='7 KANSAI NEROLAC PAINTS LIMITED May 28 2019 I. Corporate Relationship Department 2. Manager-Listing BSE Limited, National Stock Exchange of India Phiroze Jeejeebhoy Towers, Ltd. Dalal Street, Exchange Plaza, C-1, Block G, Mumbai -400001. Bandra Kurla Complex, Bandra (E), Mumbai -400 051 Sub.: CoDv of the Annual RCDort for the Financial Year 2018-19 along with the Notice convening the 99th Annual General Meeting Ref.: I. Regulation 30 and 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Reauirementst Regulations. 2015 /"SEBI ListintI Regulations"I 2. ScriD Codes : BSE -500165. NS[: -KANSAINIIR Dear Sirs, This is to infomi you that the 99th Annual General Meeting ( AGM) of our Company will be held on Friday, June 21. 2019 at 11.00 a.in. at Walchand Hirachand Hall, 4th Floor, IMC Chamber of Commerce & Industr}` IM(` Building. IMC` Marg, Churchgate, Munbai -400020. As required under Regulation 30 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015` we submit herewith the Annual Report of the Company for the Financial Year 2018-19 along with the Notice convening the 99th AGM. The Notice of the AGM is given on pages 3 to 10 of the Annual Report. I`he Annual report contains the inl`ormation lo be gi\'en and disclosures required to be made in terms ol` Regulation 34(2) and 34(3) ol` the SEBl (Listing Obligations and Disclosure Requirements) Regulations, 2015. Please take the above submission on record. your falthfuiiy` OLAC PAINTS LIMITED COMPANY SECRETARY Encl: as above Head Offlce NEnoLAc HousE Ganpatrao Kadam Mcirg, Tel. : ` Ol .22.24?3 4001 Lower PQrel Mumbal -4000\5 lnclia +91.22.2499 2500 99th Annual Report 2019 We design solutions that protect, inspire and touch lives every day This year when Nerolac redefined its vision, we Project “Uday” was initiated this year to achieve embraced a much larger purpose: Designing radical improvements in existing manufacturing solutions that protect, inspire and touch lives operations. Nerolac adopted the acquisition every day. route when it acquired RAK Paints, Bangladesh and Marpol. Marpol will help us further With this vision to guide us, we have relentlessly consolidate our leadership position in Powder worked on building or acquiring expertise to Coatings. Technologically, Nerolac continued its provide complete, end-to-end solutions to our forward-looking approach with the introduction customers. We have strengthened our presence of SAP Leonardo for Machine Learning in the in the construction chemical business through area of sales. With so many new and exciting the acquisition of Perma Coatings. Not only things on the horizon for Nerolac, we would not construction chemicals, we have also made our be making a fallacious statement if we say that presence felt in the adhesives, coil coating and Nerolac is only “99 years young”! floor coating customer segments. We continue exploring other niche categories. Manifestation The capability of Nerolac to unlearn, relearn of Nerolac in all walks of life will mean that we and reinvent itself is what keeps it buoyant truly touch lives every day! in tough market conditions. Our new brand ambassador is someone who embodies this Nerolac has always been a thought leader. But aspect of Nerolac. And may we say, he inspires being a thought leader also means constantly and touches lives every day! It is indeed a reinventing itself with times to stay ahead of pleasure for Nerolac to work with Ranveer Singh. the curve and serve the consumers better. In FY 2018-19, we initiated operations at the new All-in-all, we believe that Nerolac is armed state-of-the-art R&D facility. We also started with enough ammunition to enter its 100th year commercial production at Sayakha. Facilities at and continue building its legacy via solutions Sayakha are considered to be the best-in-class. that inspire! Annual Report 2019 DIRECTORS P. P. SHAH (Chairman) H. M. BHARUKA (Vice Chairman and Managing Director) N. N. TATA M. TANAKA H. FURUKAWA MRS. B. SOMAYA K. KATO A. JAIN (Whole-time Director) COMPANY SECRETARY G. T. GOVINDARAJAN BANKERS • UNION BANK OF INDIA • STANDARD CHARTERED BANK • HDFC BANK LTD. • BNP PARIBAS AUDITORS B S R & CO. LLP, MUMBAI SOLICITORS KANGA & CO., MUMBAI REGISTERED OFFICE NEROLAC HOUSE, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400 013 Tel: +91-22-24934001 Fax: +91-22-24936296 Website: www.nerolac.com Investors Relations e-mail ID: [email protected] Corporate Identity Number (CIN): L24202MH1920PLC000825 1 CONTENTS Notice . 3-10 Board’s Report including Management Discussion and Analysis . 11-61 Report on Corporate Governance . 62-79 Business Responsibility Report . 80-92 Product Range .. 93-94 Company's Manufacturing Facilities and Depots .. 95 New product launch .. 96 Sustainability Report .. 97-116 Auditors’ Report on Standalone Financial Statements . 117-125 Standalone Balance Sheet . 126 Standalone Statement of Profit and Loss . 127 Standalone Statement of Changes in Equity . 