Quarter 1 - financial statement for 2025

Contents Page

Corporate Information 3

Shareholding Structure and Free Float Status 4

Financial Highlights 5

Statement of Financial Position 6

Statement of Profit or Loss and Other Comprehensive Income 7

Statement of Changes in Equity 8

Statement of Cash Flows 9

Notes to the Financial Statements 10

Other National Disclosures 56

Board of Directors:

Company Secretary/Legal Adviser

Abi Ayida

Adekunle Olowokande Raj Mangtani (Indian) Ogechi Iheanacho Erejuwa Gbadebo Aisha Umar

Alaba Fagun Omolara Bello

• Chairman

• Non - Executive Director

• Non - Executive Director

• Non - Executive Director

• Independent Non - Executive Director

• Independent Non - Executive Director

• Group Managing Director

Registered Office: 102, Oba Akran Avenue,

Ikeja, Industrial Estate

P.M.B. 21052, Ikeja, Lagos.

Contact Details Mobile: +234 810 216 4586

Email: customercare@bergerpaintnig.com Website: https://www.bergerpaintsnig.com

Social Media Accounts

Facebook: https://www.facebook.com/BergerPaintsNigeriaPlc

LinkedIn: https://www.linkedin.com/company/berger-paints-nigeria-plc Twitter: https://www.twitter.com/BergerPaintsNg

Instagram: https://www.instagram.com/bergerpaintsnigeriaplc

You Tube: https://www.youtube.com/channel/UCD_T-Wid299NWbfHxA4rGXg

Investors Relation Berger Paints Nigeria Plc. has a dedicated investors' portal on its corporate website which can be accessed via this link: https://bergerpaintsnig.com/investor/

The Company's Investors' Relations Officer can also be reached through

electronic mail at: investors@bergerpaintnig.com; or telephone on:

+234 9037757191 for any investment related enquiry.

NSE Trading

Information Trading Name: Berger Paints Nig. Plc. (Berger) Ticker Symbol: Berger

Sector: Industrial Goods

Sub Sector: Building Materials Market Classification: Main Board

Registration

Number: RC: 1837

TIN 01335257-0001

FRC Registration

Number: FRC/2012/0000000000295

Registrars: Meristem Registrars Limited

213, Herbert Macaulay Way, Adekunle, Yaba, Lagos.

P.O. Box 51585, Falomo, Ikoyi, Lagos Tel: 8920491, 8920492, 01-2809250-3

Email: info@meristemregistrars.com Website: https://www.meristemregistrars.com

Independent

Auditor: PKF Professional Services 205A Ikorodu - Ososun Road Obanikoro

Lagos

Tel: +234 903 000 1351

Bankers: Access Bank Plc Keystone Bank Limited Ecobank Nigeria Limited Polaris Bank Limited

Fidelity Bank Plc Union Bank of Nigeria Plc

First Bank of Nigeria Limited United Bank for Africa Plc First City Monument Bank Limited Wema Bank Plc

Guaranty Trust Bank Plc Zenith Bank Plc Sterling Bank Plc

Company Name: Board Listed: year End: Reporting Period:

Berger Paint Nigeria PLC Main Board

31 December 31-Mar-25

Share Price at end of reporting period: N18.85 (31 December 2024: N20)

Declaration: Berger Paints PLC with a free float value of N3,758,731,489 (68.80%) as at 31 March, 2025 (31 December 2024: N3,988,044,020(68.80%) is compliant with the Nigerian Exchange's free float requirements for companies listed on the Main Board.

Omolara Bello

Company Secretary/ Legal Adviser FRC/2019/NBA/00000019782

Company Financial Highlights

In thousands of naira

As at 31st March, 2025

These financial statements were approved by the Board of Directors on 23 April, 2025 and signed on its behalf by:

Abi Ayida (FRC/2019/IODN/00000019260)

Chairman

Alaba Fagun (FRC/2023/PRO/DIR/003/234540)

Director

Additionally certified by:

Nkechi Ojeyokan (FRC/2021 /001/00000022533)

Chief Finance Officer

The significant accounting policies and accompanying notes form an integral part of these financial statements.

As at 31 March, 2025

YEAR TO DATE

GROUP GROUP COMPANY COMPANY

3 Mths to 31

Mar 2025

3 Mths to 31

Mar 2024

3 Mths to 31

Mar 2025

3 Mths to 31

Mar 2024

-

-

-

-

-

-

-

-

-

-

-

-

-

- -

- -

Unaudited Consolidated and Separate Statement of Cash Flows

As at 31 March, 2025

Notes to the Consolidated and Separate financial statements

As at 31 March, 2025

12 Basic earnings and diluted earning per share 33 29 Financial instruments - Fair values and 46

financials risk management

Notes to the Consolidated and Separate financial statements

As at 31 March, 2025

1 Reporting Entity

Berger Paints Nigeria Plc ("the Company") was incorporated in Nigeria as a private limited liability company in 1959 and was converted to a public liability company in 1973. Its registered office address is at 102, Oba Akran Avenue, Ikeja Industrial Estate, Ikeja, Lagos. The Company is listed on the Nigerian Exchange.

