BK Agrawal amp Co Crowe Horwathw Chartered Accountants Member Crowe Horwath International

Saraswati Valika 122 Pannahiti Marg Sifal Ward NO7 PO Box 3761 Kathmandu Nepal T +977 1 4481865 4467694 F +977 1 4480065 E bkagcrowehorwathcomnp E bkagwlinkcomnp W wwwcrowehorwathneUnp

Independent Auditors Report

to the Board of Directors of

Berger Jenson amp Nicholson (Nepal) Private Limited

Report on Financial Statements

We have audited the accompanying Balance Sheet of MIs Berger Jenson amp Nicholson (Nepal) Private

Limited (The Company) as of March 13 2017 and Statement of Profit amp Loss Cash Flow Statement and

Changes in Equity attached thereto for the year ended on that date and a summary of Significant

Accounting Policies and other Explanatory Notes

Managements Responsibility for the Financial Statements

The preparation and fair presentation of these Financial Statements in accordance with Nepal Financial

Reporting Standards are the responsibility of the companys management This responsibility includes the

design implementation and maintenance of internal control relevant to the preparation and presentation of

financial statements that give a true and fair view and are free from material misstatement whether due to

fraud or error

Auditors Responsibility

Our responsibility is to express an opInion on these financial statements based on our audit We

conducted our audit In accordance with Nepal standards on Auditing issued by the Institute of Chartered

Accountants of Nepal (ICAN) Those standards require that we comply with ethical requirement and plan

and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement

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 risks of material misstatement of the financial statement whether due to fraud or error In

making those risk assessments the auditor considers internal control relevant to the preparation and fair

presentation of Companys fi nancial tatements 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

Companys internal control An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by the management as well as evaluating

the overall presentation of the financial statements We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a reasonable basis for our audit opinion ~ ~

BK Agrawal amp Co Chartered Accountants

Report on Companies Act 2063 and other regulatory requirements

a We have obtained 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

Company so far as appears from our examination of such books

kept by the

c In our opinion the Balance Sheet Statement of Profit amp Loss and Cash Flow Statement with Explanatory Notes dealt with by this report are in compliance with the provisions of the Company Act 2063 and are in agreement with the books of account maintained by the company

d In our opinion so far as appeared from our examination of the books the business of the

Company has been conducted satisfactorily and

e To the best of our information and according to the explanations given to us and from our examination of the books of accounts of the Company necessary for the purposes of the audit we have not come across cases where the Board of Directors or any employees of the Company have acted contrary to legal provisions relating to accounts or committed any misappropriation or caused loss or damage to the company

Auditors Opinion

In our opinion the Financial Statements read together with Notes in Schedule 2 forming part of the

accounts give a true and fair view of the financial position of the Company as at March 13 2017 and the

financial performance and cash flows for the year then ended in accordance with Nepal Financial

Reporting Standards and comply with provisions of the Companies Act 2063

Limitations of uses of Financial Statements

This report is issued by us pursuance to specific request made by the Company as required uls 136 and

137 of Indian Companies Act 201 3 in regard to the consolidation of the companys Financial Statements

with the Holdings Company MIs Berger Paints India Limited India Therefore this report should be used

for the above specific purpose only and not for any other purpose without our prior concurrence

For BK Agrawal amp Co Chartered Accountants

Kathmandu CA SM Shrestha Date PartnerMOj ~Cf ~Ol~

Member Crowe Horwath International 2

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED BALANCE SHEET AS AT MARCH 132017

Particulars

ASSETS

Non-Current Assets Property Plant and Equipment Capital Work-in-Progress Other Intangible Assets Other non-current Assets Deferred Tax Asset (Net)

Current Assets Inventories Financial Assets

(a) Trade Receivables (b) Cash and Bank Balances (c) Other Financial Assets

Other Current Assets

TOTAL ASSETS

EQUITY AND LIABILITIES

~ Equity Share Capital Other Equity

Non-Current Liabilities Other Financial Liabilities Deferred Tax Liabilities (Net)

Current Liabilities Financial Liabilities

(a) Trade Payables (b) Other Financial Liabilities

Other Current Liabilities Provisions

TOTAL EQUITY AND LIABILITIES

Summary of Significant Accounting Policies

As AtNotes March 132017

3 360578 10729

31 2262 4 46592

207 420368

5 283876

6 542675 7 1046266 8 50404 9 25528

1948749

2369117

10 34542 11 1628896

1663438

12 45508 13

45508

14 176545 15 332 186 16 147964 17 3476

660171

2369117

2

The accompanying notes form an integral part of the financial statements

This is the Statement of Financial Position referred to in our report of even date

On behalf of the Board of Di ectors

-litn Bsht Abhimanyu Chaterjee Rishma Kaur Kanwardip S Dhingra Company Secretary Director Director Director

As At March 13 2016

in NPR 000

As At March 142015

351815 9019

3547 44226

381 097 8289

352 35418

408607 425156

278616 260692

408753 587252

27858 8146

1310625

288963 325450

52831 10569

938505

1719232 1363661

34542 1149007 1183549

34542 911090 945632

44 475 2378

46853

65 979 5550

71529

143634 251435

91019 2742

488830

140683 131846 72100

1871 346500

1719232 1363661

Srijit Dasgupta irector

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman

Kathmandu Date

~1o~ ~ f ~() 11shy

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 132017

Year endedParticulars Notes March 13 2017

Income

Revenue from operations 18 2167128 Other Income 19 45560 Total Income 2212688

Expenditure Cost of materials consumed 20 972789

Purchases of Stock-in-Trade 21 46929

Decreasel (Increase) in inventories of finished goods 22 (39274) work-in-process and stock-in-trade

Employee benefits expense 23 97245 Finance costs Depreciation and amortization expense 36159 Other expenses 24 417002 Royalty amp Technical Service Fee 30945 Total Expenditure 1561795

Profit before Statutory allocation amp Tax 650893 Less Housing Reserves 33650 Less Employee Bonus 56113

Profit Before Tax 561130

Less Tax expense Current Tax 116736 Deferred Tax (2585) Prior period expenses 740

Profit after Tax for the year 446239

Earnings per share ( in Rs) 25 Basic 1291 87 Diluted 1291 87

Summary of significant accounting policies 2

The accompanying notes form an integral part of the financial statements This is the Statement of Profit and Loss referred to in our report of even date

On behalf of the Board of Directors

in NPR 000

Year ended March 13 2016

1609931 23245

1633176

718428

33678

20291

81 771

41 276 316719

23998 1236161

397015 19851 34 288

342876

68575 (3172)

535 276938

80174 80174

~shna Bisht Abhimanyu Chaterjee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman Partner

For BK Agrawal amp Co Chartered Accountants

Kathmandu

Date 16) ~J ~ C)Oj1shy

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 132017

inNPR 000

Particulars Year ended

March 132017 Year ended

March 13 2016

A Operating Activities Profit after Tax 446239 276938 Add Depreciation 36159 41276 Less Gain on Sale of Fixed Asset (1806) (1209) Add Deferred Tax Liability (2585) (3172) Operating Profit before changes in Working Capital 478007 313833

Working Capital Change in Current Financial Assets (173850) (92394) Inventories (5260) (17924) Non Current Other Financial Liabilities 1033 (21504) Current Liabilities 171341 142330 Proposed Dividend (Not Paid) (51813) Change in Other non-current Assets (2366) (8808) Cash Flow from Operating Activities 468905 263720

B Investing Activities Purchase of Fixed Assets (65891 ) (31337) Profit on sale of fixed assets 1806 1209 Proceeds from deletion of fixed assets 20544 15418

(43541) (14710)

C Financing Activities Increase I (Decrease) in Housing Reserves 33650 12792

33650 12792

Net Cash In(Out) flow 459014 261802

Add Cash and Bank Balance at the beginning of the year 587252 325450

Cash and Bank Balance at the closing of the year 1046266 587252

The accompanying notes form an integral part of the financial statements

This is the Cash Flow Statement referred to in our report of even date

On behalf of the Board of Directors

EBSh Abhimanyu Chatterj Ee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman

Kathmandu

Date Mctj I( ~Ot-

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 13 MARCH 2017

a Equity Share Capital in NPR 000

Particulars Number of Equity Shares as at

March 132017 March 13 2016 March 152015

Paid-up amount of Equity Capital as at

March 13 2017 March 13 2016 March 15 2015

Equity Shares of Rs 100 each issued subscribed and fully paid 345421 345421 345421 ___-3-45-4=2 34542 34 542

b Other equity

For the year ended 13 March 2017 Reserves amp Surplus Items of OCI

Employee Stock Capital TotalParticulars Share Retained Capital Housing Other Items of

options outstanding Redem ption FVTOCI EquityPremium earnings Reserve Reserve OCI

account reserve

At the beginning of year Profit allocation for the period Other comprehensive Income

