Notes to Accounts of Berger Paints (India) Ltd.

Mar 31, 2025

3.15. Provisions and Contingencies

A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past
event; it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision
is presented in the Statement of Profit and Loss.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

The Company records a provision for decommissioning costs for its certain manufacturing facilities.
Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated
cash flows and are recognised as part of the cost of the particular asset. The cash flows are discounted at a
current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is
expensed as incurred and recognised in the Statement of Profit and Loss as a finance cost. The estimated future
costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future
costs or in the discount rate applied are added to or deducted from the cost of the asset.

The impact of climate-related matters on remediation of environmental damage is considered with determining the
decommissioning liability on the manufacturing facility.

If the Company has a contract that is onerous, the present obligation under the contract is recognised and
measured as a provision. However, before a separate provision for an onerous contract is established, the Company
recognises any impairment loss that has occurred on assets dedicated to that contract.

An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot
avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits
expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from
the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to
fulfil it.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a
present obligation that is not recognized because it is not probable that an outflow of resources will be required
to settle the obligation. The Company does not recognize a contingent liability but discloses its existence and
other required disclosures in notes to the financial statements, unless the possibility of any outflow in settlement
is remote.

3.16. Employee Benefits

Short-term Employee Benefits:

Liabilities for short-term employee benefits that are expected to be settled wholly within 12 months after the end
of the period in which the employees render the related service are recognised in respect of employees'' services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as ‘Employee Benefits Payable'' within ‘Other Financial Liabilities'' in the
Balance Sheet.

Post-employment Benefits:

I. Defined Contribution Plan

a. Superannuation

Contribution made to Superannuation Fund for certain employees are recognised in the Statement of
Profit and Loss as and when services are rendered by employees. The Company has no liability for
future Superannuation Fund benefits other than its contribution.

b. Provident Fund

Contributions in respect of Employees who are not covered by Company''s Employees Provident
Fund Trust are made to the Fund administered by the Regional Provident Fund Commissioner
as per the provisions of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952
and are charged to Statement of Profit and Loss as and when services are rendered by
employees. The Company has no obligation other than the contribution payable to the Regional
Provident fund.

II. Defined Benefit Plan

a. Gratuity

Every employee who has completed five years or more of service is entitled to Gratuity as per the
provisions of The Payment of Gratuity Act, 1972. Retirement Gratuity for employees, is funded through
a scheme of Life Insurance Corporation of India. The costs of providing benefits under this plan are
determined on the basis of actuarial valuation using the projected unit credit method at each year-end.
Actuarial gains/losses are immediately recognised in retained earnings through Other Comprehensive
Income in the period in which they occur. Re-measurements are not re-classified to Statement of Profit
and Loss in subsequent periods. The excess / shortfall in the fair value of the plan assets over the present
value of the obligation calculated as per actuarial methods as at balance sheet dates is recognised as
a gain/loss in the Statement of Profit and Loss. Any asset arising out of this calculation is limited to the
past service cost plus the present value of available refunds and reduction in future contributions.

b. Provident Fund

In respect of the employees covered by the Company''s Employee Provident Fund Trust in Point I b
above, contributions to the Company''s Employees Provident Fund Trust (administered by the Company
as per the provisions of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952) are made
in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being
notified by the Government.

In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if
any, between the return from the investments of the Trust and the notified interest rate and recognizes
such obligation, if any, determined based on an actuarial valuation as at the balance sheet date, as an
expense.

III. Long Term Compensated Absences

The Company treats accumulated leave to the extent such leave are carried forward as long-term employee
benefit for measurement purposes. Such long-term compensated absences are provided for based on the
actuarial valuation using the projected unit credit method at the year-end. Remeasurement gains/losses are
immediately taken to the Statement of Profit and Loss and are not deferred. The Company presents the leave
as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its
settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual
right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.

3.17. Employees Stock Option

Stock options are granted to the employees under the stock option scheme. The cost of stock options granted to
the employees (equity-settled awards) of the Company is the difference between fair value of equity instruments
granted and the price at which options may be exercised by concerned employees. For each stock option, the
measurement of fair value is performed on the grant date. The grant date is the date on which the Company and
the employees agree to the stock option scheme. The fair value so determined is revised only if the stock option
scheme is modified in a manner that is beneficial to the employees.

Aforesaid cost of stock options is recognised, together with a corresponding increase in Employee Stock Options
outstanding account in equity, over the period in which the performance and/or service conditions are fulfilled in
employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting

date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best
estimate of the number of equity instruments that will ultimately vest. The Statement of Profit and Loss expense or
credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that
period and is recognised in employee benefits expense.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted
earnings per share.

If the options vests in instalments (i.e., the options vest pro rata over the service period), then each instalment is
treated as a separate share option grant because each instalment has a different vesting period.

3.18. Cash and Cash Equivalents

Cash and cash equivalent for the purpose of presentation in cash flow statement and in the balance sheet comprise
cash at banks and on hand and short-term deposits with an original maturity of three months or less that are readily
convertible to known amounts of cash, which are subject to an insignificant risk of changes in value.

3.19. Forward Currency Contracts

The Company uses forward currency contracts to hedge its foreign currency risks. Such forward currency
contracts are initially measured at fair value on the date on which a forward currency contract is entered into and
are subsequently re-measured at fair value. Forward currency contracts are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value is negative. Changes in the fair value of forward
contracts are recognized in the Statement of Profit and Loss as they arise.

3.20. Earnings Per Share

Basic Earnings Per Share is 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. For the purpose
of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive
potential equity shares.

The weighted average number of equity shares outstanding during the period and for all periods presented is
adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed
the number of equity shares outstanding, without a corresponding change in resources.

3.21. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.

A. Financial assets

i. Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. However, trade receivables that do not contain a significant financing component are measured
at transaction price. The Company has elected the practical expedient in Ind AS 115 about the

existence of significant financing component and the disclosures pertaining to contracts with original
expected duration of one year or less and contracts where revenue recognised corresponds to the
value transferred to customer typically involving sales of products.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI,
it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)'' on the
principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an
instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair
value through profit or loss, irrespective of the business model.

The Company''s business model for managing financial assets refers to how it manages its financial
assets in order to generate cash flows. The business model determines whether cash flows will result
from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified
and measured at amortised cost are held within a business model with the objective to hold financial
assets in order to collect contractual cash flows while financial assets classified and measured at
fair value through OCI are held within a business model with the objective of both holding to collect
contractual cash flows and selling.

Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e.,
the date that the Company commits to purchase or sell the asset.

ii. Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in below categories:

> Debt instruments at amortised cost

> Equity instruments measured at fair value through other comprehensive income (FVTOCI)

> Financial assets at fair value through profit or loss..

Debt instruments at amortised cost other than derivative contracts

A ‘debt instrument'' is measured at the amortised cost if both the following conditions are met:

> The asset is held within a business model whose objective is to hold assets for
collecting contractual cash flows, and

> Contractual terms of the asset give rise on specified dates to cash flows that are
solely payments of principal and interest (SPPI) on the principal amount outstanding.

This assessment is referred to as the Solely Payments of Principal and Interest (SPPI) test and is
performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and
measured at fair value through profit or loss, irrespective of the business model.

After initial measurement, such financial assets are subsequently measured at amortised cost using
the effective interest rate (EIR) method and are subject to impairment as per the accounting policy
applicable to ‘Impairment of financial assets.'' Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included in Other Income in the Statement of Profit and Loss. The losses arising from

impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade
and other receivables.

Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value other than equity investments
measured at deemed cost on first time adoption of Ind AS. Equity instruments which are held for
trading are classified as at Fair Value Through Profit or Loss (FVTPL). For all other equity instruments,
the Company decides to classify the same either as at Fair Value Through Other Comprehensive
Income (FVTOCI) or Fair Value Through Profit or Loss (FVTPL). The Company makes such election on
an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from
OCI to Statement of Profit and Loss, even on sale of investment. However, the Company may transfer
the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the Statement of Profit and Loss.

iii. De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company''s similar financial
assets) is primarily derecognised when:

> The rights to receive cash flows from the asset have expired, or

> The Company has transferred substantially all the risks and rewards of the asset.

iv. Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance.

The Company follows ‘simplified approach'' for recognition of impairment loss allowance on
Trade receivables.

The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected
life of a financial instrument. ECL is the difference between all contractual cash flows that are due to
the Company in accordance with the contract and all the cash flows that the entity expects to receive,
discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

a. All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the
expected life of the financial instrument cannot be estimated reliably, then the entity is required
to use the remaining contractual term of the financial instrument.

b. Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance
on portfolio of its trade receivables. The provision matrix is based on its historically observed default
rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At
every reporting date, the historical observed default rates are updated and changes in the forward¬
looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the Statement of Profit and Loss (P&L). This amount is reflected under the head ‘other
expenses'' in the P&L. The balance sheet presentation for various financial instruments is described
below:

Financial assets measured at amortised cost: ECL is presented as an allowance, i.e., as an integral
part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying
amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance
from the gross carrying amount.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments
on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is
designed to enable significant increases in credit risk to be identified on a timely basis.

B. Financial liabilities

i. Initial recognition, measurement and presentation

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowing or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including
bank overdrafts and financial guarantee contracts.

ii. Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include derivatives, financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial
liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial instruments entered into by the Company that are
not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated
embedded derivatives are also classified as held for trading unless they are designated as effective
hedging instruments.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

Financial liabilities are designated upon initial recognition as at fair value through profit or loss only if the
criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable
to changes in own credit risks are recognized in OCI. These gains/ losses are not subsequently
transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All
other changes in fair value of such liability are recognised in the Statement of Profit and Loss.

Trade Payables

Trade payables represent liabilities for goods and services provided to the Company prior to the end
of financial year which are unpaid. Trade and other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting period. They are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in Statement of Profit and Loss when the
liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the
statement of profit and loss.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to
be made to reimburse the lender for a loss it incurs because the specified borrower fails to make a
payment when due in accordance with the terms of a loan agreement. Financial guarantee contracts are
recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of
loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised
less cumulative amortisation.

De-recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.

Reclassification of Financial Assets and Liabilities:

The Company determines classification of financial assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets which are equity instruments and financial
liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a

change in the business model for managing those assets. Changes to the business model are expected
to be infrequent. The Company''s senior management determines change in the business model as a
result of external or internal changes which are significant to the Company''s operations. Such changes
are evident to external parties. A change in the business model occurs when the Company either begins
or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively from the reclassification date which is the first day
of the immediately next reporting period following the change in business model. The Company does
not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are off-set and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right must not
be contingent on future events and must be enforceable in the normal course of business and in the event of
default, insolvency or bankruptcy of the Company or the counterparty.

Equity vs. financial liability classification

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of
direct issue costs. The Company classifies a financial instrument issued by it as equity instrument only if below
conditions are met:

• The instrument includes no contractual obligation to deliver cash or another financial asset to another
entity. Nor it includes any obligation to exchange financial assets or financial liabilities with another entity
under conditions that are potentially unfavourable to the issuer.

• If the instrument will, or may, be settled in the Company’s own equity instruments, it is non-derivative
instrument that includes no contractual obligation for the Company to deliver a variable number of its
own equity instruments. If the instrument is derivative, then it should be settled only by the Company
exchanging a fixed amount of cash or another financial asset for a fixed number of its own equity
instruments.

All other instruments are classified as financial liability and accounted for using the accounting policy applicable
to the Financial Liabilities.

3.22. Cash dividend to equity holders of the Company

The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution
is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India
distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly
in equity.

3.23. Operating Segments

The Business Process and Risk Management Committee of the Company approved by the Board of Directors and
Audit Committee performs the function of allotment of resources and assessment of performance of the Company.
Considering the level of activities performed, frequency of their meetings and level of finality of their decisions,
the Company has identified that Chief Operating Decision Maker function is being performed by the Business
Process and Risk Management Committee. The financial information presented to the Business Process and Risk
Management Committee in the context of results and for the purposes of approving the annual operating plan is on
a consolidated basis for various products of the Company. As the Company’s business activity falls within a single
business segment viz. ‘Paints’ and the sales substantially being in the domestic market, the Standalone financial
statements are reflective of the information required by Ind AS 108 “Operating Segments”.

3.24. Events after reporting date

If the Company receives information after the reporting period, but prior to the date of approved for issue, about
conditions that existed at the end of the reporting period, it will assess whether the information affects the amounts
that it recognises in its separate financial statements. The Company will adjust the amounts recognised in its
financial statements to reflect any adjusting events after the reporting period and update the disclosures that
relate to those conditions in light of the new information. For non-adjusting events after the reporting period, the
Company will not change the amounts recognised in its separate financial statements but will disclose the nature
of the non-adjusting event and an estimate of its financial effect, or a statement that such an estimate cannot be
made, if applicable.

3.25. New and amended standards

The Company applied for the first-time certain standards and amendments, which are effective for annual periods
beginning on or after 1 April 2024. The Company has not early adopted any standard, interpretation or amendment
that has been issued but is not yet effective.

(i) Ind AS 117 Insurance Contracts

The Ministry of Corporate Affairs (MCA) notified the Ind AS 117, Insurance Contracts, vide notification dated
12 August 2024, under the Companies (Indian Accounting Standards) Amendment Rules, 2024, which is
effective from annual reporting periods beginning on or after 1 April 2024.

Ind AS 117 Insurance Contracts is a comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure. Ind AS 117 replaces Ind AS 104
Insurance Contracts. Ind AS 117 applies to all types of insurance contracts, regardless of the type of entities
that issue them as well as to certain guarantees and financial instruments with discretionary participation
features; a few scope exceptions will apply. Ind AS 117 is based on a general model, supplemented by:

• A specific adaptation for contracts with direct participation features (the variable fee approach)

• A simplified approach (the premium allocation approach) mainly for short-duration contracts

The application of Ind AS 117 does not have material impact on the Company''s separate financial
statements as the Company has not entered any contracts in the nature of insurance contracts covered
under Ind AS 117.

(ii) Amendments to Ind AS 116 Leases - Lease Liability in a Sale and Leaseback

The MCA notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, which
amend Ind AS 116, Leases, with respect to Lease Liability in a Sale and Leaseback.

The amendment specifies the requirements that a seller-lessee uses in measuring the lease liability arising
in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain
or loss that relates to the right of use it retains.

The amendment is effective for annual reporting periods beginning on or after 1 April 2024 and must be
applied retrospectively to sale and leaseback transactions entered into after the date of initial application
of Ind AS 116.

(iii) Amendments to Ind AS 21 The Effects of Changes in Foreign Exchange Rates - Lack of
exchangeability

The Ministry of Corporate Affairs notified amendments to Ind AS 21 The Effects of Changes in Foreign
Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it
should determine a spot exchange rate when exchangeability is lacking. The amendments also require
disclosure of information that enables users of its financial statements to understand how the currency
not being exchangeable into the other currency affects, or is expected to affect, the entity''s financial
performance, financial position and cash flows.

The amendments are effective for annual reporting periods beginning on or after 1 April 2025. When
applying the amendments, an entity cannot restate comparative information.

The amendments does not have a material impact on the Company’s financial statements.

b) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of ''1 each. Holder of each equity share is
entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed
by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. 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.

c) Bonus Shares issued during the previous financial year

On September 25, 2023, the Company had allotted 19,42,84,497 bonus shares of Rupee one each (fully paid up)
in the proportion of 1 bonus share for every 5 fully paid up equity shares to eligible shareholders whose names
appeared in the Register of Members as on September 23, 2023, being the record date fixed for this purpose,
in accordance with approval received from the Members by way of postal ballot, result of which was declared
on September 08, 2023. The said bonus shares rank pari passu in all respects with the existing equity shares of
the Company, including dividend. As a result of the bonus issue, the paid-up capital of the Company increased
to ''116.57 crores from ?97.14 crores. The paid-up capital on account of bonus issue of ''19.43 crores has been
appropriated from securities premium.