The principal activities of the Company continues to be the manufacturing, sale and distribution of paints and allied products throughout the country and rent of investment property.

2 Basis of Preparation

1. Statement of compliance

   The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies and Allied Matters Act Cap C.20, Laws of the Federation of Nigeria, 2004 and the Financial Reporting Council of Nigeria Act, 2011. The Unaudited consolidated and seperate financial statements were authorised for issue by the Board of Directors on 23 April, 2025.

2. Basis of measurement

   The financial statements have been prepared on the historical cost basis except for the following:

   -Non-derivative financial instruments initially measured at fair value and subsequently measured at amortised cost.

   -Government grant (recognised as deferred income) measured at fair value.

   - Inventories: Lower of cost and net realisable value.

   The methods used to measure fair value are further disclosed in Note 2(e).

3. Functional and presentation currency

   These financial statements are presented in Naira, which is the Company's functional currency. All financial information presented in Naira has been rounded to the nearest thousand except where otherwise indicated.

4. Use of estimates and judgment

   In the preparation of these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company's accounting policy and the reported amounts of assets, liabilities, income and expenses. Actual result may differ from these estimates.

   Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

   Information about critical judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are included in the following notes:

   Note 4(Q) and 31

   Note 4(D),(F),14 and 16 Note 4(L) and 5

   leases: whether an arrangement contains a lease determination of the useful life of leasehold land

   revenue recognition and measurement of revenue from rendering of painting services

   Information about assumptions and estimation uncertainties that have most significant effects on amounts recognised in the financial statements is included in the following notes;

   Note 2(e) and 30(a)

   Note 4(G) and 30(b) Note 12

   Note 26 (a)

   Note 33

   determination of fair values

   impairment of financial assets: Expected credit loss and forward looking information

   uncertainty over income taxes: transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.

   determination of cashflows repayments in respect of the investment property development financing arrangement.

   recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources.

5. Measurement of fair values

A number of the Company's accounting policies and disclosures require the determination of fair values, for both financial and non-financial assets and liabilities.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities

• inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either

  Level 2

  directly (i.e. as prices) or indirectly (i.e. as derived from prices).

  Level 3

• inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Notes to the Consolidated and Separate financial statements

As at 31 March, 2025

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in Note 30 - Financial instruments- Fair values and financial risk management.

3 Changes in significant accounting policies

The Company has initially adopted IFRS 16 Leases and IFRIC 23 Uncertainty over Income Tax treatments from 1 January 2019. A number of other new standards are effective from 1 January 2019 but they do not have a material effect on the Company's financial statements.

1. IFRS 16 Leases

   The Company applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognized in retained earnings at 1 January 2019. Accordingly, the comparative information presented for 2018 is not restated -i.e. it is presented, as previously reported, under IAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below. Additionally, the disclosure requirements in IFRS 16 have not generally been applied to comparative information.

   1. Definition of a lease

      Previously, the Company determined at contract inception whether an arrangement was or contained a lease under IFRIC 4 Determining whether an Arrangement contains a Lease . The Company now assesses whether a contract is or contains a lease based on the definition of a lease, as explained in Note (4Q).

      On transition to IFRS 16, the Company elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Company applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed for whether there is a leases under IFRS 16. Therefore, the definition of a lease under IFRS 16 was applied only to contracts entered into or changed on or after 1 January 2019.

   2. As a Lessee

      As a lessee, the Company leases land, motor vehicles and property rentals. The Company previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Company. Under IFRS 16, the Company recognises right-of-use assets and lease liabilities for leases of land and motor vehicles- i.e. these leases are on-balance sheet.

      Leases classified as finance leases under IAS 17

      On transition to IFRS 16, the carrying amount of the right of use assets and the lease liability at 1 January 2019 is determined at the carrying amount of the leased asset and lease liability under IAS 17 immediately before that date. The right of use assets recognised from the leases are presented in investment property as well as property, plant and equipment and measured at cost at that date.

      Notes to the Consolidated and Separate financial statements

      As at 31 March, 2025

      Leases classified as operating leases under IAS 17

      Previously, the Company classified property leases as operating leases under IAS 17.

      The Company used a number of practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS17. The Company:

      • did not recognize right-of-use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application.

      • did not recognise right-of-use assets and liabilities for leases of low value asset;

      • excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application ; and

      • used hindsight when determining the lease term.