Total Comprehensive Income

15556

15556

1083877 446239

1530116

49574 33650

83224

1149007 479889

1628896

Issue of share capital Exercise of share options

Share-based payments Transaction costs Cash Dividend

At the closing of year 15556 1530116 83224 1628896

For the year ended 13 March 2016

Particulars Share Premium

Employee Stock options outstanding

account

Reserves amp Surplus

Retained earnings

Capital Reserve

Capital Redemption

reserve

Housing Reserve

Items of OCI

Other Items of OCI

FVTOCI Total

Equity

At the beginning of year Profit allocation for the period Other comprehensive income

Total Comprehensive Income

15556

15556

858752 276938

1135690

Issue of share capital Exercise of share options Share-based payments Transaction costs Util ized during the year Cash Dividend (51813)

At the closing of year 15556 1083877

~

36782 19851

56633

(7059)

49574

911090 296789

1207879

(7059) (51813)

1149007

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

1 Corporate Overview Berger Jenson amp Nicholson (Nepal) Private limited (The Company) is a private limited company incorporated under Foreign Investment and Technology Transfer Act and Companies Act of Nepal having its Registered Office at Bhaktapur Industrial District Bhaktapur PO Box 3530 Kathmandu and Manufacturing Unit-1 at Bhaktapur Industrial District (BID) Bhaktapur and Manufacturing Unit-2 at Hetauda Industrial District (HID) Makawanpur Nepal The primary objectives of the company is to manufacture decorative paints and related products

2 Statement of Significant Accounting Policies a) Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on an accrual basis and are in accordance with all material aspects with Nepal Financial Reporting Standards unless stated otherwise and relevant provisions of Nepal Companies Act 2063 and other applicable laws prevalent in Nepal The Accounting policies are consistently applied by the Company

b) Use of estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments estimates and assumptions that affect the application of accounting policies and reported amounts of assets liabilities income and expenses and disclosure of contingent liabilities on the date of the financial statements Examples of such estimates include provision against litigations prOVision for sales return provision for customer claims and impairment of assets Actual results could differ from these estimates Estimates and underlying assumptions are reviewed on ongoing basis Differences between actual results and estimates are recognized in the periods in which the results are knownmaterialized

c) Current and non-current classification All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out by the company

Assets An asset is classified as current when it satisfies any of the following criteria 1 It is expected to be realized in or is intended for sale or consumption in the companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is expected to be realized within 12 months after the reporting date or 4 it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date

Liabilities 1 It is expected to be settled in the Companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is due to be settled within 12 months after the reporting date or 4 The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date

Current assetsliabilities include the current portion of non-current financial assetslliabilities respectively All other assetslliabilities are class ified as non-current

Operating Cycle Operating Cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents

d) Fixed Assets 01) Tangible Assets (NAS-1 6) Owned assets Fixed assets are stated at their origina l cost of acquisitionlinstallationconstruction (net of Value Added Tax) less accumulated depreciation and impairment losses if any except land Land is stated at cost inclusive of land development expenses The cost of an item of tangible fixed assets comprises Its purchase price including import duties

Leased assets The Company has renewed on 15012002 (20581002) the lease agreement of land amp buildings with Bhaktapur Industrial District (BID) Bhaktapur Nepal for initial penod of 20 years with all option to renewal The lease rental paid to the BID has been charged to revenue

The Company has with approval from concern authorities of Government of Nepal also acquired a land on 20640601 (18092007) on lease from Hetauda Industrial District (HID) Makawanpur Nepal for initial period of 20 years with an option to further renewal for a period mutually agreed between the parties The lease rental paid to HID has been charged to revenue

Capital work in Progress Capital work in progress includes expenditure incurred during construction and or advances paid for acquisition of capital assets (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed asset~U(sstated at the amount expendedpaid up to the date of Balance Sheet

~ ~~~W4(Iv-~If ~I ~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED BALANCE SHEET AS AT MARCH 132017

Particulars

ASSETS

Non-Current Assets Property Plant and Equipment Capital Work-in-Progress Other Intangible Assets Other non-current Assets Deferred Tax Asset (Net)

Current Assets Inventories Financial Assets

(a) Trade Receivables (b) Cash and Bank Balances (c) Other Financial Assets

Other Current Assets

TOTAL ASSETS

EQUITY AND LIABILITIES

~ Equity Share Capital Other Equity

Non-Current Liabilities Other Financial Liabilities Deferred Tax Liabilities (Net)

Current Liabilities Financial Liabilities

(a) Trade Payables (b) Other Financial Liabilities

Other Current Liabilities Provisions

TOTAL EQUITY AND LIABILITIES

Summary of Significant Accounting Policies

As AtNotes March 132017

3 360578 10729

31 2262 4 46592

207 420368

5 283876

6 542675 7 1046266 8 50404 9 25528

1948749

2369117

10 34542 11 1628896

1663438

12 45508 13

45508

14 176545 15 332 186 16 147964 17 3476

660171

2369117

2

The accompanying notes form an integral part of the financial statements

This is the Statement of Financial Position referred to in our report of even date

On behalf of the Board of Di ectors

-litn Bsht Abhimanyu Chaterjee Rishma Kaur Kanwardip S Dhingra Company Secretary Director Director Director

As At March 13 2016

in NPR 000

As At March 142015

351815 9019

3547 44226

381 097 8289

352 35418

408607 425156

278616 260692

408753 587252

27858 8146

1310625

288963 325450

52831 10569

938505

1719232 1363661

34542 1149007 1183549

34542 911090 945632

44 475 2378

46853

65 979 5550

71529

143634 251435

91019 2742

488830

140683 131846 72100

1871 346500

1719232 1363661

Srijit Dasgupta irector

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman

Kathmandu Date

~1o~ ~ f ~() 11shy

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 132017

Year endedParticulars Notes March 13 2017

Income

Revenue from operations 18 2167128 Other Income 19 45560 Total Income 2212688

Expenditure Cost of materials consumed 20 972789

Purchases of Stock-in-Trade 21 46929

Decreasel (Increase) in inventories of finished goods 22 (39274) work-in-process and stock-in-trade

Employee benefits expense 23 97245 Finance costs Depreciation and amortization expense 36159 Other expenses 24 417002 Royalty amp Technical Service Fee 30945 Total Expenditure 1561795

Profit before Statutory allocation amp Tax 650893 Less Housing Reserves 33650 Less Employee Bonus 56113

Profit Before Tax 561130

Less Tax expense Current Tax 116736 Deferred Tax (2585) Prior period expenses 740

Profit after Tax for the year 446239

Earnings per share ( in Rs) 25 Basic 1291 87 Diluted 1291 87

Summary of significant accounting policies 2

The accompanying notes form an integral part of the financial statements This is the Statement of Profit and Loss referred to in our report of even date

On behalf of the Board of Directors

in NPR 000

Year ended March 13 2016

1609931 23245

1633176

718428

33678

20291

81 771

41 276 316719

23998 1236161

397015 19851 34 288

342876

68575 (3172)

535 276938

80174 80174

~shna Bisht Abhimanyu Chaterjee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman Partner

For BK Agrawal amp Co Chartered Accountants

Kathmandu

Date 16) ~J ~ C)Oj1shy

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 132017

inNPR 000

Particulars Year ended

March 132017 Year ended

March 13 2016

A Operating Activities Profit after Tax 446239 276938 Add Depreciation 36159 41276 Less Gain on Sale of Fixed Asset (1806) (1209) Add Deferred Tax Liability (2585) (3172) Operating Profit before changes in Working Capital 478007 313833

Working Capital Change in Current Financial Assets (173850) (92394) Inventories (5260) (17924) Non Current Other Financial Liabilities 1033 (21504) Current Liabilities 171341 142330 Proposed Dividend (Not Paid) (51813) Change in Other non-current Assets (2366) (8808) Cash Flow from Operating Activities 468905 263720

B Investing Activities Purchase of Fixed Assets (65891 ) (31337) Profit on sale of fixed assets 1806 1209 Proceeds from deletion of fixed assets 20544 15418

(43541) (14710)

C Financing Activities Increase I (Decrease) in Housing Reserves 33650 12792

33650 12792

Net Cash In(Out) flow 459014 261802

Add Cash and Bank Balance at the beginning of the year 587252 325450

Cash and Bank Balance at the closing of the year 1046266 587252

The accompanying notes form an integral part of the financial statements

This is the Cash Flow Statement referred to in our report of even date

On behalf of the Board of Directors

EBSh Abhimanyu Chatterj Ee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman

Kathmandu

Date Mctj I( ~Ot-

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 13 MARCH 2017

a Equity Share Capital in NPR 000

Particulars Number of Equity Shares as at

March 132017 March 13 2016 March 152015

Paid-up amount of Equity Capital as at

March 13 2017 March 13 2016 March 15 2015

Equity Shares of Rs 100 each issued subscribed and fully paid 345421 345421 345421 ___-3-45-4=2 34542 34 542

b Other equity

For the year ended 13 March 2017 Reserves amp Surplus Items of OCI

Employee Stock Capital TotalParticulars Share Retained Capital Housing Other Items of

options outstanding Redem ption FVTOCI EquityPremium earnings Reserve Reserve OCI

account reserve

At the beginning of year Profit allocation for the period Other comprehensive Income

Total Comprehensive Income

15556

15556

1083877 446239

1530116

49574 33650

83224

1149007 479889

1628896

Issue of share capital Exercise of share options

Share-based payments Transaction costs Cash Dividend

At the closing of year 15556 1530116 83224 1628896

For the year ended 13 March 2016

Particulars Share Premium

Employee Stock options outstanding

account

Reserves amp Surplus

Retained earnings

Capital Reserve

Capital Redemption

reserve

Housing Reserve

Items of OCI

Other Items of OCI

FVTOCI Total

Equity

At the beginning of year Profit allocation for the period Other comprehensive income

Total Comprehensive Income

15556

15556

858752 276938

1135690

Issue of share capital Exercise of share options Share-based payments Transaction costs Util ized during the year Cash Dividend (51813)

At the closing of year 15556 1083877

~

36782 19851

56633

(7059)

49574

911090 296789

1207879

(7059) (51813)

1149007

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

1 Corporate Overview Berger Jenson amp Nicholson (Nepal) Private limited (The Company) is a private limited company incorporated under Foreign Investment and Technology Transfer Act and Companies Act of Nepal having its Registered Office at Bhaktapur Industrial District Bhaktapur PO Box 3530 Kathmandu and Manufacturing Unit-1 at Bhaktapur Industrial District (BID) Bhaktapur and Manufacturing Unit-2 at Hetauda Industrial District (HID) Makawanpur Nepal The primary objectives of the company is to manufacture decorative paints and related products

2 Statement of Significant Accounting Policies a) Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on an accrual basis and are in accordance with all material aspects with Nepal Financial Reporting Standards unless stated otherwise and relevant provisions of Nepal Companies Act 2063 and other applicable laws prevalent in Nepal The Accounting policies are consistently applied by the Company

b) Use of estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments estimates and assumptions that affect the application of accounting policies and reported amounts of assets liabilities income and expenses and disclosure of contingent liabilities on the date of the financial statements Examples of such estimates include provision against litigations prOVision for sales return provision for customer claims and impairment of assets Actual results could differ from these estimates Estimates and underlying assumptions are reviewed on ongoing basis Differences between actual results and estimates are recognized in the periods in which the results are knownmaterialized

c) Current and non-current classification All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out by the company

Assets An asset is classified as current when it satisfies any of the following criteria 1 It is expected to be realized in or is intended for sale or consumption in the companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is expected to be realized within 12 months after the reporting date or 4 it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date

Liabilities 1 It is expected to be settled in the Companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is due to be settled within 12 months after the reporting date or 4 The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date

Current assetsliabilities include the current portion of non-current financial assetslliabilities respectively All other assetslliabilities are class ified as non-current

Operating Cycle Operating Cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents

d) Fixed Assets 01) Tangible Assets (NAS-1 6) Owned assets Fixed assets are stated at their origina l cost of acquisitionlinstallationconstruction (net of Value Added Tax) less accumulated depreciation and impairment losses if any except land Land is stated at cost inclusive of land development expenses The cost of an item of tangible fixed assets comprises Its purchase price including import duties

Leased assets The Company has renewed on 15012002 (20581002) the lease agreement of land amp buildings with Bhaktapur Industrial District (BID) Bhaktapur Nepal for initial penod of 20 years with all option to renewal The lease rental paid to the BID has been charged to revenue

The Company has with approval from concern authorities of Government of Nepal also acquired a land on 20640601 (18092007) on lease from Hetauda Industrial District (HID) Makawanpur Nepal for initial period of 20 years with an option to further renewal for a period mutually agreed between the parties The lease rental paid to HID has been charged to revenue

Capital work in Progress Capital work in progress includes expenditure incurred during construction and or advances paid for acquisition of capital assets (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed asset~U(sstated at the amount expendedpaid up to the date of Balance Sheet

~ ~~~W4(Iv-~If ~I ~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 132017

Year endedParticulars Notes March 13 2017

Income

Revenue from operations 18 2167128 Other Income 19 45560 Total Income 2212688

Expenditure Cost of materials consumed 20 972789

Purchases of Stock-in-Trade 21 46929

Decreasel (Increase) in inventories of finished goods 22 (39274) work-in-process and stock-in-trade

Employee benefits expense 23 97245 Finance costs Depreciation and amortization expense 36159 Other expenses 24 417002 Royalty amp Technical Service Fee 30945 Total Expenditure 1561795

Profit before Statutory allocation amp Tax 650893 Less Housing Reserves 33650 Less Employee Bonus 56113

Profit Before Tax 561130

Less Tax expense Current Tax 116736 Deferred Tax (2585) Prior period expenses 740

Profit after Tax for the year 446239

Earnings per share ( in Rs) 25 Basic 1291 87 Diluted 1291 87

Summary of significant accounting policies 2

The accompanying notes form an integral part of the financial statements This is the Statement of Profit and Loss referred to in our report of even date

On behalf of the Board of Directors

in NPR 000

Year ended March 13 2016

1609931 23245

1633176

718428

33678

20291

81 771

41 276 316719

23998 1236161

397015 19851 34 288

342876

68575 (3172)

535 276938

80174 80174

~shna Bisht Abhimanyu Chaterjee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman Partner

For BK Agrawal amp Co Chartered Accountants

Kathmandu

Date 16) ~J ~ C)Oj1shy

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 132017

inNPR 000

Particulars Year ended

March 132017 Year ended

March 13 2016

A Operating Activities Profit after Tax 446239 276938 Add Depreciation 36159 41276 Less Gain on Sale of Fixed Asset (1806) (1209) Add Deferred Tax Liability (2585) (3172) Operating Profit before changes in Working Capital 478007 313833

Working Capital Change in Current Financial Assets (173850) (92394) Inventories (5260) (17924) Non Current Other Financial Liabilities 1033 (21504) Current Liabilities 171341 142330 Proposed Dividend (Not Paid) (51813) Change in Other non-current Assets (2366) (8808) Cash Flow from Operating Activities 468905 263720

B Investing Activities Purchase of Fixed Assets (65891 ) (31337) Profit on sale of fixed assets 1806 1209 Proceeds from deletion of fixed assets 20544 15418

(43541) (14710)

C Financing Activities Increase I (Decrease) in Housing Reserves 33650 12792

33650 12792

Net Cash In(Out) flow 459014 261802

Add Cash and Bank Balance at the beginning of the year 587252 325450

Cash and Bank Balance at the closing of the year 1046266 587252

The accompanying notes form an integral part of the financial statements

This is the Cash Flow Statement referred to in our report of even date

On behalf of the Board of Directors

EBSh Abhimanyu Chatterj Ee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman

Kathmandu

Date Mctj I( ~Ot-

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 13 MARCH 2017

a Equity Share Capital in NPR 000

Particulars Number of Equity Shares as at

March 132017 March 13 2016 March 152015

Paid-up amount of Equity Capital as at

March 13 2017 March 13 2016 March 15 2015

Equity Shares of Rs 100 each issued subscribed and fully paid 345421 345421 345421 ___-3-45-4=2 34542 34 542

b Other equity

For the year ended 13 March 2017 Reserves amp Surplus Items of OCI

Employee Stock Capital TotalParticulars Share Retained Capital Housing Other Items of

options outstanding Redem ption FVTOCI EquityPremium earnings Reserve Reserve OCI

account reserve

At the beginning of year Profit allocation for the period Other comprehensive Income

Total Comprehensive Income

15556

15556

1083877 446239

1530116

49574 33650

83224

1149007 479889

1628896

Issue of share capital Exercise of share options

Share-based payments Transaction costs Cash Dividend

At the closing of year 15556 1530116 83224 1628896

For the year ended 13 March 2016

Particulars Share Premium

Employee Stock options outstanding

account

Reserves amp Surplus

Retained earnings

Capital Reserve

Capital Redemption

reserve

Housing Reserve

Items of OCI

Other Items of OCI

FVTOCI Total

Equity

At the beginning of year Profit allocation for the period Other comprehensive income

Total Comprehensive Income

15556

15556

858752 276938

1135690

Issue of share capital Exercise of share options Share-based payments Transaction costs Util ized during the year Cash Dividend (51813)