Nature and purpose of reserves:

Securities premium - Premium received on equity shares issued including those under Employee Stock Option plan are
recognised in the securities premium account net of utilization for bonus shares issued. The reserve can be utilised only
for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Retained earnings - Retained earnings includes surplus in the Statement of Profit and Loss, Ind-AS related adjustments
as on the date of transition, remeasurement gains/(losses) on defined benefit plans less any transfer to general reserve,
dividends or other distributions paid to shareholders.

General reserve - Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual
transfer of net income at a specified percentage in accordance with applicable regulations, to ensure that if a dividend
distribution in a given year is more than 10% of the paid up capital of the Company for that year, the total dividend
distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013,
the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.
However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.

Share based payment reserve - The Company has an employee stock option plan (ESOP) under which options
to subscribe for the Company''s shares have been granted to specific employees. The Share based payment reserve
is used to recognise the value of equity-settled share-based payments to employees as part of their remuneration.
The year end balance is net off options exercised by the concerned employees. Refer to Note 46 for further details of
these plans.

Capital redemption reserve - Represents amount equal to the face value of equity shares transferred at the time of
buy-back of shares in earlier years.

Capital Reserve - Includes profit on re-issue of forfeited shares.

Note-1. Cash Credits from banks are secured by way of first charge on book debts, inventories and other current assets
ranking pari passu between the lenders (first pari passu charge over entire current assets). Cash Credit is repayable on
demand and carries interest of 9.05% per annum (March 31,2024: 9.27-9.55% per annum).

Note-2. Secured Working Capital Demand Loan carried an interest at Nil per annum as at March 31,2025 (March 31,
2024: 7.90% per annum) and are repaid within the maturity period of nil days (March 31, 2024: 2-69 days). Working
Capital Demand Loan is secured by hypothecation of stock and book debts.

Note-3. Details of discrepancies between quarterly returns/statements of current assets filed by the Company with banks
and books of accounts are as follows:

Note 44. Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods.

(i) Judgements, Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Company based its assumptions and estimates on parameters
available when the Financial Statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances arising that are beyond the control
of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the
Company''s accounting policies, management has made the following judgements, estimates and assumptions,
which have the most significant effect on the amounts recognised in the Financial Statements.

(ii) Defined Employer Benefit plans (Refer Note 3.16)

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment
benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions
that may differ from actual developments in future. These include the determination of appropriate discount rate,
estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its

long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date. For further details refer Note 45.

(iii) Fair value measurement of financial instruments (Refer Note 3.21)

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using various valuation techniques. The
inputs to these techniques are taken from observable markets where possible, but where this is not feasible, a
degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as
liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair
value of financial instruments. Refer Note 51 for further disclosures.

(iv) Depreciation on Property, Plant and Equipment (Refer Note 3.8)

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in
respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the
expected residual value at the end of its life. The useful lives and residual values of company’s assets are determined
by management at the time the asset is acquired and reviewed periodically, including at each financial year end.
The lives are based on historical experience with similar assets as well as anticipation of future events, which may
impact their life, such as changes in technology. The Company also considers the impact of health, safety and
environmental legislation in its assessment of expected useful lives and estimated residual values.

(v) Impairment allowance on trade receivables (Refer Note 3.5)

The Company makes loss allowances for credit impaired debts based on an assessment of the recoverability of
trade and other receivables. The identification of credit impaired debts enquires use of judgments and estimates.
Where the expectation is different from the original estimate, such difference will impact the carrying value of
the trade and other receivables and credit impaired debts expenses in the period in which such estimate has
been changed.

(vi) Decommissioning Liability (Refer Note 3.8)

Decommissioning Liability has been recognised for items of property, plant and equipment built or installed on
specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the
lease prior to handing over to the lessor. The decommissioning costs as at the end of the lease period have been
estimated based on current costs by the Company’s own technical experts and have been escalated to the end of
the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now
discounted to the present value of such liability by applying Company’s weighted average cost of capital.

(vii) Impairment of Investment (Refer Note 3.14)

The carrying amount of the Company’s investments are assessed at the end of each reporting period to determine
whether there is any indication that an asset may be impaired. If any such indication exists, then the Company
estimates the recoverable amount of the asset. The recoverable amount of the asset is computed as the higher
of an asset’s or cash generating unit’s fair value less costs to sell and its value in use. Such value is derived using
valuation techniques (i.e., the Discounted Cash Flow (DCF) model), where future financial performance can be
reliably estimated or management’s best estimate of the estimated fair value of the carrying value of assets and
liabilities, as appropriate. The inputs to the Discounted Cash Flow models are taken from observable markets

The Company had in earlier years provided for impairment amounting to ''71.40 crores in the carrying value of its
investment in its wholly owned subsidiary, Berger Paints Cyprus Limited (BPCL) due to downturn in the Russian Economy
and its corresponding impact on Company''s ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL),
which were reflected in the consolidated financial position of the Company. The Company has made an assessment of
the fair value less costs to sell of the investments in Berger Paints Overseas Limited taking into account management''s
best estimate of the estimated fair value less costs to sale of the carrying value of assets and liabilities of the above wholly
owned subsidiary and basis such assessment no further impairment is required to be recognised in the current year.

Sensitivity analysis of assumptions

The Company had performed sensitivity analysis considering /- 2% for each of the assumptions used and ensured that the

valuation is appropriate and no impairment is required to be recognised.

(viii) Revenue from combined contracts (Refer Note 3.5)

The Company exercises judgement in estimating cost for recognizing revenue from combined contract with customers.

Losses on onerous contracts (if any) are recognized in the financial statements.

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the
valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the
prior period.

(v) Risk Exposure

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the
valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. In
practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of
the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period)
has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the
prior period.

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk
and Salary Risk.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which
is determined by reference to market yields at the end of the reporting period on government bonds. If the actual
return on plan asset is below this rate, it will create a plan deficit. However, the risk is partially mitigated by
investment in LIC managed fund.

Interest Risk: A decrease in the government bond interest rate will increase the plan liability.

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

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

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India the
return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets
is funded by the Company on a yearly basis.

(vii) The Company expects to contribute ''6.06 crores (March 31,2024: ''5.37 crores) to gratuity as specified in report
by Fund custodian during the subsequent accounting year.

Note 46. Share based payment to employees

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 [‘the Plan''] was approved at the Annual General

Meeting of the Company held on 3rd August, 2016. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions

of the Plan is reproduced below:

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through “Berger Paints
Provident Fund (Covered)” as per the provisions of the Employees'' Provident Funds and Miscellaneous
Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the
employer, any shortfall in the rate of interest on member contributions as compared to the relevant rate
of interest declared by the Government of India for this purpose will have to be met by the employer.
Such provident fund would in effect be a defined benefit plan in accordance with the requirement of
Ind AS 19 - Employee Benefits.

The Actuary has carried out actuarial valuation of interest rate guarantee obligations as at the Balance Sheet
date using Projected Unit Credit Method as outlined in the Professional Guidance Note 29 issued by the Institute
of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regards to interest
rate guarantee obligation of the Company as at the balance sheet date. Further during the year, the Company''s
contribution ''to the Provident Fund Trust, has been expensed under “Contribution to Provident and Other Funds”
(refer note 39). Disclosures given hereunder are restricted to the information available as per the Actuary''s report.

a) “Vesting Date” means the date on and from which the Option vests with the Participant and thereby
becomes exercisable.

b) “Exercise Date “means the date on which the Participant exercises his Vested Options and in case of partial
Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) “Vesting Period” means the period during which the Vesting of the Option granted to the Participant in
pursuance of the Plan takes place.

d) “Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within
which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of ''1/- per Share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate
Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant''s continued employment as defined in Clause 14 of the Plan the Unvested Options
shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total
Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant
Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on
the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to
the whole number such that the total number of Options vested shall add up to 100%, shall vest on the
third anniversary of the Grant Date. ESOP Plan 2016 was amended on 17th September, 2024 through
Postal Ballot Resolution. As per the amended ESOP Plan 2016, the Unvested Options shall vest with the
Participant automatically in accordance with the following schedule: a) 20% of the total Options granted,
shall vest on the first anniversary of the Grant Date, b) 20% of the total Options granted, shall vest on
the second anniversary of the Grant Date, c) 30% of the total Options granted, shall vest on the third
anniversary of the Grant Date and d) 30% of the total Options granted, shall vest on the fourth anniversary
of the Grant Date.

h) Options granted to an employee would continue to vest in accordance with respective vesting schedules
after retirement or superannuation in accordance with the Company''s policies and applicable law.

Note 47.b. Company as a lessor

The Company has given Color bank (tinting machines) on operating lease to its dealers. The Company enters
into 2- 5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a
shorter period or may be waived off/refunded on achievement of certain sales targets by the concerned dealers.
The minimum aggregate lease payments to be received in future is considered as '' Nil. Accordingly the disclosure
of the minimum lease payments receivable at the Balance sheet date is not made. The amounts received from
customers pending to be refunded back are recognised as liabilities. Also refer Note 4.

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key
management personnel. No share options have been granted to the non-executive members of the Board of Directors under
this scheme.

Refer to Note 46 for further details of the scheme.

* Refer Note 57.

Notes:

Terms and conditions of transactions with related parties:

Transactions relating to dividend were on the same terms and conditions that applied to other shareholders.
The sales to and purchases from related parties are made in the ordinary course of business and at arm''s length
prices. Outstanding balances at the year-end except loan given to a subsidiary are unsecured and interest free and
settlement occurs in cash. No provisions are held against receivables from related parties.

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products,
production process, regulatory environment, customers and distribution methods there are no reportable segment(s)
other than “Paints”.

The Business Process and Risk Management Committee of the Company, approved by the Board of Directors and Audit
Committee performs the function of allotment of resources and assessment of performance of the Company. Considering
the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has
identified that Chief Operating Decision Maker function is being performed by the Business Process and Risk Management
Committee. The financial information presented to the Business Process and Risk Management Committee in the context
of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products
of the Company. As the Company''s business activity falls within a single business segment viz., ‘Paints'' and the sales
substantially being in the domestic market, the financial statements are reflective of the information required by Ind AS
108 “Operating Segments”.

In terms of Ind AS 108 ‘Segment Reporting'' prescribed under Section 133 of the Companies Act, 2013 Segment
Information is presented in the Standalone Financial Statements of the Company. Given below is the information relating
to Geographical Market of the Company:

(b) Financial instruments at amortized cost

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

---

Mar 31, 2024

b) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of ''1 each. Holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. 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.

c) Bonus Shares issued during the current financial year

On September 25, 2023, the Company had allotted 19,42,84,497 bonus shares of Rupee one each (fully paid up) in the proportion of 1 bonus share for every 5 fully paid up equity shares to eligible shareholders whose names appeared in the Register of Members as on September 23, 2023, being the record date fixed for this purpose, in accordance with approval received from the Members by way of postal ballot, result of which was declared on September 08, 2023. The said bonus shares rank pari passu in all respects with the existing equity shares of the Company, including dividend. As a result of the bonus issue, the paid-up capital of the Company increased to ''116.57 crores from ''97.14 crores. The paid-up capital on account of bonus issue of ''19.43 crores has been appropriated from securities premium.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares as declared under the relevant provisions of the Companies Act , 2013.

f) Shares reserved for issue under Employee Stock Options:

For movement of shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company, refer Note 46.

g) The Company has not issued any shares pursuant to any contract without payment being received in cash. The Company has not bought back any shares.

Retained earnings - Retained earnings includes surplus in the Statement of Profit and Loss, Ind AS related adjustments as on the date of transition, remeasurement gains/ losses on defined benefit plans less any transfer to general reserve, dividends or other distributions paid to shareholders.

General reserve - Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations, to ensure that if a dividend distribution in a given year is more than 10% of the paid up capital of the Company for that year, the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Share based payment reserve - The Company has an employee stock option plan (ESOP) under which options to subscribe for the Company''s shares have been granted to specific employees. The Share based payment reserve is used to recognise the value of equity-settled share-based payments to employees as part of their remuneration. The year end balance is net off options exercised by the concerned employees. Refer to Note 46 for further details of these plans.

Capital redemption reserve - Represents amount equal to the face value of equity shares transferred at the time of buy-back of shares in earlier years.

Capital Reserve - Includes profit on re-issue of forfeited shares.

Note- 1. Cash Credits from banks are secured by way of first charge on book debts, stock and other current assets ranking pari passu between the lenders (first pari passu charge over entire current assets). Cash Credit is repayable on demand and carries interest of 9.27-9.55% per annum (March 31,2023: 7.62 % per annum).

Note-2. Secured Working Capital Demand Loan carried an interest at 7.90% per annum as at March 31,2024 (March 31, 2023: 6.73%-8.70% per annum) and are repaid within the maturity period of 2-69 days. Working Capital Demand Loan is secured by hypothecation of stock and book debts.

Note-3. Unsecured Working Capital Demand Loan carried an interest: Nil as at March 31,2024 (March 31,2023: 6.73%-8.70% per annum and are repaid within the maturity period of 12-69 days).

Note-4. Details of discrepancies between quarterly returns/statements of current assets filed by the Company with banks and books of accounts are as follows:

Note (a): The Company has submitted stock statements to Axis bank, BNP Paribas, DBS bank, Federal bank, HDFC bank, HSBC bank, ICICI bank, IndusInd bank, JP Morgan, RBL bank, Standard Chartered bank, Yes bank, South Indian bank, Kotak Mahindra bank and State Bank of India.

Note (b): Quarterly returns/statements submitted to banks were prepared and filed on the basis of provisional books/ financial statements.

# Corporate Social Responsibility expense of ''20.79 Crores (March 31, 2023: ''19.28 Crores) includes programme for promoting employment enhancing vocational skill programme named ‘iTrain.

@ Represents CSR activity undertaken during the year for which contractual payment was made subsequent to the year-end.

In compliance with the provisions laid under Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021,there was no amount unspent for the year ended March 31,2024. Amount available for set off in succeeding financial years ''0.54 crore (March 31,2023: ''0.18 crore).

Note 43. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Note 44. Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods.

(i) Judgements, Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company''s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the Financial Statements.

(ii) Defined Employer Benefit plans (Refer Note 3.15)

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details refer Note 45.

(iii) Fair value measurement of financial instruments (Refer Note 3.20)

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 51 for further disclosures.

(iv) Depreciation on Property, Plant and Equipment (Refer Note 3.7)

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The Company also considers the impact of health, safety and environmental legislation in its assessment of expected useful lives and estimated residual values.

(v) Impairment allowance on trade receivables (Refer Note 3.4)

The Company makes loss allowances for credit impaired debts based on an assessment of the recoverability of trade and other receivables. The identification of credit impaired debts enquires use of judgments and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and credit impaired debts expenses in the period in which such estimate has been changed.

(vi) Decommissioning Liability (Refer Note 3.7)

Decommissioning Liability has been recognised for items of property, plant and equipment built or installed on specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the lease prior to handing over to the lessor. The decommissioning costs as at the end of the lease period have been estimated based on current costs by the Company''s own technical experts and have been escalated to the end of the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now discounted to the present value of such liability by applying Company''s weighted average cost of capital.

(vii) Impairment of Investment (Refer Note 3.13)

The carrying amount of the Company''s investments are assessed at the end of each reporting period to determine whether there is any indication that an asset may be impaired. If any such indication exists, then the Company estimates the recoverable amount of the asset. The recoverable amount of the asset is computed as the higher of an asset''s or cash generating unit''s fair value less costs to sell and its value in use. Such value is derived using valuation techniques (i.e. the Discounted Cash Flow (DCF) model), where future financial performance can be reliably estimated or management''s best estimate of the estimated fair value of the carrying value of assets and liabilities, as appropriate. The inputs to the Discounted Cash Flow models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Key assumptions on which management has based its determination of recoverable amount includes estimated long term growth rates, weighted average cost of capital etc. Cash flow projections take into account past experience and represent management''s best estimate about future developments. The risks in respect of climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing value-in-use amount.

The Company had undertaken an impairment assessment in respect of its investment in Lusako Trading Limited, STP Limited, Berger Paints (Cyprus) Limited and Berger Nippon Paint Automotive Coatings Private Limited.