      In particular, the Company did not recognise right of use asset and liability for the property rentals as the lease terms end within 12 months of the date of initial application.

   3. As a Lessor

      The Company leases out its investment property, and an insignificant portion of the Company's building properties. The Company has classified these leases as operating leases.

      The Company is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor. Under IAS 17, the lease contracts were classified as operating leases.

2. IFRIC 23 Uncertainty over Income Tax treatments

The Company has adopted IFRIC 23 for the first time in the year 2019. The amendment clarifies how to determine the accounting tax position when there is uncertainty over income tax treatments. The interpretation requires an entity to:

• determine whether uncertain tax positions are assessed separately or as a group; and

• assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings:

• If yes, the entity should determine its accounting tax position consistently with the tax treatment used or planned to be used in its income tax filings.

• If no, the entity should reflect the effect of uncertainty in determining its accounting tax position using either the most likely amount or the expected value method.

4 Significant Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements. Set out below is an index of the significant accounting policies, the details of which are available on the pages that follow.

Notes to the Consolidated and Separate financial statements

As at 31 March, 2025

1. Foreign currency transactions

   Transactions denominated in foreign currencies are translated and recorded in Naira at the actual exchange rates at the dates of the transactions.

   Monetary assets and liabilities denominated in foreign currencies are translated to naira at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss.

2. Financial instruments

   1. Recognition and initial measurement

      Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

      A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

      The Company's financial assets comprises trade and other receivables, cash and cash equivalents and other financial assets; and are classified as financial assets measured at amortised cost.

   2. Classification and subsequent measurement Financial assets

      On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI - debt investment; FVOCI - equity investment; or FVTPL

      Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

      A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as FVTPL

      • it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

      • its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

        A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

      • it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

      • its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

        On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

        All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

        Notes to the Consolidated and Separate financial statements

        As at 31 March, 2025

        Business model assessment:

        The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

      • the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management's strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

      • how the performance of the portfolio is evaluated and reported to the Company's management;

      • the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

      • how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

      • the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

        Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company's continuing recognition of the assets.

        Financial Assets- Assessment whether contractual cash flows are solely payments of principal and interest:

        For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

        In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

      • contingent events that would change the amount or timing of cash flows;

      • terms that may adjust the contractual coupon rate, including variable-rate features;

      • prepayment and extension features; and

      • terms that limit the Company's claim to cash flows from specified assets (e.g. non-recourse features).

      A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual paramount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

      Financial assets- Subsequent measurement and gains and losses

      Financial assets at FVTPL

      Financial assets at amortised cost

      Debt investments at FVOCI

      Equity investments at FVOCI

      These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

      These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

      These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

      These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.

      Notes to the Consolidated and Separate financial statements

      As at 31 March, 2025

      Financial liabilities- Classification, subsequent measurement and gains and losses

      Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss

      The Company's financial liabilities comprises loans and borrowings, trade and other payables and dividend payable; and are classified as other financial liabilities.

      (iv) Derecognition and offsetting

      The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

      The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

      On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

      Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

3. Capital and other reserves

   1. Share capital

      The Company has only one class of shares, ordinary shares. Ordinary shares are classified as equity. When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par value is recorded as share premium. All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the Company. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

   2. Share premium

      When the company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premium on those shares is transferred to the share premium account. Any transaction costs associated with the share issues are deducted from share premium account, net of any related income tax benefits. The use of the share premium account is governed by S.120 (3) of the Companies and Allied Matters Act, CAP C.20, Laws of the Federation of Nigeria, 2004,

   3. Retained earnings

      Retained earnings represents the Company's accumulated earnings since its inception, less any distributions to shareholders, and net of any prior period adjustments. A negative amount of retained earnings is reported as accumulated deficit.

      Notes to the Consolidated and Separate financial statements

      As at 31 March, 2025

   4. Fair value reserve

      Fair value reserve comprises the cumulative net change in available-for-sale financial assets until the assets are derecognised or impaired.

4. Property, plant and equipment

   1. Recognition and measurement

      The cost of an item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably.

      Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

      Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying assets. Items of property, plant and equipment under construction are disclosed as capital work-in-progress.

      If significant part of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

   2. Subsequent cost

      The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

   3. Derecognition

      The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal.

      Gains and losses on derecognition or disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net in profit or loss in the statement of profit or loss and other comprehensive income.

   4. Depreciation

      Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

      Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of each part of an item of property, plant and equipment which reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Capital work-in-progress is not depreciated.

      The estimated useful lives for the current and comparative periods are as follows:

      • Leasehold land - Unlimited

      • Buildings - 20 years

      • Plants and machinery

        • Fixed plant - 12 -40 years

        • Movable plant - 7 years

        • Generators - 5 years

      • Motor vehicles

        • Trucks - 6 years

        • Cars - 4 years

      • Furniture and fittings - 5 years

      • Computer equipment - 5 years

      • Motor vehicles under lease - 5 years

      • Motor vehicles under lease - lease period

        Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.

        The attributable cost of each asset is transferred to the relevant asset category immediately the asset is available for use and depreciated accordingly.

        Notes to the Consolidated and Separate financial statements

        As at 31 March, 2025

5. Intangible assets

   Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with finite useful life are reviewed at the end of each year, changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the assets are considered to modify the amortisation period or method, as appropriate, and are treated as charges in accounting estimates.

   The amortisation expense of tangible assets with finite lives is recognised in the profit or loss as the expense category that is consistent with the function of the intangible assets. Gains or losses arising from derecognition of an intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when asset is derecognised.

   Purchased software are recognised as assets if there is sufficient certainty that future economic benefits associated with the

   item will flow to the entity. Amortisation is calculated using the straight-line method over three (3) years.

   The carrying amount of an intangible asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal.

   Internally generated intangible assets

   Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognised if and only if all of the following have been demonstrated:

   • the technical feasibility of completing the intangible asset so that it will be available for use or sale;

   • the intention to complete the intangible asset and use or sell it;

   • the ability to use or sell the intangible asset;

   • how the intangible asset will generate probable future economic benefits;

   • the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

   • the ability to measure reliably the expenditure attributable to the intangible asset during its development.

   The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.

   The internally generated intangible asset represents product formulation development for the newly commissioned automated paint factory.

   Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

6. Investment property

   1. Recognition and measurement

      An investment property is either land or a building or part of a building held by the Company to earn rentals or for capital appreciation or both.

      Investment property is initially measured at cost, including transaction costs. Such cost does not include start-up costs, abnormal waste, or initial operating losses incurred before the investment property achieves the planned level of occupancy.

      The cost model is applied in accounting for investment property. The investment property is recorded at cost less any accumulated depreciation and accumulated impairment losses.

      Notes to the Consolidated and Separate financial statements

      As at 31 March, 2025

   2. Subsequent expenditure

      The cost of replacing a part of an item of investment property is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of investment property are recognised in profit or loss as incurred.

   3. Depreciation

      Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

      Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of the investment property which reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

      The estimated useful lives for the current and comparative periods are as follows:

      • Buildings - 20 years

      • Leasehold land - Unlimited

        Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.

   4. Transfers

      Transfers to, or from, investment property are made when there is a change in use, evidenced by:

      • commencement of owner-occupation, for a transfer from investment property to owner-occupied property;

      • commencement of development with a view to sale, for a transfer from investment property to inventories;

      • end of owner-occupation, for a transfer from owner-occupied property to investment property; or

      • commencement of an operating lease to another party, for a transfer from inventories to investment property.

      Transfers to, or from, investment property does not change the carrying amount of the property transferred, and they do not change the cost of the property for measurement or disclosure purposes.

7. Impairment

   Non-derivative financial assets

   1. Financial instrument

      The Company's financial assets consist of cash and cash equivalent, trade receivables and other financial assets, The Company recognises loss allowances for expected credit loss (ECL) on financial assets measured at amortised cost. The Company measures loss allowances at an amount equal to lifetime ECLs.

      When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company's historical experience and informed credit assessment and including forward-looking information.

      The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 60 days past due. The Company considers a financial asset to be in default when:

      • the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or

      • the financial asset is more than 60 days past due.

      Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

      Notes to the Consolidated and Separate financial statements

      As at 31 March, 2025

      For trade receivables, the Company applies a simplified approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment and an assessment of both the current as well as the forecast direction of conditions at the reporting date.

      For cash and cash equivalent and other financials assets, Company applies a general approach in calculating the ECLs. The Company considers a financial asset to have low credit risk when its credit risk rating is equivalent to the globally understood definition of investment grade.

      1. Measurement of ECLs

         ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).

         ECLs are discounted at the effective interest rate of the financial asset.

      2. Credit-impaired financial assets

         At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

         Evidence that a financial asset is credit-impaired includes the following observable data:

         • significant financial difficulty of the borrower or issuer;

         • a breach of contract such as a default or being more than 60 days past due;

         • the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

         • it is probable that the borrower will enter bankruptcy or other financial reorganisation; or

         • the disappearance of an active market for a security because of financial difficulties.

      3. Presentation of allowance for ECL in the statement of financial position

         Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

      4. Write off

      The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof.

8. Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company, or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financial position. If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor a contingent liability and no disclosure is made.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

A contingent asset is disclosed where an inflow of economic benefits is probable. Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised in the financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, an entity discloses the contingent asset.