At the closing of year 15556 1083877

~

36782 19851

56633

(7059)

49574

911090 296789

1207879

(7059) (51813)

1149007

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

1 Corporate Overview Berger Jenson amp Nicholson (Nepal) Private limited (The Company) is a private limited company incorporated under Foreign Investment and Technology Transfer Act and Companies Act of Nepal having its Registered Office at Bhaktapur Industrial District Bhaktapur PO Box 3530 Kathmandu and Manufacturing Unit-1 at Bhaktapur Industrial District (BID) Bhaktapur and Manufacturing Unit-2 at Hetauda Industrial District (HID) Makawanpur Nepal The primary objectives of the company is to manufacture decorative paints and related products

2 Statement of Significant Accounting Policies a) Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on an accrual basis and are in accordance with all material aspects with Nepal Financial Reporting Standards unless stated otherwise and relevant provisions of Nepal Companies Act 2063 and other applicable laws prevalent in Nepal The Accounting policies are consistently applied by the Company

b) Use of estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments estimates and assumptions that affect the application of accounting policies and reported amounts of assets liabilities income and expenses and disclosure of contingent liabilities on the date of the financial statements Examples of such estimates include provision against litigations prOVision for sales return provision for customer claims and impairment of assets Actual results could differ from these estimates Estimates and underlying assumptions are reviewed on ongoing basis Differences between actual results and estimates are recognized in the periods in which the results are knownmaterialized

c) Current and non-current classification All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out by the company

Assets An asset is classified as current when it satisfies any of the following criteria 1 It is expected to be realized in or is intended for sale or consumption in the companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is expected to be realized within 12 months after the reporting date or 4 it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date

Liabilities 1 It is expected to be settled in the Companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is due to be settled within 12 months after the reporting date or 4 The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date

Current assetsliabilities include the current portion of non-current financial assetslliabilities respectively All other assetslliabilities are class ified as non-current

Operating Cycle Operating Cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents

d) Fixed Assets 01) Tangible Assets (NAS-1 6) Owned assets Fixed assets are stated at their origina l cost of acquisitionlinstallationconstruction (net of Value Added Tax) less accumulated depreciation and impairment losses if any except land Land is stated at cost inclusive of land development expenses The cost of an item of tangible fixed assets comprises Its purchase price including import duties

Leased assets The Company has renewed on 15012002 (20581002) the lease agreement of land amp buildings with Bhaktapur Industrial District (BID) Bhaktapur Nepal for initial penod of 20 years with all option to renewal The lease rental paid to the BID has been charged to revenue

The Company has with approval from concern authorities of Government of Nepal also acquired a land on 20640601 (18092007) on lease from Hetauda Industrial District (HID) Makawanpur Nepal for initial period of 20 years with an option to further renewal for a period mutually agreed between the parties The lease rental paid to HID has been charged to revenue

Capital work in Progress Capital work in progress includes expenditure incurred during construction and or advances paid for acquisition of capital assets (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed asset~U(sstated at the amount expendedpaid up to the date of Balance Sheet

~ ~~~W4(Iv-~If ~I ~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 132017

inNPR 000

Particulars Year ended

March 132017 Year ended

March 13 2016

A Operating Activities Profit after Tax 446239 276938 Add Depreciation 36159 41276 Less Gain on Sale of Fixed Asset (1806) (1209) Add Deferred Tax Liability (2585) (3172) Operating Profit before changes in Working Capital 478007 313833

Working Capital Change in Current Financial Assets (173850) (92394) Inventories (5260) (17924) Non Current Other Financial Liabilities 1033 (21504) Current Liabilities 171341 142330 Proposed Dividend (Not Paid) (51813) Change in Other non-current Assets (2366) (8808) Cash Flow from Operating Activities 468905 263720

B Investing Activities Purchase of Fixed Assets (65891 ) (31337) Profit on sale of fixed assets 1806 1209 Proceeds from deletion of fixed assets 20544 15418

(43541) (14710)

C Financing Activities Increase I (Decrease) in Housing Reserves 33650 12792

33650 12792

Net Cash In(Out) flow 459014 261802

Add Cash and Bank Balance at the beginning of the year 587252 325450

Cash and Bank Balance at the closing of the year 1046266 587252

The accompanying notes form an integral part of the financial statements

This is the Cash Flow Statement referred to in our report of even date

On behalf of the Board of Directors

EBSh Abhimanyu Chatterj Ee Rishma Kaur Kanwardip S Dhingra Srijit Dasgupta Company Secretary Director Director Director Director

Abhijit Roy G S Dhingra K S Dhingra CA SM Shrestha Director Director Chairman

Kathmandu

Date Mctj I( ~Ot-

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 13 MARCH 2017

a Equity Share Capital in NPR 000

Particulars Number of Equity Shares as at

March 132017 March 13 2016 March 152015

Paid-up amount of Equity Capital as at

March 13 2017 March 13 2016 March 15 2015

Equity Shares of Rs 100 each issued subscribed and fully paid 345421 345421 345421 ___-3-45-4=2 34542 34 542

b Other equity

For the year ended 13 March 2017 Reserves amp Surplus Items of OCI

Employee Stock Capital TotalParticulars Share Retained Capital Housing Other Items of

options outstanding Redem ption FVTOCI EquityPremium earnings Reserve Reserve OCI

account reserve

At the beginning of year Profit allocation for the period Other comprehensive Income

Total Comprehensive Income

15556

15556

1083877 446239

1530116

49574 33650

83224

1149007 479889

1628896

Issue of share capital Exercise of share options

Share-based payments Transaction costs Cash Dividend

At the closing of year 15556 1530116 83224 1628896

For the year ended 13 March 2016

Particulars Share Premium

Employee Stock options outstanding

account

Reserves amp Surplus

Retained earnings

Capital Reserve

Capital Redemption

reserve

Housing Reserve

Items of OCI

Other Items of OCI

FVTOCI Total

Equity

At the beginning of year Profit allocation for the period Other comprehensive income

Total Comprehensive Income

15556

15556

858752 276938

1135690

Issue of share capital Exercise of share options Share-based payments Transaction costs Util ized during the year Cash Dividend (51813)

At the closing of year 15556 1083877

~

36782 19851

56633

(7059)

49574

911090 296789

1207879

(7059) (51813)

1149007

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

1 Corporate Overview Berger Jenson amp Nicholson (Nepal) Private limited (The Company) is a private limited company incorporated under Foreign Investment and Technology Transfer Act and Companies Act of Nepal having its Registered Office at Bhaktapur Industrial District Bhaktapur PO Box 3530 Kathmandu and Manufacturing Unit-1 at Bhaktapur Industrial District (BID) Bhaktapur and Manufacturing Unit-2 at Hetauda Industrial District (HID) Makawanpur Nepal The primary objectives of the company is to manufacture decorative paints and related products

2 Statement of Significant Accounting Policies a) Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on an accrual basis and are in accordance with all material aspects with Nepal Financial Reporting Standards unless stated otherwise and relevant provisions of Nepal Companies Act 2063 and other applicable laws prevalent in Nepal The Accounting policies are consistently applied by the Company

b) Use of estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments estimates and assumptions that affect the application of accounting policies and reported amounts of assets liabilities income and expenses and disclosure of contingent liabilities on the date of the financial statements Examples of such estimates include provision against litigations prOVision for sales return provision for customer claims and impairment of assets Actual results could differ from these estimates Estimates and underlying assumptions are reviewed on ongoing basis Differences between actual results and estimates are recognized in the periods in which the results are knownmaterialized

c) Current and non-current classification All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out by the company

Assets An asset is classified as current when it satisfies any of the following criteria 1 It is expected to be realized in or is intended for sale or consumption in the companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is expected to be realized within 12 months after the reporting date or 4 it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date

Liabilities 1 It is expected to be settled in the Companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is due to be settled within 12 months after the reporting date or 4 The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date

Current assetsliabilities include the current portion of non-current financial assetslliabilities respectively All other assetslliabilities are class ified as non-current

Operating Cycle Operating Cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents

d) Fixed Assets 01) Tangible Assets (NAS-1 6) Owned assets Fixed assets are stated at their origina l cost of acquisitionlinstallationconstruction (net of Value Added Tax) less accumulated depreciation and impairment losses if any except land Land is stated at cost inclusive of land development expenses The cost of an item of tangible fixed assets comprises Its purchase price including import duties

Leased assets The Company has renewed on 15012002 (20581002) the lease agreement of land amp buildings with Bhaktapur Industrial District (BID) Bhaktapur Nepal for initial penod of 20 years with all option to renewal The lease rental paid to the BID has been charged to revenue

The Company has with approval from concern authorities of Government of Nepal also acquired a land on 20640601 (18092007) on lease from Hetauda Industrial District (HID) Makawanpur Nepal for initial period of 20 years with an option to further renewal for a period mutually agreed between the parties The lease rental paid to HID has been charged to revenue

