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Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.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)

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 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.

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”.

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.