The Company had in earlier years provided for impairment amounting to ''71.40 crores in the carrying value of its investment in its wholly owned subsidiary, Berger Paints Cyprus Limited (BPCL) due to downturn in the Russian Economy and its corresponding impact on Company''s ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL), which were reflected in the consolidated financial position of the Company. The Company has made an assessment of the fair value less costs to sell of the investments in Berger Paints Overseas Limited taking into account management''s best estimate of the estimated fair value less costs to sale of the carrying value of assets and liabilities of the above wholly owned subsidiary and basis such assessment no further impairment is required to be recognised in the current year.

Sensitivity analysis of assumptions

The Company had performed sensitivity analysis considering /- 2% for each of the assumptions used and ensured that the valuation is appropriate and no impairment is required to be recognised.

(viii) Revenue from combined contracts (Refer Note 3.4)

The Company exercises judgement in estimating cost for recognizing revenue from combined contract with customers. Losses on onerous contracts (if any) are recognized in the financial statements.

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk Exposure

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Actuary.

The discount rate is based on the government securities yield.

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards.

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk and Salary Risk.

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

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

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

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India the return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets is funded by the Company on a yearly basis

(vii) The Company expects to contribute an amount to gratuity as specified in report by Fund custodian during the subsequent accounting year.

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through “Berger Paints Provident Fund (Covered)” as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the employer, any shortfall in the rate of interest on member contributions as compared to the relevant rate of interest declared by the Government of India for this purpose will have to be met by the employer. Such provident fund would in effect be a defined benefit plan in accordance with the requirement of Ind AS 19 - Employee Benefits. The Actuary has carried out actuarial valuation of interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method as outlined in the Professional Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regards to interest rate guarantee obligation of the Company as at the balance sheet date. Further during the year, the Company''s contribution of ''15.30 crores (March 31,2023: ''8.02 crores) to the Provident Fund Trust, has been expensed under “Contribution to Provident and Other Funds”. Disclosures given hereunder are restricted to the information available as per the Actuary’s report.

b) “Exercise Date “means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) “Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) “Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of ''1/- per Share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c)balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of Grant of options: 9th November, 2016, 9th November, 2017, 9th November, 2019, 10th February, 2021,8th November, 2021, 17th October, 2022 and 8th November, 2023.

Note 46. Share based payment to employees

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 [‘the Plan’] was approved at the Annual General Meeting of the Company held on 3rd August, 2016. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) “Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b. Company as Lessor

(i) Vide order dated October 01,1998, the Hon''ble High Court of Calcutta had approved the Scheme of Amalgamation of Rajdoot Paints Private Limited with the Company with effect from October 01, 1998. In terms of said order, all the aforesaid leasehold land parcels held by Rajdoot Paints Private Limited was transferred to the Company. Management believes that, vide the approved Scheme of Amalgamation, the rights and obligations under respective lease arrangements were transferred in favour of the Company and no further action is necessary for the purpose.

(ii) Renewal of lease with West Bengal Government in respect of a piece of land comprising about 0.08 acres at Howrah is under process since September 26, 2017.

(iii) The Company has received the allotment in its name and execution of lease deed in respect of 80 acres in Odisha is in process.

The Company has given Color bank (tinting machines) on operating lease to its dealers. The Company enters into 2- 5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a shorter period or may be waived off/refunded on achievement of certain sales targets by the concerned dealers. The minimum aggregate lease payments to be received in future is considered as '' Nil. Accordingly the disclosure of the minimum lease payments receivable at the Balance sheet date is not made. The amounts received from customers pending to be refunded back are recognised as liabilities. Also refer Note 4.

Note 48. Commitment and Contingent Liabilities

a. Commitments

			'' in Crores
		As at March 31, 2024	As at March 31, 2023
	Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)	106.83	112.23
b.	Contingent Liabilities
	Claims against the Company not acknowledged as debts:
	(i) Legal claim contingency		'' in Crores
	Particulars	As at March 31, 2024	As at March 31, 2023
	Sales Tax, Entry Tax, VAT	9.89	20.16
	Excise Duty, Service Tax, Customs	35.99	51.73
	Goods and Service Tax	17.10	2.57
	Income Tax	8.65	16.07
	Other matter	1.64	-
		73.27	90.53

The Company has exposures towards litigation/disputes relating to various matters as set out in the above note. Since the ultimate outcome of these matters are uncertain, the Company has exercised significant judgement to determine the probability of future cash outflow for these matters and has accordingly taken provisions wherever necessary. The management judgement is also supported with legal advice in certain matters as considered appropriate.

The above guarantees have been given against loan utilised by the borrowing company and credit availed from vendors for their business activities. Also refer Note 49b.

(iv) Others

The Company continues to provide such support as may be necessary to its subsidiaries Berger Rock Paints Private Limited and Berger Paints (Cyprus) Limited [including to the ultimate wholly owned Russian subsidiary Berger Paint Overseas Limited (BPOL)], Lusako Trading Limited [including to the ultimate wholly owned Polish subsidiary Bolix S.A] and joint venture (Berger Nippon Paint Automotive Coatings Pvt. Ltd.) to enable them to continue atleast with their present scale of operations and meet their financial commitments as and when they arise.

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel. No share options have been granted to the non-executive members of the Board of Directors under this scheme.

Refer to Note 46 for further details of the scheme.

Notes:

Terms and conditions of transactions with related parties:

Transactions relating to dividend were on the same terms and conditions that applied to other shareholders. The sales to and purchases from related parties are made in the ordinary course of business and at arm''s length prices. Outstanding balances at the year-end except loan given to a subsidiary are unsecured and interest free and settlement occurs in cash. No provisions are held against receivables from related parties.

Note 50. Segment Information

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products, production process , regulatory environment , customers and distribution methods there are no reportable segment(s) other than “Paints”. The Business Process and Risk Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Business Process and Risk Management

Committee. The financial information presented to the Business process and Risk Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products of the Company. As the Company''s business activity falls within a single business segment viz. ‘Paints'' and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 “Operating Segments”.

Note 51. Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below: Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(b) Financial instruments at amortized cost

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

(c) During the year there has been no transfer from one level to another.

(d) In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements, as applicable, has been considered. These risks in respect of climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing value-in-use amounts. At present, the impact of climate-related matters is not material to the Company''s financial statements.

Note 52. Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company''s working capital requirements . The Company has various financial assets such as trade receivables, loans, investments, short-term deposits and cash & cash equivalents, which arise directly from its operations. The Company may enter into derivative transactions by way of forward exchange contracts to hedge its payables.

Risk Management Framework

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s Board of Directors oversees the management of these risks. The Company''s Board of Directors is supported by the Business Process and Risk Management Committee (BPRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The BPRMC provides assurance to the Company''s Board of Directors that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by personnels that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board has taken all necessary actions to mitigate the risks identified on the basis of the information and situation present. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market factors. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk , liquidity risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and financial derivative.

The sensitivity analysis in the following sections relate to the position as at March 31, 2024 and March 31,2023.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant at March 31,2024.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations.

The following assumptions have been made in calculating the sensitivity analyses:

> The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2024 and March 31,2023

> The sensitivity of equity is calculated as at March 31, 2024 for the effects of the assumed changes of the underlying risk

(ii) Interest rate risk

The Company has incurred short term debt to finance its working capital , which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk. Borrowing issued at fixed rates expose the Company to fair value interest rate risk. The Company''s interest rate risk management policy includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt through evaluation of various bank loans and money market instruments.

The Company does not have any significant variable rate interest bearing liabilities as at March 31,2024 and March 31,2023, hence there would not be any material impact on pretax profit and pre tax equity of the Company on account of any anticipated fluctuations in interest.

(iii) Foreign currency risk

The Company has a policy wherein it can enter into foreign exchange forward contracts to manage risk of foreign exchange fluctuations. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates of any currency . The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities by way of direct imports or financing of imports through foreign currency instruments.

There are no outstanding derivative contract as at March 31,2024 and March 31,2023.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD/Euro exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material.

The concentration of Credit Risk is limited as the customer base is large. There is no customer representing more than 10% of the total balance of trade receivable. As a practical expedient, the Company computes credit loss allowances based on a provision matrix. The provision matrix is prepared based on historically observed default rates over expected life of trade receivable and is adjusted for forward looking estimates. The Company believes that the current value of trade receivables reflects the fair value/ recoverable values.

Trade receivables and contract assets if any

Customer credit risk is managed by the management subject to the Company''s established policy, procedures and control relating to customer credit risk management. Individual credit limits are defined in accordance with credit quality of customers as assessed by the management. Outstanding customer receivables are regularly monitored and corrective actions are taken, as required.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company''s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Business Process and Risk Management Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

(vii) Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning analysis.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers'' credit facilities. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt.

(iv) Commodity price risk

The Company doesn''t enter into any long term contract with its suppliers for hedging its commodity price risk

(v) Equity price risk

The Company does not have any investments in listed securities or in Equity Mutual Funds and thereby is not exposed to any Equity price risk.

(vi) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments, as applicable.

Note 53. Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company avails short term borrowings to bridge its working capital gap and finances its capital expenditure through internal generation of funds. The Company has a generally low debt equity ratio.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements, if any. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2024 and March 31,2023.

Note 55. A. Additional regulatory information required by Schedule III to the Companies Act, 2013

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

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

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

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

(v) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

(vi) The Company has complied with the number of layers prescribed under (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017

(vii) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Parent Company (Ultimate Beneficiaries) or

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

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

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(ix) The Company does not have any transactions with companies struck off.

(x) Quarterly returns or statements of current assets filed by the Company with the banks in connection with the working capital limit sanctioned are in agreement with the books of accounts except as mentioned in Note 26.

Note 55. B. Disclosure as per Section 186 of the Companies Act, 2013

The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

(i) Details of Investments made are given in Note 7.

(ii) Details of Loans given are disclosed in Note 9 and Note 18.

(iii) Details of Guarantees given are disclosed in Note 48(b)(iii).

Note 56.

The Company has used accounting software(s) for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software(s), except that audit trail feature is not enabled for direct changes to data for users with certain privileged access rights to the Oracle application and the underlying database and in respect of Darwin box application (software used by the Company to maintain payroll records and operated by a third party software service provider), in absence of Service Organisation Controls report, management is unable to determine whether audit trail feature of the underlying database was enabled and operated throughout the year. Further no instance of audit trail feature being tampered with was noted in respect of accounting software(s) except that in absence of Service Organisation Controls report, we are unable to assess the same in respect of the software used to maintain payroll records.

Note 57.

All figures are in Rupees Crores unless otherwise stated. Figures marked with (*) are below the rounding off norm adopted by the Company.

Note 58.

There were no significant adjusting events after end of the reporting period which require any adjustment or disclosure.

---

Mar 31, 2023

Securities Premium - Premium received on equity shares issued including those under Employee Stock Option Plan are recognised in the securities premium account net of utilization for bonus shares issued. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

Retained Earnings - Retained earnings includes surplus in the Statement of Profit and Loss, Ind-AS related adjustments as on the date of transition, remeasurement gains/ losses on defined benefit plans less any transfer to general reserve, dividends or other distributions paid to shareholders.

General Reserve - Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations, to ensure that if a dividend distribution in a given year is more than 10% of the paid up capital of the Company for that year, the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Share based payment reserve - The Company has an employee stock option plan (ESOP) under which options to subscribe for the Company’s shares have been granted to specific employees. The Share based payment reserve is used to recognise the value of equity-settled share-based payments to employees as part of their remuneration. The year end balance is net off options exercised by the concerned employees. Refer to Note 44 for further details of these plans.

Capital redemption reserve - Represents amount equal to the face value of equity shares transferred at the time of buy-back of shares in earlier years.

Capital Reserve - Includes profit on re-issue of forfeited shares.

(i) Judgements, Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company’s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the Financial Statements.

(ii) Defined Employee Benefit plans (Refer Note 3.15)

Note 41. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details Refer Note 43.

(iii) Fair value measurement of financial instruments and guarantees (Refer Note 3.20)

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 49 for further disclosures.

(iv) Depreciation on Property, Plant and Equipment (Refer Note 3.7)

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The Company also considers the impact of health, safety and environmental legislation in its assessment of expected useful lives and estimated residual values.

(v) Impairment allowance on trade receivables (Refer Note 3.4)

The Company makes loss allowances for credit impaired debts based on an assessment of the recoverability of trade and other receivables. The identification of credit impaired debts enquires use of judgments and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and credit impaired debts expenses in the period in which such estimate has been changed.

Note 42 (a). Significant accounting judgements, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods.

(vi) Decommissioning Liability (Refer Note 3.7)

Decommissioning Liability has been recognised for items of property, plant and equipment built or installed on specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the lease prior to handing over to the lessor. The decommissioning costs as at the end of the lease period have been estimated based on current costs by the Company''s own technical experts and have been escalated to the end of the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now discounted to the present value of such liability by applying Company''s weighted average cost of capital.

(vii) Impairment of Investment (Refer Note 3.13)

The carrying amount of the Company’s investments are assessed at the end of each reporting period to determine whether there is any indication that an asset may be impaired. If any such indication exists, then the Company estimates the recoverable amount of the asset. The recoverable amount of the asset is computed as the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use. Such value is derived using valuation techniques (i.e. the Discounted Cash Flow (DCF) model), where future financial performance can be reliably estimated or management’s best estimate of the estimated fair value of the carrying value of assets and liabilities. The inputs to the Discounted Cash Flow models are taken from observable markets where possible, but where this is not feasible, a degree ofjudgment is required in establishing fair values. Key assumptions on which management has based its determination of recoverable amount includes estimated long term growth rates, weighted average cost of capital etc. Cash flow projections take into account past experience and represent management''s best estimate about future developments. The risks in respect of climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing value-in-use amount.

The Company had in respect of its investment in Lusako Trading Limited, STP Limited and Berger Nippon Paint Automotive Coatings Private Limited undertaken an impairment assessment. The Management has determined following assumptions for impairment testing of investments:

Sensitivity analysis of assumptions

The Company had performed sensitivity analysis considering /- 2% for each of the assumptions used and ensured that the valuation is appropriate and no impairment is required to be recognised.

(viii) Revenue from combined contracts (Refer Note 3.4)

The Company exercises judgement in estimating cost for recognizing revenue from combined contract with customers. Losses on onerous contracts (if any) are recognized in the financial statements.

Note 42 (b):

On September 07, 2022, the Company had a cyber security attack on its ancillary applications. The Company promptly took steps to contain and remediate the impact of the information security incident, including deployment of appropriate protective, detective and corrective measures and containment protocols to mitigate the threat. The Company also took additional measures to ensure the integrity of its IT systems'' infrastructure/data.

Since the main ERP software of the Company remained unimpacted, there was no financial loss with respect to underlying financial/ accounting information/data (including sales and invoicing). Remedial measures were implemented immediately to prevent horizontal spread of the malicious infection further into the ecosystem. The disruption in associated applications had caused discomfort in regular operations, however, during the outage, business had continued to operate manually as per defined processes. The Company believes that there is no impact on its financial statements for the year ended March 31, 2023 on account of this incident.

(v) Risk Exposure

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk and Salary Risk.

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

Interest Risk: A decrease in the government bond interest rate will increase the plan liability.

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

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

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India the return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets is funded by the Company on a yearly basis.

(vii) The Company expects to contribute an amount to gratuity as specified in report by Fund custodian during the subsequent accounting year.Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through "Berger Paints Provident Fund (Covered)" as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the employer, any shortfall in the rate of interest on member contributions as compared to the relevant rate of interest declared by the Government of India for this purpose will have to be met by the employer. Such provident fund would in effect be a defined benefit plan in accordance with the requirement of Ind AS 19 - Employee Benefits.

The Actuary has carried out actuarial valuation of interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method as outlined in the Professional Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regards to interest rate guarantee obligation of the Company as at the balance sheet date.

Note 44. Share based payment to employees

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 [‘the Plan’] was approved at the Annual General Meeting of the

Company held on 3rd August, 2016. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan

is reproduced below:

a) “Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) “Exercise Date” means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) “Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) “Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of ''1/- per Share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule: a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of grant of options : 9th November, 2016, 9th November, 2017, 9th November, 2019, 10th February, 2021, 8th November, 2021 and 17th October, 2022.