Capital work in Progress Capital work in progress includes expenditure incurred during construction and or advances paid for acquisition of capital assets (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed asset~U(sstated at the amount expendedpaid up to the date of Balance Sheet

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 13 MARCH 2017

a Equity Share Capital in NPR 000

Particulars Number of Equity Shares as at

March 132017 March 13 2016 March 152015

Paid-up amount of Equity Capital as at

March 13 2017 March 13 2016 March 15 2015

Equity Shares of Rs 100 each issued subscribed and fully paid 345421 345421 345421 ___-3-45-4=2 34542 34 542

b Other equity

For the year ended 13 March 2017 Reserves amp Surplus Items of OCI

Employee Stock Capital TotalParticulars Share Retained Capital Housing Other Items of

options outstanding Redem ption FVTOCI EquityPremium earnings Reserve Reserve OCI

account reserve

At the beginning of year Profit allocation for the period Other comprehensive Income

Total Comprehensive Income

15556

15556

1083877 446239

1530116

49574 33650

83224

1149007 479889

1628896

Issue of share capital Exercise of share options

Share-based payments Transaction costs Cash Dividend

At the closing of year 15556 1530116 83224 1628896

For the year ended 13 March 2016

Particulars Share Premium

Employee Stock options outstanding

account

Reserves amp Surplus

Retained earnings

Capital Reserve

Capital Redemption

reserve

Housing Reserve

Items of OCI

Other Items of OCI

FVTOCI Total

Equity

At the beginning of year Profit allocation for the period Other comprehensive income

Total Comprehensive Income

15556

15556

858752 276938

1135690

Issue of share capital Exercise of share options Share-based payments Transaction costs Util ized during the year Cash Dividend (51813)

At the closing of year 15556 1083877

~

36782 19851

56633

(7059)

49574

911090 296789

1207879

(7059) (51813)

1149007

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

1 Corporate Overview Berger Jenson amp Nicholson (Nepal) Private limited (The Company) is a private limited company incorporated under Foreign Investment and Technology Transfer Act and Companies Act of Nepal having its Registered Office at Bhaktapur Industrial District Bhaktapur PO Box 3530 Kathmandu and Manufacturing Unit-1 at Bhaktapur Industrial District (BID) Bhaktapur and Manufacturing Unit-2 at Hetauda Industrial District (HID) Makawanpur Nepal The primary objectives of the company is to manufacture decorative paints and related products

2 Statement of Significant Accounting Policies a) Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on an accrual basis and are in accordance with all material aspects with Nepal Financial Reporting Standards unless stated otherwise and relevant provisions of Nepal Companies Act 2063 and other applicable laws prevalent in Nepal The Accounting policies are consistently applied by the Company

b) Use of estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments estimates and assumptions that affect the application of accounting policies and reported amounts of assets liabilities income and expenses and disclosure of contingent liabilities on the date of the financial statements Examples of such estimates include provision against litigations prOVision for sales return provision for customer claims and impairment of assets Actual results could differ from these estimates Estimates and underlying assumptions are reviewed on ongoing basis Differences between actual results and estimates are recognized in the periods in which the results are knownmaterialized

c) Current and non-current classification All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out by the company

Assets An asset is classified as current when it satisfies any of the following criteria 1 It is expected to be realized in or is intended for sale or consumption in the companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is expected to be realized within 12 months after the reporting date or 4 it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date

Liabilities 1 It is expected to be settled in the Companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is due to be settled within 12 months after the reporting date or 4 The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date

Current assetsliabilities include the current portion of non-current financial assetslliabilities respectively All other assetslliabilities are class ified as non-current

Operating Cycle Operating Cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents

d) Fixed Assets 01) Tangible Assets (NAS-1 6) Owned assets Fixed assets are stated at their origina l cost of acquisitionlinstallationconstruction (net of Value Added Tax) less accumulated depreciation and impairment losses if any except land Land is stated at cost inclusive of land development expenses The cost of an item of tangible fixed assets comprises Its purchase price including import duties

Leased assets The Company has renewed on 15012002 (20581002) the lease agreement of land amp buildings with Bhaktapur Industrial District (BID) Bhaktapur Nepal for initial penod of 20 years with all option to renewal The lease rental paid to the BID has been charged to revenue

The Company has with approval from concern authorities of Government of Nepal also acquired a land on 20640601 (18092007) on lease from Hetauda Industrial District (HID) Makawanpur Nepal for initial period of 20 years with an option to further renewal for a period mutually agreed between the parties The lease rental paid to HID has been charged to revenue

Capital work in Progress Capital work in progress includes expenditure incurred during construction and or advances paid for acquisition of capital assets (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed asset~U(sstated at the amount expendedpaid up to the date of Balance Sheet

~ ~~~W4(Iv-~If ~I ~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

1 Corporate Overview Berger Jenson amp Nicholson (Nepal) Private limited (The Company) is a private limited company incorporated under Foreign Investment and Technology Transfer Act and Companies Act of Nepal having its Registered Office at Bhaktapur Industrial District Bhaktapur PO Box 3530 Kathmandu and Manufacturing Unit-1 at Bhaktapur Industrial District (BID) Bhaktapur and Manufacturing Unit-2 at Hetauda Industrial District (HID) Makawanpur Nepal The primary objectives of the company is to manufacture decorative paints and related products

2 Statement of Significant Accounting Policies a) Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on an accrual basis and are in accordance with all material aspects with Nepal Financial Reporting Standards unless stated otherwise and relevant provisions of Nepal Companies Act 2063 and other applicable laws prevalent in Nepal The Accounting policies are consistently applied by the Company

b) Use of estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments estimates and assumptions that affect the application of accounting policies and reported amounts of assets liabilities income and expenses and disclosure of contingent liabilities on the date of the financial statements Examples of such estimates include provision against litigations prOVision for sales return provision for customer claims and impairment of assets Actual results could differ from these estimates Estimates and underlying assumptions are reviewed on ongoing basis Differences between actual results and estimates are recognized in the periods in which the results are knownmaterialized

c) Current and non-current classification All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out by the company

Assets An asset is classified as current when it satisfies any of the following criteria 1 It is expected to be realized in or is intended for sale or consumption in the companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is expected to be realized within 12 months after the reporting date or 4 it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date

Liabilities 1 It is expected to be settled in the Companys normal operating cycle 2 it is held primarily for the purpose of being traded 3 It is due to be settled within 12 months after the reporting date or 4 The Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date

Current assetsliabilities include the current portion of non-current financial assetslliabilities respectively All other assetslliabilities are class ified as non-current

Operating Cycle Operating Cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents

d) Fixed Assets 01) Tangible Assets (NAS-1 6) Owned assets Fixed assets are stated at their origina l cost of acquisitionlinstallationconstruction (net of Value Added Tax) less accumulated depreciation and impairment losses if any except land Land is stated at cost inclusive of land development expenses The cost of an item of tangible fixed assets comprises Its purchase price including import duties

Leased assets The Company has renewed on 15012002 (20581002) the lease agreement of land amp buildings with Bhaktapur Industrial District (BID) Bhaktapur Nepal for initial penod of 20 years with all option to renewal The lease rental paid to the BID has been charged to revenue

The Company has with approval from concern authorities of Government of Nepal also acquired a land on 20640601 (18092007) on lease from Hetauda Industrial District (HID) Makawanpur Nepal for initial period of 20 years with an option to further renewal for a period mutually agreed between the parties The lease rental paid to HID has been charged to revenue

Capital work in Progress Capital work in progress includes expenditure incurred during construction and or advances paid for acquisition of capital assets (including financing cost relating to borrowed funds for construction or acquisition of qualifying fixed asset~U(sstated at the amount expendedpaid up to the date of Balance Sheet

~ ~~~W4(Iv-~If ~I ~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

02) Intangible Assets Intangible assets comprise of Computer Software acquired by the Company and Trade Marks which is stated at cost less amortization

03) Depreciation (NAS-16) Depreciation is charged to statement of profit amp loss on written down value 0fVDV) method at the rates as prescribed under Income Tax Act 2058 Depreciation on additions to fixed assets has been charged from the date it put to use Land is not depreciated The management considers that the assets if depreciated at the following rates the assets shall be amortized during its useful life as per Nepal Financial Reporting Standards (NFRS) NAS 16 although as per ihe NFRS the depreciation should be charged on Straight Line Method (SLM) as per the estimated life of the respective assets The rate applied are as follows

Particulars Rate Buildings Furniture and Fixtures Office Equipment Vehicles Computers Plants amp Machineries Others (Product display Furniture amp fixtures at dealers place SLM) Intanaible (STD

Buildings has been constructed on the leased land obtained frOIT renewal of the same for further period as agreed between the parties As such the depreciation on buildings has been charged as per the rates as specified above

As per the Companys policy written down value below of Rs 2000 of individual asset is fully amortised amp charged to revenue

04) Amortization Intangible assets ie computer software and Trade Marks are amortized on straight line method over the period of expected benefit as detailed below

Rate Software Particulars

5 Years Trade Marks 7 Years

0 5) Subsequent Expenditure Expenditure incurred to replace a component of an item of fixed assets that is accounted for separately including major inspection and overhaul expenditure is capitalized Other subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of fixed assets All other expenditure is recognized in the Statement of Profit and Loss as an expense as incurred

e) Impairment of Assets (NAS 36) The Company identifies impairable fixed assets based on cash generating unit concept at the year-end for the purpose of arriving at impairment loss thereon if any being the difference between the book value and recoverable value of relevant assets Impairment loss when crystallizes is charged to revenue

f) Going Concern The financial statements have been prepared on a going concern basis

g) Inventories (As taken valued amp certified by the Management) - (NAS 02) Inventories comprises of the stocks remains at the third party location sent for job work under an agreement Finished middotgoods inventories are stated at the lower of cost or estimated net realizable value Net realizable value is the estimated selling price in the ordinary course of business Costs corllprise stocks of purchases and manufacturing overheads Other inventories are valued as follows

i) Raw Materials Packing Materials and Stoms amp Spares are valued at weighted average cost ii) Work in Progress is valued at cost iii) Scrap is valued at net realizable value

h) Foreign Currency Transaction (NAS 21) Initial Recognition Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction

Conversion Foreign currency monetary items are translated using exchange rates prevailing at the reporting date which are carried in terms of historical cost denominated in a foreign currency are translated using the exc of the transaction and non-monetary items which are carried at fair value or other similar valuation de currency are translated using the exchange rates that existed when the values were determined r

5 25 25 20 25 15 20 20

BID and HID for initial period of 20 years with option to

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

Exchange Difference Exchange differences arising on the settlement of monetary items or on restatement of the Companys monetary items at rates different fr0 rTI those at which they were initially recorded during the year or reported in previous financial statements are recognized as income or as expenses in the year in which they arise

i) Trade and other payables Liability for trade and other payables are carried at cost which is the fair value of services

j) Cash and Bank Balances Cash and bank balances comprises cash in hand and balances with Banks as on Balance Sheet date

k) Employee Benefits (NAS 19) i Short term employee benefits are recognized in the year during which the services have been rendered

ii) The Company has hired third party HR Company to provide some marketing and other Staffs for the companys work and the payments for the staff provided by the said Company is directly made to the HR Company No any long term liabilities for those staff is required to be recognized in the books of the company

iii) The Company has schemes of retirement benefits viz Provident Fund Gratuity and Leave Encashment Periodic contributions to the retirement fund are charged to revenue and the same has been deposited with statutory authorities of Government of Nepal

I) Provisions contingent Liability and Contingent Assets (NAS 37) Provisions are recognized when the Company has a present obligation as a result of past event it is more likely than not that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made Provisions are not discounted to its present valua and are determined based on best estimate required to settle the obligation at the balance sheet date These are reviewed at each balance sheet date and adjusted to reflect the current best estimates in accordance with Nepal Financial Reporting Standards NAS 37 Provisions Contingent Liabilities and Contingent Assets

A contingent liability is disclosed where there is a possible obligation or a present obligation that may but probably will not require an outflow of resources

Contingent assets are not recognized in the financial statements However contingent assets are assessed continually and if it is virtually certain that an economic benefit will arise the assets and related income are recognized in the period in which the charge occurs

m) Revenue Recognition (NAS 16) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and associated costs incurred or to be incurred can be reliably measured

Revenue is measured at the fair value of the consideration received or receivable net of value added tax excise rebates and discount The following specific criteria are used for the revenue recognition Sale of goods Revenue from the sale of goods is recog nized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer Sale of Scrap Revenue from the sale of scrap is recogn ized in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer and are stated under other income

Income from Color-Bank Machine Income from color bank machine is recognized in the Statement of Profit and Loss on Straight Line basis over the term of agreement and are stated under other income

Interest Income Interest income is recognized on a tinle r roportion basis taking into account the principal outstanding and interest rate applicable

Insurance amp Other Claims Insurance and Other Claims to the extent it is not ascertainable are accounted for on cash basis which is not in accordance with Nepal Financial Reporting Standards NAS-18

n) Related party transactions (NAS 24) All transactions with related parties are carried out by the Company at arms length prices

0) Trade and other Receivables Trade and other Receivables are originated by the Company and are stated at cost less provisions for any uncollectible amount Provision is made against debts considered doubtful of recovery whereas debts considered irrecoverable are written off

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

Notes Contd

p) Borrowing Costs (NAS 23) Borrowing costs attributable to the acquisition of the asset is capitalized as part of the cost of the asset Other FinancingBorrowing costs are charged to the Statement of Profit and Loss in accordance with Nepal Financial Reporting Standards NAS 23 on Borrowing Costs

q) Taxation (NAS 12) Current Tax Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Nepalese Income Tax Act 2058 and provided for

Deferred Tax Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet Date Deferred tax assets are recognized and reviewed at each Balance Sheet Date only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits At each Balance Sheet Date unrecognized deferred tax assets of earlier years are reshyassessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized i(l accordance with Nepal Financial Reporting Standards NAS 12 Income Taxes Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesincome arising during the period from July 16 2016 to March 132017 has not been computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

r) Leases (NAS 17) Financial Lease The company does not have any item covered under finance lease which needs disclosure as per Nepal Financial Reporting Standards NAS 17

Operating Lease Where the Company is the Lessee Leases where the lessor effectively retains substantially aU the risks and benefits of ownership of the leased term are classified as operating leases Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straightshyline basis over the lease term

Where the Company is the Lessor Assets given under operating lease are included in fixed assets Lease income is recognized in the Statement of Profit amp Loss Costs including Depreciation are recognized as an expenses in the Statement of Profit ampLoss

s) Cash Flow Statements 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 and financing activities of the Company are segregated The Cash flow statement is separately attached with the Financial Statements of the company

t) Prior Period Items The prior period expenses are charged separately to the Statement of Profit amp Loss

u) Operating Segments (NFRS 08) Having regard to the integrated nature of the Paints production Business of the company the management of the Company is of view that the disclosure requirement of Operating Segments pursuant to the Nepal Financial Reporting Standards NFRS 08 is not applicable

v) Share Based Payments (NFRS 2) Share based payment transaction i3 a tra r saction in which entity receives goods and services as consideration for equity instruments (including shares or share options) of the entity (referred to as equity settled share passed transaction) There is no share based transactions during the Year

w) Earning Per Share (EPS) (NAS 33) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period

-f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

in NPR 000

3 Property Plant amp Equipment

Particulars Rate of Depn As at

14032016

Gross Block at Cost

Additions Deletionl during adjustment

the tear during the tear

Total as of

13032017

Depreciation 1Amortisation

Total As at For the On As at

14032016 Year Deletions 13032017

As on 13032017

Net Block

As on 311312016

As on 3152015

Buildings (Leasehold)

Computer Furniture amp Fixtures and Office Equipment

Vehicles

Plant amp Machineries

Other Assets

Total

5

25

20

15

20 (SL)

284605

17529

11 368

238515

15402

567419

5945

9393

38845

6

541189

2156

5414

22700

2807

33077

284605

21318

15347

254660

12601

588531

68829

10052

6164

118330

12229

215604

10214

3105

1572

18157

1826

34874

1913

3755

14050

2807

22525

79043

11244

3981

122437

11 248

227953

205562

10074

11366

132223

1353

360578

215776

7477

5204

120185

3173

351815

226 340

7215

4189

136755

6598

381097

Capital Work-in-Progress Total

9019 9019

11702 11702

9992 9992

10729 10729

10729 10729

9019 9019

8289 8289

31 Other Intangible Assets

Computer Software amp Licences

Grand Total (This Year)

20 (SL) 4221

580659 65891

96

43165

4125

603385

674

216278

1285

36159

96

22621

1863

229816

2262

373569

3547

364381

352

389738

Grand Total (Last Year) 578722 39626 37689 580659 188984 41276 _ 13982 216278 364381 389738 392225

p

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

4 Other Non-Current Assets Deposit with Government authorities

De~Ds iis with state owned authorities

45051

339

40666

339

34310

339

Prepayments 1202

46592

3221

44226

769

35418

5 Inventories (including in transit) (at lower of cost and net realizable value) Raw Materials Packing Materials Work in process Finished goods Stores and Spare Parts Stock-in-Trade

107838 17468

143090 4153

11327 283876

1411901 16007

106010 5565 9133

278616

105132 14648 6102

120948 5478 8384

260692

6 Trade Receivables Unsecured considered good Doubtful

542675

542675

408753

408753

288963

288963

7 Cash and Bank balances Cash and cash equivalents Cash in hand (As certified by management) Balances with banks

In Current Account In Fixed Deposit Account (Less than 3 month)

730

207756

796

160537

748

144702

Other bank balances In Fixed Deposit Account (with original maturity of more than three months but less than 12 months)

837780

1046266

425919

587252

180000

325450

8 Other Financial Assets

Secured considered good Advances recoverable in cash or in kind for value to be received

Unsecured considered good Loans and advances to related parties Others

Advances recoverable in cash or kind or for value to be received Advance income tax

4145

46259 50404

2962

24896 27858

4482

48349 52831

9 Other Current Assets Interest Receivable on Fixed Deposits Other Receivables

9477 16051 25528

1702 6444 8146

1307 9262

10569

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

10 Share Capital

Authorized 11136810 Equity shares of NRs1 001- each (Last year 1528400 equity shares of NRs1 00- each)

1113681 152840 152840

Issued 11 136810 Equity shares of N Rs 1 001- each (Last year 1528400 equity shares of NRs1001- each)

1113681 152840 152840

Subscribed and paid-up 345421 Equity shares of NRs1 001- each 34542

34542 34542 34542

34 542 34542

a) Details of Shareholders having more than 5 of holding

The Company is promoted by Berger Paints India Limited holding 100 Equity Shares and there are no other Share holders holding more than 5 of Equity Shares

b) Reconciliation of the number of shares and the amount of share capital There is no movement in number of Equity Shares and Paid-up Capital in this year and during last 2 years

c) Terms 1 rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Nepalese Rupees 100 each Each holder of Equity Shares are entitled to one vote per share In the event of liquidation of the Company the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts The distribution will be in proportion to the number of equity shares held by the shareholders

d) Shares reserved for issue under options Nil Nil

11 Other Equity A Reserves amp Surplus (I) Share Premium 15556 15556 15556

(II) Retained Earnings Balance at the beginning of the year 1083877 858752 684452

Add Net profit transferred from Statemer1t of Profit and Loss 446239 276 938 226113 Amount available for Appropriation 1530116 1135690 910565

Les Appropriations Proposed Final Dividend NPR 150 per Share 51813 51813 Transfer to Housing Fund

153011~ 1083877 858752

1545672 1099433 874308 B Other Reserves (I) Employee Stock Options outstanding (II) Capital Reserve (III) Capital Redemption Reserve

(IV) Housing Fund Balance at the beginning of the year 49574 36782 20190

Add Transferred from Statement of Profit amp loss 33650 19851 16592 Les Utilized during the year 7059

Balance at the end of the year 83224 49574 36782

1628896 1149007 911090

~

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

in NPR 000

As At March 13 2017

As At March 13 2016

As At March 14 2015

12 Other Non Current Financial Liabilities Deposits Others

36768 8740

451508

35547 8928

441475

39832 26147 651979

13 Deferred Tax Liabilities (Net) Deferred Tax Liabilities

Difference in valuation method of Inventories

Difference between the Written Down Value of fixed assets as per financial books and Income Tax Act 2058

698

10857

691

8449

1019

7341

Deferred Tax Assets Housing Fund

11555

11762 11762

9140

6762 6762

8360

2810 2810

(207) 21378 51550

The Deferred Tax Assets or Liabilities on Fixed Assets and Inventories has been calculated based on the tax base as of July 15 2016 being the fiscal year end of Nepali Fiscal Year

14 Trade Payables Sundry Creditors 176545 143634 140683

1761545 143634 140683

15 Other Financial Liabilities Dividend Payable 98445 101035 51813 Employee Bonus 56203 34 378 21066 Accrued Employee Liabilities 7610 3146 2775 Security Deposits amp retention money 474 167 188 Other liabilities 169454 112709 56004

3321186 251 1435 131 1846

Gross Dividend Payable 101035 101035 51 813 Less Dividend Tax 5 2590 2591 Net Payable 98445 101035 49222

Dividend was declared Rs 150 per Share on 345421 Equity Shares of Rs 100 each for the Nepali fiscal year ended Jul 16 2014 and July 16 2015 The same is under the process for approval from Central Bank of Nepal for repatriation

16 Other Current Liabilities Provision for Income Tax 116736 68575 57318 Other Statutory Liabilities 29128 18647 12388 Revenue Received in Advance 2100 3797 2394

1471964 91 1019 721100

17 Short-term Provisions Provision for Employee Benefits

Provision for Gratuity 2141 1971 1207 Provision for Leave Encashment 1335 771 664

31476 21742 11871

f

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

As At

18 Revenue from Operations Sale of Products Scrap Sales Other Operating Income

March 13 2017

2139733 16262 11133

2167128

19 Other Non Operative Income Interest Income Profit on sale of Fixed Assets (net) Miscellaneous Income

34265 1806 9489

45560

20 Cost of Materials Consumed Raw Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Packing Materials Consumed Opening Stocks Add Purchases Less Closing Stock

Total (A)

Total (8)

141901 767588 107838 801651

16007 159910

17468

158449

Total (A+8) 960~0

Material processing service cost 12689 972789

21 Purchases of Stock-in-Trade Colorant Painting Tools

42 285 4644

46929

22 Decreasel (Increase) in inventories of finished goods work-in-process and stock-in-trade Opening Stocks

Work-in-process Stock-in-Trade 9133 Finished Goods 106010

115143 Closing Stocks

Work-in-process Stock-in-Trade (11 327) Finished Goods (143090)

(154417)

(39274)

in NPR 000

As At March 13 2016

1588441 12793 8697

1 609931

16657 1209 5379

23245

105132 637479 141901 600710

14648 109084

16007

107725

708435

9993 718428

33678

33678

6102 8384

120948 135434

(9133) (1 0601 O~ (115143)

20291

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 132017

23 Employee Benefits Expense Salaries and Wages Contribution to provident and other funds Staff Welfare Expenses

24 Other Expenses Power amp Fuel Consumption of Stores and Spare Parts Repairs amp Maintenance Rent Rates amp Taxes Travelling Advertisement and Sales Promotion Expenses Freight Outward and Delivery Insurance Provision for Bad amp Doubtful Debts Outsourced Sales SeNice Other expenses

Other Expenses includes Auditors Remuneration and expenses as below Statutory Audit Fee Periodical Audit Fee Miscellaneous Certifications Reimbursement of expenses

25 Earnings per share i) Profit after Taxation RsOOO ii) Weighted average of Equity Shares outstanding Nos iii) Effect of potential Equity Shares on Employee Stock Options outstanding

Nos

iv) Weighted average number of Equity Shares in computing diluted earnings per share [(ii) + (iii)]

Nos

v) Earnings per share (Face Value Rs 10000 per Share) shy-Basic [(i) (ii)] in Rs -Diluted [(i) (iv)] - in Rs in Rs

~~

in NPR 000

As At As At March 13 2017 March 13 2016

90 942 75 988 2491 2224 3812 3559

97245 81771

6255 3657 2415 2113 4554 9656 7448 6337 2701 1872

13923 12651 250861 181924

69042 54100 9848 8290 5220

11367 8582 33368 27537

417002 316719

300 300 200

15 30 50 50

565 380

446239 345421

276938 345421

345421 345 421

1291 87 1291 87

801 74 80174

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

26 Income Tax Income tax on the profit for the year comprises current tax payable on the taxable income calculated as per Income Tax Act 2058

Income tax assessment up to fiscal year 2063-64 (FlY 2006-07) was completed by the tax authorities in earlier years and all the tax payable as per the assessment has been paid by the Company The tax assessment for the fiscal Year 2064shy65 (FlY 2007-08) to 2071-72 (2014-15) was also completed by the tax authorities during the period under review and has raised additional demand of income Tax and VAT from the Company The Company has not accepted the additional demand and disputed the case (see note 306) The Excise Duty assessment was completed by Inland Revenue Department (IRD) from 2064-04-01 to 2072-03-31 (2007-07-17 to 2015-07-16) and raised additional demand which was not accepted by the Company and the Company filed application to IRD for administrative review The decision of the same is still awaited

27 Transactions with Parent Company The company is subsidiary of Mis Berger Paints India Limited (BPIL) a Company incorporated in India under Indian Companies Act 1956 which owns 100 of the Companys shares The Transaction with parent company is as below

Year ended Year ended March 13 2017 March 13 2016

RsOOO RsOOO

Opening balance (due to BPIL) 48102 65801 Purchases 90919 83175 Royalty amp Technical Service Fee (Gross) 30945 23998 Payment dLring the Reporting period ~458) (124872)

