cash flows are not solely payments of principal and
interest are accounted for at FVTPL. Assets in this
category are measured at fair value with gains or
losses recognised in profit or loss. The fair values of
financial assets in this category are determined by
reference to active market transactions or using a
valuation technique where no active market exists.
During the year the company had not classified any
financial assets as FVTPL.
Financial assets at fair value through other
comprehensive income (FVOCI)
The Company accounts for financial assets at FVOCI
if the assets meet the following conditions:
• They are held under a business model whose
objective it is “hold to collect” the associated cash
flows and sell and
• The contractual terms of the financial assets
give rise to cash flows that are solely payments
of principal and interest on the principal amount
outstanding.
Any gains or losses recognised in other
comprehensive income (OCI) will be recycled upon
derecognition of the asset.
During the year the Company had not classified any
financial assets at FVOCI.
3.1.1.1 Cash and cash equivalents
Cash and cash equivalents comprise cash
balances and call deposits with original
maturities or three months or less. Bank
overdrafts that are repayable on demand and
form an integral part of the Company’s cash
management are included as a component of
cash and cash equivalents for the purpose of
the statement of cash flows.
13
Financial Statements
3.1.1.2 Impairment - Financial asset
The Company use more forward-looking
information to recognise expected credit
losses.
Recognition of credit losses is no longer
dependent on the Company first identifying
a credit loss event. Instead the Company
considers a broader range of information when
assessing credit risk and measuring expected
credit losses, including past events, current
conditions, reasonable and supportable
forecasts that affect the expected collectability
of the future cash flows of the instrument.
Trade and other receivables
The Company makes use of a simplified approach
in accounting for trade and other receivables and
records the loss allowance as lifetime expected
credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential
for default at any point during the life of the
financial instrument. In calculating, the Company
uses its historical experience, external indicators
and forward-looking information to calculate the
expected credit losses using a provision matrix.
The Company assess impairment of trade receivables
on a collective basis as they possess shared credit
risk characteristics they have been Computed based
on the days past due.
3.1.2 Financial liabilities
Recognition and derecognition
The Company recognizes financial liabilities in
the statement of financial position when the
Company becomes a party to the contractual
provisions of the financial liability.
A financial liability is de-recognised when the
obligation under the liability is discharged or
cancelled or expires. Where an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as a de-recognition of the original
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

liability and the recognition of a new liability.
The difference between the carrying value
of the original financial liability and the
consideration paid is recognised in profit or
loss.
Classification and measurement of financial
liabilities
The Company’s financial liabilities include
borrowings, trade and other payables.
Financial liabilities are initially measured at
fair value, and, where applicable, adjusted
for transaction costs. Subsequently, financial
liabilities are measured at amortised cost using
the effective interest method.
All interest-related charges and, if applicable,
changes in an instrument’s fair value that are
reported in profit or loss are included within
finance costs or finance income.
3.1.3 Stated capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the
issue of ordinary shares are recognized as a
deduction from equity, net of any tax effects.
The gain or loss on disposal of an item of property
and equipment is determined by comparing the
proceeds from disposal with the carrying amount
of the item of property and equipment and is
recognised in other income/other expenses in profit
or loss.
Subsequent costs
The cost of replacing a component of an item of
property, plant and equipment is recognised in the
carrying amount of the item if it is probable that
the future economic benefits embodied within
the part will flow to the Company and its cost can
be measured reliably. The carrying amount of the
replaced part is derecognised. The costs of the day-
to-day servicing of property, plant and equipment
are recognised in profit or loss as incurred.
Depreciation
Depreciation is recognised in profit or loss on a
straight-line basis over the estimated useful lives
of each part of an item of property, plant and
equipment since this most closely reflects the
expected pattern of consumption of the future
economic benefits embodied in the asset. Leased
assets are depreciated over the shorter of the lease
term and their useful lives.

3.2 Property, plant and equipment The estimated useful lives for the current and
Recognition and measurement comparative years are as follows:
Items of property, plant and equipment are
measured at cost less accumulated depreciation and Leasehold land Over the lease period of
accumulated impairment losses. 30 to 50 years
Buildings From 15 to 50 years,
Cost includes expenditures that are directly subject to the remaining
attributable to the acquisition of the asset. The useful life of the
cost of self-constructed assets includes the cost of leasehold land not
materials and direct labour, any other costs directly exceeding the useful
attributable to bringing the assets to a working
life of the building
condition for their intended use, the costs of
Plant and machinery 4 to 10 years
dismantling and removing the items and restoring
the site on which they are located and capitalised Factory, stores, office 10 years
borrowing costs. Purchased software that is integral and lab equipment
to the functionality of the related equipment is Computers 4 years
capitalised as part of that equipment. Furniture and fittings 4 years
Vehicles 10 years
When parts of an item of property or equipment
have different useful lives, they are accounted for Colour world machine 9 years
as separate items (major components) of property,
plant and equipment.
14

Notes to the Financial Statements (Contd.)
Depreciation of an asset begins when it is available
for use and ceases at the earlier of the dates on
which the asset is classified as held for sale or is
derecognised. Depreciation methods, useful lives
and residual values are reassessed at each reporting
date and adjusted if appropriate.
Impairment of property, plant and equipment
The carrying value of Property Plant and Equipment
is reviewed for impairment when events or changes
in circumstances indicate the carrying value may
not be recoverable. If any such indication exists and
where the carrying value exceeds the estimated
recoverable amount, the assets are written down
to their recoverable amount. Impairment losses
are recognized in profit or loss unless it reverses a
previous revaluation surplus for the same asset.
The Company has not identified any indications
of impairment as at the reporting date due to the
disruptions caused to operations by the COVID-19
pandemic and the Company resumed operations
on 11 May 2020, whilst strictly adhering to and
supporting government directives.
Capital work in progress
Capital expenses incurred during the year which are
not completed as at the reporting date are shown as
Capital Work – In – Progress whilst, the capital assets
which have been completed during the year and put
to use have been transferred to Property, Plant and
Equipment.
3.3 Intangible assets
Software
Software acquired by the Company is measured
at cost less accumulated amortization and any
accumulated impairment losses.
Expenditure on internally developed software
is recognized as an asset when the Company is
able to demonstrate its intention and ability to
complete the development and use the software
in a manner that will generate future economic
benefits, and can reliably measure the costs to
complete the development. The capitalised costs
of internally developed software include all costs
directly attributable to developing the software
and capitalized borrowing costs and are amortised
15
Financial Statements
over its useful life. Internally developed software
is stated at capitalised cost less accumulated
amortisation and any accumulated impairment
losses.
Subsequent expenditure on software assets
is capitalised only when it increases the future
economic benefits embodied in the specific asset to
which it relates. All other expenditure is expensed as
incurred.
Software is amortised on a straight-line basis in
income statement over its estimated useful life,
from the date on which it is available for use. The
estimated useful life of software for the current and
comparative periods is four years.
Amortisation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate.
3.4 Leases
The Company assesses whether a contract is or
contains a lease at the inception of the contract.
The assessment involves the exercise of judgement
about whether it depends on a specified asset,
whether the Company obtains substantially all the
economic benefits from the use of that asset, and
whether the Company has the right to direct the use
of the asset.
The Company recognises a right-of-use asset
and a corresponding lease liability at the lease
commencement date.
3.4.1 Right-of-use assets
3.4.1.1 Recognition
The right-of-use asset is initially measured at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or before the commencement date,
plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the
underlying asset or to restore the underlying
asset or the site on which it is located, less any
lease incentives received.
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

3.4.1.2 Depreciation of the right-of-use asset •  ayments of penalties for terminating

The right-of-use asset is subsequently
depreciated using the straight-line method
from the commencement date to the earlier
3.4.2.2
of the end of the useful life of the right-of-
use asset or the end of the lease term. The
estimated useful lives of right-of-use assets
are determined on the same basis as those
of property and equipment. In addition, the
right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for
certain re-measurements of the lease liability.
3.4.1.3 Impairment of right-of-use asset
The Company applies LKAS 36 to determine
3.4.3 Short-term leases and leases of low-value
whether a right-of-use asset is impaired and
accounts for any identified impairment loss
as described in impairment on non-financial
assets.
The lease liability is initially measured at the
present value of the lease payments that
are not paid at the commencement date,
discounted using the interest rate implicit
3.5 Inventory
in the lease or, if that rate cannot be readily
determined, the Company uses an incremental
borrowing rate specific to the Company, term
and currency of the contract. Generally, the
Company uses its incremental borrowing rate as
the discount rate.
Lease payments included in the measurement
of the lease liability comprise:
•  ixed lease payments (including in-
F
substance fixed payments), less any lease
incentive receivables
•  ariable lease payments that depend on an
V realisable value of obsolete and slow-moving
index or rate, initially measured using the
index or rate at the commencement date
P
the lease, if the lease term reflects the
exercise of an option to terminate lease
Subsequent measurement of lease liability
After the commencement date, the amount
of lease liabilities is increased to reflect the
accretion of interest and reduced for the
lease payments made and remeasured (with a
corresponding adjustment to the related ROU
asset) when there is a change in future lease
payments in case of renegotiation, changes of
an index or rate or in case of reassessment of
options.
assets
The Company has elected not to recognize
right-of-use assets and lease liabilities for short
term leases as well as low value assets and
recognizes the lease payments associated with
these leases as an expense on a straight-line
basis over the lease term.
Inventory are measured at the lower of cost and
net realisable value. The cost of inventory includes
expenditure incurred in acquiring the inventory,
production or conversion costs and other costs
incurred in bringing them to their existing location
and condition as appropriate. In the case of
manufactured inventory and work in progress,
cost includes an appropriate share of production
overheads based on normal operating capacity.
Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated
costs of completion and selling expenses. Net
inventory over 365 days are considered as nil.

•  he amount expected to be payable by the

T
lease under the residual value guarantees

•  he exercise price of purchase options, if

T
the lessee is reasonably certain to exercise
the options and

16

Notes to the Financial Statements (Contd.)
The cost of each category of inventory is based on
the following:
Raw Materials : Based on the weighted
average cost price and
includes expenditure
incurred in acquiring the
inventory and bringing them
to their existing location and
condition.
Work - in – Progress: At raw material cost which
include direct expenditure
and production overhead on
normal operating capacity
Finished goods : At raw material cost and
packing materials, which
include direct expenditure
and production overhead on
normal operating capacity.
Packing materials : Based on the weighted
average cost price and
includes expenditure
incurred in acquiring the
inventories and bringing
them to their existing
location and condition
Spares, stores and accessories: Based on the
weighted average
cost price
and includes
expenditure
incurred in
acquiring the
inventories and
bringing them
to their existing
location and
condition.
3.6 Impairment
The carrying amounts of the Company’s non-
financial assets, other than deferred tax assets,
are reviewed at each reporting date to determine
whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable
amount is estimated. For intangible assets that have
17
Financial Statements
indefinite useful lives or that are not yet available
for use, the recoverable amount is estimated
each year at the same time. An impairment loss
is recognised if the carrying amount of an asset
exceeds its estimated recoverable amount.
The recoverable amount of an asset is the greater
of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future
cash flows are discounted to their present value
using a pre-tax discount rate that reflects current
market assessments of the time value of money and
the risks specific to the asset. For the purpose of
impairment testing, assets that cannot be tested
individually are grouped together into the smallest
group of assets that generates cash inflows from
continuing use that are largely independent of the
cash inflows of other assets.
3.7 Liabilities and provisions
All financial liabilities are initially recognized at the
transaction price (including transaction costs). Trade
payables are obligations on the basis of normal
credit terms and do not bear interest. Liabilities
are settled in the normal operating cycle of the
Company.
Liabilities classified as current liabilities on the
statement of financial position are those, which fall
due for payment on demand or within one year from
the reporting date. Non-current liabilities are those
balances that fall due for payment after one year
from the financial position date.
Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result
of a past events, it is probable that the Company
will be required to settle the obligation, and a
reliable estimate can be made of the amount of the
obligation.
The amount recognized as provision is the best
estimate of the consideration required to settle
the present obligation at the date of statement of
financial position, taking into account the risks and
uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount
is the present value of those cash flows.
 Causeway Paints Lanka (Pvt) Ltd
Notes to the Financial Statements (Contd.)
When some or all of the economic benefits required
to settle a provision are expected to be recovered
from a third party, the receivable is recognized as an
asset if it is virtually certain that reimbursement will
be received and the amount of the receivable can be
measured reliably.
3.8 Employee benefits
3.8.1 Short-term benefits
Short-term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related service is provided. A
liability is recognized for the amount expected
to be paid under short-term cash bonus or
profit-sharing plans 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 obligation can be
estimated reliably.
3.8.2 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. Obligations
for contributions to Provident and Trust Funds
covering all employees are recognized as an
expense in the Profit or loss when incurred.
3.8.3 Defined benefit plans
A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan.
Provision has been made for retirement
gratuities from the first year of service for
all employees, in conformity with LKAS
19 – Employee Benefits. However, under
the Payment of Gratuity Act No. 12 of 1983,
the liability to an employee arises only on
completion of 5 years of continued service.
The liability recognized in the statement of
financial position in respect of defined benefit
plan is the present value of the defined benefit
obligation at the reporting date. As required
by LKAS 19 the Company applies the actuarial
valuation method to determine the liability
18
in respect of retirement gratuity. Resulting
actuarial gains and losses are recognised in
other comprehensive income.
The liability is not externally funded.
Statement of profit or loss
3.9 Revenue recognition
Revenue from contracts with customers is
recognized on transfer of control of promised
goods or services to a customer at an amount that
reflects the consideration to which the Company
is expected to be entitled to in exchange for those
goods or services. Revenue towards satisfaction
of a performance obligation is measured at the
amount of transaction price (net of variable
consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered includes variable consideration
on account of various discounts and schemes
offered by the Company as part of the contract. This
variable consideration is estimated based on the
expected value of outflow. Revenue (net of variable
consideration) is recognized only to the extent that
it is highly probable that the amount will not be
subject to significant reversal when uncertainty
relating to its recognition is resolved.
3.9.1 Sale of goods
Revenue from sale of products is recognized
when the control on the goods have been
transferred to the customer. The performance
obligation in case of sale of product is satisfied
at a point in time i.e., when the material is
dispatched to the customer.
3.9.2 Exchange of goods
When goods are exchanged for those with
similar nature and value, the exchange is not
regarded as a transaction, which generates
revenue. When exchanges are made with
dissimilar goods or services the exchange is
recognized as revenue measured at fair value of
the goods received, adjusted by the amount of
any cash or cash equivalents transferred.

Notes to the Financial Statements (Contd.)
3.10 Expenditure recognition
All expenditure incurred in running of the business
and in maintaining the capital assets in a state of
efficiency has been charged to Revenue in arriving at
the profit for the year.
3.13.2 Deferred tax
Expenditure incurred for the purpose of acquiring,
expanding or improving assets of a permanent
nature by means of which to carry on the business
or for the purpose of increasing the earning
capacity of the business has been treated as capital
expenditure.
Repairs and renewals are recognized in profit or loss
in the year in which the expenditure is incurred.
3.11 Finance income and finance costs
Finance Income comprise interest income on funds
invested recognized in profit or loss using the
effective interest method. Finance Costs comprise
interest expense on borrowings recognized in profit
or loss using the effective interest method and
foreign currency losses.
3.12 Borrowing costs
All borrowing costs are recognized as expenses in
the period in which they are incurred except those
that are directly attributable to the construction
or development of property, plant and equipment
which are capitalized as a part of the cost of
that asset during the period of construction or
development.
3.13 Income tax expense
Income tax expense comprises current and deferred
tax. Current and deferred tax are recognized in
profit or loss except to the extent that it relates
to items recognized directly in equity, or in other
3.14 Statement of cash flows
comprehensive income.
The statement of cash flow has been prepared
3.13.1 Current tax
Current income tax assets and liabilities for the
current periods are measured at the amount
expected to be recovered from or paid to the
Cash and cash equivalents comprise short term,
taxation authorities.
The provision for income tax is based on
the elements of income and expenditure
19
Financial Statements
as reported in the financial statements and
computed in accordance with the provisions of
the Inland Revenue Act No. 24 of 2017 and with
the subsequent amendments.
Deferred tax is recognized in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and the amounts used for
taxation purposes.
Deferred tax is measured at the tax rates that
are expected to be applied to the temporary
differences when they reverse, based on the
laws that have been enacted or substantively
enacted by the reporting date.
Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset
current tax liabilities against current tax assets,
and they relate to 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 realized
simultaneously.
A deferred tax asset is recognized for unused
tax losses, tax credits and deductible temporary
differences to the extent that it is probable
that future taxable profits will be available
against which they can be utilized. Deferred tax
assets are reviewed at each reporting date and
are reduced to the extent that it is no longer
probable that the related tax benefit will be
realized.
using the Indirect Method of preparing cash flows in
accordance with the Sri Lanka Accounting Standard
(LKAS) 7, Statement of Cash Flows.
highly liquid investments that are readily convertible
to known amounts of cash and are subject to an
insignificant risk of changes in value. The cash and
cash equivalents include cash in-hand, balances with
banks and short-term deposits with banks.
 Causeway Paints Lanka (Pvt) Ltd
Notes to the Financial Statements (Contd.)
For cash flow purposes, cash and cash equivalents
are presented net of bank overdrafts.
3.15 Commitments and contingencies
All discernible risks are accounted for in determining
the amount of all known liabilities. Contingent
liabilities are possible obligations whose existence
will be confirmed only by uncertain future events or
present obligations where the transfer of economic
benefits is not probable, or the amount cannot be
reliably measured. Contingent liabilities are not
recognised in the statement of financial position but
are disclosed.
3.16 Current and non-current classification
All assets and liabilities have been classified as
current or non-current as per the Company’s normal
operating cycle and other criteria set out in the
LKAS. Based on the nature of products and the time
20
between acquisition of assets for processing and
their realization in cash and cash equivalents, the
Company has ascertained its operating cycle as 12
months for the purpose of current or non-current
classification of assets and liabilities.
3.17 Basic earnings/ (loss) per share
The Company presents Basic Earnings/ (Loss) Per
Share (EPS) date for its Ordinary Shares. Basic EPS is
calculated by dividing the profit or loss attributable
to ordinary shareholders of the Company by the
weighted average number of Ordinary Shares
outstanding during the period.
4. Events after the reporting period
All events after the reporting period are considered
in preparing these financial statements and where
necessary disclosures or amendments are made.
 21
Notes to the Financial Statements (Contd.)

Financial Statements
5. Revenue
2022/2023 2021/2022
LKR LKR
Local sales 13,608,981,377 13,645,716,464
Export sales 259,435,653 92,168,454
13,868,417,030 13,737,884,919

6. Other income
2022/2023 2021/2022
LKR LKR
Interest income 243,074,429 26,733,243
Insurance claims 4,932,827 -
Profit on disposal of property and equipment 177,649 449,998
Scrap sales 23,450,165 31,133,052
Rental of colourworld machine 3,880,753 4,772,674
Profit on termination/remeasurement of lease asset 108,881 489,661
Miscellaneous income 249,922 167,796
Sundry balance write back 5,601,058 245
281,475,684 63,746,668

7. Profit / (loss) before tax

Profit / (loss) before tax is stated after accounting for all expenses
including the following:
31.03.2023 31.03.2022
LKR LKR
Salaries and wages 1,307,744,993 1,096,993,898
Defined contribution plan 104,966,877 88,654,179
Retirement benefit obligations 42,744,353 31,758,799
Depreciation and amortisation 181,476,052 136,377,224
Auditor's remuneration 2,593,160 2,064,076
Impairment allowance on inventory / (reverse) 170,661,833 42,768,291
Increase in loss allowance on trade receivables 52,780,114 89,363,738

8. Income tax expense

8.1 INCOME TAX RECOGNISED IN PROFIT OR LOSS

31.03.2023 31.03.2022
LKR LKR
Current tax
In respect of current year 695,855,942 18,725,874
Over provision of previous year taxes - (2,063,775)
695,855,942 16,662,099
Deferred tax
Relating to the origination and (reversal) of temporary differences (60,956,641) (18,348,350)
Relating to change in tax rates (40,887,065) -
Total income tax recognised in the current year 594,012,237 (1,686,251)
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

8.2 Reconciliation between accounting profit and taxable income

A reconciliation between the tax expense and the product of accounting profit multiplied by the statutory tax
rate is as follows:
31.03.2023 31.03.2022
LKR LKR
Accounting profit before taxation 2,652,933,419 (23,629,879)
Less: Allowable expenses:
Gratuity paid (11,139,477) (15,005,363)
Capital allowance (233,920,740) (161,157,530)
Write off for bad debts (38,069,552) -
Others (25,383,614) (23,178,235)
Add: Disallowable expenses
Depreciation 181,476,052 136,377,224
Provision for gratuity 42,744,353 31,758,799
Provision for doubtful debt 90,849,665 89,363,738
Impairment allowance on inventory 170,661,833 42,768,291
Others 228,49,459 16,702,578
Adjusted trade profit 2,853,001,399 93,999,624
Liable income
Profit on manufactured income 1,186,164,052 63,900,599
Profit on export income 20,716,448 -
Profit on all other income first 6 months 239,835,995 30,099,024
Profit on all other income second 6 months 1,406,284,904 -
Statutory income 2,853,001,400 93,999,623
Assessable income 2,853,001,400 93,999,623
Tax payable on
Tax on manufactured income @ 18% 213,509,529 11,502,108
Tax on income taxable at special rate @ 14% 2,900,303 -
Tax on all other income @ 24% 57,560,639 7,223,766
Tax on all other income @ 30% 421,885,471 -
Income tax expense 695,855,942 18,725,874
Effective tax rate 24.4% 19.9%

Income tax rate is increased to 30% with effect from 1 October 2022.

22
 23
Notes to the Financial Statements (Contd.)

Financial Statements
8.3 Deferred tax expense
Recognized income statement
31.03.2023 31.03.2022
LKR LKR
Deferred tax expense arising from;
Property, plant and equipment (63,814,151) 2,383,306
Retirement benefit obligation 31,371,365 3,259,976
Provision for doubtful debts 64,697,075 17,032,423
Provision for obsolete inventory 68,894,365 7,947,697
Provision for accumulated leave balance 3,169,691 (991,586)
Provision for sick leave 158,517 (405,648)
Right of use assets (5,863,104) (9,132,163)
Other provisions 3,229,948 (1,745,654)
101,843,705 18,348,350
Recognized in other comprehensive income
Deferred tax expense arising from;
Re-measurement of employee benefit obligation 3,578,132 (2,668,634)
3,578,132 (2,668,634)

8.4 Deferred tax assets

31.03.2023 31.03.2022
LKR LKR
At the beginning of the year 65,774,843 22,906,205
Adjustment due to merger - 27,188,921
Charge for the year (Note 8.3) 105,421,837 15,679,716
At the end of the year 171,196,678 65,774,843

The following are the major deferred tax (liabilities) and assets recognized by the company and movements
thereon during the current and prior reporting period.
31.03.2023 31.03.2022
LKR LKR
Tax amount of temporary differences arising from accounting
(134,420,992) (70,606,841)
depreciation
Tax amount of temporary differences arising from retirement benefit
70,163,687 35,214,190
obligation
Tax amount of temporary differences arising from provision for doubtful
143302838 78,605,762
debtors
Tax amount of temporary differences arising from provision for obsolete
97361545 28,467,181
inventory
Tax amount of temporary differences arising from provision for
5219595 2,049,904
accumulated leave balance
Tax amount of temporary differences arising from provision for sick leave 275244 116,727
Tax amount of temporary differences arising from right to use assets (15020516) (9,157,412)
Tax amount of temporary differences arising from other provisions 4315277 1,085,333
171196678 65,774,843
Effective tax rate used for deferred tax calculation 30.0% 18.5%
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

9. Earnings / (loss) per share

 he calculation of basic and diluted earnings / (loss) per share is based on
T
the net profit / (loss) for the year attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding during
the year.
2022/2023 2021/2022
LKR LKR
Profit / (loss) attributable to shareholders 2,058,921,182 (21,943,627)
Weighted average number of ordinary shares used as denominator 42,470,425 42,470,425
Basic and diluted earnings / (loss) per share 48.48 (0.52)

Diluted earnings / (loss) per share and the basic earnings/(loss) per share are same due to non availability of
potential dilutive ordinary shares.

10. Dividend per share

2022/2023 2021/2022
LKR LKR
Paid:
Interim LKR nil per share (2022/2023 - LKR 10.60) 450,186,505 -
Final LKR nil per share (2020/2021 - LKR NIL) - -
Dividend per share 10.60 -

The company has paid total dividend of LKR 450,186,505 (Rs 10.60 per share) on 29 December 2022 and 12
January 2023

24
 11. Property plant and equipment
Land Buildings Vehicles Plant & Office Furniture Lab Computers Tinting Capital WIP Total

machinery equipment & fittings equipment machine

LKR LKR LKR LKR LKR LKR LKR LKR LKR LKR LKR

Cost

Balance as at 1 April 2021 - 305,333,488 210,289,642 447,379,132 31,763,394 30,442,687 28,971,164 24,833,675 - 5,465,247 1,084,478,430

Adjustment due to Merger 32,277,655 74,502,572 - 200,588,668 6,735,718 16,198,895 8,879,234 43,232,412 251,218,008 1,125,343 634,758,505

Additions during the year - - - - - - 1,133,847 5,933,530 - 656,756,758 663,824,135

Transfers during the year - 1,804,962 6,300,000 126,915,768 5,779,892 1,046,500 - - 774,418 (142,621,539) -

Disposal during the year - (891,663) - (6,453,678) (11,258) - - - (780,184) - (8,136,782)

Balance as at 1 April 2022 32,277,655 380,749,359 216,589,642 768,429,890 44,267,746 47,688,082 38,984,244 73,999,617 251,212,242 520,725,809 2,374,924,288

Additions during the year - - 16,475,000 - - 2,172,455 272,900 2,341,407 - 150,609,965 171,871,726

Transfers during the year - 389,000,091 - 272,900,432 8,298,276 1,136,975 - - - (671,335,773) -

Disposal during the year - (8,256,442) - (17,051,132) (320,252) (48,600) (3,593,582) (290,500) (30,515,120) - (60,075,628)

Balance as at 31 March 2023 32,277,655 761,493,008 233,064,642 1,024,279,189 52,245,771 50,948,912 35,663,562 76,050,524 220,697,122 - 2,486,720,386

Accumulated depreciation

Balance as at 1 April 2021 - 51,768,474 163,678,732 110,320,483 15,726,130 14,825,534 14,435,868 16,078,726 - - 386,833,948
Notes to the Financial Statements (Contd.)

Adjustment due to merger - 31,186,594 - 170,547,351 6,413,262 15,817,662 8,389,634 41,688,785 202,421,806 - 476,465,094

Depreciation / amortization - 13,324,269 8167,777 50,036,117 4,462,386 5,165,856 3,514,662 4,034,702 11,055,773 - 99,761,541

Disposal during the year - (384,177) - (5,382,021) - - - - (366,132) - (6,132,330)

Balance as at 1 April 2022 - 95,895,160 171,846,509 325,521,930 26,601,778 35,809,052 26,340,164 61,802,213 213,111,447 - 956,928,254

Depreciation / amortization - 30,942,776 9,952,164 79,771,446 6,027,231 5,580,702 3,442,948 4,917,810 9,299,835 - 149,934,911

Disposal during the year - (1,348,178) - (17,049,179) (320,245) (48,600) (3,486,671) (198,295) (29,220,140) - (51,671,308)

Balance as at 31 March 2023 - 125,489,758 181,798,673 388,244,196 32,308,764 41,341,154 26,296,440 66,521,728 193,191,142 - 1,055,191,857

Carrying value

As at 31 March 2023 32,277,655 636,003,250 51,265,969 636,034,993 19,937,006 9,607,758 9,367,122 9,528,796 27,505,980 - 1,431,528,529

As at 31 March 2022 32,277,655 284,854,199 44,743,133 442,907,960 176,65,968 11,879,030 12,644,081 12,197,404 38,100,795 520,725,809 1,417,996,034

Property, plant and equipment include fully depreciation asset having a cost of LKR 541,819,291.74 (2022 - LKR 568,395,376.83).
25

Financial Statements
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

11.1 Intangible assets

31.03.2023 31.03.2022
LKR LKR
Computer software and systems
Balance at the beginning of the year 12,763,615 14,245,239
Adjustment due to merger - 7,664,728
Additions during the year - 387,121
Amortized during the year (9,550,384) (9,533,473)
Balance at the end of the year 3,213,231 12,763,615
Intangible Assets includes fully amortised asset having a cost LKR 16,878,635 (2022 - LKR 16,440,930).

11.2 Right of use assets

Leasehold Land Leasehold Motor vehicle Total
11.2.1 Cost building
LKR LKR LKR LKR
Balance as at 1 April 2021 73,396,184 17,938,734 - 91,334,918
Adjustment due to merger - 52,780,618 13,167,993 65,948,611
Additions during the year - 10,893,488 - 10,893,488
Derecognition during the year - (36,438,158) (4,980,300) (41,418,458)
Balance as at 1 April 2022 73,396,184 45,174,682 8,187,693 126,758,559
Additions during the year - 20,877,743 1,598,718.69 22,476,461
Derecognition during the year - (9,439,470) (8,187,692) (17,627,162)
Balance as at 31 March 2023 73,396,184 56,612,955 1,598,720 131,607,858
11.2.2 Accumulated depreciation
Balance as at 1 April 2021 19,632,812 6,630,063 - 26,262,874
Adjustment due to merger - 35,065,419 4,295,097 39,360,516
Charge for the year 1,952,281 22,012,854 3,117,075 27,082,209
Derecognition during the year - (35,292,446) (2,621,390) (37,913,836)
Balance as at 1 April 2022 21,585,093 28,415,889 4,790,782 54,791,764
Charge for the year 1,952,281 18,808,650 1,229,826 21,990,757
Derecognition during the year - (8,293,758) (5,383,992) (13,677,750)
Balance as at 31 March 2023 23,537,374 38,930,782 636,616 63,104,771
Carrying value as at 31 March 2023 68,503,088
Carrying value as at 31 March 2022 71,966,795

12. INVENTORY
31.03.2023 31.03.2022
LKR LKR
Raw materials and packing materials 1,850,609,179 1,732,978,100
Work-in-progress 128,770,021 134,321,708
Finished goods 1,934,474,943 1,267,150,431
Goods in transit 76,371,679 821,236,306
3,990,225,822 3,955,686,544
Less: Allowance for impairment of inventory (Note 12.1) (347,663,688) (177,001,854)
3,642,562,134 3,778,684,690

Details of inventory mortgaged against bank overdrafts are disclosed under note 21.

12.1 Movement in allowance for impairment of inventories

2022/2023 2021/2022
LKR LKR
Balance at the beginning of the year 177,001,854 115,132,315
Adjustment due to merger - 19,101,248
Net increase / (decrease) in impairment allowance 170,661,833 42,768,291
Balance at the end of the year 347,663,688 177,001,854
26
 27
Notes to the Financial Statements (Contd.)

Financial Statements
13. TRADE AND OTHER RECEIVABLES
31.03.2023 31.03.2022
LKR LKR
Trade receivables 4,005,162,241 4,835,157,833
Less: Loss allowance for impairment (Note 13.1) (477,676,125) (424,896,011)
3,527,486,116 4,410,261,822

Discounts receivable 3,979,108 30,798,831

Prepaid expenses 7,127,565 17,825,873
Advance to employees 4,732,451 4,119,010
Advance towards capital expenditure 4,500,814 35,372,194
Advance to suppliers 478,133,209 99,809,237
NBT receivable - 1,329,853
VAT receivable - 12,364,494
Other receivables 22,936,673 14,699,351
Amounts due from related companies (Note 13.2) 38,806,754 57,663,721
4,087,702,691 4,684,244,386
The details of trade receivables mortgaged against bank overdrafts are disclosed under note 21.

13.1 Movement in loss allowance for receivables

31.03.2023 31.03.2022
LKR LKR
Balance at the beginning of the year 42,489,6011 208,356,871
Adjustments due to merger - 127,175,402
Net increase / (decrease) in loss allowance 52,780,114 89,363,738
Balance at the end of the year 477,676,125 424,896,011

13.2 Amounts due from related companies

31.03.2023 31.03.2022
LKR LKR
Asian Paints International Private Limited 18,684,067 5,293,435
Berger Paints (Emirates) Limited 2,429,568 9,196,530
Asian Paints (Bangladesh) Limited - 17,229,094
Asian Paints Limited 13,637,852 19,518,811
Asian Paints (South Pacific) Limited, Fiji 4,055,267 3,387,951
Asian Paints (Nepal) Limited - 3,037,900
38,806,754 57,663,721
The transactions with related parties have been disclosed in Note
27.2 to these financial statements.

14. OTHER FINANCIAL INVESTMENTS

31.03.2023 31.03.2022
LKR LKR
Term deposits with banks 1,514,588,807 1,031,415,223

LKR 156,772,840.73 term deposits have been pledged as securities for the bank overdraft obtained as detailed in
Note 21 to these financial statements.
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

15. CASH IN HAND AND AT BANK

31.03.2023 31.03.2022
LKR LKR
Cash at bank (Note 15.1) 1,502,692,381 1,801,821,488
Cash in hand 1,491,040 2,363,442
1,504,183,421 1,804,184,930

15.1 Cash at bank

31.03.2023 31.03.2022
LKR LKR
Current accounts 1,160,346,350 915,886,818
Savings accounts 342,346,031 885,934,670
1,502,692,381 1,801,821,488

16. STATED CAPITAL

No. of shares LKR
Fully paid ordinary shares 42,470,425 2,101,449,061

17. Retirement benefit obligations Defined benefit plan - Gratuity

31.03.2023 31.03.2022
LKR LKR
Balance at the beginning of the year 190,346,974 136,884,162
Adjustment due to merger - 51,183,005
Add: Current services cost 16,275,297 16,676,680
Interest charge for the year 26,469,056 15,082,119
Less: Payments made during the year (11,139,477) (15,005,363)
Actuarial (gains) / losses 11,927,106 (14,473,629)
Balance at the end of the year 233,878,956 190,346,974
An actuarial valuation was carried out by an independent professional valuer, Messrs, TransValue
Consultants as of 31 March 2023, to determine the actuarial value of the retirement benefit obligations
applicable in terms of the Payment of Gratuity Act No 12 of 1983, in respect of all employees of the
Company as at 31 March 2023, from the commencement of employment.
The following assumptions were used in determining the post-employment benefit obligations:
Discount rate 16.0% 14.7%
Expected future salary increment rate 12.5% 10.0%
Staff turnover rate 16.8% 16.5%
Retirement age 60 years 60 years
The sensitivity analyses below have been determined based on reasonably possible changes of the
17.1 respective assumptions occurring at the end of the reporting period, while holding all other assumptions
constant.
31.03.2023 31.03.2022
LKR LKR
Defined benefit obligation on current assumption 233,878,956 190,346,974
Impact of increase in rate of discounting by 100 basis point (8,516,468) (6,736,165)
Impact of decrease in rate of discounting by 100 basis point 9,190,837 7,512,169
Impact of increase in rate of salary increase by 100 basis point 10,395,080 85,58,182
Impact of decrease in rate of salary increase by 100 basis point (9,776,817) (7,574,475)
28
 29
Notes to the Financial Statements (Contd.)

Financial Statements
The sensitivity analysis presented above may not be representative of the actual change in the defined
benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as
some of the assumptions maybe correlated.

In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been
calculated using the projected unit credit method at the end of the reporting period, which is the same as
that applied in calculating the defined benefit obligation liability recognized in the statement of financial
position.

There was no change in the methods and assumptions used in preparing the sensitivity analysis when
compared to the prior year.

Maturity analysis of the payments

17.2
The following payments are expected on employee benefit liabilities in future years:
Less than 1 year 47,218,965 39,461,400
Over 1 year and less than or equal to 2 years 44,692,375 6,818,733
Over 2 years and less than or equal to 5 years 121,756,526 22,689,758
Over 5 years and less than or equal to 10 years 180,386,764 25,326,455

18. Trade and other payables

31.03.2023 31.03.2022
LKR LKR
Trade creditors 406,345,551 3,351,991,370
Amounts due to related companies -Trade and other payables (Note
64,786,365 770,005,194
18.1)
Amounts due to related companies - Royalty payables (Note 18.2) 210,660,540 326,526,148

Deposits from employees - 57,000

Other payables and accrued expenses 1,160,497,700 979,917,544
1,842,290,157 5,428,497,256

18.1 Amounts due to related companies - Trade and other payables

Asian Paints Ltd 38,243,675 637,328,078
Asian Paints International (Private) Ltd 24,576,732 72,070,115
Asian Paints (Middle East) LLC, Oman - 487,200
Asian Paints (Nepal) Ltd - 2,883,304
PPG Asian Paints Private Ltd - 8,971,563
Berger Paints (Emirates) Ltd 1,965,959 48,264,934
64,786,365 770,005,194

18.2 Amounts due to related companies - Royalty fee

Asian Paints Limited 210,660,540 326,526,148
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

19. Income tax payable / (receivable)

2022/2023 2021/2022
LKR LKR
Balance at the beginning of the year (26,422,518) 70,987,989
Adjustment due to merger - 17,148,087
Provision for the year 695,855,942 18,725,874
Under provision for previous year - (2,063,775)
Tax payments during the year (240,441,964) (131,220,693)
Balance as at the end of the year 428,991,460 (26,422,518)

20. Lease liability

2022/2023 2021/2022
LKR LKR
At the beginning of the year 22,467,269 7,362,091
Adjustment due to merger - 26,447,820
Additions 17,796,461 10,893,488
Interest 2,279,579 3,105,235
Termination / reassessment of lease (4,058,294) (3,994,283)
Payments (22,301,766) (21,347,082)
At the end of the year 16,183,249 22,467,269
Lease liability current 3,728,066 17,698,310
Lease liability non-current 12,455,183 4,768,959

Leasehold land represents leases of land obtained from NDA under different lease agreements, which have
tenures ranging from 30 years to 50 years.

Lease agreements Period

1. 19-11-1997 - 18/11/2047 50 years
2. 01-08-2005 - 31/07/2055 50 years
3. 02-01-2014 - 02/01/2034 30 years

21. Bank overdrafts

31.03.2023 31.03.2022
LKR LKR
Lending institution Interest rate p.a.
Hatton National Bank AWPLR+ 0.25% - 236,354
- 236,354

The following securities have been pledged against the above facilities:

- Commercial Bank: Lien over term deposit for LKR 156,772,840.73 for the overdraft facility of LKR 50,000,000 and
Letter of Credit, Import Demand Loan, Letter of Guarantee & short term loan of LKR 100,000,000

- HNB PLC: Floating Mortgage Bond totaling to LKR170.94 Mn. over immovable property in Moratuwa and
secondary floating mortgage bond.

30
 31
Notes to the Financial Statements (Contd.)

Financial Statements
22. Notes to the cash flow statement
2022/2023 2021/2022
LKR LKR
Cash and cash equivalents
Cash at bank and in hand (Note 15) 1,504,183,421 1,804,184,930
Bank overdrafts (Note 21) - (236,354)
1,504,183,421 1,803,948,576

23. Contingent liabilities and capital commitments

No significant capital commitments and contingent liabilities exists as the financial reporting date which required
adjustments to or disclosures in the financial statements other than the following:

2022/2023 2021/2022
LKR LKR
Contingent liabilities
Bank guarantees issued 14,439,673 16,752,630
Outstanding letters of credit - 12,985,570

24. Litigation and claims against the company

• Magistrate’s Court of Hingurakgoda case no. 50385

The above action was instituted by the Consumer Affairs Authority against Causeway Paints Lanka (Private)
Limited for violating section 60(5)(b) read together with section 10(3) of the Consumer Affairs Authority
Act No.9 of 2003. The trial of the case is in progress as the management of Causeway Paints Lanka (Private)
Limited intends to contest the matter vigorously in Court. Prosecution witness number two has been
summoned on the next date to give evidence before the Hon. Magistrate of Hingurakgoda. A final date has
been given for the prosecution witness number 2 to give evidence. An unfavourable outcome is unlikely
considering the evidence in favour of Causeway Paints Lanka (Private) Limited.

• Magistrate’s Court of Naula case no. 27737

“The above action was instituted by the Consumer Affairs Authority against Causeway Paints Lanka (Private)
Limited for violating section 60(5)(b) read together with section 10(3) of the Consumer Affairs Authority Act
No.9 of 2003.
A written representation was made to the Chairman of the Consumer Affairs Authority urging the authority
to amend the charge sheet in order to discharge Causeway Paints Lanka (Private) Limited from the case
and frame charges only against the distributor of the relevant area. A submission was also made to the
Hon. Magistrate of Naula requesting the same. There are ongoing discussions with the legal division of the
Consumer Affairs Authority and the Attorney-at-Law representing the CAA in Naula to conclude this matter
expeditiously.
In light of the above, an unfavourable outcome and potential loss with regard to this action is unlikely.”

• District Court of Matara case no. 3/ MR 18941

“The above action was filed by the Plaintiffs, F.P. Kahingala and F.T Ayesha, against the Defendants,
Causeway Paints Lanka (Private) Limited and Sampath Bank PLC, seeking inter alia an order preventing
the encashment of a Bank Guarantee amounting to LKR 2,500,000/- issued by the said Plaintiffs to
Causeway Paints Lanka (Private) Limited. Even though an enjoining order was initially issued preventing the
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

24. Litigation and claims against the company (Contd.)

abovementioned encashment, the said order was vacated subsequent to written and oral submissions made
on behalf of Causeway Paints Lanka (Private) Limited.
The parties to the case have filed written submissions and the case is fixed for order regarding the interim
injunction prayed for by the said Plaintiffs.”

There is no potential loss and unfavourable outcome in this case as the said Bank Guarantee has already been
encashed by the company.

25. Open tax assessments

Assessment year Assessment

2009-10 Company has received a default tax note from IRD during March 2023. As per the
& 2010-11 (AP Lanka) records of the IRD the tax value of LKR 6.61 Mn (tax with penalty) confirmed by CGIR.

The Management is of the view that the Management has followed due process and acted in accordance with
the prevailing laws in its tax submissions for above years of assessment. With the enactment of Finance Act,
No. 18 of 2021 in 2021 under the title of “provisions to write off tax arrears under certain laws” company has
applied for write-off. However, a provision of LKR 16.8 Mn was made in these financial statements for the above
assessments.

26. Financial instruments

2022/2023 2021/2022
LKR LKR
26.1 Categories of financial instruments
Financial assets
Cash and bank balances 1,504,183,421 1,804,184,930
Amortised cost 1,514,588,807 1,031,415,223
Financial liabilities
Amortized cost 1,781,158,096 5,428,497,256

Carrying values of financial assets and liabilities that have a short term maturity such as trade and other
receivables and payables, other financial assets, cash and cash equivalents are reasonable approximation of
their fair values. Therefore, a fair value hierarchy is not applicable.

26.2 Financial risk management objectives and policies

Financial instruments held by the Company, principally comprise of cash, short term deposits, trade and other
receivables, trade and other payables. The main purpose of these financial instruments is to manage the
operating, investing and financing activities of the Company.

Financial risk management of the Company is carried out by unit Finance function which reports to the General
Manager and comes under the purview of the Board of Directors of the company.

The finance division identifies, evaluates and mitigates financial risk in close co-operation with the Group’s
finance department which has also issued various policies and guidelines to ensure financial risk control. The
group provides guidelines for overall risk management, as well, covering specific areas such as credit risk,
investment of excess liquidity, interest rate risk and foreign currency risk.

The Company has established guidelines for risk controlling procedures and for the use of financial instruments,
including a clear segregation of duties with regard to financial activities, settlement, accounting and related
controlling. The guidelines upon which the Company’s risk management processes are based are designed to
32
 33
Notes to the Financial Statements (Contd.)

Financial Statements
26.2 Financial risk management objectives and policies (Contd.)

identify and analyze these risks throughout the Company, to set appropriate risk limits and controls and to
monitor the risks by means of reliable and up-to-date administrative and information systems. The guidelines
and systems are regularly reviewed and adjusted to changes in markets and products. The Company manages and
monitors these risks primarily through its operating and financing activities.

26.3 Credit risk

Credit risk is the risk that the counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions
and other financial instruments.

The Company trades only with recognised, creditworthy third parties. It is the Company’s policy that all clients
who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances
are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant.

With respect to credit risk arising from the other financial assets of the Company, such as cash and cash
equivalents, the Company’s exposure to credit risk arises from default of the counterparty. The Company takes all
reasonable steps to ensure that the counterparties fulfil their obligations.

The maximum risk positions of financial assets which are generally subject to credit risk are equal to their carrying
amounts.

The requirement for impairment is analysed at each month on an individual basis for all customers. In order to
mitigate settlement and operational risks related to cash and cash equivalents, the Company uses selected banks
with acceptable ratings for its deposits.

2022/2023 2021/2022
LKR LKR
a) The maximum exposure to credit risk at reporting date
Cash at bank (Note 15.1) 1,502,692,381 1,801,821,488
Other financial assets (Note 14) 1,514,588,807 1,031,415,223
Trade receivables (Note 13) 3,527,486,116 4,410,261,822
Other receivables (Note 13) 521,409,820 202,624,496
Amounts due from related parties (Note 13.2) 38,806,754 57,663,721
7,104,983,879 7,503,786,750
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

Gross
b) The aging of trade receivables at the reporting date Loss allowance Carrying value
Receivables
2023 2023 2023
LKR LKR
Not dues 3,274,210,853 - 3,274,210,853
Past dues:
Past due 0-3 months 223,024,763 - 223,024,763
Past due 4-6 months 87,427,548 57,177,048 30,250,500
Past due 7-9 months 70,772,895 70,772,895 -
Past due 10-12 months 81,122,772 81,122,772 -
More than 12 months 268,603,409 268,603,409 -
TOTAL 4,005,162,241 477,676,124 3,527,486,117

Gross
Loss allowance Carrying value
Receivables
2022 2022 2022
LKR LKR
Not dues 3,316,294,340 - 3,316,294,340
Past dues:
Past due 0-3 months 876,723,697 - 876,723,697
Past due 4-6 months 163,186,392 - 163,186,392
Past due 7-9 months 85,387,710 31,330,318 54,057,392
Past due 10-12 months 66,684,132 66,684,132 -
More than 12 months 326,881,562 326,881,562 -
TOTAL 4,835,157,833 424,896,011 4,410,261,823

31.03.2023 31.03.2022
LKR LKR
c) Movement in the impairment allowance
Balance at the beginning of the year 424,896,011 208,356,871
Adjustment due to merger - 127,175,402
Allowance for impairment recognized during the year 52,780,114 89,363,738
Balance at the end of the year 477,676,125 424,896,011

d) Other financial assets

The Company limits its exposure to credit risk by investing in fixed deposits with selected bankers with Board
approval.

e) Cash equivalents
The Company held cash at bank balances of LKR 1,502.69 Mn as at 31 March 2023 (31 March 2022 - LKR 1,801.8
Mn) which represent its maximum credit exposure on these assets. The cash equivalents are held with bank and
financial institutions counterparties, which have better rankings.

Respective credit ratings of banks in which the company balances are held is as follows;

Commercial Bank of Ceylon PLC A(lka)

Bank of China A
State Bank of India BBB-
Indian Overseas Bank CRISIL A1+

34
 35
Notes to the Financial Statements (Contd.)

Financial Statements
26.4 Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the
use of multiple sources of funding including short term loans and overdrafts.

The Company’s policy is to hold cash and undrawn committed facilities at a level sufficient to ensure that
the Company has available funds to meet its medium term capital and funding obligations and to meet any
unforeseen obligations. The Company holds cash and undrawn committed facilities to enable the Company
to manage its liquidity risk.

a) The following are the contractual maturities of the financial liabilities (excluding other payables and
amounts due to related parties) at its carrying value:

Contractual maturities of financial liabilities

Carrying Up to 3 3-12 More than
31 March 2023
amount Months Months 1 Year
LKR LKR LKR LKR
Lease Liability 16,183,249 3,366,720 9,088,463 3,728,066
Trade payables 406,345,551 406,345,551 - -
Royalty fee payable 210,660,540 210,660,540 - -
Leave encashments 70,568,811 - 9,773,802 60,795,009
Dealer discounts 425,080,636 425,080,636 - -
Sick leave provisions 768,776 - 186,328 582,448
CW deposits received 22,523,279 - - 22,523,279
1,152,130,842 1,045,453,447 19,048,593 87,628,802

a) The following are the contractual maturities of the financial liabilities (excluding other payables and
amounts due to related parties) at its carrying value:

Contractual maturities of financial liabilities

Carrying Up to 3 3-12 More than
31 March 2022
amount Months Months 1 Year
LKR LKR LKR LKR
Lease Liability 22,467,269 4,702,463 12,995,847 4,768,959
Trade payables 3,351,991,370 3,351,991,370 - -
Royalty fee payable 326,526,148 326,526,148 - -
Leave encashments 56,052,551 - 6,300,001 49,752,550
Dealer discounts 366,888,182 366,888,182 - -
Sick leave provisions 630,958 155,334 475,624
CW deposits received 23,191,196 23,191,196
4,147,747,674 4,050,108,163 19,451,182 78,188,329
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

26.5 Market risk

Market risk is the risk that the fair value of future cash flows of financial instruments will fluctuate due
to the changes in market prices. Mainly the changes in market prices, such as foreign exchange rates and
interest rates will affect the Company’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposure within acceptable
parameters, while optimising the return.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company’s exposure to the risk of changes in market
interest rates was related primarily to the company’s fixed deposits held at MCB Bank, Commercial Bank
and Public Bank. If the interest rate had appreciated / depreciated by 1% the profit before tax for the period
ended 31 March 2023 would increase / decrease by LKR 1,838,123.

b) Foreign currency risk

The foreign currency risk is the risk that the fair value or future cash flows of a financial instrument
fluctuating due to changes in foreign exchange rates. The Company is exposed to foreign currency risk on
revenue, and cash deposits denominated in currencies other than the functional currency of the Company.
The currency giving rise to this risk is primarily US Dollars.

27. Transactions with key management personnel and related parties

Mr. Sireesh Rao, Mr. Aashish Kshetry and Mr. Parag Rane continued to be directors for the financial year.

27.1 Key management personnel compensation

Key Management Personnel comprised of the directors and the General Manager of the Company. Remuneration
paid to key management personnel during the year are as disclosed below:

2022/2023 2021/2022
LKR LKR
Remuneration paid to key management personnel 100,065,601 59,164,995

27.2 Related party transactions

The related party transactions during the period are as follows:

Company Relationship Nature of transactions 2022/2023 2021/2022

LKR LKR
Asian Paints Limited Ultimate Parent Royalty fees 210,660,540 204,522,185
Company
Reimbursement of expenses 31,228,557 31,569,752
incurred on behalf of
company
Reimbursement of time cost – 27,412
of executives on behalf of
company
Recovery of expenses 235,750 1,360,886
incurred by the company

36
 37
Notes to the Financial Statements (Contd.)

Financial Statements
Company Relationship Nature of transactions 2022/2023 2021/2022
LKR LKR
Recovery of value of leave 5,759,845 11,120,551
balance for employee
transferred
Purchase of materials 466,447,946 576,322,310
Recovery of time cost of 20,324,331 13,996,287
executives
Asian Paints Immediate Recovery of time cost of 64,403,310 4,214,351
International Private Parent Company executives.
Limited
Reimbursement of time cost – 2,374,069
of executives on behalf of
company
Reimbursement of 30,143,382 49,116,243
information technology cost
Interest bearing loan 1,418,750,000 897,000,000
Loan interest 93,294,679 4,308,039
Capex purchase – 387,121
Asian Paints (South Related Recovery of time cost of 13,868,792 8,402,571
Pacific) Limited, Fiji Company executives
Asian Paints (Nepal) Related Sale of goods – 465,520
Limited Company
Reimbursement of expenses – 1,659,285
incurred on behalf of
company
Berger Paints Related Reimbursement of time cost 18,769,316 14,207,392
(Emirates) Limited Company of executives on behalf of
company
Purchase of goods 14,796,617 72,392,511
Recovery of value of leave – 9,196,530
balance for employee
transferred
Recovery of time cost of – 268,173
executives
Capex purchases – 4,450,048
Reimbursement of expenses 1,180,085 1,706,970
incurred on behalf of
company
Sale of materials 2,356,608
Asian Paints PPG (Pvt) Related Purchase of goods – –
Limited Company
PPG Asian Paints Related Purchase of goods – 14,964,276
Private Limited Company
Asian Paints (Middle Related Purchase of goods – 487,200
East) LLC, Oman Company
 Causeway Paints Lanka (Pvt) Ltd

Notes to the Financial Statements (Contd.)

Company Relationship Nature of transactions 2022/2023 2021/2022

LKR LKR
Asian Paints Related Recovery of time cost of – 17,229,094
(Bangladesh) Limited Company executives
Resins and Plastics Related Purchase of goods – 1,093,830
Limited Company
PT Asian Paints Related Purchase of goods 4,695,804 1,093,830
Indonesia Company
Please refer to notes 13.2 for balances due from related parties and 18.1 and 18.2 for balances due to related
parties.

28. Event after reporting period date

No significant events have occurred after the statement of financial position date which requires adjustments to
or disclosures in the financial statements other than following:

The board of Directors at its meeting held on 28 April 2023 have recommended payment of final dividend of LKR
9.42 per equity share. Total amounts to LKR 400,071,403.50.

The above is subject to approval at the ensuing Annual General Meeting of the Company hence is not recognized
as a liability.

29. Interest bearing loans

2022/2023 2021/2022
LKR LKR
Bank loans- HNB - 5,004,000
Bank loans- HSBC 1,248,750,000 1,497,440,175
Loan from related party 2,206,125,000 902,586,956
3,454,875,000 2,405,031,130
Payable after one year 2,039,625,000 1,906,125,000
Payable within one year 1,415,250,000 498,906,130

Securities:

Bank loans- HNB Floating Mortgage Bond for 155Mn over immovable property in Moratuwa.
Bank loans- HSBC Letter of awareness issued by Asian Paints Limited.

38
 39
Detailed notes to the Financial Statements

Financial Statements
For the year ended 31 March 2023

2022/2023 2021/2022
LKR LKR
1. Cost of materials consumed
Opening stock of materials 3,778,684,690 1,646,186,986
Adjustment due to merger - 586,417,141
Purchases 6,836,200,126 11,109,716,809
Closing stock of materials (3,642,562,134) (3,778,684,690)
6,972,322,682 9,563,636,247

2. Employee benefits expenses

Directors remuneration 53,246,850 33,535,521
Salaries wages and allowances 1,254,498,143 1,063,458,377
Contribution towards EPF and ETF 104,966,877 88,654,179
Gratuity 42,744,353 31,758,799
Staff welfare 105,49,879 125,393,038
1,560,806,102 1,342,799,915

3. Finance and other costs

Interest expense 170,271,511 99,284,712
Bank charges 65,886,193 38,462,942
236,157,704 137,747,653

4. Exchange loss
Exchange loss 872,978,910 1,320,871,549

5. Other expenses
Repairs and maintenance machinery 37,147,641 29,589,293
Power and fuel 44,528,087 33,575,832
Processing charges 9,775,150 41,598,119
Water charges 3,043,963 3,486,575
Vehicle fuel maintenance & delivery expenses 274,538,083 231,862,722
Customer helpers incentive 44,555,279 29,802,832
Freight and handling charges 101,616,527 142893002
Advertisement 350,184,144 163,711,505
Provision for doubtful debts 52780114 89,363,738
Write off for bad debts 38,069,552 -
Travelling expenses 36,513,792 6,420,581
Rates and taxes 5,141,438 1,588,548
Security expenses 19,580,904 18,117,016
Legal and professional expenses 32,167,440 25,178,411
Printing stationery and communication expenses 35,052,046 25,057,749
Systems expenses 41,739,361 45,891,888
 Causeway Paints Lanka (Pvt) Ltd

Detailed notes to the Financial Statements (Contd.)

2022/2023 2021/2022
LKR LKR
Conference seminar and workshops 31,049,254 31,887,633
Royalty 210,660,540 204,522,185
Auditor’s remuneration 2,593,160 2,064,076
Repairs and maintenance others 18,503,842 13,860,219
Insurance 9,365,259 6,870,933
Donations - 50,000
Lab expenses 8,881,555 8,341,704
Training and recruitment expenses 1,843,816 2,937,245
Loss on disposal of property and equipment 3,037,057 1,451,525
VAT expense 4,468,884 701,663
Material handling expenses 1,230,000 5,182,845
Fines and penalties 164,758 354,603
Rent 27,289,167 60,053,972
Outsourced manpower 34,119,035 71,630,585
Social security contribution on sales 148,105,661 -
Testing and other safety 10,130,746 14,180,861
Clearing chargers 8,036,200 8,080,823
Sundry balance write down 4,111,752 869,181
Licence fee 5,201,986 2,005,525
Provision for doubtful debtors 6,836,011 315,869
Other miscellaneous expenses 11,155,639 329,621
1,673,217,846 1,323,828,879

6. Other payables and accrued expenses

VAT payable 61,132,062 -
Salary payable 71,774,056 57,024,172
PAYE 21,523,848 2,297,544
EPF and ETF payable 14,139,309 10,963,398
Employee bonus 49,785,977 37,624,218
Provision for annual leave encashment 9,773802 6,300,001
Provision for accumulated leave balance (Note 18.3.1) 17,470,279 11,080,560
Expact leave balance 43,324,730 38,671,991
Sick leave provision (Note 18.3.2) 768,776 630,958
Dealer discounts 425,080,636 366,888,182
Payable to sundry creditors 102,149,686 144,697,646
Payable for capital expenditure 36,225 65,440,392
CW deposits received 22,523,279 23,191,196
SSCL payable 29,702,968 -
Outstanding expenses payable 190,515,858 139,983,051
Employee cost provisions 98,175,014 71,262,330
Others 2621,196 3,861,906

40 1,160,497,700 979,917,544
 41

Detailed notes to the Financial Statements (Contd.)

Financial Statements
2022/2023 2021/2022
LKR LKR
6.1.1 Provision for accumulated leave balance
Balance at the beginning of the year 11,080,560 -
Adjustment due to merger - 9,647,381
Provision for the year (Note 6.1.1.1) 6,848,266 1,511,353
Actuarial loss / (gain) during the year (Note 6.1.1.2) - 945,411
Payments made during the year (458,547) (1,023,585)
Balance at the end of the year 17,470,279 11,080,560

An actuarial valuation was carried for leave encashment liability as at March 31 2023 by Mr. Saket Singhal
of TransValue Consultants a firm of Actuaries and Financial Consultants. The valuation method used by the
actuaries to value the liability is the “Projected Unit Credit Method (PUCM)” the method recommended by
the Sri Lanka Accounting Standard LKAS 19 on “Employee Benefits”.

6.1.1.1 Provision recognized in the profit or loss

Current service cost 1,070,227 774,202
Interest on obligation 1,521,220 737,151
Remeasurements 4,256,819
6,848,266 1,511,353

31.03.2023 31.03.2022
LKR LKR
6.1.1.2 Provision recognized in the other comprehensive income
Actuarial loss / (gain) during the year - 945,411

6.1.1.3 The principal assumptions used in determining the cost of leave encashment were as follows;
Discount rate 16.0% 14.7%
Future salary increment rate 12.5% 10%

6.1.2 Provision for sick leave

Balance at the beginning of the year 630,958 -
Adjustment due to merger - 1,220,861
Provision for the year (Note 6.1.2.1) 137,818 340,101
Actuarial loss / (gain) during the year (Note 6.1.2.2) - (930,004)
Payments made during the year - -
Balance at the end of the year 768,776 630,958
 Causeway Paints Lanka (Pvt) Ltd

Detailed notes to the Financial Statements (Contd.)

An actuarial valuation was carried for leave encashment liability as at March 31, 2023 by Mr. Saket Singhal
of TransValue Consultants, a firm of Actuaries and Financial Consultants. The valuation method used by the
actuaries to value the liability is the “Projected Unit Credit Method (PUCM)”, the method recommended by
the Sri Lanka Accounting Standard, LKAS 19 on “Employee Benefits”.

31.03.2023 31.03.2022
LKR LKR
6.1.2.1 Provision recognized in the profit or loss
Current service cost 121,878 242,098
Interest on obligation 90,292 98,003
Remeasurements (74,352)
137,818 340,101

6.1.2.2 Provision recognized in the other comprehensive income

Actuarial loss / (gain) during the year - (930,004)

6.1.2.3 The principal assumptions used in determining the cost of leave encashment were as follows;
Discount rate 16.0% 14.7%
Future salary increment rate 12.5% 10.0%

42