128 Standalone Statement of Cash Flows . 129-130 Notes to the Standalone Financial Statements . 131-167 Salient Features of the Subsidiaries in Form AOC-1 . 168 Auditors’ Report on Consolidated Financial Statements . 169-175 Consolidated Balance Sheet . 176 Consolidated Statement of Profit and Loss . 177 Consolidated Statement of Changes in Equity . 178 Consolidated Statement of Cash Flows . 179-180 Notes to the Consolidated Financial Statements . 181-223 Summarised Standalone Statement of Profit and Loss of 15 Years . 224 2 Annual Report 2019 Registered Office : ‘Nerolac House’, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013. Tel: +91-22-24934001 • Fax: +91-22-24936296 • Website: www.nerolac.com Investors Relations e-mail ID: [email protected] • Corporate Identity Number (CIN): L24202MH1920PLC000825 NOTICE NOTICE is hereby given that the Ninety-Ninth Annual from the conclusion of the 99th Annual General General Meeting of KANSAI NEROLAC PAINTS LIMITED Meeting of the Company until the conclusion of the will be held at Walchand Hirachand Hall, 4th Floor, 104th Annual General Meeting of the Company, on IMC Chamber of Commerce & Industry, IMC Building, IMC such terms and conditions, including remuneration, Marg, Churchgate, Mumbai – 400 020, on Friday, 21st June, as may be fixed by the Audit Committee or Board of 2019 at 11.00 a.m., to transact the following business: Directors, from time to time.” Ordinary Business: Special Business: 1. To consider and adopt the audited financial statements 6. To consider and if thought fit, to pass the following (including the consolidated financial statements) of Resolution as an Ordinary Resolution: the Company for the year ended 31st March, 2019 “RESOLVED that pursuant to the provisions of Section and the Reports of the Board of Directors and the 148 and other applicable provisions, if any, of the Auditors thereon. Companies Act, 2013, read with the Companies 2. To declare a normal dividend of ` 2.60 (260%) per (Audit and Auditors) Rules, 2014 and Companies (Cost Equity Share of the nominal value of ` 1 each for the Records and Audit) Rules, 2014 (including any statutory year ended 31st March, 2019. amendment or modification or re-enactment thereof, 3. To appoint a Director in place of Mr. Hidenori Furukawa for the time being in force), the remuneration of the (holding Director Identification Number 06924589), Cost Auditor, D. C. Dave & Co., Cost Accountants who retires by rotation and being eligible, offers (Firm Registration No. 000611), to conduct the audit himself for re-appointment. of the cost records of the Company for the financial year ending 31st March, 2020, as recommended by 4. To appoint a Director in place of Mr. Anuj Jain, the Audit Committee and approved by the Board of Whole-time Director (holding Director Identification Directors, be and is hereby ratified.” Number 08091524), who retires by rotation and being eligible, offers himself for re-appointment. 7. To consider and if thought fit, to pass the following 5. To consider and if thought fit, to pass the following Resolution as an Ordinary Resolution: Resolution as an Ordinary Resolution: “RESOLVED that pursuant to the provisions of “RESOLVED that pursuant to the provisions of Sections Section 197 and other applicable provisions, if any, 139, 141, 142 and other applicable provisions, if any, of the Companies Act, 2013 (“Act”), read with of the Companies Act, 2013, read with the Companies Regulation 17(6)(a) of the Securities and Exchange (Audit and Auditors) Rules, 2014 (including any Board of India (Listing Obligations and Disclosure statutory amendment or modification or re-enactment Requirements) Regulations, 2015, remuneration not thereof, for the time being in force) and pursuant exceeding 1% (one percent) per annum of the net to the recommendation of the Audit Committee, profits of the Company, calculated in accordance S R B C & CO LLP, Chartered Accountants (Firm with the provisions of Section 198 of the Act, Registration No. 324982E/E300003), be and are hereby be paid to and distributed amongst the Directors of appointed as Statutory Auditors of the Company, to the Company or some or any of them (other than hold office for a term of 5 (five) consecutive years the Managing Director and/or Whole-time Directors) 3 in such amounts or proportions and in such manner 4. Dividend: and in all respects as may be directed by the Board (i) The Board of Directors has recommended for of Directors of the Company and such payments shall consideration of the Members a normal dividend be made in respect of the profits of the Company for of ` 2.60 (260%) per Equity share of the nominal each financial year beginning from the financial year value of ` 1 each for the year ended 31st March, ending on 31st March, 2019.” 2019. For and on behalf of the Board (ii) The Register of Members and Share Transfer books of the Company will remain closed from Saturday, P.