Closing Balance 85508 48102

28 Royalty amp Technical Service Fee The company has renewed Royalty amp Technical Service Agreement dated September 24 2006 with Berger Paints India Limited (BPIL) and obtained approval from the Department of Industries effective from November 24 2016 for the further period of 5 years in respect of Royalty 1 and Technical Service Fee 2 on net sales of registered products of BPIL Accordingly Royalty and Technical Service Fee payable on registered products has been charged to revenue during the reporting period amounting to NRs30945 (PY NRs23998) thousand

29 Contingent Liabilities Year ended Year ended

a) Claims against the Company not acknowledged as debts March 13 2017 March 13 2016

RsOOO RsOOO VAT 34598 28785 Income tax 32730 26316 Excise Duty 23619 19230 TDS 21312 21 312

The Company is of the view that none of the claims are tenable and is therefore contesting the same The future cash flows on account of the above cannot be determined unless the judgmenUdecisions are received from the ultimate judicial forums

NPR 000 NPR 000 b) Guarantees issued by the Company in ordinary course of business Nil Nil

c) Unexpired Letter of Nil il

30 Capital amp Other Commitments Estimated amount of contracts remaning to be executed on capital Nil Nil account not provided for

31 Employee Bonus Employee Bonus has been provided as per the provismiddotions of Nepal Bonus Act 2030 Accordingly a sum of NPR 56113 (PY NPR 34288) thousand has been provldfd

32 Advances

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

~

BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

33 Housing Reserves As required under Sec 41 of Nepal Labour Act 2048 the Company has allocated for Housing Reserves of NPR 33650 thousand (PY~ NPR 19851 thousand) being 5 of Net Profit before Bonus as against 5 of Gross Profit as provided in the Labour Act which is a non-compliance of the Labour Act of Nepal The same has been deposited in a separate Bank Account maintained by Company The Company has also earned interest from the deposit of the Housing Reserves fund in the bank account maintained by the Company

The Company has utilized in 2071-72 (2014-15) year a sum of Rs 7059 thousand from the Housing Reserves to provide the repairing of the houses to the employees damaged due to the Devastating Earthquake of April 2015

34 Revaluation Fixed assets are not revalued during the period

35 Land amp Buildings on Lease The details of the leased properties are as follows

Particulars Industrial District

Bhaktapur Industrial District Bhaktapur

Hetauda Industrial Hetauda

Lease started from 1501 2002 18092007 Property Land amp Part of Factory Buildings Land Period of Lease 20 Years 20 Years Renewal Option Available Available

36 Share Premium The Company have Share Premium Reserve of Rs 15556 thousand since earlier years and stated under Reserves amp Surplus

37 Color Bank Machine at Dealers Place The Company provides Colorbank Machines (Color Mixing Machine) to its Dealers on rental for the purposes of paint mixing and make these salable The income generated from such machine rental is shown under Revenue from operation on Straight Line basis over the term of agreement period The machines are in the ownership of the company and the Company is charging depreciation

The Company has disposed off 152 sets of color mixing machines (CBM) during the reporting period as per the policy of the Company The profit on the disposal of these CBM are shown under Other Non Operating Income in the Income Statement

38 Capital Work-in-Progress Capital Work-in-Progress includes various civil constructions and Office equipment not put-to-use The value of capital work-in-progress is as certified by the management

NPR 000 Particulars Closing Balance Colorbank Machine (Not put to use) 10729 Total 10729

39 Donation The Company has paid donations to various parties which is in excess of the limit mentioned in section 105(1 )(Ga) of Companies Act 2063 wherein a maximum limit of NPR 50 thousand has been fixed

40 Earning Per Shares (EPS) The earning per shares has been calCulated as below

Year ended Year endedParticulars March 13 2017 March 13 2016

Profit after tax for the year (Rs) 446239000 276938000 Weighted average no of equity shares (Units) 345421 345421 Diluted number of equity shares (Units) 345421 345421 Nominal value of shares (Rs) 100 100 Basic Earning per share (Rs) 129187 80174 Diluted Earning per share (Rs) 129187 801 74

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

41 Advertisement and Sales Promotion Expenses The Company has incurred advertisement and sales promotion expenses to the tune of NPR 250861 (PY NPR 181924) thousand during the reporting period which comprises of expenses on various promotional activities advertisement activities and g uest entertainment expenses related to sales

42 Retirement Benefits The Company has arrangement with Citizen Investment Trust (CIT) for depositing the amount of Gratuity amp Paid Absence of the employees as per the Labour Act 2048 The liability against the same is deposited with CIT

43 Operation of Depot The Company has opened its depots at Pokhara Biratnagar Nepalgunj Narayangarh amp Kathmandu (Vanasthali) and all depots are in business operations of the company All the expenses of the said Depots have been consolidated in the respective expenses head

44 Furniture amp Fixtures at dealers place As per the decision of the management the expenditure incurred on creation of the Product Display Furnitures amp Fixtures at dealers place have been capitalized in the books under Other Assets which shall be amortized over a period of five years on straight line basis

45 Outsourced Sales Support Expenses The Company has outsourced sales support service from agencies and incurred a sum of Rs 11 367 (Last year same period Rs8582) thousand on outsourced sales support service cost during the reporting period

46 Production at third Party Manufacturers place The company has arranged to get certain products to be manufactured at third party manufacturers on payment of agreed processing charges The said production is included in the Companys Production Further the cost of raw materials Processing charges paid to the third party manufacturer and stock of raw materials and finished goods has been accounted by the Company During the reporting period the Company has paid NPR 12689 thousand (PY 9993 thousand) Processing charges to the third party manufacturer and included in the Cost of Materials Consumed

47 Incresed in Authorised amp Issued Share Capital The Company has increased its authorized amp Issued share capital to NPR 1113681 thousand from NPR 152840 thousand during the year under review and same has been recorded in the record of Registrar of Company ( ROC) vide its letter no 7273 Ch no 19436 dated 2072111-7

48 Provision for Bad Debts The Company has recognised receivables amounting to Rs 5220 thousand as Doubtful and provision has been made for the same accordingly

49 Recognition of Deferred Tax Assets and Liabilities Deferred tax has been recognized up to the close of Nepali Fiscal Year on July 15 2016 only The deferred tax expensesl income arising during the period from July 16 2016 to March 13 2017 has been not computed and accounted for as the same shall be recognized as of close of Nepali Fiscal Year on July 15 2017

50 Event after Balance Sheet date No events have occurred since the Balance Sheet date in respect of the matters which would require adjustment to or disclosure in the accounts or which shou ld be disclosed to shareholders through some other medium

51 Period of Financial Statement The companys accounts closes on 15th16th July as per prevalent Laws of Nepal however since these accounts are prepared for consolidation with the holdinJ company whose accounts closes on 31st March these accounts are prepared for the period from 14th March 20 16 to 13th March 2017 (01122072 to 30112073 ie 12 months period)

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

52 Regrouping of Figures a) Previous years figures have been re-groupedrearranged wherever necessary to comply with IND-AS and make them

comparable with the figures of the current year

b) Previous years figures of LC Margin Amount under cash amp Bank Balance has been regrouped in Current year The detail is as below

Rs OOO PY Figure

Particulars PY Difference Reqrouped in CY

Cash amp Bank Balance LC Margin 759 5632 (4873)

Total (A) 759 5632 (4873)

Other Financial Assets

Advance Against Purchase amp Expenses 429 (31) 460 Deposit with IRD 40666 36253 4413

Total (B) 41095 36222 4873

Total (A+B) ~li~ ~1lS~

53 Miscellaneous i) All amounts are stated in Nepalese Rupees and rounded nearest to thousand Rupees ii) The accounts confirmations on account of purchase sales receivables amp payables are in the process of obtaining from them

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BERGER JENSON amp NICHOLSON (NEPAL) PRIVATE LIMITED Notes to the Financial Statements for the year ended March 13 2017

Notes Contd

52 Regrouping of Figures a) Previous years figures have been re-groupedrearranged wherever necessary to comply with IND-AS and make them

comparable with the figures of the current year

b) Previous years figures of LC Margin Amount under cash amp Bank Balance has been regrouped in Current year The detail is as below

Rs OOO PY Figure

Particulars PY Difference Reqrouped in CY

Cash amp Bank Balance LC Margin 759 5632 (4873)

Total (A) 759 5632 (4873)

Other Financial Assets

Advance Against Purchase amp Expenses 429 (31) 460 Deposit with IRD 40666 36253 4413

Total (B) 41095 36222 4873

Total (A+B) ~li~ ~1lS~

53 Miscellaneous i) All amounts are stated in Nepalese Rupees and rounded nearest to thousand Rupees ii) The accounts confirmations on account of purchase sales receivables amp payables are in the process of obtaining from them

bull

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