Notes to Accounts of Centum Electronics Ltd.

Mar 31, 2025

l. Provisions and contingent liabilities

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a 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.
When the Company expects some or all of a
provision to be reimbursed, for example, under
an insurance contract, the reimbursement is
recognised as a separate asset, but only when
the reimbursement is virtually certain. The
expense relating to a provision is presented
in the statement of profit and loss net of any
reimbursement.

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.

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. The
cost of fulfilling a contract comprises the costs
that relate directly to the contract (i.e., both
incremental costs and an allocation of costs
directly related to contract activities).

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. A
contingent liability also arises in extremely rare
cases where there is a liability that cannot be
recognized because it cannot be measured
reliably. The Company does not recognize a
contingent liability but discloses its existence in
the standalone Ind AS financial statements.

Provisions and contingent liability are reviewed
at each balance sheet.

m. Retirement and other employee benefits

Retirement benefit in the form of provident
fund and pension fund are defined contribution
scheme. The Company has no obligation, other
than the contribution payable. The Company
recognizes contribution payable to provident
fund and pension fund as expenditure, when
an employee renders the related service. If the
contribution payable to the scheme for service
received before the balance sheet date exceeds
the contribution already paid, the deficit payable
to the scheme is recognized as a liability after
deducting the contribution already paid. If
the contribution already paid exceeds the
contribution due for services received before the
balance sheet date, then excess is recognized
as an asset to the extent that the pre-payment
will lead to, for example, a reduction in future
payment or a cash refund.

Accumulated leave, which is expected to be
utilized within the next twelve months, is treated
as short-term employee benefit. The Company
measures the expected cost of such absences
as the additional amount that it expects to
pay as a result of the unused entitlement that
has accumulated at the reporting date. The
Company recognizes expected cost of short¬
term employee benefit as an expense, when an
employee renders the related service.

The Company treats accumulated leave
expected to be carried forward beyond twelve
months, 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 reporting date.
Actuarial gains/losses are immediately taken
to the statement of profit and loss and are
not deferred. The obligations are presented
as current liabilities in the balance sheet if the
entity does not have an unconditional right to
defer the settlement for at least twelve months
after the reporting date.

The Company presents the leave as a current
liability in the standalone Ind AS balance sheet,
to the extent it does not have an unconditional
right to defer its settlement for twelve months
after the reporting date.

The cost of providing benefits under the defined
benefit plan is determined using the projected
unit credit method using actuarial valuation to
be carried out at each balance sheet date.

Re-measurements, comprising of actuarial
gains and losses, the effect of the asset ceiling,

excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the standalone
Ind AS balance sheet with a corresponding
debit or credit to retained earnings through
OCI in the period in which they occur. Re¬
measurements are not reclassified to profit or
loss in subsequent periods.

Past service costs are recognised in profit or loss
on the earlier of:

a) The date of the plan amendment or
curtailment, and

b) The date that the Company recognises
related restructuring costs

Net interest is calculated by applying the
discount rate to the net defined benefit liability
or asset. The Company recognises the following
changes in the net defined benefit obligation as
an expense in the statement of profit and loss:

a) Service costs comprising current service
costs, past-service costs, gains and
losses on curtailments and non-routine
settlements; and

b) Net interest expense or income.

n. Financial instruments

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contract embodying the related financial
instruments. All financial assets, financial
liabilities and financial guarantee contracts
are initially measured at transaction cost and
where such values are different from the fair
value, at fair value. Transaction costs that are
directly attributable to the acquisition or issue
of financial assets and financial liabilities (other
than financial assets and financial liabilities at
fair value through profit and loss) are added to
or deducted from the fair value measured on
initial recognition of financial asset or financial
liability. Transaction costs directly attributable to
the acquisition of financial assets and financial
liabilities at fair value through profit and loss
are immediately recognised in the statement of
profit and loss.

Financial assets are classified, at initial
recognition, as subsequently measured at
amortised cost and fair value through profit
or loss. The classification of financial assets
at initial recognition depends on the financial
asset''s contractual cash flow characteristics and
the Company''s business model for managing
them. With the exception of trade receivables
that do not contain a significant financing

component or for which the Company has
applied the practical expedient, the Company
initially measures a financial asset at its fair
value plus, in the case of a financial asset not
at fair value through profit or loss, transaction
costs. Trade receivables that do not contain a
significant financing component or for which the
Company has applied the practical expedient are
measured at the transaction price as disclosed
in section 2.3.(c) Revenue recognition.

In order for a financial asset to be classified and
measured at amortised cost, 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.

Investment in equity instruments issued by
subsidiaries, associates are measured at cost
less impairment.

Effective interest method

The effective interest method is a method of
calculating the amortised cost of a financial
instrument and of allocating interest income or
expense over the relevant period. The effective
interest rate is the rate that exactly discounts
future cash receipts or payments through the
expected life of the financial instrument, or
where appropriate, a shorter period.

(i) Financial assets

Financial assets at amortised cost

Financial assets are subsequently
measured at amortised cost if these
financial assets are held within a business
model whose objective is to hold these
assets in order to collect contractual cash
flows and the contractual terms of the
financial asset give rise on specified dates
to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

Financial assets measured at fair
value

Financial assets are measured at fair value
through other comprehensive income if
these financial assets are held within a
business model whose objective is to hold
these assets in order to collect contractual
cash flows and to sell these financial
assets and the contractual terms of the
financial asset give rise on specified dates
to cash flows that are solely payments

of principal and interest on the principal
amount outstanding.

Financial asset not measured at amortised
cost or at fair value through other
comprehensive income is carried at fair
value through the statement of profit and
loss.

For financial assets maturing within
one year from the balance sheet date,
the carrying amounts approximate fair
value due to the short maturity of these
instruments.

Impairment of financial assets
excluding investments in subsidiaries
and associates

Loss allowance for expected credit losses
is recognised for financial assets measured
at amortised cost and fair value through
the statement of profit and loss.

The Company recognises impairment
loss on trade receivables using expected
credit loss model, which involves use of
provision matrix constructed on the basis
of historical credit loss experience as
permitted under Ind AS 109 - Financial
Instruments.

For financial assets whose credit risk
has not significantly increased since
initial recognition, loss allowance equal
to twelve months expected credit losses
is recognised. Loss allowance equal to
the lifetime expected credit losses is
recognised if the credit risk on the financial
instruments has significantly increased
since initial recognition.

For financial assets maturing within one
year from the balance sheet date, the
carrying amounts approximates fair
value due to the short maturity of these
instruments.

De-recognition of financial assets

The Company de-recognises a financial
asset only when the contractual rights
to the cash flows from the financial
asset expire, or it transfers the financial
asset and the transfer qualifies for de¬
recognition under Ind AS 109.

If the Company neither transfers nor
retains substantially all the risks and
rewards of ownership and continues
to control the transferred asset, the
Company recognises its retained interest
in the assets and an associated liability for
amounts it may have to pay.

If the Company retains substantially all
the risks and rewards of ownership of a
transferred financial asset, the Company
continues to recognise the financial
asset and also recognises a collateralised
borrowing for the proceeds received.

On de-recognition of a financial asset in
its entirety, the difference between the
carrying amount measured at the date
of de-recognition and the consideration
received is recognised in statement of
profit or loss.

(ii) Financial liabilities and equity
instruments

Classification as debt or equity

Financial liabilities and equity instruments
issued by the Company are classified
according to the substance of the
contractual arrangements entered into
and the definitions of a financial liability
and an equity instrument.

Equity Instruments

An equity instrument is any contract that
evidences a residual interest in the assets
of the Company after deducting all of its
liabilities. Equity instruments are recorded
at the proceeds received, net of direct
issue costs.

Financial Liabilities

Financial liabilities are initially measured
at fair value, net of transaction costs, and
are subsequently measured at amortised
cost, using the effective interest rate
method where the time value of money
is significant. Interest bearing bank
loans, overdrafts and issued debt are
initially measured at fair value and are
subsequently measured at amortised cost
using the effective interest rate method.
Any difference between the proceeds (net
of transaction costs) and the settlement
or redemption of borrowings is recognised
over the term of the borrowings in the
statement of profit and loss.

For trade and other payables maturing
within one year from the balance sheet
date, the carrying amounts approximate
fair value due to the short maturity of
these instruments.

a) Supplier finance arrangements

The Company has established
supplier finance arrangements
[Refer Note 22(2)]. The Company
evaluates whether financial liabilities

covered such arrangements
continue to be classified within
trade payables, or they need to
be classified as a borrowing or as
part of other financial liabilities/ as
a separate line item on the face of
the balance sheet. Such evaluation
requires exercise of judgment basis
specific terms of the arrangement.

The Company classifies financial
liabilities covered under supplier
finance arrangement within trade
payables in the balance sheet only
if (i) the obligation represents
a liability to pay for goods and
services, (ii) is invoiced and formally
agreed with the supplier, (iii) is
part of the working capital used in
its normal operating cycle, (iv) the
company is not legally released
from its original obligation to the
supplier, and has not assumed a
new obligation toward the bank,
and another party (iv) there is no
substantial modification to the terms
of the liability.

If one or more of the above criteria
are met, the Company derecognises
its original liability toward the
supplier and recognise a new liability
toward the bank which is classified
as bank borrowing or other financial
liability, depending on factors such
as whether the Company (i) has
obligation toward bank, (ii) is getting
extended credit period such that
obligation is no longer part of its
working capital cycle, (iii) is paying
interest directly or indirectly, (iv) has
provided guarantee or security, and/
or (v) is recognized as borrower in
the bank books.

Cash flows related to liabilities
arising from supplier finance
arrangements that continue to
be classified in trade payables in
the standalone balance sheet are
included in operating activities in the
standalone statement of cash flows,
when the Company finally settles
the liability.

In cases, where the Company has
derecognised its original liability
toward the supplier and recognise
a new liability toward the bank, the
Company has assessed that the
bank is acting as its agent in making

payment to the supplier. Accordingly,
the Company presents operating
cash outflow and financing cash
inflow, when bank made payment
to the supplier. The payment
made by the Company to the bank
toward interest, if any, as well as on
settlement is presented as financing
cash outflow.

b) Financial guarantee contracts

Financial guarantee contracts issued
by the Company are those contracts
that require a payment to be made
to reimburse the holder for a loss it
incurs because the specified debtor
fails to make a payment when due in
accordance with the terms of a debt
instrument. 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.

c) 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.

Off-setting of financial
instruments

Financial assets and financial
liabilities are offset and the net
amount is reported in the standalone
Ind AS 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.

o. Derivative financial instruments

The Company uses derivative financial
instruments, such as interest rate swaps to
hedge its interest fluctuation risks, etc. Such
derivative financial instruments are initially
recognised at fair value on the date on which
a derivative contract is entered into and are
subsequently re-measured at fair value through
statement of profit and loss. Derivatives are
carried as financial assets when the fair value is
positive and as financial liabilities when the fair
value is negative.

Any gains or losses arising from changes in the
fair value of derivatives are taken directly to
profit or loss, except for the effective portion
of cash flow hedges, which is recognised in OCI
and later reclassified to profit or loss when the
hedge item affects profit or loss or treated as
basis adjustment if a hedged forecast transaction
subsequently results in the recognition of a non¬
financial asset or non-financial liability.

p. Cash and cash equivalents

Cash and cash equivalent in the standalone
Ind AS 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 a known amount of
cash and which are subject to an insignificant
risk of changes in value.

For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and
short-term deposits, as defined above, as they
are considered an integral part of the Company''s
cash management.

q. Share-based payments

Certain employees of the Company and
its subsidiaries are entitled to share-based
payments, whereby employees render services
as consideration for equity instruments (equity-
settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is
determined by the fair value at the date when
the grant is made using an appropriate valuation
model.

That cost is recognised, together with a
corresponding increase in share-based payment
(SBP) reserves 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 expense or credit in statement of profit
and loss 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.

Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company''s best estimate of the number
of equity instruments that will ultimately vest.
Market performance conditions are reflected
within the grant date fair value. No expense is
recognised for awards that do not ultimately
vest because non-market performance and/or
service conditions have not been met.

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

r. Dividend

The Company recognises a liability to pay
dividend to equity holders of the parent
when the distribution is authorised, and the
distribution is no longer at the discretion of the
Company. As per the corporate laws in India, a
distribution is authorised when it is approved
by the shareholders. A corresponding amount
is recognised directly in equity. Final dividends
on shares are recorded as a liability on the date
of approval by the shareholders and interim
dividends are recorded as a liability on the
date of declaration by the Company''s Board of
Directors.

s. Foreign currencies

The standalone Ind AS financial statements are
presented in INR, which is also the Company''s
functional currency.

Transactions in foreign currencies are initially
recorded at functional currency spot rates
at the date the transaction first qualifies for
recognition. However, for practical reasons,
the Company uses average rate if the average
approximates the actual rate at the date of the
transaction.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency spot rates of exchange at
the reporting date.

Exchange differences arising on settlement or
translation of monetary items are recognised in
profit or loss.

Non-monetary items that are measured in
terms of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are
translated using the exchange rates at the date
when the fair value is determined. The gain
or loss arising on translation of non-monetary
items measured at fair value is treated in line
with the recognition of the gain or loss on the
change in fair value of the item (i.e., translation
differences on items whose fair value gain or
loss is recognised in OCI or profit or loss are also
recognised in OCI or profit or loss, respectively).

Exchange differences arising on the retranslation
or settlement of other monetary items are
included in the statement of profit and loss for
the period.

t. Research and development expenditure

Research costs are expensed as incurred.
Development expenditure incurred on an
individual project is recognized as an intangible
asset when the Company can demonstrate all
the following:

i. The technical feasibility of completing the
intangible asset so that it will be available
for use or sale

ii. Its intention to complete the asset

iii. Its ability to use or sell the asset

iv. How the asset will generate future
economic benefits

v. The availability of adequate resources to
complete the development and to use or
sell the asset

vi. The ability to measure reliably the
expenditure attributable to the intangible
asset during development.

Following the initial recognition of the
development expenditure as an asset, the cost
model is applied requiring the asset to be carried
at cost less any accumulated amortization and
accumulated impairment losses. Amortization
of the asset begins when development is
complete, and the asset is available for use.
It is amortized on a straight-line basis over
the period of expected future benefit from the
related project. Amortization is recognized in
the standalone statement of profit and loss.
During the period of development, the asset is
tested for impairment annually.

u. Earnings per share

Basic earnings per share is calculated by
dividing the net profit or loss attributable to
equity holder of the Company by the weighted
average number of equity shares outstanding
during the period. Partly paid equity shares are
treated as a fraction of an equity share to the
extent that they are entitled to participate in
dividends relative to a fully paid equity share
during the reporting period.

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

2.4. Standard notified but not yet effective

(i) Amendments to Ind AS 21-Lack of exchangeability

The MCA 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 Ind AS 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 are not expected to have
a material impact on the Company''s Ind AS
financial statements.

2.5. Climate - related matters

The Company considers climate-related matters
in estimates and assumptions, where appropriate.
This assessment includes a wide range of possible
impacts on the Company due to both physical and
transition risks. Even though the Company believes
its business model and products will still be viable
after the transition to a low-carbon economy, climate-
related matters increase the uncertainty in estimates
and assumptions underpinning several items in
the standalone Ind AS financial statements. Even
though climate-related risks might not currently
have a significant impact on measurement, the
Company is closely monitoring relevant changes
and developments, such as new climate-related
legislation.

a. The Company has investments in Centum Electronics UK Limited, which in turn has made investment in Centum
T&S Group (CTSG) Societe Anonyme (S.A.). CTSG and its underlying subsidiaries have incurred losses leading
to erosion of networth and the carrying value of the investment of ^ 1,537.83 million continues to be higher
than the net worth of CTSG.

As at March 31, 2025, the management has carried out the annual impairment exercise in respect of its carrying
value of investment in its subsidiaries and, basis valuation carried out by an external expert, has concluded that
carrying value of investment in subsidiaries is appropriate considering their recoverable amounts which, inter-
alia, includes estimation of their value-in-use based on management projections. These projections have been
made for a period of five years and consider various factors, such as market scenario, growth trends, growth
and margin projections, and terminal growth rates specific to the business. For such projections, discount rate
of 11.50% (March 31, 2024 - 11%) and terminal growth rate of 1.00% (March 31, 2024 - 0.90%) have been
considered. Discount rate has been determined considering the Weighted Average Cost of Capital (WACC) of
market benchmarks. The Company has also performed sensitivity analysis around the base assumptions.
Based on the above assessment, no impairment has been recognised during the year.

b. The Company has investments in Qulsar Inc. Based on internal assessment performed with regard to future
operations, the management of the Company created provision for impairment amounting to ^13.26 million
during the year ended March 31, 2024.

c. The Company has filed an application for the scheme of amalgamation of Centum T&S Private Limited (Transferor
Company) with Centum Electronics Limited (Transferee Company) under section 230 and 232 of the Companies
Act, 2013, with National Company Law Tribunal ("NCLT"), Bengaluru, on March 20, 2025.

Nature and purpose of reserves
Securities premium

Securities premium reserve is used to record the premium on issue of shares and is utilised in accordance with the
provisions of the Companies Act, 2013.

General reserve

The Company created a general reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where
in certain percentage of profits was required to be transferred to General reserve before declaring dividends. As per
Companies Act 2013, the requirements to transfer profits to general reserve is not mandatory. However, the amount
previously transferred to the general reserve can be utilised only in accordance with the specific requirements of
Companies Act, 2013.

Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general
reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss /
(gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

Effective portion of cash flow hedge

The Company uses hedging instruments as part of its management of foreign currency risk. For hedging foreign
currency, the Company uses foreign currency forward contracts. To the extent these hedges are effective, the change
in fair value of the hedging instrument is recognised in the effective portion of cash flow hedges.

Share based payments reserve

The share-based payment reserve is used to recognise the value of equity-settled share-based options provided to
employees, including key management personnel, as part of their remuneration. Refer to note 45 for further details
of these plans.

Capital reserve

The Company recognises the forfeiture or cancellation of vested options of the Company''s equity-settled share-based
payments to capital reserve.

Indian Rupee term loan from bank

a) Indian rupee term loan from a bank of ^102.62 million (March 31, 2024: 154.32 million) carries interest rate
of 2.00% above 6 month Marginal Cost of Funds based Lending Rate ("MCLR") of the bank i.e @ 10.55% to
10.99% p.a. (March 31, 2024: 10.55% p.a) payable on a monthly basis. The loan is repayable in 57 monthly
instalments.

Foreign currency term loan from bank

b) Foreign currency term loan from a bank of ^43.29 million (March 31, 2024: Nil) carries interest rate @ 7.93%
p.a (March 31, 2024: Nil) payable on a monthly basis. The loan is repayable in 16 quarterly instalments.

c) Borrowings are secured by way of :

(i) Exclusive charge on plant & machinery and other assets financed by the bank.

(ii) Hypothecation of present and future fixed assets pari passu first charge with other banks.

(iii) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore -
560 106 belonging to the Company, on pari passu first charge with other banks; and

(iv) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No.
58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of
Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging
to the Company on pari passu first charge with other banks.

(a) Cash credit and overdraft from banks and packing credit from banks are payable on demand and are secured by way
of :

(i) Hypothecation of entire current assets viz. stock of raw materials/stores and spares/work-in-progress/
finished goods, receivables / book debts and other current assets / moveable fixed assets on pari passu
first charge with other banks;

(ii) Hypothecation of present and future fixed assets pari passu first charge with other banks, other than
exclusively charged for the term loan availed;

(iii) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore -
560 106 belonging to the Company, on pari passu first charge with other banks; and

(iv) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No.
58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of
Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging
to the Company on pari passu first charge with other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 10.55% to 11.70% p.a. (March
31, 2024: 10.55% to 18% p.a.).

The rate of interest of Packing credit loan from banks ranges from 5.99% to 9.50% p.a. (March 31, 2024:
5.00% to 6.65% p.a.).

The interest is payable on monthly basis.

(b) The Company has established a vendor finance arrangement. Participation in the arrangement is at the
suppliers'' own discretion. Suppliers that participate in the supplier finance arrangement will receive payment on
due date on invoices sent by the Company to the Company''s external finance provider. In order for the finance
provider to pay the invoices, the goods must have been received or supplied and the invoices approved by the
Company. As per the arrangement the bank agrees to pay amounts which Company owes to it''s suppliers and
the Company agrees to pay the bank at a date later than suppliers are paid. Consequently, the vendor financing
liabilities which are funded through bank are classified as borrowings on the balance sheet. The Company
accounts for all payments made under the program in cash flow statement as part of financing activities. The
Company has paid interest @ 8.94% p.a. to 9.81% p.a. (March 31, 2024: 9.05% p.a. to 9.81% p.a.) on the
amounts paid by the bank to the vendor for a period starting from the date of disbursement by the bank to the
date of payment by the Company to the bank which does not exceed 90 days.

During the year ended March 31, 2024, the Company had classified payables subject to the vendor finance
arrangement under trade payables. However, Institute of Chartered Accountants of India ("ICAI") has issued
exposure draft on amendments to Ind AS 7 and Ind AS 107 to increase the level of disclosure and transparency
about entities'' vendor finance arrangements. The Company has reclassified the payables subject to the vendor
finance arrangement for year ended March 31, 2024 from trade payables to borrowings based on the conditions
specified in the exposure draft released by ICAI.

(c) Includes bank overdraft amounting to ^ 23.08 million (March 31, 2024 ^ 20.10 million)

(d) The quarterly returns or statements filed by the Company with banks or financial institutions towards sanction
of working capital limits are in agreement with the books of account of the Company.

(e) The Company has not been declared as a wilful defaulter by any banks or financial institutions.

(f) The Company has not defaulted in repayment of borrowings or in the payment of interest thereon to banks or
financial institutions.

38. Income tax

The Company is subject to income tax in India on the basis of standalone Ind AS financial statements.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 COrdinance'') issued by Ministry of Law and Justice
(Legislative Department) on September 20, 2019 which is effective from April 1, 2019, domestic companies have the
option to pay income tax at 22% plus applicable surcharge and cess (''new tax regime'') subject to certain conditions.
The Company based on the current projections has chosen to adopt the reduced rates of tax as per the Income Tax
Act, 1961 from the financial year 2020-21 and accordingly the Company has accounted deferred tax asset based on
the reduced applicable tax rates.

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. The estimates and assumptions are based on historical
experience and other factors including expectations of future events that are considered to be relevant. The estimates
and underlying assumptions are continually evaluated and any revisions thereto are recognised in the period of
revision and future periods if the revision affects both the current and future periods. Uncertainties 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.

Key Sources of estimation uncertainty :

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. Existing circumstances and assumptions about future developments 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.

Impairment of non current asset including goodwill and investments

Determining whether investment and goodwill are impaired requires an estimation of the value in use of the respective
asset or the relevant cash generating units. The value in use calculation is based on DCF model. Further, the cash
flow projections are based on estimates and assumptions which are considered as reasonable by the management.
Refer note 3, 4 and 5.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be
available against which the same can be utilised. Significant management judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable
profits together with future tax planning strategies. Refer note 8 and 38 for further disclosures.

Fair value measurement of financial instruments

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 48 for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including
legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently
involves the exercise of significant judgement and the use of estimates regarding the outcome of future events. Refer
note 44 (c) for further disclosures.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, 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.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest rates of government bonds where remaining maturity of
such bond correspond to expected term of defined benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only
at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected
future inflation rates for India.

Further details about gratuity obligations are given in note 42.

Provision for inventory obsolescence

Inventory obsolescence provision are determined using policies framed by the Company and in accordance with
the methodologies that the Company deems appropriate to the business. There is a significant level of judgment
involved in assessing whether provision for obsolescence for slow moving, excess or obsolete inventory items should
be recognized considering orders in hand, expected orders, alternative usage, etc.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental
borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay
to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value
to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would
have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted
to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as
market interest rates) when available and is required to make certain entity-specific estimates.

No share options have been granted to the non-executive members of the Board of Directors under the share
based payments plans of the Company. Refer note 45 for further details on the scheme.

Notes:

(i) As the liability for gratuity and leave encashment is provided on actuarial basis for the Company, as a
whole the amount pertaining to the key managerial personnel''s'' are not disclosed above.

(ii) For investments in related parties, refer note 5.

Terms and conditions of transactions with related parties

The sales to and purchases from 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 normally interest free except
loan. There have been no guarantees provided to or received from any related party for payables or receivables.
For the year ended March 31, 2025 and March 31, 2024, the Company has not recorded any impairment
of receivables relating to amounts owed by related parties. This assessment is undertaken each financial
year through examining the financial position of the related party and the market in which the related party
operates.

42. Gratuity and other post-employment benefits plans
a) Defined contribution plan

The Company''s contribution to provident fund, Employees'' State Insurance and other funds are considered as
defined contribution plans. The contributions are charged to the standalone Ind AS statement of profit and loss
as they accrue. Contributions to provident and other funds included in employee benefits expense (refer note
34) are as under:

b) Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity
Act, 1972. Under the act, every employee who has completed five years or more of service gets gratuity
on departure at 15 days salary (last drawn salary) for each completed year of service. The level of benefits
provided depends on the member''s length of service and salary at retirement age. The Gratuity plan is funded
partially through contributions made to SBI Life Insurance Company Limited.

The following tables summarise the components of net benefit expense recognised in the standalone Ind AS
statement of profit or loss and amounts recognised in the standalone balance sheet for gratuity benefit:

Notes:

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

ii) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit
either by way of retirement, death or disability. The benefits are defined on the basis of final salary
and the period of service and paid as lump sum at exit. The Plan design means the risks commonly
affecting the liabilities and the financial results are expected to be:

a. Discount rate risk : The defined benefit obligation calculated uses a discount rate based on
government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

b. Salary inflation risk : Higher than expected increases in salary will increase the defined benefit
obligation

43. Segment information - Disclosure pursuant to Ind AS 108 ''Operating Segments''

(a) Information about reportable segments

Basis of identifying operating segments / reportable segments:

(i) Basis of identifying operating segments:

Operating segments are identified as those components of the Company (a) that engage in business
activities to earn revenues and incur expenses (including transactions with any of the Company''s other
components); (b) whose operating results are regularly reviewed by the Company''s Chief Operating
Decision Maker (CODM) to make decisions about resource allocation and performance assessment and
(c) for which discrete financial information is available. The accounting policies consistently used in the
preparation of financial statements are also applied to record revenue and expenditure in individual
segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised
based on items that are individually identifiable to that segment, while other items, wherever allocable,
are apportioned to the segment on an appropriate basis. Certain items are not specifically allocable to
individual segments as the underlying services are used interchangeably. The Company therefore believes
that it is not practical to provide segment disclosures relating to such items and accordingly such items
are separately disclosed as ''unallocated''

(ii) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment
revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the
operating segments.

CODM evaluates the performance of the Company based on the single operative segment as Electronics
System Design and Manufacturing ("ESDM"). Therefore, there is only one reportable segment called
ESDM in accordance with the requirement of Ind AS 108 "Operating Segments".

(c) Combined revenue from one external customer group having more than 10% each of the Company''s total
revenue amounting to ^ 2,946.46 million (March 31, 2024: ^ 1,889.09 million). Further, the top 5 customer
group of the Company contribute to more than 60% of the revenue for the year ended March 31, 2025 and
more than 62% of the revenue during the year ended March 31, 2024.

44. Leases, commitments and contingencies

(a) Leases

I. Company as a lessee

The Company has lease contracts for office facilities and equipment. The lease term of the office facilities
is generally 2 - 4 years .The Company''s obligations under its leases are secured by the lessor''s title to the
leased assets. The lease term for equipments is 8 years and the assets are transferred to the Company
at the end of lease term.

The Company also has certain leases of computer and computer equipments with low value. The Company
applies the ''lease of low-value assets'' recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies
judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew
or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination. After the commencement date, the Company reassesses the
lease term if there is a significant event or change in circumstances that is within its control and affects its
ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant
leasehold improvements or significant customisation to the leased asset).

(ii) Power purchase agreement

The Company has commitment in nature of variable lease payment towards purchase of solar and
wind power with various parties whereby the Company has committed to purchase and supplier has
committed to sell contracted quantity of solar and wind power for period as defined in the power purchase
agreements.

(c) Contingent liabilities

The following is a description of claims and assertions where a potential loss is possible, but not probable. The
Company believes that none of the contingencies described below would have a material adverse effect on the
Company''s financial condition, results of operations or cash flows.

* Excludes performance bank guarantees given to various customers as the management is of the view
that the same is not required to be disclosed here.

(ii) The Hon''ble Supreme Court of India in the month of February 2019 had passed a judgement relating to
definition of wages under the Provident Fund Act, 1952. The Management is of the view that there are
interpretative challenges on the application of the judgement retrospectively. Based on the legal advice
and in the absence of reliable measurement of the provision for earlier periods, the Company has made a
provision for provident fund contribution pursuant to the judgement only from the date of Supreme Court
Order. The Company will evaluate its position and update its provision, if required, on receiving further
clarity on the subject. The Company does not expect any material impact of the same.

(iii) The Code on Social Security, 2020 CCode'') relating to employee benefits during employment and post
employment benefits received Presidential assent in September 2020. The Code has been published
in the Gazette of India. Certain sections of the Code came into effect on May 03, 2023, the final rules/
interpretation have not yet been issued. Based on a preliminary assessment, the entity believes the
impact of the change will not be significant.

45. Share-based payments

A Description of the share based payment arrangements
(i) Share option plans (equity settled)

The Centum Employee Stock Option Plan (''ESOP'') - 2013 plan.

(a) The Centum ESOP - 2013 plan was approved by the directors of the Company in May 2013 and by the
shareholders in August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the
employees of the Company and its subsidiaries (whether in India or outside India), who are in whole time
employment with the Company and/or it''s subsidiaries.

The plan is administered by the Nomination and Remuneration committee. Options will be issued to
employees of the Company and/or it''s subsidiaries at an exercise price, which shall not be less than the
market price immediately preceding the date of grant. The equity shares covered under these options
vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period
is ten years from the date of vesting.

The Centum Electronics Limited Restricted Stock Unit Plan 2021.

(a) The Centum Electronics Limited Restricted Stock Unit Plan 2021 was approved by the shareholders of
the Company in October 2021. Centum RSU - 2021 plan provides for the issue of 1,75,000 shares to the
employees of the Company and its subsidiaries (whether in India or outside India), who are in whole time
employment with the Company and/or it''s subsidiaries.

The plan is administered by a Nomination and Remuneration committee. Options will be issued to
employees of the Company and/or it''s subsidiaries at an exercise price, which shall be equal to the face
value of the shares. RSUs granted under this Plan would vest not earlier than minimum vesting period of 1
(one) year or such other period as may be prescribed under applicable laws and not later than maximum
vesting period of 8 (eight) years from the date of grant of such RSUs. The exercise period is 5 years from
the date of last vesting of RSU.

B Measurement of fair values

The fair value of employee share options has been measured using Black Scholes model. The fair value of the

options and the input used in the measurement of the grant- date fair values of both the plans are as follows:

46. Issue of equity shares through QIP

During the year ended March 31, 2025, the Fund Raising Committee of the Board of Directors of the Company at its
meeting held on March 10

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Mar 31, 2024

m. Provisions and contingent liabilities

General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a 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. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

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.

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. The cost of fulfilling a contract comprises the costs that relate directly to the contract (i.e., both incremental costs and an allocation of costs directly related to contract activities).

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence 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. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the standalone Ind AS financial statements.

Provisions and contingent liability are reviewed at each balance sheet.

Decommissioning liability

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.

n. Retirement and other employee benefits

Retirement benefit in the form of provident fund and pension fund are defined contribution scheme. The Company has no obligation, other than the contribution payable. The Company recognizes contribution payable to provident fund and pension fund as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to

pay as a result of the unused entitlement that has accumulated at the reporting date. The Company recognizes expected cost of shortterm employee benefit as an expense, when an employee renders the related service.

The Company treats accumulated leave expected to be carried forward beyond twelve months, 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 reporting date. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

The Company presents the leave as a current liability in the standalone Ind AS balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method using actuarial valuation to be carried out at each balance sheet date.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the standalone Ind AS balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

a) The date of the plan amendment or curtailment, and

b) The date that the Company recognises

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

a) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

b) Net interest expense or income.

o. Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction cost and where such values are different from the fair value, at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss.

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price as disclosed in section 2.3.(c) Revenue recognition.

In order for a financial asset to be classified and measured at amortised cost, 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.

Investment in equity instruments issued by subsidiaries, associates are measured at cost less impairment.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

(i) Financial assets

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at fair value

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through the statement of profit and loss.

For financial assets maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Impairment of financial assets excluding investments in subsidiaries and associates

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through the statement of profit and loss.

The Company recognises impairment loss on trade receivables using expected credit loss model, which involves use of provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 - Financial Instruments.

For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition.

For financial assets maturing within one year from the balance sheet date, the carrying amounts approximates fair value due to the short maturity of these instruments.

De-recognition of financial assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the financial asset expire, or it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On de-recognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of de-recognition and the consideration received is recognised in statement of profit or loss.

(ii) Financial liabilities and equity instruments Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial Liabilities

Financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant. Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of

thoco i mof-ri imanto

a) Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. 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.

b) 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.

Off-setting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the standalone Ind AS 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.

p. Derivative financial instruments

The Company uses derivative financial instruments, such as interest rate swaps to hedge its interest fluctuation risks, etc. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and

are subsequently re-measured at fair value through statement of profit and loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Refer to note 51 for more details.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or nonfinancial liability.

q. Cash and cash equivalents

Cash and cash equivalent in the standalone Ind AS 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 a known amount of cash and which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, as they are considered an integral part of the Company’s cash management.

r. Share-based payments

Certain employees of the Company and its subsidiaries are entitled to share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.

That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves 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 expense or credit in statement of profit and loss 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.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met.

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

s. Cash dividend

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

t. Foreign currencies

The standalone Ind AS financial statements are presented in INR, which is also the Company’s functional currency.

Transactions in foreign currencies are initially recorded at functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses average rate if the average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

Exchange differences arising on the retranslation or settlement of other monetary items are included in the statement of profit and loss for the period.

u. Research and development expenditure

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Company can demonstrate all the following:

i. The technical feasibility of completing the intangible asset so that it will be available for use or sale

ii. Its intention to complete the asset

iii. Its ability to use or sell the asset

iv. How the asset will generate future economic benefits

v. The availability of adequate resources to complete the development and to use or sell the asset

vi. The ability to measure reliably the expenditure attributable to the intangible asset during development.

Following the initial recognition of the development expenditure as an asset. The cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight line basis over the period of expected future

benefit from the related project. Amortization is recognized in the standalone statement of profit and loss. During the period of development, the asset is tested for impairment annually.

v. Corporate social responsibility (‘CSR’) expenditure

The Company charges its CSR expenditure during the year to the statement of profit and loss.

w. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holder of the Company by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period.

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

2.4 Standard notified but not yet effective

There are no standards that are notified and not yet effective as on the date.

2.5 Climate - related matters

The Company considers climate-related matters in estimates and assumptions, where appropriate. This assessment includes a wide range of possible impacts on the Company due to both physical and transition risks. Even though the Company believes its business model and products will still be viable after the transition to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions underpinning several items in the standalone Ind AS financial statements. Even though climate-related risks might not currently have a significant impact on measurement, the Company is closely monitoring relevant changes and developments, such as new climate-related legislation.

5. Non - current financial assets: Investments (Contd..)

1. a) The Company has investments in Centum Electronics UK Limited, which in turn has made investment

in Centum T&S Group SA (formerly known as Centum Adetal Group SA). Centum T&S Group SA and its underlying subsidiaries have incurred losses.

During the year ended March 31, 2024, the Board of Directors of Company further invested in Centum Electronics UK Limited to acquire an additional 12.31% stake in Centum T&S Group SA from the existing shareholders and has a cumulative stake of 90.08% as at March 31, 2024 in Centum T&S Group SA. Centum T&S Group SA has been incurring losses and the carrying value of the aforesaid investment continues to be higher than the net worth of Centum T&S Group SA.

However, based on internal assessment performed as at March 31, 2024 with regard to future operations, the management of the Company is of the view that the carrying value of the Company’s investment in Centum Electronics UK Limited is appropriate.

2. The Company has investments in Qulsar Inc. Based on internal assessment performed with regard to future operations, the management of the Company has created provision for impairment amounting to H 13.26 million during the year ended March 31, 2024.

Nature and purpose of reserves

Securities premium

Securities premium reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

General reserve

The Company created a general reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain percentage of profits was required to be transferred to General reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to general reserve is not mandatory. General reserve is a free reserve available to the Company.

Retained earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

Effective portion of cash flow hedge

The Company uses hedging instruments as part of its management of foreign currency risk. For hedging foreign currency, the Company uses foreign currency forward contracts. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the effective portion of cash flow hedges.

Share based payments reserve

The share-based payment reserve is used to recognise the value of equity-settled share-based options provided to employees, including key management personnel, as part of their remuneration. Refer to Note 46 for further details of these plans.

Capital reserve

The Company recognizes the exercise or cancellation of vested options of the Company’s equity-settled share-based payments to capital reserve.

l) Term loan from bank

a) Indian rupee term loan from a bank of H 154.32 million (March 31, 2023: Nil) (including current maturities of long term borrowings amounting to H 51.70 million (March 31, 2023: Nil) carries interest rate of 2.00% above 6 month Marginal Cost of Funds based Lending Rate ("MCLR") of the bank i.e @ 10.55% p.a (March 31, 2023: Nil) payable on a monthly basis. The loan is repayable in 57 monthly instalments as per the repayment schedule as per the terms of the loan agreement.

b) The aforementioned borrowings of the Company are secured by way of :

(i) Exclusive charge on plant & machinery and other assets financed by the bank.

(ii) Hypothecation of present and future fixed assets pari passu first charge with other banks.

(iii) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 belonging to the Company, on pari passu first charge with other banks; and

(iv) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with other banks.

21. Government grants (Contd..)

Government grants have been received towards the purchase and construction of certain items of property, plant and equipment under Modified Special Incentive Package Scheme (m-SIPS) as notified by Ministry of Communications and Information Technology, Department of Information Technology. As per the scheme, the Company is required to abide by all terms and conditions of M-SIPS policy, guidelines and amendments issued from time to time. The Company vide its letter of undertaking dated May 02, 2018 has agreed to comply with all terms and conditions of M-SIPS policy, guidelines and amendments issued from time to time.

1. Cash credit and overdraft from banks, packing credit, FCNR loan and WCD loan from banks are payable on

demand and are secured by way of :

(a) Hypothecation of entire current assets viz. stock of raw materials/stores and spares/work-in-progress/ finished goods, receivables / book debts and other current assets / moveable fixed assets on pari passu first charge with other banks;

(b) Hypothecation of present and future fixed assets pari passu first charge with other banks, other than exclusively charged for the term loan availed;

(c) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore -560 106 belonging to the Company, on pari passu first charge with other banks; and

(d) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 10.55% to 18.00% p.a. (March 31, 2023:

9.7% to 12.84% p.a.).

23. Current financial liabilities: Borrowings (Contd..)

The rate of interest of Packing credit loan from banks ranges from 5.00% to 6.65% p.a. (March 31, 2023: 2.26% to 8.22% p.a.).

The rate of interest of WCD loan is Nil (March 31, 2023: 11.65% p.a.).

The rate of interest of FCNR loan is Nil (March 31, 2023: 3.97% to 9.12% p.a).

The interest is payable on monthly basis.

2. The quarterly returns or statements filed by the Company with banks or financial institutions towards sanction of working capital limits are in agreement with the books of account of the Company.

3. The Company has not been declared as a wilful defaulter by any banks or financial institutions.

4. The Company has not defaulted in repayment of borrowings or in the payment of interest thereon to banks or financial institutions.

39. Income tax

The Company is subject to income tax in India on the basis of standalone Ind AS financial statements. Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') issued by Ministry of Law and Justice (Legislative Department) on September 20, 2019 which is effective from April 1, 2019, domestic companies have the option to pay income tax at 22% plus applicable surcharge and cess (''new tax regime'') subject to certain conditions. The Company based on the current projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial year 2020-21 and accordingly the Company has accounted deferred tax asset based on the reduced applicable tax rates.

40. Earnings per share (''EPS'')

Basic EPS amounts are calculated by dividing the profit / loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders 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.

41. Significant accounting judgements, estimates and assumptions (Contd..)

The preparation of the Company''s standalone Ind AS financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results could differ from those estimates.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.

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

Significant judgements and estimates relating to the carrying values of assets and liabilities include impairment of non current asset including goodwill and investments, taxes, fair value measurement of financial instruments, contingencies, defined benefit plans (gratuity benefits), provision for inventory obsolescence and leases -estimating the incremental borrowing rate.

(i) 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 standalone Ind AS 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.

Impairment of non current asset including goodwill and investments

Determining whether investment and goodwill are impaired requires an estimation of the value in use of the respective asset or the relevant cash generating units. The value in use calculation is based on DCF model. Further, the cash flow projections are based on estimates and assumptions which are considered as reasonable by the management.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Refer note 8 and 39 for further disclosures.

Fair value measurement of financial instruments

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 48 for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events. Refer note 45 (c) for further disclosures.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, 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.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

Further details about gratuity obligations are given in note 43.

Provision for inventory obsolescence

Inventory obsolescence provision are determined using policies framed by the Company and in accordance with the methodologies that the Company deems appropriate to the business. There is a significant level of judgment involved in assessing whether provision for obsolescence for slow moving, excess or obsolete inventory items should be recognized considering orders in hand, expected orders, alternative usage, etc.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (ibr) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

43. Gratuity and other post-employment benefits plans

a) Defined contribution plan

The Company’s contribution to provident fund, Employees’ State Insurance and other funds are considered as defined contribution plans. The contributions are charged to the standalone Ind AS statement of profit and loss as they accrue. Contributions to provident and other funds included in employee benefits expense (refer note 35) are as under:

b) Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The level of benefits provided depends on the member’s length of service and salary at retirement age. The Gratuity plan is funded partially through contributions made to SBI Life Insurance Company Limited.

The following tables summarise the components of net benefit expense recognised in the standalone Ind AS statement of profit or loss and amounts recognised in the standalone balance sheet for gratuity benefit:

Notes:

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

ii) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way of retirement, death or disability. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

a. Discount rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase

b. Salary inflation risk : Higher than expected increases in salary will increase the defined benefit obligation

c. Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

44. Segment information - Disclosure pursuant to Ind AS 108 ‘Operating Segments’

(a) Information about reportable segments

Basis of identifying operating segments / reportable segments:

(i) Basis of identifying operating segments:

Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company’s other components); (b) whose operating results are regularly reviewed by the Company’s Chief Operating Decision Maker (CODM) to make decisions about resource allocation and performance assessment and (c) for which discrete financial information is available. The accounting policies consistently used in the preparation of financial statements are also applied to record revenue and expenditure in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the segment on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company therefore believes that it is not practical to provide segment disclosures relating to such items and accordingly such items are separately disclosed as ‘unallocated’

(ii) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.

CODM evaluates the performance of the Company based on the single operative segment as Electronics System Design and Manufacturing (“ESDM”). Therefore, there is only one reportable segment called ESDM in accordance with the requirement of Ind AS 108 “Operating Segments”.

45. Leases, commitments and contingencies

(a) Leases

I. Company as a lessee

The Company has lease contracts for office facilities and equipment. The lease term of the office facilities is generally 3 - 4 years .The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. The lease term for equipments is 8 years and the assets are transferred to the Company at the end of lease term.

The Company also has certain leases of computer and computer equipments with low value. The Company applies the ‘lease of low-value assets’ recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

(c) Contingent liabilities

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

(iii) The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain sections of the Code came into effect on May 03, 2023, the final rules/interpretation have not yet been issued. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.

46. Share-based payments

A Description of the share based payment arrangements

The Company has following share based payment arrangements:

(i) Share option plans (equity settled)

The Company sponsers share option plan -

The Centum Employee Stock Option Plan (‘ESOP’) - 2013 plan. The details of the aforementioned plan are as follows:

(a) The Centum ESOP - 2013 plan was approved by the directors of the Company in May 2013 and by the shareholders in August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the employees of the Company and its subsidiaries (whether in India or outside India), who are in whole time employment with the Company and/or it’s subsidiaries.

The plan is administered by a Compensation committee. Options will be issued to employees of the Company and/or it’s subsidiaries at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

The Centum Electronics Limited Restricted Stock Unit Plan 2021. The details of the aforementioned plan are as follows:

(a) The Centum Electronics Limited Restricted Stock Unit Plan 2021 was approved by the shareholders of the Company in October 2021. Centum RSU - 2021 plan provides for the issue of 1,75,000 shares to the employees of the Company and its subsidiaries (whether in India or outside India), who are in whole time employment with the Company and/or it’s subsidiaries.

The plan is administered by a Nomination and Remuneration committee. Options will be issued to employees of the Company and/or it’s subsidiaries at an exercise price, which shall be equal to the face value of the shares. RSUs granted under this Plan would vest not earlier than minimum vesting period of 1 (one) year or such other period as may be prescribed under applicable laws and not later than maximum vesting period of 8 (eight) years from the date of grant of such RSUs. The exercise period is 5 years from the date of last vesting of RSU.

47. Capital Management

The Company''s capital management is intended to create value for the shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short term bank borrowings.

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 shareholders of the Company.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company''s policy is to keep the gearing ratio at an optimum level to ensure that the debt related covenants are complied with.

48. Disclosures on Financial instruments

This section gives an overview of the significance of financial instruments of the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2.3(b) and 2.3(o), to the standalone Ind AS financial statements.

(a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2024 and March 31, 2023.

(b) Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level l): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using 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).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

(i) Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(iii) There have been no transfers between Level 1, Level 2 and Level 3 for the year ended March 31, 2023 and March 31, 2024.

(c) Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade receivables, other financial assets and cash and bank balances derived from its operations.

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Market risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

(b) Market risk- 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 foreign exchange rates.

Foreign currency sensitivity (refer note 54)

The following tables demonstrate the sensitivity to a reasonably possible change in USD and EURO exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in th

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Mar 31, 2023

m. Provisions and contingent liabilities General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a 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. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

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.

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. The cost of fulfilling a contract comprises the costs that relate directly to the contract (i.e., both incremental costs and an allocation of costs directly related to contract activities).

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. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the standalone Ind AS financial statements.

Provisions and contingent liability are reviewed at each balance sheet.

Decommissioning liability

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.

n. Retirement and other employee benefits

Retirement benefit in the form of provident fund and pension fund are defined contribution scheme. The Company has no obligation, other than the contribution payable. The Company recognizes contribution payable to provident fund and pension fund as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company

recognizes expected cost of short-term employee benefit as an expense, when an employee renders the related service.

The Company treats accumulated leave expected to be carried forward beyond twelve months, 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 reporting date. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

The Company presents the leave as a current liability in the standalone Ind AS balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method using actuarial valuation to be carried out at each balance sheet date.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the standalone Ind AS balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

a) The date of the plan amendment or curtailment, and

b) The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

a) Service costs comprising current service costs, past-service costs, gains and tosses on curtailments and non-routine settlements; and

b) Net interest expense or income.

o. Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction cost and where such values are different from the fair value, at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss.

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price as disclosed in section 2.3.(c) Revenue recognition.

In order for a financial asset to be classified and measured at amortised cost, 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.

Investment in equity instruments issued by subsidiaries, associates are measured at cost less impairment.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

(i) Financial assets

Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at fair value

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through the statement of profit and loss.

For financial assets maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Impairment of financial assets excluding investments in subsidiaries and associates

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through the statement of profit and loss.

The Company recognises impairment toss on trade receivables using expected credit loss model, which involves use of provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 - Financial Instruments.

For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition.

For financial assets maturing within one year from the balance sheet date, the carrying amounts approximates fair value due to the short maturity of these instruments.

De-recognition of financial assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the financial asset expire, or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On de-recognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of de-recognition and the consideration received is recognised in statement of profit or loss.

(ii) Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the

substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial Liabilities

Financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant. Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

a) Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. 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.

b) 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.

Off-setting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the standalone Ind AS 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.

p. Derivative financial instruments

The Company uses derivative financial instruments, such as interest rate swaps to hedge its interest fluctuation risks, etc. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value through statement of profit and loss. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Refer to note 51 for more details.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.

q. Cash and cash equivalents

Cash and cash equivalent in the standalone Ind AS 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 a known amount of cash and which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, as they are considered an integral part of the Company''s cash management.

r. Share-based payments

Certain employees of the Company and its subsidiaries are entitled to share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.

That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves 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 expense or credit in statement of profit and loss 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.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company''s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met.

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

s. Cash dividend

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

t. Foreign currencies

The standalone Ind AS financial statements are presented in INR, which is also the Company''s functional currency.

Transactions in foreign currencies are initially recorded at functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses average rate if the average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

Exchange differences arising on the retranslation or settlement of other monetary items are included in the statement of profit and loss for the period.

u. Research and development expenditure

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible asset when the Company can demonstrate all the following:

i. The technical feasibility of completing the intangible asset so that it will be available for use or sale

ii. Its intention to complete the asset

iii. Its ability to use or sell the asset

iv. How the asset will generate future economic benefits

v. The availability of adequate resources to complete the development and to use or sell the asset

vi. The ability to measure reliably the expenditure attributable to the intangible asset during development.

Following the initial recognition of the development expenditure as an asset. The cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on a straight line basis over the period of expected future benefit from the related project. Amortization is recognized in the standalone statement of profit and loss. During the period of development, the asset is tested for impairment annually.

v. Corporate social responsibility (''CSR'') expenditure

The Company charges its CSR expenditure during the year to the statement of profit and loss.

w. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holder of the Company by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period.

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

2.4 Standard notified but not yet effective

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules 2023 dated March 31, 2023 to amend the following Ind AS which are effective from April 01, 2023.

i) Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after 1 April 2023 and apply to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period.

The amendments are not expected to have a material impact on the Company''s standalone Ind AS financial statements.

ii) Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant'' accounting policies with a requirement to disclose their ‘material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments to Ind AS 1 are applicable for annual periods beginning on or after 1 April 2023. Consequential amendments have been made in Ind AS 107.

The Company is currently revisiting their accounting policy information disclosures to ensure consistency with the amended requirements.

iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences.

The amendments should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, at the beginning of the earliest comparative period presented, a deferred tax asset (provided that sufficient taxable profit is available) and a deferred tax liability should also be recognised for all deductible and taxable temporary differences associated with leases and decommissioning obligations. Consequential amendments have been made in Ind AS 101. The amendments to Ind AS 12 are applicable for annual periods beginning on or after 1 April 2023.

The amendments are not expected to have a material impact on the Company''s standalone Ind AS financial statements.

22 Current financial liabilities: Borrowings (Contd..)

(d) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 9.7% to 12.84% p.a. (March 31,2022: 9.70% to 9.85% p.a.). The rate of interest of Packing credit loan from banks ranges from 2.26% to 8.22% p.a. (March 31, 2022: 2.15% to 3.35% p.a.). The rate of interest of WCD loan is 11.65% (March 31, 2022: Nil).

The rate of interest of FCNR loan ranges from 3.97% to 9.12% p.a. (March 31, 2022: 3.82% to 4.31% p.a.).

The interest is payable on monthly basis."

3. The quarterly returns or statements filed by the Company with banks or financial institutions towards sanction of working capital limits are in agreement with the books of account of the Company.

4. The Company has not been declared as a wilful defaulter by any banks or financial institutions.

5. The Company has not defaulted in repayment of borrowings or in the payment of interest thereon to banks or financial institutions.

41 Significant accounting judgements, estimates and assumptions (Contd...)

Significant judgements and estimates relating to the carrying values of assets and liabilities include impairment of non current asset including goodwill and investments, taxes, fair value measurement of financial instruments, contingencies, defined benefit plans (gratuity benefits), provision for inventory obsolescence and leases - estimating the incremental borrowing rate.

(i) 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 standalone Ind AS 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.

Impairment of non current asset including goodwill and investments

Determining whether investment and goodwill are impaired requires an estimation of the value in use of the respective asset or the relevant cash generating units. The value in use calculation is based on DCF model. Further, the cash flow projections are based on estimates and assumptions which are considered as reasonable by the management.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Refer note 8 and 39 for further disclosures.

Fair value measurement of financial instruments

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 48 for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events. Refer note 45 (c) for further disclosures.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, 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.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

41 Significant accounting judgements, estimates and assumptions (Contd..)

Further details about gratuity obligations are given in note 43.

Provision for inventory obsolescence

Inventory obsolescence provision are determined using policies framed by the Company and in accordance with the methodologies that the Company deems appropriate to the business. There is a significant level of judgment involved in assessing whether provision for obsolescence for slow moving, excess or obsolete inventory items should be recognized considering orders in hand, expected orders, alternative usage, etc.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

46 Share-based payments

A Description of the share based payment arrangements

The Company has following share based payment arrangements:

(i) Share option plans (equity settled)

The Company sponsers share option plan -

The Centum Employee Stock Option Plan (‘ESOP'') - 2013 plan. The details of the aforementioned plan are as follows:

(a) The Centum ESOP - 2013 plan was approved by the directors of the Company in May 2013 and by the shareholders in August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the employees of the Company and its subsidiaries (whether in India or outside India), who are in whole time employment with the Company and/or it''s subsidiaries.

The plan is administered by a Compensation committee. Options will be issued to employees of the Company and/or it''s subsidiaries at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

The Centum Electronics Limited Restricted Stock Unit Plan 2021. The details of the aforementioned plan are as follows:

(a) The Centum Electronics Limited Restricted Stock Unit Plan 2021 was approved by the shareholders of the Company in October 2021. Centum RSU - 2021 plan provides for the issue of 1,75,000 shares to the employees of the Company and its subsidiaries (whether in India or outside India), who are in whole time employment with the Company and/or it''s subsidiaries.

48 Disclosures on Financial instruments (Contd..)

(ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(iii) There have been no transfers between Level 1, Level 2 and Level 3 for the year ended March 31,2022 and March 31,2023. (c) Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade receivables, other financial assets and cash and bank balances derived from its operations.

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Market risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.

56 Other Statutory Information (Contd..)

(b) provide any guarantee, security or the tike on behalf of the Ultimate Beneficiaries"

(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

57 Events after reporting period

The Board of Directors have proposed dividend after the balance sheet date which are subject to approval by the shareholders at the annual general meeting. Refer note 19 for details.

58 Previous year numbers have been reclassified/regrouped wherever necessary to confirm to current year classifications.

59 Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in these standalone Ind AS financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited

For S.R. Batliboi & Associates LLP

Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu

ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director

DIN:00286308 DIN:00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer

Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

---

Mar 31, 2022

(a) Karnataka Industrial Area Development (KIADB) has allotted land to the Company on a lease cum sale basis i.e. 24,280.60 sq. mts at Plot No. 58-P Bengaluru Aerospace Park, Industrial Area for a period of 10 years w.e.f., December 18, 2013. The aggregate capitalized cost of the land at the end of the year is '' 114.61 million (March 31, 2021: '' 114.61 million). The agreement gives a right to the Company to acquire land at the end of the lease term at an additional consideration, if any fixed by KIADB, after reducing the amount already paid.

(b) Property, plant and equipments and other intangible assets of the Company have been pledged / mortgaged as securities against borrowings. Refer note 18 and 21 for details of borrowings.

(c) The Company during the year ended March 31, 2018 had adopted Ind AS under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) rules, 2015 and relevant amendment rules issued thereafter. The Company had availed the exemption available under Ind AS 101, wherein the carrying value of property, plant and equipment has been carried forward at the amount as determined under the previous GAAP as at April 01, 2016.

(b) The Company had entered into a business transfer agreement with Centum Industries Private Limited, an enterprises where key managerial personnel or their relatives exercise significant influence, on December 1, 2015 for the purchase of business on slump sale. As per the terms of agreement, the Company had purchased the net assets pertaining to plastic and defence and space of Centum Industries Private Limited for an aggregate consideration '' 57.00 million, which was arrived at based on the business valuation done by an independent professional firm. The valuation ascribed to assets taken over by an independent professional valuer resulted in the aforesaid goodwill.

The aforementioned goodwill is tested for impairment annually. As at March 31, 2022 and March 31, 2021, the goodwill is not impaired.

(c) The Company during the year ended March 31, 2018 had adopted Ind AS under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) rules, 2015 and relevant amendment rules issued thereafter. The Company had availed the exemption available under Ind AS 101, wherein the carrying value of other intangible assets / goodwill has been carried forward at the amount as determined under the previous GAAP as at April 01, 2016.

1. a) The Company has investments in Centum Electronics UK Limited, which in turn has made investment in Centum Adetel Group SA.Centum Adetel Group SA and its underlying subsidiaries have incurred losses. During the year ended March 31, 2021, the Board of Directors of Company further acquired 10.51% stake of Centum Adetel Group SA through Centum Electronics UK Limited from other shareholders of Centum Adetel Group SA.The carrying value of the aforesaid investment is higher than the net worth of Centum Adetel Group SA.

However, based on internal assessment performed with regard to future operations and external valuation by an expert, the management of the Company is of the view that the carrying value of the Company''s investment in Centum Electronics UK Limited is appropriate.

b) During the year ended March 31, 2020, the management of Centum Adetel Group SA, a step down subsidiary entered into agreement for sale of 65% stake in HOLIWATT (formerly known as Centum Adetel Transportation SAS), subsidiary of Centum Adetel Group SA. Centum Adetel Group SA had a put option to sale its remaining 35% stake at a fixed price amounting to EUR 3.96 million plus interest at the rate of 6% p.a as per the aforesaid sale agreement and has other receivables of EUR 0.5 million . During the year ended March 31, 2022 the HOLIWATT has been placed in specific insolvency statutes, allowing it to commence negotiation with other parties including its shareholders and the Commercial Court of Lyon has announced the opening of judicial recovery procedures. Accordingly, based on its internal assessment, the management of the Company has provided for its receivables amounting to '' 18.36 million and the same has been disclosed as exceptional items in the audited standalone Ind AS financial statements for the year ended March 31, 2022.

2 The Company vide its letter dated March 21, 2017 sought clarification from the Reserve Bank of India (''the RBI'') regarding the permissibility of the investment by overseas subsidiary of the Company as subscribers to the Memorandum of Association of Centum Adeneo India Private Limited (""CAIPL"") under the Foreign Exchange Management (Transfer or issue of any foreign security) Regulations, 2004 (Notification 120/2004 RB, dated 7 July 2004). RBI vide its letter dated July 18, 2018 expressed its inability to accede to the request of the Company with regard to infusion of capital by it''s overseas subsidiaries.

Further the Company based on the legal opinion obtained, is of the veiw that the above rejection by RBI do not have any impact on the incorporation of CAIPL under the applicable laws of India and CAIPL can change the initial subscribers to the Memorandum of Association.

Accordingly, the Company, acquired 100% interest in CAIPL during the year ended March 31, 2019 from Centum Adetel Group SA i.e. it''s foreign subsidiary.

3. The Company has investments in Qulsar Inc. Based on internal assessment performed with regard to future operations, the management of the Company is of the view that the carrying value of the Company''s investment in Qulsar Inc. approximates the fair value as on the reporting dates.

Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend 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.

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 equity shareholders.

Nature and purpose of reserves Securities Premium

Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve

The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain percentage of profits was required to be transferred to General reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General reserve is not mandatory. General reserve is a free reserve available to the Company.

Retained earnings

Retained Earnings are the profits of the Company earned till date net of appropriations.

Share based payments reserve

The share-based payment reserve is used to recognise the value of equity-settled share-based options provided to employees, including key management personnel, as part of their remuneration. Refer to Note 45 for further details of these plans.

Capital reserve

The Company recognizes the exercise or cancellation of vested options of the Company''s equity-settled share-based payments to capital reserve.

1. Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at March 31st.

2. 2. The Board of Directors of the Company at its meeting held on May 24, 2022 had recommended a final dividend of 25 % (i.e. ''. 2.50 per equity share) for the year ended March 31, 2022 which is in compliance with Section 123 of the Companies Act, 2013.

1. Foreign currency term loan represents term loan taken from a bank and secured by way of :-

(a) First pari-passu charge on current assets including stock and receivables of the Company;

(b) First pari-passu charge on present and future fixed assets of the Company; and

(c) First pari-passu charge by way of equitable mortgage on Land and building situated at i) No. 44, KHB Industrial Area,

Yelahanka, Bangalore - 560 106 and ii) Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District.

The term loan carried an interest rate of 4.25% p.a. on the outstanding amount of the loan payable at quarterly rests. The term loan is repayable in sixteen equal quarterly instalments from September 2017. The loan is repayable in next one year and hence been classified under current maturties of long term borrowings. The loan have been repaid entirely during the year March 31, 2022.

2. The Indian rupee term loan of '' Nil (March 31, 2021: '' 136.57 million) including current maturity of '' Nil (March 31, 2021: '' 38.28 million) from a Financial Institution carried an interest rate of 12% p.a on the outstanding amount of loan payable. The term loan was repayable in Sixty One unequal monthly instalments from April 2019. The Indian rupee term loan of '' Nil (March 31, 2021: '' 32.61 million) including current maturity of '' Nil (March 31, 2021 : '' 16.92 million) from a Financial Institution carried an interest rate of 11.75% p.a on the outstanding amount of loan payable. The term loan was repayable in Thirty Six equal monthly instalments from February 2020. The loans were secured by :

(a) Mortgage on Residential Property of Swarnalata Mallavarapu situated at site no. A-11 and A-12, Manyatha Residency, Rachenahalli Village, K. R. Puram, Hobli, Bengaluru.

(b) Personal Guarantee of Mrs.Swarnalata Mallavarapu to be restricted to the collateral mortgaged and the value of unpaid loan.

(c) 4 undated cheques (''UDC'') for '' 50.00 Million each and 4 undated cheques of '' 12.5 million each respectively.

(d) 3 post dated cheques (''PDC'') for '' 4.45 Million each and 2 electronic clearing service mandate form with undertaking for '' 1.66 million each.

(e) Invest in SIP-MF (Debt Fund) of '' 0.5 Million per month for 24 months.

The loans have been repaid entirely during the year ended March 31, 2022.

Government grants have been received towards the purchase and construction of certain items of property, plant and equipment under Modified Special Incentive Package Scheme (M-SIPS) as notified by Ministry of Communications and Information Technology, Department of Information Technology. As per the scheme, the Company is required to abide by all terms and conditions of M-SIPS policy, guidelines and amendments issued from time to time. The Company vide its letter of undertaking dated May 02, 2018 has agreed to comply with all terms and conditions of M-SIPS policy, guidelines and amendments issued from time to time.

1. Secured Indian rupee short term loan from a bank carries interest at 8.70% p.a. (March 31, 2021: 11.28% p.a). The loan is secured by way of:

(a) Charge on current assets including stock and receivables of the Company;

(b) Charge on plant and machinery and furniture and fixture of the Company; and

(c) Charge by way of equitable mortgage on Land and building situated at i) No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 and ii) Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District.

(d) Cash collateral to the tune of '' 50.00 million.

2. Cash credit and overdraft from banks, packing credit, FCNR loan from banks are payable on demand and are secured by way of :

(a) Hypothecation of entire stock of raw materials/work-in-progress/finished goods, receivables / book debts and other current assets / moveable fixed assets on pari passu first charge with other banks;

(b) Hypothecation of present and future fixed assets pari passu first charge with other banks;

(c) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 belonging to the Company, on pari passu first charge with other banks; and

(d) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 9.70% to 9.85% p.a. (March 31, 2021: 9.70% to 10.80% p.a). The rate of interest of Packing credit from banks ranges from 2.15% to 3.35% p.a. (March 31, 2021: 2.22% to 4.09% p.a.) and that of FCNR ranges from 3.82% to 4.31% p.a. (March 31, 2021: 3.84% to 5.46% p.a.) payable on monthly basis.

4. The quarterly returns or statements filed by the Company with banks or financial institutions towards sanction of working capital limits are in agreement with the books of account of the Company.

5. The Company has not been declared as a wilful defaulter by any banks or financial institutions.

6. The Company has not defaulted in repayment of borrowings or in the payment of interest thereon to banks or financial institutions.

a) Trade payables include due to suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2016). Amount due to suppliers under the MSMED Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Further in view of the management, the impact of interest,

Income tax

The Company is subject to income tax in India on the basis of standalone financial statements. Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (''Ordinance'') issued by Ministry of Law and Justice (Legislative Department) on September 20, 2019 which is effective from April 1, 2019, domestic companies have the option to pay income tax at 22% plus applicable surcharge and cess (''new tax regime'') subject to certain conditions. The Company based on the current projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial year 2020-21 and accordingly the Company has accounted deferred tax asset based on the reduced applicable tax rates.

Earnings per share (''EPS'')

Basic EPS amounts are calculated by dividing the profit / loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders 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.

40 Significant accounting judgements, estimates and assumptions

The preparation of the Company''s standalone Ind AS financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results could differ from those estimates. 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.

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

Significant judgements and estimates relating to the carrying values of assets and liabilities include impairment of non current asset including goodwill and investments, taxes, fair value measurement of financial instruments, contingencies, defined benefit plans (gratuity benefits), provision for inventory obsolescence and leases - estimating the incremental borrowing rate.

(i) 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 standalone Ind AS 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.

Impairment of non current asset including goodwill and investments

Determining whether investment and goodwill are impaired requires an estimation of the value in use of the respective asset or the relevant cash generating units. The value in use calculation is based on DCF model. Further, the cash flow projections are based on estimates and assumptions which are considered as reasonable by the management.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Refer note 8 and 38 for further disclosures.

Fair value measurement of financial instruments

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 47 for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, 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.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for India.

Further details about gratuity obligations are given in note 42.

Provision for inventory obsolescence

Inventory obsolescence provision are determined using policies framed by the Company and in accordance with the methodologies that the Company deems appropriate to the business. There is a significant level of judgment involved in assessing whether provision for obsolescence for slow moving, excess or obsolete inventory items should be recognized considering orders in hand, expected orders, alternative usage, etc.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

(i) As the liability for gratuity and leave encashment is provided on actuarial basis for the Company, as a whole the amount pertaining to the key managerial personnel''s'' are not disclosed above.

(ii) For investments in related parties, refer note 5.

(iii) Refer note 18 and 21 for long term borrowings and short term borrowings respectively with regard to security given by related parties for loans availed by the Company.

Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement age. The Gratuity plan is unfunded.

The following tables summarise the components of net benefit expense recognised in the standalone Ind AS statement of profit or loss and amounts recognised in the standalone balance sheet for gratuity benefit:

ii) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way of retirement, death or disability. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

a. Discount rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase

b. Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation

c. Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

The above sensitivity analysis is based on a change in an assumption while holding all other 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.

43 Segment information - Disclosure pursuant to Ind AS 108 ''Operating Segments''(a) Information about reportable segments

Basis of identifying operating segments / reportable segments:

(i) Basis of identifying operating segments:

Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company''s other components); (b) whose operating results are regularly reviewed by the Company''s Chief Operating Decision Maker (CODM) to make decisions about resource allocation and performance assessment and (c) for which discrete financial information is available. The accounting policies consistently used in the preparation of financial statements are also applied to record revenue and expenditure in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the segment on an appropriate basis. Certain items are not specifically allocable to individual segments

as the underlying services are used interchangeably. The Company therefore believes that it is not practical to provide segment disclosures relating to such items and accordingly such items are separately disclosed as ''unallocated''

(ii) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.

CODM evaluates the performance of the Company based on the single operative segment as Electronics System Design and Manufacturing ("ESDM"). Therefore, there is only one reportable segment called ESDM in accordance with the requirement of Ind AS 108 "Operating Segments".

(c) Combined revenue from four external customer group having more than 10% each of the company''s total revenue amounting to '' 2,378.41 million (March 31, 2021: Combined revenue from three external customer group having more than 10% each of the company''s total revenue amounting to '' 2,528.03 million).

44 Leases , commitments and contingencies(a) LeasesI. Company as a lessee

The Company has lease contracts for office facilities and equipment. The lease term of the office facilities and for equipment is generally 3 - 5 years .The Company''s obligations under its leases are secured by the lessor''s title to the leased assets.

The Company also has certain leases of computer and computer equipments with low value. The Company applies the ''lease of low-value assets'' recognition exemptions for these leases.

The Company has lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

(ii) Power purchase agreement

The Company has commitment in nature of variable lease payment towards purchase of solar and wind power with various parties whereby the Company has committed to purchase and supplier has committed to sell contracted quantity of solar and wind power for period as defined in the power purchase agreements.

(c) Contingent liabilities

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

(ii) The Supreme court of India in the month of February 2019 had passed a judgement relating to definition of wages under the Provident Fund Act, 1952. The Management is of the view that there are interpretative challenges on the application of the judgement retrospectively. Based on the legal advice and in the absence of reliable measurement of the provision for earlier periods, the Company has made a provision for provident fund contribution pursuant to the judgement only from the date of Supreme Court Order. The Company will evaluate its position and update its provision, if required, on receiving further clarity on the subject. The Company does not expect any material impact of the same.

(iii) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

* The aforementioned amounts under disputes are as per the demands from various authorities for the respective periods and has not been adjusted to include further interest and penalty leviable, if any, at the time of final outcome of the appeals.

The Company is subject to legal proceeding and claims, which have arisen in the ordinary course of business. The Company has reviewed all its pending litigations and proceedings and is not carrying provisions for all the above mentioned amounts in its books of account, as the Company''s Management is confident of successfully litigating the matters and these are disclosed as contingent liability, where applicable in its standalone Ind AS financial statements. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect of the Company''s results of operations or financial condition.

45 Share-based paymentsA Description of the share based payment arrangements

The Company has following share based payment arrangements:

(i) Share option plans (equity settled)

The Company sponsers share option plan - the Centum Employee Stock Option Plan (''ESOP'') - 2013 plan. The details of the aforementioned plan are as follows:

(a) The Centum ESOP - 2013 plan was approved by the directors of the Company in May 2013 and by the shareholders in August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the employees of the Company and its subsidiaries / joint venture (whether in India or outside India), who are in whole time employment with the Company and/or it''s subsidiaries / joint venture.

The plan is administered by a Compensation committee. Options will be issued to employees of the Company and/ or it''s subsidiaries / joint venture at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

B Measurement of fair values

The fair value of employee share options has been measured using Black Scholes model. The fair value of the options and the input used in the measurement of the grant- date fair values of both the plans are as follows:

E The Company had granted stock options to employees of Centum Rakon India Private Limited under ESOP plans as detailed in note 45(A) above. The Company had an obligation to settle the transaction with the aforementioned entity''s employees by providing it''s own equity shares. Therefore, in accordance with Ind AS 102, the Company had measured its obligation in accordance with the requirements applicable to equity settled share-based payment transaction.

46 Capital Management

The Company''s capital management is intended to create value for the shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short term bank borrowings.

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 shareholders of the Company.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is total borrowings divided by total capital plus total borrowings. The Company''s policy is to keep the gearing ratio at an optimum level to ensure that the debt related covenants are complied with.

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.

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

47 Disclosures on Financial instruments

This section gives an overview of the significance of financial instruments of the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2.3(b) and 2.3(o), to the financial statements.

(a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2022 and March 31, 2021.

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using 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).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

(i) Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(ii) Interest rate swaps are fair valued using market observable rates and published prices together with forecasted cash flow information where applicable.

(iii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(iv) There have been no transfers between Level 1, Level 2 and Level 3 for the year ended March 31, 2021 and March 31, 2022.

(c) Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade receivables, other financial assets and cash and bank balances derived from its operations.

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Market risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

(b) Market risk- 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 foreign exchange rates.

The sensitivity analysis has been based on the composition of the Company''s financial assets and liabilities at March 31, 2022 and March 31, 2021 .The period end balances are not necessarily representative of the average debt outstanding during the period.

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, investments, cash and cash equivalents.

The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was '' 1,473.79 million and '' 1,547.84 million as at March 31, 2022 and March 31, 2021 respectively, being the total carrying value of trade receivables, balances with bank, bank deposits, investments (other than investments in subsidiaries and joint ventures) and other financial assets.

Customer credit risk is managed by each business unit based on the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major customers. The Company does not hold collateral as security. Further, the top 5 customer group of the Company contribute to more than 49% of the trade receivables for the year ended March 31, 2022 and more than 66% of the trade receivables during the year ended March 31, 2021.

With respect to Trade receivables, the Company has constituted the terms to review the receivables on periodic basis and to take necessary mitigations, wherever required. The Company creates allowance for all unsecured receivables based on lifetime expected credit loss based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

Credit risk from balances with bank and financial institutions and in respect to loans and security deposits 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. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

(d) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital limits from various banks. The Company invests its surplus funds in bank fixed deposit, which carry no or low market risk.

The Company monitors its risk of shortage of funds on a regular basis. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, etc. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be medium.

The following table shows a maturity analysis of the anticipated cash flows excluding interest obligations for the Company''s financial liabilities on an undiscounted basis, which may differ from both carrying value and fair value.

1. Disclosure of financial data as per Ind AS - 112 ''Disclosure of Interests in Other Entities'' has been done based on the financial statements for the respective periods provided to us by the management.

2. The above disclosure made do not include step down subsidiaries and associates and are with respect to subsidiaries and associates existing as at March 31, 2022.

50 Hedging activities and derivativesDerivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts and interest rate swaps to manage some of its transaction exposures. These derivative instruments are not designated as cash flow / fair value hedges and are entered into for periods consistent with foreign currency exposure of underlying transactions. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.

51 The Company is in the process of conducting a transfer pricing study as required by the transfer pricing regulations under the IT Act (''regulations'') to determine whether the transactions entered during the year ended March 31, 2022, with the associated enterprises were undertaken at "arm''s length price". The management confirms that all the transactions with associate enterprises are undertaken at negotiated prices on usual commercial terms and is confident that the aforesaid regulations will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

54 Pursuant to the ongoing COVID-19 pandemic, the Company has made a detailed assessment of its liquidity position as at the date of approval of these standalone Ind AS financial statements for the next one year and of the recoverability and carrying values of its assets including property, plant and equipment (including capital work-in-progress), intangible assets, trade receivables, inventory , investments and other assets as at the reporting date and has concluded that there are no material adjustments required in the standalone Ind AS financial statements. Management believes that it has taken into account all the possible impact of known events and economic forecasts based on internal and external sources of information arising from COVID-19 pandemic while making such assessment in the preparation of the standalone Ind AS financial statements.

55 As at March 31, 2022, trade payables amounting to '' 9.22 million, advance from customers amounting to '' 47.27 million and trade receivables amounting to '' 9.64 million towards purchase and sale of goods and services respectively, which are outstanding beyond permissible time period stipulated under the Master Circular on Import of Goods and Services and Master Circular on Export of Goods and Services issued by Reserve Bank of India (''the RBI''). Considering that the balances are outstanding for more than the stipulated time, the Company is in the process of intimating the appropriate regulatory authorities and seeking requisite approvals for extensions. The management is confident that required approvals would be received and penalties, if any that may be imposed on the Company would not be material. Accordingly, no adjustments have been made by the management to these standalone Ind AS financial statements in this regard.

56 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

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

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested 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 company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) 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

(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

57 Events after reporting period

The board of directors have proposed dividend after the balance sheet date which are subject to approval by the shareholders at the annual general meeting. Refer note 17 for details.

58 Previous year numbers have been reclassified/regrouped wherever necessary to confirm to current year classifications. The management believes that such reclassifications of items are not material as they would, individually or collectively, not influence the economic decisions that users make on the basis of the standalone Ind AS financial statements.

59 Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in these standalone Ind AS financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

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Mar 31, 2018

1. Corporate information

Centum Electronics Limited (“Centum” or “the Company”) is a public limited company domiciled in India. The registered office of the Company is located at Bangalore, India. Its equity shares are listed on National Stock Exchange and Bombay Stock Exchange in India.

Centum designs, manufactures and also exports electronic products. It also provides design services to its customers. These include systems, subsystems and modules.

Information on related party relationships of the Company is provided in Note 40.

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

(b) Karnataka Industrial Area Development (KIADB) has allotted following land to the Company on a lease cum sale basis i.e. 24,280.60 sq. mts at Plot No. 58-P Bengaluru Aerospace Park, Industrial Area for a period of 10 years w.e.f December 18, 2013. The aggregate capitalized cost of the land at the end of the year is Rs. 114.61 million. The agreement gives a right to the Company to acquire land at the end of the lease term at an additional consideration, if any fixed by KIADB, after reducing the amount already paid.

(c) During the year ended March 31, 2017, the Company had capitalised borrowing cost towards Avansa building. Addition to gross block for the year ended March 31, 2017 includes borrowing cost amounting to Rs.6.14 million.

(d) Property, plant and equipments and other intangible assets of the Company have been pledged / mortgaged as securities against borrowings. Refer note 18 and 21 for details of borrowings.

(e) Gross block of buildings and plant and equipments amounting to Rs.565.83 million (March 31, 2017: Rs.543.03 million; April 1, 2016: Rs.Nil) are on leasehold land.

(c) The Company had entered into a business transfer agreement with Centum Industries Private Limited on December 1, 2015 for the purchase of business on slump sale. As per the terms of agreement, the Company had purchased the net assets pertaining to plastic and defence and space of Centum Industries Private Limited for an aggregate consideration Rs.57.00 million, which was arrived at based on the business valuation done by an independent professional firm. The valuation ascribed to assets by an independent professional valuer amounting Rs.17.35 million resulted in a goodwill of Rs.39.65 million.

The aforementioned goodwill is tested for impairment annually. As at March 31, 2018, March 31, 2017 and April 1, 2016, the goodwill is not impaired.

2. The Company has investments in Centum Electronics UK Limited, which in turn has made investment in Centum Adetel Group SA. Based on internal assessment performed with regard to future operations, the management of the Company is of the view that the carrying value of the Company''s investment in Centum Electronics UK Limited is appropriate.

3. The Company has investments in Qulsar Inc. Based on internal assessment performed with regard to future operations, the management of the Company is of the view that the carrying value of the Company''s investment in Qulsar Inc. approximates the fair value as on the reporting dates.

4. During the year ended March 31, 2017, Qulsar Inc. has issued 14,837 bonus shares to the Company.

5. Includes balance in unclaimed dividend account Rs.2.45 million (March 31, 2017: Rs.1.77 million, April 1, 2016: Rs.26.94 million).

6. Margin money is against bank guarantees issued in favour of customers and statutory authorities.

7. Balances with banks on current accounts does not earn interest. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash-requirement of the Company, and earn interest at the respective short-term deposit rates.

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend 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.

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 equity shareholders.

1. Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability (including dividend distribution tax thereon) as at March 31st.

2. The Board of Directors of the Company at its meeting held on May 30, 2017 have recommended a final dividend of 30% (i.e. Rs.3 per equity share) for the year ended March 31, 2017.

1. Foreign currency term loan represents term loan taken from a bank and secured by way of :-

(a) First pari-passu charge on current assets including stock and receivables of the Company;

(b) First pari-passu charge on present and future fixed assets of the Company; and

(c) First pari-passu charge by way of equitable mortgage on Land and building situated at i) No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 and ii) Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District.

2. The term loan carries an interest rate of 4.25 % per annum (p.a.) (March 31, 2017: 4.25% p.a. and April 1, 2016: Nil) on the outstanding amount of the loan payable at quarterly rests. The term loan is repayable in sixteen equal quarterly instalments from September 2017.

1. Secured Indian rupee term loan from a bank of Rs.200.00 million (March 31, 2017: Rs.Nil; April 1, 2016: Rs.Nil) carries interest at 10.25% p.a. (March 31, 2017: Nil; April 1, 2016: Nil). The loan is secured by way of:

(a) First pari-passu charge on current assets including stock and receivables of the Company;

(b) First pari-passu charge on present and future fixed assets of the Company; and

(c) First pari-passu charge by way of equitable mortgage on Land and building situated at i) No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 and ii) Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 -Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District.

2. Cash credit and overdraft from banks, packing credit and FCNR loan from banks are payable on demand and are secured by way of :

(a) Hypothecation of entire stock of raw materials/work-in-progress/finished goods, receivables / book debts and other current assets / moveable fixed assets on pari passu first charge with other banks;

(b) Hypothecation of plant and machinery pari passu first charge with other banks;

(c) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 belonging to the Company, on pari passu first charge with other banks; and

(d) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 10.40% to 11.10% p.a. (March 31, 2017: 11.25% to 11.30% p.a; April 1, 2016: 11.30% to 11.90% p.a.). The rate of interest of Packing credit from banks ranges from 3.34% to 5.74% (March 31, 2017: 3.12% p.a. ; April 1, 2016: 2.36% to 2.78% p.a.) and that of FCNR ranges from 5.38% to 5.69% p.a. (March 31, 2017: 5.5% p.a.; April 1, 2016: 5.5% p.a.) payable on monthly basis.

3. Buyer''s credit from banks carried an interest rate at Nil (March 31, 2017: 0.30% to 1.94% p.a., April 1, 2016: 0.56% to 1.62% p.a.) and the interest and principal were repayable within a maximum tenor of twelve months. During March 31, 2018, the buyer''s credit was repaid in full.

Sale of products includes excise duty collected from customers of Rs.33.57 million (March 31, 2017: Rs. 116.44 million). Sale of products net of excise duty is Rs.3,468.42 million (March 31, 2017: Rs.3,744.61 million). Revenue from operations for periods up to June 30, 2017 includes excise duty. From July 1, 2017 onwards the excise duty and most indirect taxes in India have been replaced with Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations for the year ended March 31, 2018 is not comparable to March 31, 2017,

The Board of Directors of the Company had considered and approved the investment of 51% controlling stake in Adetel Company SA, France through Centum Electronics UK Limited on June 17, 2016. The said transaction was completed on July 4, 2016. Consequent to the acquisition, Adetel Company SA, France and its subsidiaries became subsidiaries of the Company.

Further the Board of Directors of the Company had considered and approved a further investment of 3.15% stake in Centum Adetel Company SA (formerly Adetel Company SA), France through Centum Electronics UK Limited on March 10, 2017. The Company had incurred expenses amounting to Rs.39.12 million in connection with the said investment, which was disclosed as an exceptional item for the year ended March 31, 2017.

8. INCOME TAX

The Company is subject to income tax in India on the basis of standalone financial statements. As per the Income Tax Act, the Company is liable to pay income tax which is the higher of regular income tax payable or the amount payable based on the provisions applicable for Minimum Alternate Tax (MAT).

MAT paid in excess of regular income tax during a year can be carried forward for a period of 15 years and can be offset against future tax liabilities.

Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

9 EARNINGS PER SHARE (''EPS'')

Basic EPS amounts are calculated by dividing the profit/ loss for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders 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.

10 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. 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.

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

Significant judgements and estimates relating to the carrying values of assets and liabilities include impairment of investments in subsidiaries and joint ventures, impairment of goodwill, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.

(i) 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.

Impairment of non current asset including goodwill and investments

Determining whether investment and goodwill are impaired requires an estimation of the value in use of the respective asset or the relevant cash generating units. The value in use calculation is based on DCF model. Further, the cash flow projections are based on estimates and assumptions which are considered as reasonable by the management.

Taxes

Deferred tax assets are recognised for MAT credit entitlement and unused tax losses to the extent that it is probable that taxable profit will be available against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Refer note 7 and 37 for further disclosures.

Fair value measurement of financial instruments

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 46 for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, 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.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds.

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in note 41.

No share options have been granted to the non-executive members of the Board of Directors under the share based payments plans of the Company. Refer to Note 44 for further details on the scheme.

Notes:

(i) As the liability for gratuity and leave encashment is provided on actuarial basis for the Company, as a whole the amount pertaining to the key managerial personnel''s'' are not disclosed above.

(ii) For investments in related parties, refer note 5(2).

11 Gratuity and other post-employment benefits plans

a) Defined contribution plan

The Company''s contribution to provident fund, Employees'' State Insurance and other funds are considered as defined contribution plans. The contributions are charged to the standalone statement of profit and loss as they accrue. Contributions to provident and other funds included in employee benefits expense (note 32) are as under:

b) Defined benefits plan

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement age. The Gratuity plan is unfunded.

The following tables summarise the components of net benefit expense recognised in the standalone statement of profit or loss and amounts recognised in the standalone balance sheet for gratuity benefit:

12 Segment information - Disclosure pursuant to Ind AS 108 ‘Operating Segments’

(a) Information about reportable segments

Basis of identifying operating segments / reportable segments:

(i) Basis of identifying operating segments:

Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company''s other components); (b) whose operating results are regularly reviewed by the Company''s Chief Operating Decision Maker (CODM) to make decisions about resource allocation and performance assessment and (c) for which discrete financial information is available. The accounting policies consistently used in the preparation of financial statements are also applied to record revenue and expenditure in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the segment on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company therefore believes that it is not practical to provide segment disclosures relating to such items and accordingly such items are separately disclosed as ‘unalliocated''

(ii) Reportable segments: An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.

CODM evaluates the performance of the Company based on the single operative segment as ESDM. Therefore, there is only one reportable segment called ESDM in accordance with the requirement of Ind AS 108 "Operating Segments".

*Revenue by geographical area are based on the geographical location of the customer.

**Non-current assets excludes financial instruments and tax assets.

(c) No single customer represents 10% or more of the entity''s total revenue during the year ended March 31, 2018.

13 Commitments and contingencies

(a) Operating leases: Company as lessee

The Company has entered into operating leases for office facilities and equipments (like car and computers) under cancellable operating leases. There are no restrictions imposed by lease arrangements and there are no sub leases. The total rental expense towards the aforementioned leases charged to the statement of profit and loss is Rs.25.36 million (March 31, 2017: '' 29.87 million).

Company as lessor

The Company has entered into operating lease for giving office facilities under cancellable operating lease arrangement to its joint venture company. The total rental income recognised by the Company in the statement of profit and loss amounted to Rs.3.03 million (March 31, 2017: Rs.3.03 million).

(c) Contingencies

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

14 Share-based payments

A Description of the share based payment arrangements

The Company has following share based payment arrangements:

(i) Share option plans (equity settled)

The Company sponsers two share option plans - the Centum Employee Stock Option Plan (''ESOP'') - 2007 plan and the Centum ESOP - 2013 plan. The details of the aforementioned plans are as follows:

(a) The Centum ESOP - 2007 plan was approved by the directors of the Company in October 2007 and by the shareholders in December 2007. Centum ESOP - 2007 plan provides for the issue of 416,666 shares to the employees of the Company and its subsidiaries / joint venture (whether in India or outside India), who are in whole time employment with the Company and/or it''s subsidiaries / joint venture.

(b) The Centum ESOP - 2013 plan was approved by the directors of the Company in May 2013 and by the shareholders in August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the employees of the Company and its subsidiaries / joint venture (whether in India or outside India), who are in whole time employment with the Company and/or it''s subsidiaries / joint venture.

The plan is administered by a Compensation committee. Options will be issued to employees of the Company and/or it''s subsidiaries / joint venture at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

E The Company has granted stock options to employees of Centum Rakon India Private Limited under ESOP plans as detailed in note 44(A) above. The Company has an obligation to settle the transaction with the aforementioned entity''s employees by providing it''s own equity shares. Therefore, in accordance with Ind AS 102, the Company has measured its obligation in accordance with the requirements applicable to equity settled share-based payment transaction.

15 Capital Management

The Company''s capital management is intended to create value for the shareholders by facilitating the meeting of long term and short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long term and short term bank borrowings.

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 shareholders of the Company.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is total debt divided by total capital plus total debt. The Company''s policy is to keep the gearing ratio at an optimum level to ensure that the debt related covenants are complied with.

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.

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

16 Disclosures on Financial instruments

This section gives an overview of the significance of financial instruments of the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2.2(b) and 2.2(n), to the financial statements.

(b) Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares, and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using 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).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

(i) Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(ii) Foreign exchange forward contracts and interest rate swaps are fair valued using market observable rates and published prices together with forecasted cash flow information where applicable.

(iii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(iv) There have been no transfers between Level 1, Level 2 and Level 3 for the years ended March 31, 2018, March 31, 2017 and April 1, 2016.

(c) Financial risk management objectives and policies

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Market risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.

(b) Market risk- 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 foreign exchange rates.

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. For unhedged foreign currency exposure, refer note 54.

The sensitivity analysis has been based on the composition of the Company''s financial assets and liabilities at March 31, 2018 and March 31, 2017 excluding cash and cash equivalents which does not present a material exposure. The period end balances are not necessarily representative of the average debt outstanding during the period.

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. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, investments, cash and cash equivalents and derivatives.

The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was Rs.1,219.20 million, Rs.1,155.63 million and Rs.1,397.77 million, as at March 31, 2018, March 31, 2017 and April 1, 2016, respectively, being the total carrying value of trade receivables, balances with bank, bank deposits, investments (other than investments in subsidiaries and joint ventures) and other financial assets (excluding assets held for disposal).

Customer credit risk is managed by each business unit based on the Company''s established policy, procedures and control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an individual basis for major customers. The Company does not hold collateral as security. Further, the top 5 customers of the Company contribute to more than 38% of the receivables for the year ended March 31, 2018 and more than 50% of the receivables during the year ended March 31, 2017 and April 1, 2016.

With respect to Trade receivables, the Company has constituted the terms to review the receivables on periodic basis and to take necessary mitigations, wherever required. The Company creates allowance for all unsecured receivables based on lifetime expected credit loss based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

Credit risk from balances with bank 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. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital limits from various banks. The Company invests its surplus funds in bank fixed deposit, which carry no or low market risk.

The Company monitors its risk of a shortage of funds on a regular basis. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, etc. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.

The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company''s financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value. Floating rate interest is estimated using the prevailing interest rate at the end of the reporting period.

17 First time adoption of Ind AS

These standalone financial statements, for the year ended March 31, 2018, are the first financial statements, the Company has prepared in accordance with Ind AS. For the periods upto March 31, 2017, the Company has prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and Amendment thereof ("Indian GAAP" or "previous GAAP").

Accordingly, the Company has prepared these standalone financial statements which comply with Ind AS applicable for year ended March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2016, 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 April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

(A) Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following material exemptions:

Exemptions

Estimates:

The estimates as at April 1, 2016 and as at March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP apart from the Impairment of financial assets based on Expected Credit Loss (ECL) 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 as at April 1, 2016, the date of transition to Ind AS and as of March 31, 2017.

De-recognition of financial assets and liabilities:

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

Classification and measurement of financial assets:

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exists at the date of transition to Ind AS.

Impairment of financial assets: (Trade receivables and other financial assets)

As at the date of transition to Ind AS, the Company has determined that there will be significant increase in credit risk since the initial recognition of a financial instrument which would require undue cost or effort. The Company has recognised a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognised (unless that financial instrument is low credit risk at a reporting date). Deemed cost - Previous GAAP carrying amount: (PPE and Intangible Assets)

The Company has elected to avail exemption under Ind AS 101 to use Indian GAAP carrying value as deemed cost at the date of transition for all items of property, plant and equipment, capital work in progress and intangible assets as per the balance sheet prepared in accordance with previous GAAP.

Investments in subsidiaries, joint ventures and associates

In separate financial statements, a first-time adopter that subsequently measures an investment in a subsidiary, joint venture or associate at cost, may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its separate opening Ind AS balance sheet. The Company has elected to apply the previous GAAP carrying amount of its investment in subsidiaries, associates and joint ventures.

Share - based payment transactions:

Ind AS 101 permits a first time adopter to not apply Ind AS 102 share based payments to equity instruments that settled before date of transition to Ind AS. Accordingly, the Company has elected to measure only those employee stock options that have not been settled as on the date of transition.

Fair value measurement of financial assets or financial liabilities:

In accordance with paragraph D20 of Ind AS 101, the Company has applied day one gain or loss provisions prospectively to transactions occurring on or after the date of transition to Ind AS.

Notes to the reconciliation between previous GAAP and Ind AS

18. Re-measurement of post employment benefit plans

In accordance with Ind AS 19, "Employee Benefits", re-measurement gains and losses on post employment defined benefit plans are recognised in other comprehensive income as compared to the statement of profit and loss under the Previous GAAP.

19. Expected credit loss

The provision is made against trade receivables based on “expected credit loss” model as per Ind AS 109. Under previous GAAP the provision was made when the receivable turned doubtful based on the assessment on case to case basis.

20. Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP, Accordingly, under Ind AS, there are transitional adjustments leading to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings on transition or a separate component of equity depending on the recognition of the instrument.

21. Interest rate swap not designated as hedging instrument

Under the previous GAAP, the Company had considered both the critical terms of the interest rate swap and those of the repayment of interest on foreign currency term loan as same. Based on the internal assessment carried out by the management, the net impact of the marked to market valuation of the foreign currency swap, net of gain/ loss on the underlying loan, is not expected to be material and accordingly no adjustments were made in the standalone financial statements.

In accordance with Ind AS 109 “Financial Instruments”, all derivative financial instruments are recognised at fair value as at each reporting date through the statement of profit and loss.

22. Amortisation of goodwill

The goodwill recognised on transactions in earlier years was amortised under previous GAAP, however the same has been recognised at previous GAAP carrying value on transition date in accordance with Ind AS 101 transition provisions. Amortisation of goodwill amount has been reversed for the year ended March 31, 2017 and has been reinstated.

23. Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

24. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows,

25. Previous year figures have been regrouped

The figures of the previous periods have been regrouped/reclassified, where necessary, to conform with the current year''s classification.

26. Hedging activities and derivatives

Derivatives not designated as hedging instruments

The Company uses foreign exchange forward contracts and interest rate swaps to manage some of its transaction exposures. These derivative instruments are not designated as cash flow / fair value hedges and are entered into for periods consistent with foreign currency exposure of underlying transactions. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.

27. The Company is in the process of conducting a transfer pricing study as required by the transfer pricing regulations under the IT Act (‘regulations'') to determine whether the transactions entered during the year ended March 31, 2018, with the associated enterprises were undertaken at “arm''s length price”. The management confirms that all the transactions with associate enterprises are undertaken at negotiated prices on usual commercial terms and is confident that the aforesaid regulations will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation,

28. Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 "Revenue from Contracts with Customers" was issued on March 28, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Company. Ind AS 115 is effective for the Company in the first quarter of fiscal year 2019 using either one of two methods:

(i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or

(ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (April 1, 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Company continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Company''s considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements. The Company has established an implementation team to implement Ind AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes, and additional disclosure requirements that may be necessary. A reliable estimate of the quantitative impact of Ind AS 115 on the standalone financial statements will only be possible once the implementation project has been completed.

Amendments to Ind 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112

The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entity''s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for disposal.

As at March 31, 2018, the Company has classified its interest in Centum Rakon India Private Limited, a joint-venture Company, as held for sale (see note 53), but these amendments are unlikely to affect the Company''s financial statements.

Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount,

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact,

These amendments are effective for annual periods beginning on or after April 1, 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

29. The Board of Directors of the Company in its meeting held on February 26, 2018 had approved proposal to sell 51% stake held in Centum Rakon India Private Limited (a joint venture company), subject to approval of the shareholders. Subsequent to the year ended March 31, 2018, the Company has signed Share Purchase Agreement with Rakon Limited for the sale of entire 51% stake held by the Company in Centum Rakon India Private Limited.

30. The Company has set up a research and development unit to develop new products and processes, to improve the product designs and quality and others. The Company has received approval from the Department of Scientific and Industrial Research for recognition of in-house research and development unit for the purpose of availing customs duty exemption in terms of Government Notification No. 51/96-Customs dated July 23, 1996, Notification No. 24/2007-Customs dated March 1, 2007 and Notification No. 43/2007-Customs dated June 30, 2017, as amended from time to time.

The Company has identified the following as expenditure on research and development:

31. Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in these standalone financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

32. The comparatives given in the stanalone financial starements have been compiled after making necessary Ind AS adjustments to the respective audited financial statements under previous GAAP to give a true and fair view in accordance with Ind AS.

33. The audit of standalone financial statements of the Company under previous GAAP for the period ended March 31, 2017 and April 1, 2016 was carried out by firm of Chartered Accountants other than S.R. Batliboi & Associates LLP.

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Mar 31, 2017

1. The Company has entered into a business transfer agreement with Centum Industries Private Limited on 1 December 2015 for the purchase of business on slump sale. As per the terms of agreement, the Company has purchased the net assets pertaining to plastic and defence and space of Centum Industries Private Limited for an aggregate consideration Rs.57,000,000, which was arrived at based on the business valuation done by an independent professional firm. The valuation ascribed to assets by an independent professional valuer amounting Rs.17,347,378 , resulting in a goodwill of Rs.39,652,622.

2. The following table sets out the status of the gratuity plan as required under AS 15.

(a) Post retirement benefit - Defined contribution plans

The Company has recognised an amount of Rs. 26,378,514 (31 March 2016: Rs. 20,763,190) as expenses under the defined contribution plans in the statement of profit and loss for the year:

(b) Post retirement benefit - Defined benefit plans

Reconciliation of opening and closing balances of the present value of the defined benefit obligation.

3. Employee stock options:

The company has two stock option plans.

Centum employee stock option plan 2007

The Centum ESOP -2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 416,666 shares to the employees of the company and one of its subsidiaries. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

The options outstanding as at 31 March 2017 had an exercise price of Rs.69.14 and the weighted average remaining contractual life of 8.03 years.

Centum employee stock option plan 2013

The Centum ESOP - 2013 was approved by the board of directors of the Company in May 2013 and by the shareholders in August 2013. The 2013 plan provides for the issue of 250,000 shares to the employees of the company and one of its subsidiaries. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

The options outstanding as at 31 March 2017 had an exercise price of Rs.71.25 and the weighted average remaining contractual life of 9.41 years.

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on Accounting for Employee Share Based Payments” issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

Had the compensation been determined using the fair value approach described in the aforesaid Guidance Note, the Company’s net profit and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

4. Leases

The Company has taken office facilities, car and computer under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognised in the profit and loss for the year in respect of the aforementioned lease is Rs.29,575,012 (previous year: Rs.24,615,036).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognized in the profit and loss for the year with respect to the above is Rs.3,032,400 (previous year: Rs.3,032,400).

5. Segment Information

The Company’s primary segment is identified as a business segment based on risk, return and nature of products and secondary segment is defined based on the geographical location of the Customers as per Accounting Standard -17. The Company oprerates in a single reporitng segment called “Electronic System Design and Manufacturing (ESDM)” .

6. Related party disclosures

A. Parties where control exists:

Apparao V Mallavarapu (directly and indirectly exercises 51.79% voting power in the Company) Subsidiary of the company Centum Rakon India Private Limited Centum Electronics UK Limited#

Centum Adetel Group SA*

Centum Adeneo SAS*

Centum Adeneo CRD SAS*

Centum Adetel Transportation System SAS*

Centum Adetel Transportation SAS*

Centum Adetel Synergies SARL*

Centum Adetel Solution*

Centum Adetel Equipment*

Adetel Maroc SA*

Adetel Equipment Maroc SA*

Centum Adeneo India Private Limited**

Jointly Controlled Entity Sandhi SAS*”

Associate Ausar Energy SAS*

B. Other related parties where transactions have taken place during the year:

Parties under common control

Centum Industries Private Limited

C. Key management personnel:

Apparao V Mallavarapu - Chairman and Managing Director Swarnalatha Mallavarapu - Director

# with effect from 18 May 2016

* with effect from 30 June 2016

** with effect from 06 December 2016

7. The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006 (‘the Act’). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2017 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

8. Disclosure as per Regulation 34 (3) and 53 (f) read with Part A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of loans and advances, the amount in the nature of loans outstanding at year end:

9. During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:

10. During the year ended 31 March 2017, no material foreseeable loss was incurred for any long-term contract including derivative contracts.

11. Corporate social responsibility expenses

a) Gross amount required to be spent by the company during the year is Rs.7,512,000 (previous year Rs.8,148,000).

b) Amount spent during the year on:

12. The Company has recommended and disclosed final dividend of Rs.3 per share (previous year: Rs.NIL).The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

13. The Board of Directors of the Company has considered and approved the investment of 51% controlling stake in Adetel Group SA, France through Centum Electronics UK Limited on 17 June 2016. The said transaction was completed on 04 July 2016. Consequent to the acquisition, Adetel Group SA, France and its subsidiaries have become subsidiaries of the Company. Further the Board of Directors of the Company has considered and approved a further investment of 3.15% stake in Centum Adetel Group SA (formerly Adetel Group SA), France through Centum Electronics UK Limited on 10 March 2017.

The Company had incurred expenses amounting to Rs.39,119,132 on account of professional charges, travelling, finance costs etc. in connection with the said investment which is shown under exceptional items.

14. Previous year’s figures have been regrouped / reclassified as per the current year’s presentation for the purpose of comparability. The following regrouping / reclassifications of the previous year figures have been made.

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Mar 31, 2016

Rights, preferences and restrictions attached to equity shares

The Company has only one class of share referred to as equity share having par value of Rs.10. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholder meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders'' meeting.

The Company declares and pays dividends in Indian rupees. During the year ended 31 March 2016, the amount of per share interim dividend recognized as distributions to equity shareholders was Rs.3 (previous year: Re 1) and per share final dividend was Rs. Nil (Previous year: Rs 2). The total dividend appropriation for the year ended 31 March, 2016 amounted to Rs 37,982,754 (previous year: Rs 37,769,288) including corporate dividend tax of Rs.Nil (previous year: Rs Nil).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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.

Refer note 29 for disclosure in relation to employee stock option plan.

Based on a demand notice dated 12 February 2010 received from District Registrar, Stamps and Registration Department, Karnataka, the Company has estimated and provided Rs 11,174,165 towards additional stamp duty liability against a claim of Rs 16,281,302 in the aforementioned demand notice, payable pursuant to the demerger of EMS business from Centum Electronics Limited (formerly known as Solectron Centum Electronics Limited) on 1 October 2006, as per the Scheme of Arrangement approved by the Honorable High Court of Karnataka effective 13 July 2007. The differential amount of Rs 5,107,137 has been disclosed as a contingent liability. The Company has also provided Rs 8,411,723 towards stamp duty payable pursuant to the merger of Solectron EMS India Limited with the Company.

1. During the year the Company has entered into a business transfer agreement with Centum Industries Private Limited on 1 December 2015 for the purchase of business on slump sale. As per the terms of agreement, the Company has purchased the net assets pertaining to plastic and defense and space of Centum Industries Private Limited for an aggregate consideration Rs.57,000,000, which was arrived at based on the business valuation done by an independent professional firm. The valuation ascribed to assets by an independent professional value amounting Rs 17,347,378 , resulting in a goodwill of Rs.39,652,622.

2. The following table sets out the status of the gratuity plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

The estimate of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market. The Company does not have any planned assets.

3. Employee stock options:

The company has two stock option plans.

Centum employee stock option plan 2007

The Centum ESOP -2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 416,666 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

The options outstanding as at 31 March 2016 had an exercise price of Rs.64.10 and the weighted average remaining contractual life of 8.96 years.

Centum employee stock option plan 2013

The Centum ESOP -2013 was approved by the board of directors of the Company in May 2013 and by the shareholders in August 2013. The 2013 plan provides for the issue of 250,000 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

The options outstanding as at 31 March 2016 had an exercise price of Rs 71.25 and the weighted average remaining contractual life of 10.31 years.

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on “Accounting for Employee Share Based Payments” issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

Had the compensation been determined using the fair value approach described in the aforesaid Guidance Note, the Company’s net profit and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

4. Leases

The Company has taken office facilities, car and computer under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognized in the profit and loss for the year in respect of the aforementioned lease is Rs 24,615,036 (previous year: Rs 19,130,347).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognized in the profit and loss for the year with respect to the above is Rs 3,032,400 (previous year: Rs 3,032,400).

5. Segment Information

The Company’s primary segment is identified as a business segment based on risk, return and nature of products and secondary segment is defined based on the geographical location of the Customers as per Accounting Standard -17. The disclosure on primary business segment reporting has been changed to a single segment called “Electronic System Design and Manufacturing (ESDM)” instead of the two segments “Products” and “Electronics Manufacturing Services” previously. The change has been made to reflect the evolved business of the company appropriately.

6. Related party disclosures

A. Parties where control exists:

Apparao V Mallavarapu (directly and indirectly exercises 59.85% voting power in the Company) Subsidiary of the company Centum Rakon India Private Limited

B. Other related parties where transactions have taken place during the year:

Parties under common control Centum Industries Private Limited

C. Key executive management personnel:

Apparao V Mallavarapu - Chairman and Managing Director S Krishnan (Director)

Rajiv C Mody (Director)

Pranav Patel (Director)

Manoj Nagrath (Director)

Swarnalatha Mallavarapu (Additional Director)

K S Desikan (Chief Financial Officer)

Ramu Akkili (Company Secretary)

7. The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006 (‘the Act’). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2016 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

8. Previous year''s figure including those in brackets have been regrouped and / or rearranged wherever necessary.

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Mar 31, 2015

Rights, preferences and restrictions attached to equity shares

The Company has only one class of share referred to as equity share having par value of Rs.10. Each holder of the equity share, as reflected in the records of the Company as of the date of the shareholder meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholder's meeting.

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."During the year ended 31 March 2015, the amount of per share interim dividend recognised as distributions to equity shareholders was Re.1 (previous year: Re 1) and per share final dividend was Rs.2 (previous year: Rs 1.50). The total dividend appropriation for the year ended 31 March, 2015 amounted to Rs.37,769,288 (previous year: Rs 31,108,015) including corporate dividend tax of Rs.Nil (previous year: Rs Nil).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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.

Refer note 1 for disclosure in relation to employee stock option plan.

Cash credit and Packing credit from bank is secured by way of hypothecation on the inventories, book debts and other current assets of the Company. Additionally it is secured by way of collateral charge on plant and machinery and an equitable mortgage of land.

*The term loan from others represents vehicle loan taken from a non banking financial institution and secured by vehicle of the company. The term loan carries an interest rate of 10.45% per annum on the outstanding amount of the loan. The interest was payable monthly along with the principle repayment. The term loan from other was repayable in thirty five equal monthly installments commencing from 1 February 2012. The term loan has been fully repaid in the current year.

Finance lease obligation is towards laptops and computers purchased on finance lease and secured by the leased assets. The finance lease obligation is repayable in twelve quarterly installments from the date of lease of the leased assets.The finance lease obligation has been fully repaid in the current year.

There is no continuing default in the principal and repayment amount.

2. Capital commitments and contigent liabilities (Amount in Rs ) As at As at Particulars 31 March 2015 31 March 2014

Capital commitment

Estimated amount of contracts remaining to be executed on capital account and provided(net of advances) 435,582,192 49,078,476

Contingent liabilities

Claims against the Company not acknowledged as debts in respect of:

Income tax 34,015,175 54,053,780

Sales tax 10,559,633 10,559,633

Excise duty 9,988,320 9,988,320

Stamp duty [refer schedule 41] 5,107,137 5,107,137

The estimate of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.The Company does not have any planned assets.

3. Employee stock options:

The company has two stock option plans.

Centum employee stock option plan 2007

The Centum ESOP - 2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 416,666 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting. Option activity during the year ended 31 March 2015 and the related weighted average exercise price of stock options under the Centum ESOP plan 2007 is presented below.

Centum employee stock option plan 2013

The Centum ESOP -2013 was approved by the board of directors of the Company in May 2013 and by the shareholders in August 2013. The 2013 plan provides for the issue of 250,000 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting. Option activity during the year ended 31 March 2015 and the related weighted average exercise price of stock options under the Centum ESOP plan 2013 is presented below.

The options outstanding as at 31 March 2015 had an exercise price of Rs 71.25 and the weighted average remaining contractual life of 11.35 years.

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on "Accounting for Employee Share Based Payments" issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

Had the compensation been determined using the fair value approach described in the aforesaid Guidance Note, the Company's net profit and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

4 Leases

The Company has taken office facilities under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognised in the profit and loss for the year in respect of the aforementioned lease is Rs 19,130,347 (previous year: Rs 17,108,134).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognized in the profit and loss for the year with respect to the above is Rs 3,032,400 (previous year: Rs 3,032,400).

5. Segment Information

The Company operates through two divisions, products business comprising of Modules (Products segment) and Electronic Manufacturing Services (Services segment), which are considered to be the primary segments and geography as the secondary segment.

The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identified to that segment, while other items, wherever allocable, are apportioned to the segments on appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company, therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are separately disclosed as 'unallocated'.

6 Related party disclosures

A. Parties where control exists:

Apparao V Mallavarapu (directly and indirectly exercises 60.28% voting power in the Company) Subsidiary of the company Centum Rakon India Private Limited

B. Other related parties where transactions have taken place during the year:

Parties under common control Centum Industries Private Limited

C. Key executive management personnel represented on the Board:

Apparao V Mallavarapu - Chairman and Managing Director S Krishnan (Director)

Rajiv C Mody (Director)

Pranav Patel (Director)

Manoj Nagrath (Director)

Swarnalatha Mallavarapu ( Additional Director) (Appointed with effect from 26 March 2015) Dr.P Rama Rao (Director) (Resigned with effect from 1 August 2014)

K S Desikan (Chief Financial Officer)

Ramu Akkili (Company Secretary)

7. The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the 'Micro, Small and Medium Enterprises Development Act, 2006' ('the Act'). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2015 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

8. Based on a demand notice dated 12 February 2010 received from District Registrar, Stamps and Registration Department, Karnataka, the Company has estimated and provided Rs 11,174,165 towards additional stamp duty liability against a claim of Rs 16,281,302 in the aforementioned demand notice, payable pursuant to the demerger of EMS business from Centum Electronics Limited (formerly known as Solectron Centum Electronics Limited) on 1 October 2006, as per the Scheme of Arrangement approved by the Honorable High Court of Karnataka effective 13 July 2007. The differential amount of Rs 5,107,137 has been disclosed as a contingent liability [refer note 25].

The Company has also provided Rs 8,411,723 towards stamp duty payable pursuant to the merger of Solectron EMS India Limited with the Company.

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Mar 31, 2013

1. Employee stock options:

Centum employee stock option plan 2007

The Centum ESOP -2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 416,666 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

Option activity during the year ended 31 March 2013 and the related weighted average exercise price of stock options under the Centum ESOP plan 2007 is presented below. There was no new employee stock option plan during the year ended 31 March 2013.

The options outstanding as at 31 March 2013 had an exercise price of Rs 58.09 and the weighted average remaining contractual life of 10.78 years.

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on "Accounting for Employee Share Based Payments" issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

2 Leases

The Company has taken office facilities under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognised in the statement of profit and loss for the year in respect of the aforementioned lease is Rs 13,916,072 (previous year: Rs 9,789,229).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognised in the statement of profit and loss for the year with respect to the above is Rs 3,032,400 (previous year: Rs 3,032,400).

3. Segment Information

The Company operates through two divisions, component business comprising of Modules (Products segment) and Electronic Manufacturing Services (Services segment), which are considered to be the primary segments and geography as the secondary segment.

The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identified to that segment, while other items, wherever allocable, are apportioned to the segments on appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company, therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are separately disclosed as ''unallocated''.

4 Related party disclosures

A. Parties where control exists:

Apparao V Mallavarapu (directly and indirectly exercises 61% voting power in the Company) Subsidiary of the company Centum Rakon India Private Limited

B. Other related parties where transactions have taken place during the year:

Parties under common control

Centum Industries Private Limited

C. Key executive management personnel represented on the Board:

Mr. Apparao V Mallavarapu - Chairman and Managing Director

5.The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ''Micro, Small and Medium Enterprises Development Act, 2006'' (''the Act''). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2013 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

6. Based on a demand notice dated 12 February 2010 received from District Registrar, Stamps and Registration Department, Karnataka, the Company has estimated and provided Rs 11,174,165 towards additional stamp duty liability against a claim of Rs 16,281,302 in the aforementioned demand notice, payable pursuant to the demerger of EMS business from Centum Electronics Limited (formerly known as Solectron Centum Electronics Limited) on 1 October 2006, as per the Scheme of Arrangement approved by the Honourable High Court of Karnataka effective 13 July 2007. The differential amount of Rs 5,107,137 has been disclosed as a contingent liability [refer note 26].

The Company has also provided Rs 7,379,248 during 2010-11 towards stamp duty payable pursuant to the merger of Solectron EMS India Limited with the Company.

7. As at March 31, 2013, the Company has outstanding forward contracts amounting to USD 750,000 (As at March 31, 2012: USD Nil). These derivative instruments have been entered to hedge highly probable forecasted sales.

In accordance with the provisions of AS 30, these derivative instruments qualify for cash flow hedge accounting and have been fair valued at the balance sheet date and the resultant exchange loss has been debited to hedge reserve (Refer Note 3).

8. The comparative figures have been re-grouped/reclassified wherever necessary to conform to the current year''s presentation.

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Mar 31, 2012

The company has only one class of share referred to as equity share having par value of Rs 10. Each holder of the equity share, as reflected in the records of the Company, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholders' meeting.

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.

During the year ended 31 March 2012, the amount of per share dividend recognised as distributions to equity shareholders was Re 1 (previous year: Re 1). The total dividend appropriation for the year ended 31 March 2012 amounted to Rs 14,371,125 (previous year: Rs 14,399,120) including corporate dividend tax of Rs 2,005,942 (previous year: Rs 2,050,887).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the 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.

Refer note 30 for disclosure in relation to employee stock option plan

The term loan from others represents vehicle loan taken from a non banking financial institution and secured by vehicle of the company. The term loan carries an interest rate of 10.45% per annum on the outstanding amount of the loan. The interest is payable monthly along with the principle repayment. The term loan from other is repayable in thirtyfive equal monthly installments commencing from 1 February 2012.

Finance lease obligation is towards laptops and computers purchased on finance lease and secured by the leased assets. The finance lease obligation is repayable in twelve quarterly installments from the date of lease of the leased assets.

Cash credit from bank is secured by way of hypothecation on the inventories, book debts and other current assets of the company. Additionally it is secured by way of collateral charge on plant and machinery and an equitable mortgage of land.

Packing credit from bank is secured by way of hypothecation of inventories, book debts and fixed assets (present and future) of the company. Additionally, it is secured by way of collateral charge on plant and machinery. There is no continuing default in the repayment of the principal and interest amounts.

*Margin money is against bank guarantees issued in favour of customers and statutory authorities

* Includes an amount of Rs 11,327,466 (previous year: Rs 51,623,677) receivable from companies where directors of the company are also directors / members.

*Includes balance in unclaimed dividend account Rs. 629,519 (Previous year: Rs. 627,224). **Margin money is against bank guarantees issued in favour of customers and statutory authorities.

1.The following table sets out the status of the gratuity plan as required under AS 15.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation

The estimate of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.The Company does not have any planned assets.

2. Employee stock options:

Centum employee stock option plan 2007

The Centum ESOP -2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 416,666 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

Option activity during the year ended 31 March 2012 and the related weighted average exercise price of stock options under the Centum ESOP plan 2007 is presented below. There was no new employee stock option plan during the year ended 31 March 2012.

The weighted average share price of the options exercised as at the date of exercise was 31.60.

There were 288,319 equity shares given as options during the current year. The options outstanding as at 31 March 2012 had an exercise price of Rs 58.38 and the weighted average remaining contractual life of 10.81 years.

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on "Accounting for Employee Share Based Payments" issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

Had the compensation been determined using the fair value approach described in the aforesaid Guidance Note, the Company's net profit and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

The fair value of each option under the 2007 plan is estimated by management on the date of grant using the Black - Scholes model with the following assumptions

3 Leases

The Company has taken office facilities under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognised in the profit and loss for the year in respect of the aforementioned lease is Rs 9,789,229 (previous year: Rs 10,409,541).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognized in the profit and loss for the year with respect to the above is Rs 3,032,400 (previous year: Rs 3,698,400).

4.Segment Information

The Company operates through two divisions, component business comprising of Modules (Products segment) and Electronic Manufacturing Services (Services segment), which are considered to be the primary segments and geography as the secondary segment.

The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identified to that segment, while other items, wherever allocable, are apportioned to the segments on appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company, therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are separately disclosed as 'unallocated'.

Geographic segments: The Company's business is organised into four geographic segments. Revenues are attributable to individual geographic segments based on the location of the customer. The Company's fixed assets are situated in India.

5 Related party disclosures

A. Parties where control exists:

Apparao V Mallavarapu (directly and indirectly exercises 61% voting power in the Company) Subsidiary of the company Centum Rakon India Private Limited

B. Other related parties where transactions have taken place during the year Parties under common control Centum Industries Private Limited

C. Key executive management personnel represented on the Board Mr. Apparao V Mallavarapu – Chairman and Managing Director

6.The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the 'Micro, Small and Medium Enterprises Development Act, 2006' ('the Act'). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

7.Based on a demand notice dated 12 February 2010 received from District Registrar, Stamps and Registration Department, Karnataka, the Company has estimated and provided Rs 11,174,165 towards additional stamp duty liability against a claim of Rs 16,281,302 in the aforementioned demand notice, payable pursuant to the demerger of EMS business from Centum Electronics Limited (formerly known as Solectron Centum Electronics Limited) on 1 October 2006, as per the Scheme of Amalgamation approved by the Honourable High Court of Karnataka effective 13 July 2007. The differential amount of Rs 5,107,137 has been disclosed as a contingent liability [refer note 26]."The Company has also provided Rs 7,379,248 during the previous year towards stamp duty payable pursuant to the merger of Solectron EMS India Limited with the Company.

8.Research and development expenditure (including depreciation) amounting to Rs 14,476,008 (previous year: Rs 17,356,873) incurred during the year has been charged to the respective heads of account in the statement of profit and loss account.

9.The financial statements for the year ended 31 March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

Statement on subsidiary pursuant to Circular No: 51/12/2007-CL-III dt. February 8, 2011 issued by Ministry of Corporate Affairs Pursuant to the said circular, The Board of Directors of the Company has passed a resolution at its meeting held on May 25, 2012 consenting for not attaching the balance sheet of the subsidiary, Centum Rakon India Private Limited and other documents required to be attached to the balance sheet as required by law to the balance sheet of the Company.

The Company hereby undertakes that annual accounts of the subsidiary, Centum Rakon India Private Limited and the related detailed information shall be made available to shareholders of the Company and the subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary company shall also be kept for inspection by any shareholders at the head office of the Company at 44, KHB Industrial Area, Yelahanka New Town, Bangalore -560106. The Company shall furnish a hard copy of details of accounts of subsidiary to any shareholder on demand.

The company hereby discloses in the consolidated balance sheet the following information in aggregate for its subsidiary, Centum Rakon India Private Limited

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Mar 31, 2011

A) Capital commitment and contigent liabilities

Rs

As at As at

31 March 2011 31 March 2010

Capital commitment

Estimated amount of contracts remaining to be executed on capital account (net of advances) 95,505,150 50,664,967

Contingent liabilities

Claims against the Company not acknowledged as debts in respect of:

Income tax 34,015,175 33,384,502

Sales tax 5,106,330 5,106,330

Excise duty 9,988,320 9,988,320

Stamp duty [refer schedule 19(w)] 5,107,137 5,107,137

b) Amalgamation

a. