Income The companys income changed by 13% during the year ended 2009.

There was an increase in the net turnover and the income from other sources like discounts, bad debt recovery, and consultancy also increased. The profit on sale of fixed assets increased significantly by 1440%. Expenditure The Expenditure of the company of the year ended 2010 increased by 14.5%. Material Consumed: Opening Stocks (Raw Materials, Containers, Work-in-Process, Finished Goods) for both the years remained nearly the same. However the purchases by the company increased in 2010 by 13% .The cost of material sold and consumed in painting contracts however increased by only 9% and hence an overall expenditure increased (Schedule 16)

Expenses: Operating Expenses: The freight, octroi, delivery costs, power and fuel consumption increased from the previous year. Personnel Expenses: Despite of the economic slowdown the companys expenses on salaries, wages, bonus and contribution to Provident and Gratuity increased. The company however cut down on Insurance cost by 32% and Commission to stockist and distributors by 28%. (Schedule 17) (Schedule 18) Profit before taxation and Exceptional Items Current Tax is the tax payable for the period determined as per the provisions of the Income Tax Act, 1961. Deferred Tax Assets and Liabilities represent adjustments for timing differences in the manner in which items of income or expenditure are recognized for tax calculations and annual accounts (as per the Companies Act, 1956). The profits before taxation decreased by 1.44%. The company did not offer any benefits under its Voluntary Retirement Scheme compared t last year. (Schedule 19)

(Schedule 20) Profit after taxation The recession starting from the second half of 2008, affected the automotive sector and the construction sector, which are the two biggest customer of the paint industry. Thus profits declined and the company showed slower growth in 2009. The situation is improving now with demands increasing from the small towns and the semi- urban regions in India. Although, profit after taxation decreased in 2009, the total profits increased by 52%. This is because of the profits carried forward from the previous year. Thus, the profit carried to Balance sheet after deducting Transfer to general reserves, dividend and Tax on profit increased to Rs. 1,467,131 in 2009 from Rs. 892,171 in 2008. Dividend The company gave a dividend of 0.6 per share of Rs. 2 (i.e. 30%). The amount of Rs. 191 million and will be paid to those members whose names appear in the Register of Members. In terms of the provisions of Section 205C of the Companies Act, 1956, your Company transferred an amount of Rs. 1,656,810 to the Investor Education and Protection Fund, in respect of dividend amounts lying unclaimed / unpaid for more than seven years from the date they became due i.e., for the year ended 31st March, 2001.

Earnings per Share Basic and Diluted Preparation of Final Accounts of the company The company Berger Paints Limited has prepared and presented its final statements in accordance with Section 211 of the companies Act, 1956, which requires that a companys accounts give the true picture of the companys state of affairs. As per Section 209 of the Companies Act, the company has followed the Double Entry System of Book Keeping and has recorded all transactions on Accrual

Basis. The company Berger Paints limited has presented its final accounts in compliance with Schedule VI of the Companies Act 1956, which is divided into 4 parts. PART I deals with the disclosure of information related to share capital, assets and Liabilities. The company has followed the vertical format to present the balance sheet. PART II deals with the disclosure of Profits and Loss of the company. However, no form of profits and loss is prescribed. PART III contains interpretation of certain items and PART IV requires disclosure of certain information as part of publication information. ORDER of permeance/order of liquidity

BALANCE SHEET Sources of Funds Shareholders Fund Overall, the shareholders funds increased by 7.14%, for the year ended 2009,for the company Berger Paints India Limited. The authorized share capital of the company increased by 15% in 2009.The issued share capital and the subscribed share capital was however the same in the two years. The company issued share warrants worth Rs. 99,000 in 2009. (Schedule 1) It also increased the reserves and surplus by 23% in 2009 by changes in the following: Capital Reserve, which is the amount set aside to deal with general, unspecified contingencies like inflation and cannot be distributed as dividends to share holders remained the same The revenue reserve, for e.g. the general reserve and Profit and Loss account however decreased. The company maintained its capital redemption reserve (created out of profits earned) for redemption of preference share to 408,000 for both the years. Loan Funds

Secure Loans: The company has reduced its value of Secured Loans from 998,391,000 to 780,017,000 in 2009. As per accounting policies it has clearly specified the securities are hypothecation of stock in trade and book debts. (Schedule 3) Unsecured Loans: The company has reduced its unsecured loans from Fixed Deposit Sources by 28% and has no current short term loans and advances for the year ended 2009. (Schedule 5) Deferred Taxation

Application of Funds Fixed Assests: While the company did not acquire any new land for business, it invested..% on Freehold buildings(partly on leasehold land). It also increased its investment in Plant and Machinary by ..%,Furniture and Fittings by ..% and Equipments like Motor Cars and other vehicles by ..%.Because the company has moved to a new ERP System in late 2008,its investment in intangible assets like Computer Software have increased by ..%. The company calculates Depreciation following the .Method Refer to note (ii) (a) in Schedule 21 Investments: The companies overall investments increased by 35% in 2009. Under long term investment, the company has invested 4,579,000 worth of Shares in Lusako Trading limited, its wholly owned subsidiary. It has also increased its investments in the shares of Berger Paints (Cyprus) Limited from 858,762 to 1.263,727.From the year ended 2009, the company has no investments in 7 years NSS that it had last year. The aggregate amount of Companys unquoted investment over short-term adds up to 3,205,600. The company had no such investment in the previous year. (Schedule 7) (DIVIDEND) Current assets, loans and advances

Inventories: The companys inventories including inventories in transit, consisting of store s and spare parts, raw materials, containers, work in process and finished goods increased by 1.03%. (Schedule 8) Sundry Debtors: The company has no bad or doubtful debts. Its sundry debts include debts which are unsecured but are good. The companys debts outstanding for a period of more than 6 months have increased by 29.5%.(Schedule 9) Cash & Bank Balance: The companys cash & bank balance increased by 20%. (Schedule 10)

(i) SIGNIFICANT ACCOUNTING POLICIES a) Accounting convention The financial statements are audited in accordance with the accounting principles generally accepted in India, the applicable. Accounting Standards notified u/s 211 (3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

b) Fixed Assets and Depreciation i) Fixed Assets are carried at cost of acquisition, except in the case of certain Land and Freehold Buildings which are carried at revaluation on current cost basis less depreciation as applicable. ii) Depreciation is provided on a straight line method as follows : (a) In respect of assets other than motor vehicles and computers : 1. In respect of additions before 1.7.87 on the basis of specified period determined at the time of acquisition at the rates inter alia under the Income Tax Act, 1961 and Rules framed thereunder and, 2. In respect of additions on or after 1.7.87 in accordance with the provisions of Schedule XIV of the Companies Act, 1956.

(b) In respect of motor vehicles and computers at 15% and 25% respectively and, (c) Tinting machines are depreciated at rates based on the estimated useful life varying from 60 months to 100 months, which are higher than rates specified in Schedule XIV. In respect of revalued assets, depreciation on the amount added on revaluation is set off against Revaluation Reserve. Payments made/costs incurred in connection with acquisition of leasehold rights are amortised over the period of the lease. iii) Intangible Assets are recognized only when future economic benefits arising out of the assets flow to the enterprise and are amortised over their useful life. iv) Cash generating units/Assets are assessed for possible impairment at balance sheet dates based on external and internal sources of information. Impairment losses, if any, are recognised as an expense in the Profit and Loss Account. c) Investments Investments are stated at cost less amounts written off where appropriate. Current investments are valued at lower of cost or fair value. d) Inventories Finished goods inventories are stated at the lower of cost or estimated net realisable value. Costs comprise costs of purchase and production overheads. Other inventories are also valued at lower of cost or net realisable value. Provision is made for damaged, defective or obsolete stocks where necessary. All inventories are valued according to weighted average cost method of valuation. e) Foreign Currencies Transactions in foreign currency are recorded at the rates of exchange prevalent on the date of transaction. Exchange differences arising from foreign currency transactions are dealt with in the Company's Profit and Loss

Account after converting monetary assets and liabilities in foreign currencies at year end rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported at balance sheet dates using the exchange rates at the date of transactions. f) Sales Sales comprise invoiced value of goods net of sales tax and are recognised on passing of property in goods. g) Other Income Other incomes such as discounts, .are recognized on accrual basis.

h) Employee Benefits Contribution made to approved Employees' Provident Fund and Superannuation Fund for certain category of employees are recognized in the Profit and Loss Account on an accrual basis. Retirement Gratuity for employees, is funded through a scheme of Life Insurance Corporation of India. The excess / shortfall in the fair value of the plan assets over the present value of the obligation calculated as per actuarial methods as at balance sheet dates is recognized as a gain / loss in the Profit and Loss Account. Liability for Leave encashment benefit is calculated using actuarial methods at year end.

i) Borrowing Costs Borrowing costs charged to the Profit and Loss Account include interest and discounts on bank borrowings and short and long term borrowings. Borrowing costs attributable to qualifying assets, if any, are capitalized as cost of the assets.

In the first half of the year, the industry encountered a major crisis in the form of increase in

crude oil prices rising nearly to $ 150 a barrel in a short period and sharply pushing up prices of the downstream raw materials. The resultant price hike of finished products led to increases in inventory holding at the dealers end. Sales growth in the first half was therefore higher than normal.

CONCLUSION: The Company, on a stand-alone basis, has only one segment of activity paints, in accordance with definition of segment as per Accounting Standard 17 issued by the Institute of Chartered Accountants of India. The company is seeing a major growth opportunity by working in collaboration which with the housing construction industry is focused on increasing the usable housing stock.. The company faces a major threat from international players who may venture into the Indian market if growth in their sector is low. With the growth in countrys GDP, check on Inflation and reforms for sustainable infrastructure development and increased FII has boosted growth of the company. ,