(i) Vide order dated October 01, 1998, the Hon’ble High Court of Calcutta had approved the Scheme of Amalgamation of Rajdoot Paints Private Limited with the Company with effect from October 01, 1998. In terms of said order, all the aforesaid leasehold land parcels held by Rajdoot Paints Private Limited was transferred to the Company. Management believes that, vide the approved Scheme of Amalgamation, the rights and obligations under respective lease arrangements were transferred in favour of the Company and no further action is necessary for the purpose.

(ii) The Company has obtained the allotment letter in its name and execution of lease deed in respect of 9.91 acres of land at Panagarh Industrial Park is in process.

(iii) Renewal of lease with West Bengal Government in respect of a piece of land comprising about 0.08 acres at Howrah is under process since September 26, 2017.

b. Company as Lessor

The Company has given Color bank (tinting machines) on operating lease to its dealers. The Company enters into 2- 5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a shorter period or may be waived off/refunded on achievement of certain sales targets by the concerned dealers. The minimum aggregate lease payments to be received in future is considered as '' Nil. Accordingly the disclosure of the minimum lease payments receivable at the Balance sheet date is not made. The amounts received from customers pending to be refunded back are recognised as liabilities and are included in "Deposits" under "Other financial liabilities" in Note 21 and Note 27. Also refer Note 4.

Note 46. Commitment and Contingent Liabilities a. Commitments '' in Crores
	Particulars			Year ended March 31, 2023		Year ended March 31, 2022
	Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)			112.23		435.21
	b. Contingent Liabilities (i) Claims against the Company not acknowledged as debts: '' in Crores
	Legal claim contingency			Year ended March 31, 2023		Year ended March 31, 2022
	Sales Tax			20.16		25.22
	Excise Duty, Service Tax, Customs			51.73		37.44
	Goods and Service Tax			2.57		3.33
	Income Tax			16.07		16.08
	Total			90.53		82.07
	The Company has exposures towards litigation/disputes relating to various tax matters as set out in the above note. Since the ultimate outcome of these matters are uncertain, the Company has exercised significant judgement to determine the probability of future cash outflow for these matters and has accordingly taken provisions wherever necessary. The management judgement is also supported with legal advice in certain matters as considered appropriate. '' in Crores
		Particulars		Year ended March 31, 2023		Year ended March 31, 2022
	ii.	Guarantees excluding corporate guarantees
		Outstanding Bank Guarantees		141.49		127.16
	iii.	Corporate guarantees
		Corporate guarantees issued by the Company to certain banks for loans taken by certain subsidiaries and a joint venture. Total value of guarantee provided by the Company is ''102.00 Crores (March 31, 2022: ''227.73 Crores) and the outstanding balance of loan in the books of subsidiaries and joint venture is '' 46.14 Crores (March 31, 2022: ''122.93 Crores) which has been disclosed under contingent liabilities		46.14		122.93
Details of Guarantees given are as below: '' in Crores
	Name of Related parties		As at March 31, 2023		As at March 31, 2022
	Lusako Trading Limited		-		66.33
	STP Limited		44.66		55.11
	Berger Hesse Wood Coatings Private Limited		1.48		1.49
	Total		46.14		122.93
The above guarantees have been given against loan utilised by the borrowing company for their business activities. Also refer Notes 27 and 47b.

iv. The Company had mortgaged land & building located at Howrah, Rishra, Hindupur and Head Office building at Park Street in relation to loan extended by Hongkong and Shanghai Bank (HSBC) to its wholly owned subsidiary, M/s Lusako Trading Limited. Also refer Note-47(b).Such mortgage was released in the current financial year subsequent to repayment of loan.

v. Others

The Company continues to provide such support as may be necessary to its subsidiaries Berger Rock Paints Private Limited and Berger Paints (Cyprus) Limited [including to the ultimate wholly owned Russian subsidiary Berger Paint Overseas Limited (BPOL)], Lusako Trading Limited [including to the ultimate wholly owned Polish subsidiary Bolix S.A] and joint venture (Berger Nippon Paint Automotive Coatings Pvt. Ltd.) to enable them to continue atleast with their present scale of operations and meet their financial commitments as and when they arise.

Notes:

Terms and conditions of transactions with related parties:

Transactions relating to dividend were on the same terms and conditions that applied to other shareholders. The sales to and purchases from related parties are made in the ordinary course of business and at arm’s length prices. Outstanding balances at the year-end except loan given to a subsidiary are unsecured and interest free and settlement occurs in cash. No provisions are held against receivables from related parties.

Note 48. Segment Information

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products, production process, regulatory environment, customers and distribution methods there are no reportable segment(s) other than "Paints".

The Business Process and Risk Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Business Process and Risk Management Committee. The financial information presented to the Business Process and Risk Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products of the Company. As the Company’s business activity falls within a single business segment viz., ‘Paints’ and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 “Operating Segments”.

Note 49. Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below:-Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(b) Financial instruments at amortized cost

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

(c) During the year there has been no transfer from one level to another.

(d) In determining fair value measurement, the impact of potential climate-related matters, including legislation, which may affect the fair value measurement of assets and liabilities in the financial statements, as applicable, has been considered. These risks in respect of climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing value-in-use amounts. At present, the impact of climate-related matters is not material to the Company’s financial statements.

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company''s working capital requirements. The Company has various financial assets such as trade receivables, loans, investments, short-term deposits and cash & cash equivalents, which arise directly from its operations. The Company may enter into derivative transactions by way of forward exchange contracts to hedge its payables.

Risk Management Framework

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks. The Company’s Board of Directors is supported by the Business Process and Risk Management Committee (BPRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The BPRMC provides assurance to the Company’s Board of Directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by personnel that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board has taken all necessary actions to mitigate the risks identified on the basis of the information and situation present. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market factors. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk , liquidity risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and financial derivative.

The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant at March 31, 2023.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations.

The following assumptions have been made in calculating the sensitivity analyses:

? The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

? The sensitivity of equity is calculated as at March 31, 2023 for the effects of the assumed changes of the underlying risk.

(ii) Interest rate risk

The Company has incurred short term debt to finance its working capital , which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk. Borrowing issued at fixed rates expose the Company to fair value interest rate risk. The Company''s interest rate risk management policy includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt through evaluation of various bank loans and money market instruments.

The Company does not have any significant variable rate interest bearing liabilities as at March 31, 2023 and March 31, 2022, hence there would not be any material impact on pre-tax profit and pre tax equity of the Company on account of any anticipated fluctuations in interest.

(iii) Foreign currency risk

The Company has a policy of entering into foreign exchange forward contracts to manage risk of foreign exchange fluctuations on borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates of any currency. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities by way of direct imports or financing of imports through foreign currency instruments.

The Company proactively hedged its currency exposures in case of a significant movement in exchange rates for imports and in case the hedged cost of foreign currency instrument is lower than the domestic cost of borrowing in case of short term import financing.

There are no outstanding derivative contract as at March 31, 2023 and March 31, 2022.

(vi) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments, as applicable.

The concentration of Credit Risk is limited as the customer base is large. There is no customer representing more than 5% of the total balance of trade receivable. As a practical expedient, the Company computes credit loss allowances based on a provision matrix. The provision matrix is prepared based on historically observed default rates over expected life of trade receivable and is adjusted for forward looking estimates. Additionally, considering the COVID-19 situation, the Company has also assessed the performance and recoverability of trade receivables. The Company believes that the current value of trade receivable reflects the fair value/ recoverable values.

(iv) Commodity price risk

The Company doesn’t enter into any long term contract with its suppliers for hedging its commodity price risk.

(v) Equity price risk

The Company does not have any investments in listed securities or in Equity Mutual Funds and thereby is not exposed to any Equity price risk.

Trade receivables and contract assets if any

Customer credit risk is managed by the management subject to the Company’s established policy, procedures and control relating to customer credit risk management. Individual credit limits are defined in accordance with credit quality of customers as assessed by the management. Outstanding customer receivables are regularly monitored by BPRMC and corrective actions are taken..

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Business Process and Risk Management Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(vii) Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning analysis.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers'' credit facilities. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt.

Note 53 (A)- Additional regulatory information required by Schedule III to The Companies Act, 2013

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

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

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

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

(v) The Company does not have any pending charges which is yet to be registered with the Registrar of Companies beyond the statutory period. There are instances amounting to ''130.16 Crores in the aggregate in respect of 14 banks for periods ranging between 14 to 40 years where the Company is yet to receive charge satisfaction letter from the respective banks pending which the charges are yet to be filed with the Registrar of Companies.

(vi) The Company has complied with the number of layers prescribed under (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

(vii) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Parent Company (Ultimate Beneficiaries) or

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

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

(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

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

(ix) The Company does not have any transactions with companies struck off.

(x) Quarterly returns or statements of current assets filed by the Company with the banks in connection with the working capital limit sanctioned are in agreement with the books of accounts.

Note 53 (B)- Disclosure as per Section 186 of The Companies Act, 2013

The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:

(i) Details of Investments made are given in Note 7.

(ii) Details of Loans given are disclosed in Note 8.

(iii) Details of Guarantees given are disclosed in Note 46(b)(iii).

Note 54

Previous year figures have been regrouped, wherever necessary, to confirm to the current years presentation.

Note 55

All figures are in Rupees Crores unless otherwise stated.Figures marked with (*) are below the rounding off norm adopted by the Company.

Note 56

There were no significant adjusting events after end of the reporting period which require any adjustment or disclosure in the financial statements subsequent to the reporting period.

---

Mar 31, 2022

Securities Premium - Premium received on equity shares issued including those under Employee Stock Option Plan are recognised in the securities premium account net of utilization for bonus shares issued.

Retained Earnings - Retained earnings includes surplus in the Statement of Profit and Loss, Ind-AS related adjustments as on the date of transition, remeasurement gains/ losses on defined benefit plans less any transfer to general reserve, dividends or other distributions paid to shareholders.

General Reserve - Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations, to ensure that if a dividend distribution in a given year is more than 10% of the paid up capital of the Company for that year, the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

Share Based Payment Reserve - The Company has an Employee Stock Option Plan (ESOP) under which options to subscribe for the Company’s shares have been granted to specific employees. The Share Based Payment Reserve is used to recognise the value of equity-settled share-based payments to employees as part of their remuneration. The year end balance is net off options exercised by the concerned employees. Refer to Note 44 for further details of these plans.

Capital Redemption Reserve - Represents amount equal to the face value of equity shares transferred at the time of buy-back of shares. Capital Reserve - Includes profit on re-issue of forfeited shares.

The Company had in earlier years provided for impairment amounting to ''71.40 crores in the carrying value of its investment in its wholly owned subsidiary, Berger Paints Cyprus Limited (BPCL) on account of losses sustained by the ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL) due to downturn in Russian economy which were reflected in the consolidated financial position of the Company. BPOL continued to make losses and hence, the Company had made an assessment of the fair value less costs to sell of the investments in Berger Paints Overseas Limited taking into account management’s best estimate of the estimated fair value less costs to sell of the carrying value of assets and liabilities of the wholly owned subsidiary. Based on such assessment and improvement in performance of BPOL during the year ended December 31, 2021, no further provision has been considered necessary in this regard. Management believes that the ongoing conflict between Ukraine and Russia will not adversely impact the subsidiary''s future performance but will continue to closely monitor such performance and assess impact thereof on the carrying value of the Company''s investment.

Note 41. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Note 42. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s Ind AS financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods.

(i) Judgements, Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company’s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the Ind AS Financial Statements.

(ii) Defined Employer Benefit plans (Refer Note 3.15)

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details refer Note 43.

(iii) Fair value measurement of financial instruments and guarantees (Refer Note 3.20)

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 49 for further disclosures.

(iv) Depreciation on Property, Plant and Equipment (Refer Note 3.7)

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology. The Company also considers the impact of health, safety and environmental legislation in its assessment of expected useful lives and estimated residual values.

(v) Impairment allowance on trade receivables (Refer Note 3.4)

The Company makes loss allowances for credit impaired debts based on an assessment of the recoverability of trade and other receivables. The identification of credit impaired debts enquires use of judgments and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and credit impaired debts expenses in the period in which such estimate has been changed.

(vi) Decommissioning Liability (Refer Note 3.7)

Decommissioning Liability has been recognised for items of property plant and equipment built or installed on specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the lease prior to handing over to the lessor. The decommissioning costs as at the end of the lease period have been estimated based on current costs by the Company''s own technical experts and have been escalated to the end of the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now discounted to the present value of such liability by applying Company''s weighted average cost of capital.

(vii) Impairment of Investment (Refer Note 3.13)

The carrying amount of the Company’s investments are assessed at the end of each reporting period to determine whether there is any indication that an asset may be impaired. If any such indication exists, then the Company estimates the recoverable amount of the asset. The recoverable amount of the asset is computed as the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use. Such value is derived using valuation techniques [i.e., the Discounted Cash Flow (DCF) model], where future financial performance can be reliably estimated or management’s best estimate of the estimated fair value of the carrying value of assets and liabilities. The inputs to the Discounted Cash Flow models are taken from observable markets where possible, but where this is not feasible, a degree ofjudgment is required in establishing fair values. Key assumptions on which management has based its determination of recoverable amount includes estimated long term growth rates, weighted average cost of capital, estimated operating margins etc. Cash flow projections take into account past experience and represent management''s best estimate about future developments. Details about impairment of investment recognised in the previous year has been further explained in Note 40.3.

(viii) Revenue from combined contracts (Refer Note 3.4)

The Company exercises judgement in estimating cost for recognizing revenue from combined contract with customers. Losses on onerous contracts (if any) are recognized in the financial statements.

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk Exposure

Since the employees gratuity fund is a defined benefit plan the liability to be provided will be subject to interest rate risk since the future valuation of benefit depends upon the yield of government bonds for matching maturities.

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India the return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets is funded by the Company on a yearly basis.

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through "Berger Paints Provident Fund (Covered)" as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the employer, any shortfall in the rate of interest on member contributions as compared to the relevant rate of interest declared by the Government of India for this purpose will have to be met by the employer. Such provident fund would in effect be a defined benefit plan in accordance with the requirement of Ind AS 19 - Employee Benefits.

The Actuary has carried out actuarial valuation of interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method as outlined in the Professional Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regards to interest rate guarantee obligation of the Company as at the balance sheet date. Further during the year, the Company’s contribution of ''7.19 crores (March 31,2021: ''6.25 crores) to the Provident Fund Trust, has been expensed under “Contribution to Provident and Other Funds”. Disclosures given hereunder are restricted to the information available as per the Actuary’s report.

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 (‘the Plan’) was approved at the Annual General Meeting of the

Company held on 3rd August, 2016. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of

the Plan are reproduced below:

a) “Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) “Exercise Date “means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) “Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) “Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of ''1/- per Share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule: a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

b. Company as Lessor

The Company has given color bank (tinting machines) on operating lease to its dealers. The Company enters into 2- 5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a shorter period or may be waived off/refunded on achievement of certain sales targets by the concerned dealers. The minimum aggregate lease payments to be received in future is considered as '' Nil. Accordingly the disclosure of the minimum lease payments receivable at the Balance Sheet date is not made. The amounts received from customers pending to be refunded back are recognised as liabilities and are included in "Deposits" under "Other financial liabilities" in Note 21 and Note 27. Also refer Note 4.

The Company has been advised by its lawyers that none of the claims are tenable and hence these are being contested and no provision in the books have been considered necessary for these matters. The future cash flows on account of the above cannot be determined unless the judgements/decisions are received from the ultimate judicial forums. No reimbursements is expected to arise to the Company in respect of above cases.

The above guarantees have been given against loan utilised by the borrowing company for their business activities. Also refer Notes 27 and 47.

vi. Others

The Company continues to provide such support as may be necessary to its subsidiaries Berger Rock Paints Private Limited and Berger Paints (Cyprus) Limited [including to the ultimate wholly owned Russian subsidiary Berger Paint Overseas Limited (BPOL)], Lusako Trading Limited and joint venture (Berger Nippon Paint Automotive Coatings Pvt. Ltd.) to enable them to continue atleast with their present scale of operations and meet their financial commitments as and when they arise.

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel. No share options have been granted to the non-executive members of the Board of Directors under this scheme.

Refer to Note 44 for further details of the scheme.

Notes:

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash except as otherwise mentioned.

Note 48. Segment Information

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products, production process, regulatory environment, customers and distribution methods there are no reportable segment(s) other than "Paints". The Business Process and Risk Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Business Process and Risk Management Committee. The financial information presented to the Business Process and Risk Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products of the Company. As the Company’s business activity falls within a single business segment viz. ‘Paints’ and the sales substantially being in the domestic market, the Ind AS financial statement are reflective of the information required by Ind AS 108 “Operating Segments”.

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below:-Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(b) Financial instruments at amortized cost

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

(c) During the year there has been no transfer from one level to another.

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company''s working capital requirements . The Company has various financial assets such as trade receivables, loans, investments, short-term deposits and cash & cash equivalents, which arise directly from its operations. The Company enters into derivative transactions by way of forward exchange contracts to hedge its payables.

Risk Management Framework

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks. The Company’s Board of Directors is supported by the Business Process and Risk Management Committee (BPRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The BPRMC provides assurance to the Company’s Board of Directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by personnel that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board has taken all necessary actions to mitigate the risks identified on the basis the information and situation present. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market factors. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk , liquidity risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and financial derivative.

The sensitivity analysis in the following sections relate to the position as at March 31,2022 and March 31, 2021.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant at March 31, 2022.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations.

The following assumptions have been made in calculating the sensitivity analysis:

? The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2022 and March 31, 2021.

? The sensitivity of equity is calculated as at March 31, 2022 for the effects of the assumed changes of the underlying risk.

(ii) Interest rate risk

The Company has incurred short term debt to finance its working capital, which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk. Borrowing issued at fixed rates expose the Company to fair value interest rate risk. The Company''s interest rate risk management policy includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt through evaluation of various bank loans and money market instruments.

The Company does not have any significant variable rate interest bearing liabilities as at March 31, 2022 and March 31, 2021, hence there would not be any material impact on pretax profit and pre tax equity of the Company on account of any anticipated fluctuations in interest.

(iii) Foreign currency risk

The Company has a policy of entering into foreign exchange forward contracts to manage risk of foreign exchange fluctuations on borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates of any currency . The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities by way of direct imports or financing of imports through foreign currency instruments.

The Company proactively hedged its currency exposures in case of a significant movement in exchange rates for imports and in case the hedged cost of foreign currency instrument is lower than the domestic cost of borrowing in case of short term import financing.

There is no outstanding derivative contract as at March 31, 2022 and March 31,2021.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD/Euro exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

(iv) Commodity price risk

The Company doesn’t enter into any long term contract with its suppliers for hedging its commodity price risk.

(v) Equity price risk

The Company does not have any investments in listed securities or in Equity Mutual Funds and thereby is not exposed to any Equity price risk.

(vi) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments.

The concentration of Credit Risk is limited as the customer base is large. There is no customer representing more than 5% of the total balance of trade receivable. As a practical expedient, the Company computes credit loss allowances based on a provision matrix. The provision matrix is prepared based on historically observed default rates over expected life of trade receivable and is adjusted for forward looking estimates. Additionally, considering the COVID 19 situation, the Company has also assessed the performance and recoverability of trade receivables. The Company believes that the current value of trade receivables reflects the fair value/ recoverable values.

'' in Crores
Movement in expected credit loss allowance on trade receivable	As at March 31, 2022	As at March 31, 2021
Balance at the beginning of the year	16.88	6.85
Loss allowance/(reversal) measured at lifetime expected credit losses (net of bad debts)	2.13	10.03
Balance at the end of the year	19.01	16.88

Trade receivables and contract assets if any

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored by BPRMC and corrective actions taken.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(vii) Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning analysis.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers'' credit facilities. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt.

Note 51. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2022 and March 31, 2021. .

@ Increase in debt equity ratio is on account of increase in short term borrowings by the Company during the year ended March 31,2022.

@@ Increase in net capital turnover ratio is on account of increase in revenue from operations for the year ended March 31, 2022, however, there has been decrease in net working capital due to increase in short term borrowings.

Note 53 (A). COVID -19 Assessment

During the year, the Company’s business operations were initially impacted due to COVID-19 pandemic and consequent lockdowns. While the pandemic situation has improved significantly in the last nine months of the current year, the Company is closely monitoring the uncertainties arising from continuing COVID-19 pandemic and has taken into consideration possible effects of such pandemic for preparation of these financial statements, including assessment of recoverability of its assets based on the internal and external information upto the date of approval of the financial statements. The Company will also continue to monitor any material impact of future economic conditions.

Note 53 (B). Social Security Code

The Indian Parliament has approved the Code on Social Security, 2020 (''the Code'') which, inter alia, deals with employee benefits during employment and post employment. The Code has been published in the Gazette of India. The effective date of the Code is yet to be notified and the rules for quantifying the financial impact are also yet to be issued. In view of this, the impact of the change, if any, will be assessed and recognized post notification of the relevant provisions.

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

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

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

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

(v) The Company does not have any charges or satisfaction of charges which is yet to be registered with Registrar of Companies beyond the statutory period.

(vi) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities ("Intermediaries") with the understanding (whether recorded in writing or otherwise) that the Intermediary shall, whether directly or indirectly lend or invest in other persons/entities identified in any other manner whatsoever by or on behalf of the Company (''ultimate beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries other than investments aggregating ''5.08 crores (including share application money pending allotment) given during the year to Berger Paints (Cyprus) Limited, a subsidiary and an investment of the Company in the ordinary course of business and in keeping with the applicable regulatory requirements for onward funding to an overseas step-down subsidiary of the Company towards meeting their business requirements. Accordingly no further disclosures, in this matter has been given.

(vii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities ("Funding party") with the understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding party (ultimate beneficiaries); or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(viii) The Company does not have any transactions with companies struck off.

(ix) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

Note 54 (B). Disclosure as per Section 186 of The Companies Act, 2013

The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of

Board and its Powers) Rules, 2014 are as follows:

(i) Details of Investments made are given in Note 7.

(ii) Details of Loans given are disclosed in Note 8.

(iii) Details of Guarantees given are disclosed in Note 46(b)(iii).

Note 55.

All figures are in Rupees Crores unless otherwise stated. Figures marked with (*) are below the rounding off norm adopted by the Company.

Note 56.

Previous year figures have been regrouped, wherever necessary, to confirm to the current years presentation.

---

Mar 31, 2019

1. Corporate Information

Berger Paints India Limited (‘BPIL’ or ‘the Company’) is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on three stock exchanges in India. The Company is engaged in the manufacturing and selling of paints. The Company caters primarily to domestic market. The registered office of the Company is located at Berger House, 129 Park Street, Kolkata-700 017.

These Ind AS financial statements were approved for issue in accordance with a resolution of the Board of directors on May 30, 2019.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013 (Ind AS compliant Schedule III), as applicable to the financial statements.

These Ind AS financial statements have been prepared on a historical cost basis, except for certain assets and liabilities which have been measured at fair values (refer accounting policy regarding financial instruments). The Ind AS financial statements are presented in INR and all values are rounded to the nearest crores in INR, except when otherwise indicated.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Note :

i) The Company has subscribed to 51% equity shares of Berger Rock Paints Private Limited (“Berger Rock”) representing 51% of the paid up equity share capital ofBerger Rock upon incorporation ofBerger Rock on September 25, 2018.

ii) The Company has acquired 51 % of the paid up equity share capital of Saboo Hesse Wood Coating Private Limited after close of business hours on January 28, 2019.

iii) During the previous year, the Company had acquired 100% of the paid up equity share capital of SBL Specialty Coatings Private Limited [formerly known as Saboo Coatings Private Limited (“SCPL”)] after close ofbusiness hours on June 5, 2017.

* Refer Note 41

# In the previous year, Excise duty disclosed in Statement of Profit and Loss for the three months period ended June 30, 2017 is net of excise duty benefit of Rs.8.16 crores. Subsequent to the implementation of GST w.e.f July 1,2017, the Company has claimed subsidy available under “Scheme of Budgetary Support under GST Regime to the eligible units” located in specified States amounting to Rs.51.60 crores (March 31, 2018: Rs.28.38 crores ).

b) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.1 each. Holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. 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.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares as declared under the relevant provisions of the Companies Act ,2013.

e) Shares reserved for issue under Employee Stock Options:

For details of shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company, refer Note 31.

Securities Premium - Premium received on equity shares issued including those under Employee Stock Option Plan are recognised in the securities premium account net of utilization for bonus shares issued.

Retained Earnings - Retained earnings includes surplus in the Statement of Profit and Loss, Ind-AS related adjustments as on the date of transition, remeasurement gains/ losses on defined benefit plans and Revaluation Reserve that had arisen from revaluation of Leasehold Land, Freehold Land and Freehold Buildings of the Company in 1989, 1985 and 1993 done by approved valuers. The aforementioned revaluation reserve is not a free reserve as per the Companies Act, 2013 and hence is not available for distribution as dividend.

General Reserve - Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations, to ensure that if a dividend distribution in a given year is more than 10% of the paid capital of the Company for that year, the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

Share based payment reserve - The Company has two Employee Stock Option Plans (ESOP) under which options to subscribe for the Company’s shares have been granted to specific employees.

The Share based payment reserve is used to recognise the value of equity-settled share-based payments to employees as part of their remuneration. The year end balance is net of options exercised by the concerned employees. Refer to Note 31 for further details of these plans.

Capital redemption reserve - Represents amount equal to the face value of equity shares transferred at the time ofbuy-back of shares.

During the year ended March 31, 2019 and March 31, 2018, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders.

Note 3a. Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31, 2019 and March 31, 2018:

Income tax on the Company’s taxable profit differs from the theoretical amount that would have arisen had the enacted rate of corporate tax in India (34.944%) being applied to such taxable profits as explained below :

Cash Credits from banks are secured by way of first charge on book debts and other current assets ranking pari passu between the lenders (first pari passu charge over entire current assets). Cash Credit is repayable on demand and carries interest at 7.30% to 12.10 % per annum (March 31, 2018: 7.30%-11.75% per annum).

Working Capital demand loan from banks are secured by way of first charge on book debts and other current assets ranking pari passu between the lenders (first pari passu charge over entire current assets). Working capital demand loan is repayable within April 30, 2019 and carries interest at 9.50% -10.25% per annum (March 31, 2018: Nil).

Commercial paper carries interest at 9.50% per annum (March 31, 2018: Nil) and is repayable by April 11, 2019.

Amendments to Ind AS 7 Statement of Cash Flows:

The amendments to Ind AS 7 require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative period is as under.

Terms and conditions of the above trade payables:

Trade payables are non interest bearing and are normally settled on 45-90 days terms. For terms and conditions of transactions with related parties, refer Note 34.

Revenue from operations for period up to June 30,2017 includes excise duty. From July 1,2017 onwards excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST from its customers on behalf of the Government and hence, GST is not included in Revenue from operations. Revenue from operations includes excise duty collected from customers of ‘ Nil (March 31, 2018: Rs.134.28 crores). Revenue from operations net of excise duty is Rs.5,515.55 (March 31, 2018 Rs.4,705.09 crores). In view of the aforesaid change in indirect taxes, Revenue from operations for year ended March 31,2019is not comparable with the amount reported for the year ended March 31,2018.

* Revenue from sale of products are recognised when goods are transferred at a point in time.

** Contract revenue is recognised over a period of time.

The Company had in an earlier year provided for impairment amounting to Rs.28 crores in the carrying value of its investment in its wholly owned subsidiary, Berger Paints Cyprus Limited (BPCL) on account of losses sustained by the ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL) due to downturn in Russian economy which were reflected in the consolidated financial position of the Company. BPOL continues to make losses and hence, the Company has made an assessment of the fair value less costs to sell off the investments in Berger Paints Overseas Limited taking into account management’s best estimate of the estimated fair value less costs to sell off the carrying value of assets and liabilities of the wholly owned subsidiary. Based on the above and as matter of prudence, a further provision of Rs.28.60 crores has been recognised in the current year towards impairment of such investment and has been accounted for as an exceptional item in the Statement of Profit and Loss.

Note 4. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following table reflects the income and earnings per share data used in the basic and diluted EPS computations:

Note 5. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s Ind AS financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets and liabilities affected in future periods.

Judgements, Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company’s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the Ind AS Financial Statements.

Defined Employer Benefit plans

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details refer Note 30.

Fair value measurement of financial instruments and guarantees

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree ofjudgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 36 for further disclosures.

Depreciation on Property, Plant and Equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company’s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

Decommissioning Liability

Decommissioning Liability has been recognised for items of property plant and equipment built or installed on specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the lease prior to handing over to the lessor. The decommissioning costs as at the end of the lease period have been estimated based on current costs by the Company’s own technical experts and have been escalated to the end of the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now discounted to the present value of such liability by applying Company’s weighted average cost of capital.

Impairment of Investment

The carrying amount of the Company’s investments are assessed at the end of each reporting period to determine whether there is any indication that an asset may be impaired. If any such indication exists, then the Company estimates the recoverable amount of the asset. The recoverable amount of the asset is computed as the higher of an asset’s or cash generating unit’s fair value less costs to sell and its value in use. Such fair value is derived using valuation techniques (i.e. the Discounted Cash Flow (DCF) model) or management’s best estimate of the estimated fair value of the carrying value of assets and liabilities. The inputs to the Discounted Cash Flow models are taken from observable markets where possible, but where this is not feasible, a degree ofjudgment is required in establishing fair values. Key assumptions on which management has based its determination of recoverable amount includes estimated long term growth rates , weighted average cost of capital, estimated operating margins etc. Cash flow projections take into account past experience and represent management’s best estimate about future development. Details about impairment of investments recognised during the year has been further explained in Note 26.3.

Note 6. Gratuity and other post-employment benefit plans

(I) Defined benefit plans

(a) Gratuity

(i) The following table summarizes the components of net defined benefit expense towards gratuity recognised in the Statement of Profit and loss and OCI and the funded status and amounts recognised in the Balance Sheet.

(ii) The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Actuary.

The discount rate is based on the government securities yield.

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards.

(iii) Major category of Plan Assets of the fair value of the total plan assets are as follows:-

(iv) A quantitative sensitivity analysis for significant assumptions are as shown below:

Impact on defined benefit obligation:

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk Exposure

Since the employees gratuity fund is a defined benefit plan, the liability to be provided will be subject to interest rate risk since the future valuation ofbenefit depends upon the yield of government bonds for matching maturities.

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India, the return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets is funded by the Company on a yearly basis.

(vii) In 2018-19, the Company expects to contribute Rs.1.43 crores (March 31, 2018: Rs.2.12 crores) to gratuity.

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through “Berger Paints Provident Fund (Covered)” as per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the employer, any shortfall in the rate of interest on member contributions as compared to the relevant rate of interest declared by the Goverment of India for this purpose will have to be met by the employer. Such provident fund would in effect be a defined benefit plan in accordance with the requirement of Ind AS 19- Employee Benefits.

The Actuary has carried out acturial valuation of interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deteministic Approach as outlined in the Professional Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regards to interest rate guarantee obligation of the Compay as at the balance sheet date. Further during the year, the Company’s contribution of Rs.5.76 crores (March 31, 2018: Rs.4.93 crores) to the Provident Fund Trust, has been expensed under “Contribution to Provident and Other Funds”. Disclosures given hereunder are restricted to the information available as per the Actuary’s report.

(c) Other Defined Benefit Plans

The amounts for “Other Defined Benefit Plans” are below the rounding off norm adopted by the Company (refer Note 41) and hence the disclosures as required under Ind AS 19- “Employee Benefits” have not been given.

(II) Defined contribution plans

During the year, the Company has recognised the following amounts in the Statement of Profit and Loss for defined contribution plans:

Note 7. Employee Stock Option Plan

Berger Paints India Limited Employee Stock Option Scheme, 2010

The Berger Paints India Limited - Employee Stock Option Plan [‘the Plan’] was approved at the Annual General Meeting of the Company held on 29th July, 2010. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) ”Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) ”Exercise Date “means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part ofhis Vested Options.

c) ”Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) ”Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of Rs.2/- per Share. However, due to sub-division of Company’s share from F.V of Rs.2/- to Rs.1/- w.e.f from 9th January, 2015, the Compensation & Nomination & Remuneration Committee made fair and reasonable adjustments with respect to ESOP’s earlier approved and granted by the Compensation & Nomination & Remuneration Committee.

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of grant of options :1st August, 2010.

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 [‘the Plan’] was approved at the Annual General Meeting of the Company held on 3rd August, 2016. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) ”Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) ”Exercise Date” means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part ofhis Vested Options.

c) ”Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) ”Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of Rs.1/- per share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of grant of options : 9th November, 2016.

Expected volatility during the expected term of the ESOP is based on historical volatility of the observed market prices of the Company’s publicly traded equity shares during a period equivalent to the expected term of the ESOP.

The fair values of our ESOP are based on the market value of our stock on the date of grant.

m. The following table summarizes information about Share Options outstanding as at year end:-

Note 8. Leases

Operating lease - Company as lessee

The Company’s leasing arrangements for various depots, offices etc are in the nature of operating leases which are cancellable at the option of the Company. These leases have a life between 1 year to 20 years ( March 31, 2018 - 1 year to 20 years ) which is renewable by mutual consent of concerned parties. No contingent rent is payable by the Company in respect of the above leases. Some of the lease agreements have price escalation clauses. Related lease rentals have been disclosed under the head “Rent” in Note 26 of Statement of Profit and Loss. There are no restrictions placed upon the Company by such leases.

Operating lease - Company as lessor

The Company has given Color Bank (tinting machines) on operating lease to its dealers. The Company enters into 3- 5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a shorter period or may be waived off/refunded on acheivement of certain sales targets by the concerned dealers.The minimum aggregate lease payments to be received in future is considered as ‘ Nil. Accordingly the disclosure of the minium lease payments receivable at the Balance sheet date is not made. The amounts received from customers pending to be refunded back are recognised as liabilities and are included in “Deposits” under “Other financial liabilities” in Note 12. Also refer note 4.

Note 9. Commitment and Contingencies

a. Commitments

b. Contingent Liabilities

(i) Claims against the Company not acknowledged as debts:

The Company has been advised by its lawyers that none of the claims are tenable and is therefore contesting the same and hence has not been provided for in the books. The future cash flows on account of the above cannot be determined unless thejudgements/decisions are received from the ultimatejudicial forums. No reimbursements is expected to arise to the Company in repect of above cases.

There are numerous interpretative issues relating to the Supreme Court (SC)judgement dated February 28, 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The impact is not expected to be material as per the assessment made by the Company.

a) The Company has mortgaged certain immovable properties with Standard Chartered Bank and has also created charge on certain fixed moveable assets with DBS Bank in relation to loan extended to its subsidiary, M/s Lusako Trading Limited.

b) The loan is utilised by the said subsidiary for its business purposes. Also refer note 12 and 34.

9a. Disclosure in respect of Related Parties pursuant to Ind AS 24 List of Related Parties

I. Parent and Subsidiary Companies:

II. Other related parties with whom transactions have taken place during the year: a) Key Management Personnel

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel. No share options have been granted to the non-executive members of the Board of Directors under this scheme. Refer to Note 31 for further details of the scheme.

* ReferNote 41

Refer Note 5a for details of investments held.

Notes:

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash except as otherwise mentioned.

Note 10. Segment Information

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products, production process, regulatory environment, customers and distribution methods there are no reportable segment(s) other than “Paints”.

Note 11. Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below:-Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

(b) Financial instruments at amortized cost

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

(c) During the year there has been no transfer from one level to another.

(d) Also refer note 17a and 17b.

Note 12. Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company’s working capital requirements . The Company has various financial assets such as trade receivables, loans, investments,short-term deposits and cash & cash equivalents , which arise directly from its operations. The Company enters into derivative transactions by way of forward exchange contracts to hedge its payables

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks. The Company’s Board of Directors is supported by the Business Process and Risk Management Committee (BPRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The BPRMC provides assurance to the Company’s Board of Directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by personnels that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

Market Risk

Market risk is the risk that the fair value offuture cash flows of a financial instrument will fluctuate because ofchanges in market factors. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk, liquidity risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments and financial derivative. The sensitivity analyses in the following sections relate to the position as at March 31,2019 and March 31,2018.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant at March 31, 2019. The analyses exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations. The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31,2019 and March 31,2018

- The sensitivity of equity is calculated as at March 31,2019 for the effects of the assumed changes of the underlying risk Interest rate risk

The Company has incurred short term debt to finance its working capital , which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk. Borrowing issued at fixed rates expose the Company to fair value interest rate risk. The Company’s interest rate risk management policy includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt through evaluation of various bank loans and money market instruments.

Some of the Company’s borrowings are index linked, that is their cost is linked to changes in the London inter-bank offer rate (Libor).

Although the Company has significant variable rate interest bearing liabilities at March 31,2019, there would not be any material impact on pretax profit and pretax equity of the Company on account of any anticipated fluctuations in interest

Foreign currency risk

The Company has a policy of entering into foreign exchange forward contracts to manage risk of foreign exchange fluctuations on borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates of any currency. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities by way of direct imports or financing of imports through foreign currency instruments.

The Company proactively hedged its currency exposures in case of a significant movement in exchange rates for imports and in case the hedged cost of foreign currency instrument is lower than the domestic cost ofborrowing in case of short term import financing.

As at March 31, 2019, the Company hedged 28 % (March 31, 2018: 2%) for 6-9 months, of its expected foreign currency payables. This foreign currency risk on payables is hedged by using foreign currency forward contracts.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD/Euro/JPY exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Company’s exposure to foreign currency changes for all other currencies is not material.

Commodity price risk

The Company doesn’t enter into any long term contract with its suppliers for hedging its commodity price risk.

Equity price risk

The Company does not have any investments in listed securities or in Equity Mutual Funds and thereby is not exposed to any Equity price risk.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored by BPRMC and corrective actions taken.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2019 and March 31, 2018 is the carrying amounts as illustrated in Note 12 except for financial guarantees .The Company’s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note 36 and the liquidity table below.

Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning tool.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers’ credit facilities. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

Note 13. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company only avails short term borrowings to bridge its working capital gap and finances its capital expenditure through internal generation of funds. The Company has a generally low debt equity ratio.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowings in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2019 and March 31, 2018.

Note 14 Expenditure on Research & Development

a. Details of Research & Development expenses incurred during the year, debited under various heads of Statement of Profit and Loss is given below.

b. Details of Capital expenditures incurred for Research & Development are given below:

Above includes allowable expenditure under section 35(2AB) of the Income Tax Act for a research & development unit situated in Howrah, Kolkata which focuses on reasearch on new and existing paint products, reformulation for cost optimization, environment friendly products etc.

Details are mentioned below :

Capital expenditure Rs.2.20 Crores(March31,2018Rs.0.51crores)

Revenue expenditure Rs.10.41 Crores(March31,2018Rs.9.54crores)

Note 15

The figures of previous year have been regrouped/rearranged wherever considered necessary.

Note 16

All figures are in Rupees Crores. Figures marked with (*) are below the rounding off norm adopted by the Company.

---

Mar 31, 2018

1. Corporate Information

Berger Paints India Limited (‘BPIL’ or ‘the Company’) is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on three stock exchanges in India. The Company is engaged in the manufacturing and selling of paints. The Company caters primarily to domestic market. The registered office of the Company is located at Berger House, 129 Park Street, Kolkata-700 017.

The financial statements were approved for issue in accordance with a resolution of the Board of directors on May 30, 2018.

2. Basis of Preparation

The financial statements of the Company for the year ended March 31,2018 have been prepared in accordance with accounting principles generally accepted in India, including the Ind AS specified under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

The financial statements have been prepared on a historical cost basis, except for certain assets and liabilities which have been measured at fair values (refer accounting policy regarding financial instruments).

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

a) Terms/Rights attached to class of shares

The Company has only one class of equity shares having a par value of Rs. 1 each. Holder of each equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuig Annual General Meeting, except in case of interim dividend. 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.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares as declared under the relevant provisions of the Companies Act,2013

b) Shares reserved for issue under Employee Stock Options:

For details of shares reserved for issue under the Employee Stock Option Plan (ESOP) of the Company, refer Note 32.

c) Fully paid up equity shares allotted by way of bonus shares 27,73,91,165 bonus shares were issued and allotted during the previous year by the Company to eligible members holding ordinary shares of Rs.1 each (ratio 2:5) by capitalizing Rs. 27.74 Crores out of the sum standing to the credit of Company’s Securities Premium Account.

Securities Premium Account- Premium received on equity shares issued including those under Employee Stock Option Plan are recognised in the securities premium account net of utilization for bonus shares issued etc.

Retained Earnings - Retained earnings includes surplus in the Statement of Profit and Loss, Ind-AS related adjustments as on the date of transition, remeasu-ment gains/ losses on defined benefit plans and Revaluation Reserve aggregating to Rs. Nil (March 31, 2017: Rs. 0.83 crores ) that had arisen from revaluation of Leasehold Land, Freehold Land and Freehold Buildings of the Company in 1989, 1985 and 1993 done by approved valuers. The aforementioned revaluation reserve is not a free reserve as per the Companies Act, 2013 and hence is not available for distribution as dividend.

General Reserve - Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations, to ensure that if a dividend distribution in a given year is more than 10% of the paid capital of the Company for that year, the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

Share based payment reserve - The Company has two Employee Stock Option Plan (ESOP) under which options to subscribe for the Company’s shares have been granted to specific employees.

The Share based payment reserve is used to recognise the value of equity-settled share-based payments to employees as part of their remuneration. The year end balance is net off options exercised by the concerned employees Refer to Note 32 for further details of these plans.

Capital redemption reserve - Represents amount equal to the face value of equity shares transferred at the time of buy-back of shares

During the year ended March 31, 2018 and March 31, 2017, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders.

3(a) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for March 31, 2018 and March 31, 2017:

Income tax on the Company''s taxable profit differs from the theoretical amount that would have arisen had the enacted rate of corporate tax in India (34.608%) being applied to such taxable profits as explained below :

Bank overdraft are repayable on demand and carry interest rate of MIBOR 130 bps (March 31, 2017: MIBOR 130 bps)

Cash Credits from banks are secured by way of first charge on book debts and other current assets ranking pari passu between the lenders (first pari passu charge over entire current assets). Cash Credit is repayable on demand and carries interest at 7.30 % - 11.75% per annum (March 31, 2017: 8%-10% per annum). The buyers'' credit is repayable in six months and carries interest at Nil (March 31, 2017: LIBOR 0.25%) and is secured by hypothecation of stocks and book debts, both present and future.

Amendments to Ind AS 7 Statement of Cash Flows:

The amendments to Ind AS 7 require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative period as under

Revenue from operations for period up to June 30, 2017 includes excise duty. From July 1,2017 onwards excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST from its customers on behalf of the Government and hence, GST is not included in Revenue from operations.Sale of products includes excise duty collected from customers of f 115.58 crores (March 31, 2017: Rs. 498.20 crores). Sale of products net of excise duty is f 4,677.09 crores (March 31, 2017 f 4,210.53 crores). In view of the aforesaid change in indirect taxes, Revenue from operations for year ended March 31, 2018 is not comparable with the amount reported for the year ended March 31, 2017

1. During the previous year, the Company''s paint division (“the Business”) relating to 4 wheeler passenger cars and SUVs, 3 Wheelers and related ancillaries was transferred to Berger Nippon Paint Automotive Coatings Private Limited or BNPAC (Formerly known as BNB Coatings India Private Limited), an existing joint venture between Berger Paints India Limited and Nippon Paints Automotive Coatings Co. Ltd., Japan after the close of business hours of 30th June, 2016 on a slump sale basis at a consideration of Rs.90 crores, paid in cash. By virtue of being a joint venture where Berger Paints India Limited holds 49% of the paid up share capital, BNPAC may be deemed to be a related party and the transaction was done at an Arm''s length basis. The exceptional item for the year ended March 31, 2017 represents the profit on the transfer of the Business, being Rs.86.67 crores, which is subject to tax.

2. The Company had provided for impairment in the carrying value of its investment in its wholly owned subsidiary, Berger Paints Cyprus Limied (BPCL ) on account of losses sustained by the ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL ) due to downturn in Russian economy which were reflected in the consolidated financial position of the Company. The Company had made an assessment of the fair value of the investments in Berger Paints Overseas Limited taking into account past business performance, prevailing business conditions and revised expectations about future performance. Based on the above factors and as matter of prudence provision of Rs. 28 crores towards impairment of such investment had been recognised in the accounts. The recoverable amount of the investment was determined at Rs. 37.12 crores, which was based on its value in use. This value in use calculation was carried out taking into account the discount rate of 14% per annum.The Company is in the process of reorgansing its business operation in that country and based on such plan no further impairment has been considered necessary.

Note 4. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets & liabilities affected in future periods.

Judgements, Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation, uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company’s accounting policies, management has made the following judgements, estimates and assumptions, which have the most significant effect on the amounts recognised in the Financial Statements.

Defined Employer Benefit plans

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details refer Note 31.

Fair value measurement of financial instruments and guarantees

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree ofjudgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 37 for further disclosures.

Depreciation on Property, Plant and Equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

Decommissioning Liability

Decommissioning Liability has been recognised for items of property plant and equipment built or installed on specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the lease prior to handing over to the lessor. The decommissioning costs as at the end of the lease period have been estimated based on current costs by the Company''s own technical experts and have been escalated to the end of the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now discounted to the present value of such liability by applying Company''s weighted average cost of capital.

Impairment of Investment

Based on indication that the carrying value of investment in a stepdown subsidiary may be lower than the fair value, an impairment assessment has been carried out. Market related information and estimates are used to determine the recoverable value of the investment. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past expereince and represent management''s best estimate about future developements.

Note 5. Gratuity and other post-employment benefit plans

(I) Defined benefit plans

(a) Gratuity

(i) The following table summarizes the components of net defined benefit expense towards gratuity recognised in the Statement of Profit and loss and OCI and the funded status and amounts recognised in the Balance Sheet.

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market

Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India The discount rate is based on the government securities yield

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards.

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk Exposure

Since the employees gratuity fund is a defined benefit plan the liability to be provided will be subject to interest rate risk since the future valuation of benefit depends upon the yield of government bonds for matching maturities.

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India the return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets is funded by the Company on a yearly basis.

(vii) In 2018-19, the Company expects to contribute Rs. 2.12 crores (March 31, 2017: Rs. 2.08 crores) to gratuity

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through “Berger Paints Provident Fund (Covered)” as per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the employer, any shortfall in the rate of interest on member contributions as compared to the relevant rate of interest declared by the Goverment of India for this purpose will have to be met by the employer. Such provident fund would in effect be a defined benefit plan in accordance with the requirement of Ind AS 19 - Employee Benefits.

Based on valuation of related defined benefit obligation and plan assets at the year end carried out by an independent actuary no provision has been considered necessary in this regard in these financial statements Key actuarial assumptions are as follows

(c) Other Defined Benefit Plans

The amounts for “Other Defined Benefit Plans” are below the rounding off norm adopted by the Company (refer Note 43 ) and hence the disclosures as required under Ind AS 19 - “Employee Benefits” have not been given.

(II) Defined contribution plans

During the year, the Company has recognised the following amounts in the Statement of Profit and Loss for defined contribution plans:

Note 6. Employee Stock Option Plan

Berger Paints India Limited Employee Stock Option Scheme, 2010

The Berger Paints India Limited - Employee Stock Option Plan [‘the Plan’] was approved at the Annual General Meeting of the Company held on 29th July, 2010. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) ”Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) ”Exercise Date “means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) ”Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) ”Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of f2/- per share. However, due to sub-division of Company’s share from F.V of f 2/- to Rs. 1/-w.e.f from 9th January, 2015, the Compensation & Nomination & Remuneration Committee made fair and reasonable adjustments with respect to ESOPs earlier approved and granted by the Compensation & Nomination & Remuneration Committee.

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of grant of options :1st August, 2010.

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 [‘the Plan’] was approved at the Annual General Meeting of the Company held on 3rd

August, 2016. The objective of the plan is to:

1) Attract, retain and motivate Employees,

2) Create and share wealth with the Employees,

3) Recognise and reward employee performance with shares and

4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) ”Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) ”Exercise Date “means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) ”Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) ”Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of Rs. 1/- per share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anni versary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of grant of options : 9th November, 2016.

Expected volatility during the expected term of the ESOP is based on historical volatility of the observed market prices of the Company''s publicly traded equity shares during a period equivalent to the expected term of the ESOP.

The fair values of our ESOP are based on the market value of our stock on the date of grant.

Operating lease — Company as lessee

The Company''s leasing arrangements for various depots, offices etc are in the nature of operating leases which are cancellable at the option of the Company. These leases have a life between 1 year to 20 years ( March 31, 2017 - 1 year to 20 year ) which is renewable by mutual consent of concerned parties. No contingent rent is payable by the Company in respect of the above leases. Some of the lease agreements have price escalation clauses. Related lease rentals have been disclosed under the head “Rent” in Note 26 of Statement of Profit and Loss. There are no restrictions placed upon the Company by such leases. Operating lease — Company as lessor

The Company has given Color bank (tinting machines) on operating lease to its dealers. The Company enters into 3- 5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a shorter period or may be waived off/refunded on acheivement of certain sales targets by the concerned dealers.The minimum aggregate lease payments to be received in future is considered as Rs. Nil. Accordingly the disclosure of the minimum lease payments receivable at the Balance sheet date is not made. The amounts received from customers pending to be refunded back are recognised as liabilities and are included in “Deposits” under “Other financial liabilities” in Note 12. Also refer note 4.

The Company has been advised by its lawyers that none of the claims are tenable and is therefore contesting the same and hence has not been provided for in the books. The future cash flows on account of the above cannot be determined unless the judgements/decisions are received from the ultimate judicial forums. No reimbursements are expected to arise to the Company in repect of above cases.

a) Immovable assets aggregating Rs. 236.40 crores ( March 31, 2017: Rs.232.95 crores) have been mortgaged by deposit of title deeds in favour of BNP Paribas & Standard Chartered towards loan extended to its subsidiary, M/s Lusako Trading Limited a Subsidiary of the Company

b) The loan is utilised by the said subsidiary for its business pruposes. Also refer note 12 and 35

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key management personnel. No share options have been granted to the non-executive members of the Board of Directors under this scheme. Refer to Note 31 for further details of the scheme.

* Refer Note 42 Notes:

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in Arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash except unless otherwise mentioned.

Note 7

During the year, National Company Law Tribunal has approved the scheme of amalgamation (‘Scheme’) between the Company and BJN Paints India Limited (‘BJN’), India, a wholly owned step down subsidiary of the Company from the Appointed Date of April 1, 2017. The Scheme became effective from March 29, 2018 after completion of all related regulatory formalities. In accordance with the above Scheme and the accounting treatment prescribed for merger of entities under common control in IND AS 103 - Business Combination (pooling of interests method), the financial statements of the Company for the previous year have been restated with effect from 1st April 2016, being the earliest period presented. Consequently, for the previous year, revenue of Rs.114.99 crores and loss before tax of f 2.35 crores appearing in the books of BJN has been included in the revenue and profit before tax of the Company in the above financial statements for that year. In respect of the Balance Sheet, all assets and liabilities and differential value of equity have been recognised by the Company.

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below:-Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(b) Financial instruments at amortized cost

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

(c) During the year there has been no transfer from one level to another

(d) Also refer note 17a and 17b

The Company''s principal financial liabilities, other than derivatives, comprise borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company''s working capital requirements. The Company has various financial assets such as trade receivables, loans, investments,short-term deposits and cash & cash equivalents , which arise directly from its operations. The Company enters into derivative transactions by way of forward exchange contracts to hedge its payables .

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks. The Company’s Board of Directors is supported by the Business Process and Risk Management Committee (BPRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The BPRMC provides assurance to the Company’s Board of Directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by personnel that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market factors. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk , liquidity risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments and financial derivative.

The sensitivity analyses in the following sections relate to the position as at March 31, 2018 and March 31, 2017.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant at March 31, 2018.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations.

The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2018 and March 31, 2017

- The sensitivity of equity is calculated as at March 31,2018 for the effects of the assumed changes of the underlying risk Interest rate risk

The Company has incurred short term debt to finance its working capital , which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk. Borrowing issued at fixed rates expose the Company to fair value interest rate risk. The Company''s interest rate risk management policy includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt through evaluation of various bank loans and money market instruments .

Some of the Company''s borrowings are index linked, that is their cost is linked to changes in the London inter-bank offer rate (Libor) .

Although the Company has significant variable rate interest bearing liabilities at March 31, 2018, there would not be any material impact on pre-tax profit and pre-tax equity of the Company on account of any anticipated fluctuations in interest Foreign currency risk

The Company has a policy of entering into foreign exchange forward contracts to manage risk of foreign exchange fluctuations on borrowings and payables. These contracts are not designated in hedge relationships and are measured at fair value through profit or loss. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates of any currency. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities by way of direct imports or financing of imports through foreign currency instruments.

The Company proactively hedged its currency exposures in case of a significant movement in exchange rates for imports and in case the hedged cost of foreign currency instrument is lower than the domestic cost of borrowing in case of short term import financing .

As at March 31, 2018, the Company hedged 2% (March 31, 2017: 58%) for 6 months , of its expected foreign currency payables. This foreign currency risk on payables is hedged by using foreign currency forward contracts.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD/Euro exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities . The Company’s exposure to foreign currency changes for all other currencies is not material.

Commodity price risk

The Company doesn’t enter into any long term contract with its suppliers for hedging its commodity price risk Equity price risk

The Company does not have any investments in listed securities or in Equity Mutual Funds and thereby is not exposed to any Equity price risk.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored by BPRMC and corrective actions taken.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2018 and March 31, 2017 is the carrying amounts as illustrated in Note 12 except for financial guarantees. The Company’s maximum exposure relating to financial guarantees and financial derivative instruments is noted in note 37 and the liquidity table below.

Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning tool.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers'' credit facilities. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

Note 8 Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company only avails short term borrowings to bridge its working capital gap and finances its capital expenditure through internal generation of funds.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

Above includes allowable expenditure under section 35(2AB) of the Income Tax Act Capital expenditure Rs. 0.51 crores ( March 31, 2017 Rs. 1.10 crores)

Revenue expenditure Rs. 9.54 crores ( March 31, 2017 Rs. 8.72 crores)

The Company has a research & development unit situated in Howrah, Kolkata which focuses on reasearch on new and existing paint products, reformulation for cost optimization, environment friendly products etc.

Note 9 Segment Information

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products, production process , regulatory environment, customers and distribution methods there are no reportable segment(s) other than “Paints”.

10 All figures are in Rupees Crores. Figures marked with (*) are below the rounding off norm adopted by the Company.

---

Mar 31, 2017

1. The Company’s paint division (“the Business”) relating to 4 wheeler passenger cars and SUVs, 3 Wheelers and related ancillaries was transferred to Berger Nippon Paint Automotive Coatings Private Limited or BNPAC (Formerly known as BNB Coatings India Private Limited), an existing joint venture between Berger Paints India Limited and Nippon Paints Automotive Coatings Co. Ltd., Japan after the close of business hours of 30th June, 2016 on a slump sale basis at a consideration of Rs, 90 crores, paid in cash. By virtue of being a joint venture where Berger Paints India Limited holds 49% of the paid up share capital, BNPAC may be deemed to be a related party and the transaction was done at an arm’s length basis. The exceptional item for the year ended March 31, 2017 represents the profit on the transfer of the Business, being Rs, 86.67 crores, which is subject to tax.

2. The Company has provided for impairment in the carrying value of its investment in its wholly owned subsidiary, Berger Paints Cyprus Limited (BPCL) on account of losses sustained by the ultimate wholly owned subsidiary Berger Paints Overseas Limited (BPOL ) due to downturn in Russian economy which were reflected in the consolidated financial position of the Company. The Company had made an assessment of the fair value of the investments in Berger Paints Overseas Limited taking into account past business performance, prevailing business conditions and revised expectations about future performance. Based on the above factors and as matter of prudence provision of Rs, 28 crores towards impairment of such investment has been recognized in the accounts. The recoverable amount of the investment was determined at Rs, 37.12 crores, which was based on its value in use. This value in use calculation was carried out taking into account the discount rate of 14% per annum.

Note 3. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Note 4. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgments, Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur. In the process of applying the Company’s accounting policies, management has made the following judgments, estimates and assumptions, which have the most significant effect on the amounts recognized in the Financial Statements.

Defined Employer Benefit plans

The cost and the present value of the defined benefit gratuity plan and other post-employment leave encashment benefit are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These include the determination of appropriate discount rate, estimating future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. For further details refer Note 30.

Fair value measurement of financial instruments and guarantees

When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 36 for further disclosures.

Depreciation on Property, Plant and Equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company’s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

Decommissioning Liability

Decommissioning Liability has been recognized for items of property plant and equipment built or installed on specified leasehold land the terms of which said leases include decommissioning of such assets on expiry of the lease prior to handing over to the less or. The decommissioning costs as at the end of the lease period have been estimated based on current costs by the Company’s own technical experts and have been escalated to the end of the leasehold period using suitable inflation factors. The said escalated cost as at the end of the lease period is now discounted to the present value of such liability by applying Company’s weighted average cost of capital.

Impairment of Investment

Based on indication that the carrying value of investment in a step down subsidiary may be lower than the fair value, an impairment assessment has been carried out. Market related information and estimates are used to determine the recoverable value, of the investment. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management’s best estimate about future developments.

Impact on defined benefit obligation

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(v) Risk Exposure

Since the employees gratuity fund is a defined benefit plan the liability to be provided will be subject to interest rate risk since the future valuation of benefit depends upon the yield of government bonds for matching maturities.

(vi) Defined Benefit Liability and Employer Contributions

Since the employees gratuity fund is a defined benefit plan maintained by Life Insurance Corporation of India the return is generated from a pool of assets invested by them and any deficit in the liability and return on plan assets is funded by the Company on a yearly basis.

(vii) In 2017-18, the Company expects to contribute Rs, 0.60 crores (31 March 2016: Rs, 2.71 crores) to gratuity

(b) Provident Fund

Provident Fund for certain eligible employees is administered by the Company through “Berger Paints Provident Fund (Covered)” as per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a trust provide that in a provident fund set up by the employer, any shortfall in the rate of interest on member’s contributions as compared to the relevant rate of interest declared by the Government of India for this purpose will have to be met by the employer. Such provident fund would in effect be a defined benefit plan in accordance with the requirement of Ind AS 19 - Employee Benefits.

(c) Other Defined Benefit Plans

The amounts for “Other Defined Benefit Plans” are below the rounding off norm adopted by the Company (refer Note 43) and hence the disclosures as required under Ind AS 19 - “Employee Benefits” have not been given.

(II) Defined contribution plans

During the year, the Company has recognized the following amounts in the Statement of Profit and Loss for defined contribution plans:

Note 5. Employee Stock Option Plan Berger Paints India Limited Employee Stock Option Scheme, 2010

The Berger Paints India Limited - Employee Stock Option Plan [‘the Plan’] was approved at the Annual General Meeting of the Company held on 29th July, 2010. The objective of the plan is to: 1) Attract, retain and motivate Employees, 2) Create and share wealth with the Employees, 3) Recognize and reward employee performance with shares and 4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) “Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) “Exercise Date” means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) “Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) “Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of '' 2/- per Share. However, due to sub-division of Company’s share from F.V of '' 2/- to '' 1/- w.e.f from 9th January, 2015, the Compensation & Nomination & Remuneration Committee made fair and reasonable adjustments with respect to ESOP’s earlier approved and granted by the Compensation & Nomination & Remuneration Committee.

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

h) The Date of grant of options :1st August, 2010.

Berger Paints India Limited Employee Stock Option Plan 2016

The Berger Paints India Limited - Employee Stock Option Plan 2016 [‘the Plan’] was approved at the Annual General Meeting of the Company held on 3rd August, 2016. The objective of the plan is to:1) Attract, retain and motivate Employees, 2) Create and share wealth with the Employees, 3) Recognise and reward employee performance with shares and 4) Encourage employees to align individual performance with the objective of the Company. The terms and conditions of the Plan is reproduced below:

a) “Vesting Date” means the date on and from which the Option vests with the Participant and thereby becomes exercisable.

b) “Exercise Date” means the date on which the Participant exercises his Vested Options and in case of partial Exercise shall mean each date on which the Participant exercises part of his Vested Options.

c) “Vesting Period” means the period during which the Vesting of the Option granted to the Participant in pursuance of the Plan takes place.

d) “Exercise Period” means a period of 3 years from the Vesting Date as defined above of the Plan within which the Vested Options can be exercised in pursuance of the Plan.

e) The Exercise Price of an Option shall be the face value of '' 1/- per Share

f) Cashless exercise of the Options are not permitted under the Plan. Participants to pay full Aggregate Exercise Price upon the Exercise of the Vested Options.

g) Subject to Participant’s continued employment as defined in Clause 14 of the Plan the Unvested Options shall vest with the Participant automatically in accordance with the following schedule : a) 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the first anniversary of the Grant Date; b) further 33% of the total Options granted, rounded up to the nearest whole number, shall vest on the second anniversary of the Grant Date and c) balance 34% of the total Options granted, rounded up to the whole number such that the total number of Options vested shall add up to 100%, shall vest on the third anniversary of the Grant Date.

Expected volatility during the expected term of the ESOP is based on historical volatility of the observed market prices of the Company’s publicly traded equity shares during a period equivalent to the expected term of the ESOP.

The fair values of our ESOP are based on the market value of our stock on the date of grant.

Note 6. Leases

Operating lease — Company as lessee

The Company’s leasing arrangement are in the nature of cancellable operating leases. The Company has taken various depots, offices etc. on Operating Leases. These leases have a life of between 1 year to 20 years (31 March 2016 - 1 year to 20 years; 1 April 2015-1 year to 20 years) which is renewable by mutual consent of concerned parties. No contingent rent is payable by the Company in respect of the above leases. Some of the lease agreements have price escalation clauses. Related lease rentals have been disclosed under the head “Rent” in Note 25 of Statement of Profit and Loss. There are no restrictions placed upon the Company by such leases.

Operating lease — Company as less or

The Company has given Colour bank (tinting machines) on operating lease to its dealers. The Company enters into 3-5 years cancellable lease agreements. However the corresponding lease rentals may be receivable for a shorter period or may be waived off. The minimum aggregate lease payments to be received in future is considered as '' Nil. Accordingly the disclosure of the minimum lease payments receivable at the balance sheet date is not made. Also refer note 4.

a) Tangible assets having carrying value of Rs, 232.95 crores (31 March, 2016 - Rs, 191.29 crores, 1 April, 2015 - Rs, 197.93 crores) have been mortgaged by deposit of title deeds in favour of BNP Paribas & Standard Chartered towards loan extended to M/s. Lusako Trading Limited, a Subsidiary of the Company.

b) The loan is utilised by the subsidiaries towards their business purposes. Also refer note 11 and 34.

Note 7. Disclosure in respect of Related Parties pursuant to Ind AS 24 List of Related Parties

I. Parent and Subsidiary Companies:

Name of related parties Nature of relationship

U K Paints (India) Private Limited Holding Company

Berger Jenson & Nicholson (Nepal) Private Limited Wholly Owned Subsidiary

Beepee Coatings Private Limited Wholly Owned Subsidiary

Berger Paints (Cyprus) Limited Wholly Owned Subsidiary

Lusako Trading Limited Wholly Owned Subsidiary

BJN Paints India Limited Wholly Owned Subsidiary of Beepee Coatings Private Limited

Berger Paints Overseas Limited Wholly Owned Subsidiary of Berger Paints (Cyprus) Limited

Bolix S.A. Wholly Owned Subsidiary of Lusako Trading Limited

BUILD-TRADE BIS sp. z o.o Wholly Owned Subsidiary of Bolix S.A.

Bolix UKRAINA sp.z o.o Wholly Owned Subsidiary of Bolix S.A.

Soltherm External Insulations Limited Wholly Owned Subsidiary of Bolix S.A.

Soltherm Insolations Thermique Exterieure (w.e.f July, 2016) Wholly Owned Subsidiary of Bolix S.A.

II. Other related parties with whom transactions have taken place during the year:

a) Key Managerial Personnel

Name of related parties Nature of relationship

Mr. K. S. Dhingra Director

Mr. G. S. Dhingra Director

Mr. Kanwardip Singh Dhingra Whole time director and relative of Mr. G. S. Dhingra

Mrs. Rishma Kaur Whole time director and relative of Mr K. S. Dhingra

Mr. Abhijit Roy Managing Director & CEO

Mr. Srijit Dasgupta Director-Finance & Chief Financial Officer

Mr. Aniruddha Sen Senior Vice President & Company Secretary

Mr. Kamal Ranjan Das Independent Director

Mr. Naresh Gujral Independent Director

Mr. Dhirendra Swarup Independent Director

Mr. Gopal Krishna Pillai Independent Director

b) Others

Name of related parties Nature of relationship

Berger Becker Coatings Private Limited Joint Venture of the Company

Berger Nippon Paint Automotive Coatings Private Limited (Formerly known Joint Venture of the Company as BNB Coatings India Private Limted/BNB Coatings India Limited)

Jenson & Nicholson (Asia) Limited Fellow Subsidiary

Berger Paints (Bangladesh) Limited Fellow Subsidiary

Citland Commercial Credits Limited Fellow Subsidiary

Wang Investment Finance Private Limited Fellow Subsidiary

Berger Paints Provident Fund (Covered) Post-employment benefit plan of the Company

Berger Paints Officers (Non-Management Category) Superannuation Fund Post-employment benefit plan of the Company

Berger Paints Management Staff Superannuation Fund Post-employment benefit plan of the Company

Seaward Packaging Private Limited Entity controlled by Key Managerial Personnel

Flex Properties Private Limited Entity controlled by Key Managerial Personnel

Wazir Estates Private Limited Entity controlled by Key Managerial Personnel

Kay Dee Farms Private Limited Entity controlled by Key Managerial Personnel

Malibu Estate Private Limited Entity controlled by Key Managerial Personnel

Bigg Investment & Finance Private Limited Entity controlled by Key Managerial Personnel

Mrs. Meeta Dhingra Spouse of Mr. K. S. Dhingra

Mrs. Vinu Dhingra Spouse of Mr. G. S. Dhingra

Mrs. Jessima Kumar Daughter of Mr. K. S. Dhingra

Ms. Dipti Dhingra Daughter of Mr. K. S. Dhingra

Mrs. Sunaina Kohli Daughter of Mr. G. S. Dhingra

Mrs. Anshna Sawhney Daughter of Mr. G. S. Dhingra

Note 8. Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company’s working capital requirements. The Company has various financial assets such as trade receivables, loans, investments, short-term deposits and cash & cash equivalents, which arise directly from its operations. The Company enters into derivative transactions by way of forward exchange contracts to hedge its payables.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks. The Company’s Board of Directors is supported by the Business Process and Risk Management Committee (BPRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The BPRMC provides assurance to the Company’s Board of Directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by personnel that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors review and agrees policies for managing each of these risks, which are summarized below.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market factors. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk , liquidity risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments and financial derivative. The sensitivity analysis in the following sections relate to the position as at 31 March 2017 and 31 March 2016.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant at 31 March 2017. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations.

The following assumptions have been made in calculating the sensitivity analysis:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2017 and 31 March 2016.

- The sensitivity of equity is calculated as at 31 March 2017 for the effects of the assumed changes of the underlying risk.

Interest rate risk

The Company has incurred short term debt to finance its working capital, which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk. Borrowing issued at fixed rates expose the Company to fair value interest rate risk. The Company’s interest rate risk management policy includes achieving the lowest possible cost of debt financing, while managing volatility of interest rates, applying a prudent mix of fixed and floating debt through evaluation of various bank loans and money market instruments.

Some of the Company’s borrowings are index linked, that is their cost is linked to changes in the London inter-bank offer rate (LIBOR)

Although the Company has significant variable rate interest bearing liabilities at March 31, 2017, there would not be any material impact on pre-tax profit of the Company on account of any anticipated fluctuations in interest.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in exchange rates of any currency. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities by way of direct imports or financing of imports through foreign currency instruments.

The Company proactively hedged its currency exposures in case of a significant movement in exchange rates for imports and in case the hedged cost of foreign currency instrument is lower than the domestic cost of borrowing in case of short term import financing.

At 31 March 2017, the Company hedged 58% (31 March 2016: 9%, 1 April 2015: 59%), for 6 months, of its expected foreign currency payables. This foreign currency risk on payables is hedged by using foreign currency forward contracts.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD/Euro exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Company’s pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges. The Company’s exposure to foreign currency changes for all other currencies is not material.

Commodity price risk

The Company doesn’t enter into any long term contract with its suppliers for hedging its commodity price risk.

Equity price risk

The Company does not have any investments in listed securities or in Equity Mutual Funds and thereby is not exposed to any Equity price risk.

Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored by BPRMC and corrective actions taken.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2017 and 31 March 2016 is the carrying amounts as illustrated in Note 11 except for financial guarantees and financial derivative instruments. The Company’s maximum exposure relating to financial guarantees and financial derivative instruments is noted in Note 37 and the liquidity table below.

Liquidity risk

The Company monitors its risk of shortage of funds using a liquidity planning tool.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers’ credit facilities. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2017 and 31 March 2016.

Note 9. First-time adoption of Ind AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Exemptions and exceptions applied

Ind AS 101 allows first-time adopters certain exemptions and mandatory exceptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions and exceptions:

1 The Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value as on the date of transition. The written down value as per the Previous GAAP as on April 1, 2015 has been considered as the Gross Block under Ind AS for respective classes of assets in accordance with Ind AS 101- First-time adoption of Indian Accounting Standards.

In addition, decommissioning liability measured in accordance with Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets at the date of transition has been included in the above deemed cost as per Ind AS 101- First-time adoption of Indian Accounting Standards.

2 The Company has elected to measure all of its investment in subsidiaries and joint ventures at their previous GAAP carrying value in accordance with Ind AS 101- First-time adoption of Indian Accounting Standards.

3 The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from FVTPL - Mutual Funds and Impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015 (i.e. the date of transition to Ind-AS) and as of 31 March 2016.

4 Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS in accordance with Ind AS 101- First-time adoption of Indian Accounting Standards.

Above includes allowable expenditure under section 35(2AB) of the Income Tax Act Capital expenditure Rs,1.10 crores ( 31 March 2016 Rs,0.45 crores)

Revenue expenditure Rs,8.72 crores ( 31 March 2016 Rs,7.20 crores)

The Company has a research & development unit situated in Howrah, Kolkata which focuses on research on new and existing paint products, reformulation for cost optimization, environment friendly products etc.

Note 10. Segment Information

The Company is engaged in the business of manufacturing and selling of paints. Based on the nature of products, production process , regulatory environment, customers and distribution methods there are no reportable segment(s) other than “Paints”.

Note 11. All figures are in Rupees Crores. Figures marked with (*) are below the rounding off norm adopted by the Company. Note 44. Details of Specified Bank Notes (SBN) held and transacted during the period November 8,2016 to December 30, 2016

---

Mar 31, 2014

1. CONTINGENT LIABILITIES

As at As at 31st March, 2014 31st March,2013 Rs. Crores Rs. Crores

a) Claims against the Company not acknowledged as debts :

The Sales Tax, Excise & Service Tax, and Income Tax have made certain claims totalling Rs. 29 (31st March 2013: Rs. 28), Rs. 18 (31st March 2013: Rs. 29), Rs. 18 (31st March 2013: Rs. 9) respectively in respect of earlier years. The Company has been advised by its lawyers 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 judgement/decisions are received from the ultimate judicial forums.

b) Corporate guarantees issued by the Company to certain banks for loans taken by some of its subsidiaries and amount outstanding as at 31st March 253.16 242.90

c) Some of the fixed assets of the Company have been mortgaged by deposit of title deeds in favour of Standard Chartered Bank towards loan extended to its subsidiary, M/s Lusako Trading Limited.

2. SEGMENT INFORMATION

The Company has only one business segment, namely Paints with almost the entire sales being made in the domestic market.

3. LEASES

The Company''s leasing arrangements are in the nature of cancellable operating leases. These are usually renewed periodically by mutual consent. Related lease rentals have been disclosed under the head Rent in Note 28 of the Statement of profit and Loss.

4. PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped and reclassified to confirm to current year''s classifcation wherever necessary.

5. All figures are in Rupees Crores. Figures marked with asterisks (*) are below the rounding of norm adopted by the Company.

---

Mar 31, 2013

1. CONTINGENT LIABILITIES As at As at 31st March, 2013 31st March, 2012 Rs. Crores Rs. Crores

a) Claims against the Company not acknowledged as debts :

The Sales Tax, Excise & Service Tax, Income Tax and Provident Fund Authorities have made certain claims totalling Rs. 28 (2011-12: Rs. 33), Rs. 29 (2011-12: Rs. 34), Rs. 9 (2011-12: Rs. 15) and Rs. Nil (2011-12: Rs. 1) respectively in respect of earlier years. The Company has been advised by its lawyers 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 judgement/decisions are received from the ultimate judicial forums.

b) Corporate guarantees issued by the Company to certain banks for loans taken by some of its subsidiaries and amount outstanding as at 31st March 242.90 206.90

c) Some of the fixed assets of the Company have been mortgaged by deposit of title deeds in favour of Standard Chartered Bank towards loan extended to its subsidiary, M/s Lusako Trading Limited.

2. SEGMENT INFORMATION

The Company has only one business segment, namely Paints with almost the entire sales being made in the domestic market.

3. LEASES

The Company''s leasing arrangement are in the nature of operating leases which are not non cancellable. These are usually renewed periodi- cally by mutual consent. The rentals payable against these arrangements appear under the head Rent in Note 28 to the Statement of Profit and Loss - Rs. Nil (2011-12: Rs. Nil).

4. PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped and reclassified to conform to current year''s classification.

5. All figures are in Rupees Crores. Figures marked with asterisks (*) are below the rounding off norm adopted by the Company.

---

Mar 31, 2012

A) Terms / rights attached to equity shares :

Share Capital comprises only equity shares of Rs 2/- each only.

The equity shares rank pari passu in all respects including right to dividend, issue of new shares and voting rights.

b) Shares reserved for issue under options Refer Note 45 for details.

* Refer Note 47

a. Cash Credit are secured by hypothecation of stock-in-trade and book debts and repayable on demand.

1. CONTINGENT LIABILITIES As at As at 31st March, 2012 31st March, 2011 Rs Mn Rs Mn

a) Claims against the Company not acknowledged as debts :

The Sales Tax, Excise & Service Tax, Income Tax and Provident Fund Authorities have made certain claims totalling Rs 333 (2010-11: Rs 263), Rs 344 (2010-11: Rs 394), Rs 151 (2010-11: Rs 30) and Rs 1 (2010-11: Rs 1) respectively in respect of earlier years. The Company has been advised by its lawyers 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 judgement/decisions are received from the ultimate judicial forums.

b) Corporate guarantees issued by the Company to certain banks for loans taken by some of its subsidiaries and amount outstanding as at 31st March 2,069 1,759

c) Some of the fixed assets of the Company have been mortgaged by deposit of title deeds in favour of Standard Chartered Bank towards loan extended to its subsidiary, M/s Lusako Trading Limited.

Notes : a) The disclosures included above are limited to the extent provided by the actuary.

b) The amounts for "Other Defined Benefit Plans" are below the rounding off norm adopted by the Company (refer note 47) and hence the disclosures as required under AS - 15 "Employee Benefits" have not been given.

ii) During the year, the Company has recognised the following amounts in the Statement of Profit and Loss for defined contribution plans :

- Provident and Family Pension Fund (applicable for certain eligible employees whose provident fund accounts are maintained with the Regional Provident Fund Commissioner - Rs 9 (2010-11: Rs 9)

- Superannuation Fund - Rs 20 (2010-11: Rs 19).

iii) Provident Fund for certain eligible employees is administered by the Company through the Trust "Berger Paints Provident Fund (Covered)" as per the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The Rules for such a Trust provide that in a provident fund set up by the employer, being exempt under Section 17(1) of the said Act, any shortfall in the rate of interest on contributions as compared to the rate approved by the government for the Employees' Provident Fund administered by the Regional Provident Fund Commissioner is to be met by the employer. Such a provident fund would in effect be a defined benefit plan in accordance with the requirement of AS 15, Employee Benefits (Revised 2005).

The actuarial valuation conducted (as per the Guidance Note issued by the Actuarial Society of India during the year) indicate that there is no shortfall as on 31st March, 2012 based on the following assumptions:

2. SEGMENT INFORMATION

The Company has only one business segment, namely Paints with almost the entire sales being made in the domestic market.

3. LEASES

The Company's leasing arrangement are in the nature of operating leases which are not non cancellable. These are usually renewed periodically by mutual consent. The rentals payable against these arrangements appear under the head Rent in Note 28 to the Statement of Profit and Loss - Rs 0 (2010-11: Rs 0)*.

* Refer Note 47

4. PREVIOUS YEAR COMPARATIVES

The financial statements for the year 31st March, 2011 had been prepared as per pre-revised Schedule VI to the Companies Act, 1956 applicable for the year. The financial statements for year ended 31st March, 2012, however, have been prepared as per Revised Schedule VI notified under the Companies Act, 1956 applicable for financial statements prepared for the financial year commencing April 1, 2011. Accordingly, the previous year's figures have been regrouped and reclassified to confirm to current year's classification.

5. All figures are in Rs Million. Figures marked with asterisks (*) are below the rounding off norm adopted by the Company.

---

Mar 31, 2011

(i) to Profit and Loss Account) of employment with the Company.

(ii) The Company’s leasing arrangements are in the nature of operating leases which are not non cancellable. These are usually renewed periodically by mutual consent. The rentals payable against these arrangements appear under the head Rent in schedule 17 to the Profit and Loss Account - Rs 218 (2009-10: Rs 123).

(iii) All figures are in Rupees thousands.

(iv) Previous years figures have been regrouped wherever necessary.

---

Mar 31, 2010

(i) (a) Gross depreciation for the year amounts to Rs. 265,243 (2008-09 : Rs. 205,400) from which has been deducted Rs. 1,173 (2008-09 : Rs. 1,417) being extra depreciation for the year arising on revaluation of fixed assets withdrawn from Revaluation Reserve.

(b) Net gain on exchange fluctuation recognised in the Profit and Loss Account amounts to Rs. 12,741 (2008-09 Net Loss : Rs. 28,889).

(c) Calculation of Earnings per Share of Rs. 3.65 (2008-09 : Rs. 2.78) (Face Value Rs. 2) :

The numerator (net profit for the year) and denominator (number of equity shares) are Rs. 1,201,378 (2008-09 : Rs. 887,554) and 329,156,300 (2008-09 : 318,872,464) shares respectively.

(ii) The Company has only one business segment, namely Paints with almost the entire sales being made in the domestic market.

(iii) The Companys leasing arrangements are in the nature of operating leases which are not non-cancellable. These are usually renewed periodically by mutual consent. The rentals payable against these arrangements appear under the head Rent in Schedule 17 to the Profit and Loss Account - Rs. 123 (2008-09 : Rs. 123). (xv) All figures are in Rupees thousands.

(iv) Previous years figures have been regrouped wherever necessary.

2) The above Cash Flow Statement has been prepared under the "Indirect Method" as set out in Accounting Standard - 3 on Cash Flow Statement issued by the Institute of Chartered Accountants of India.

3) Previous years figures have been regrouped, wherever necessary. This is the Cash Flow Statement referred to in our report of even date.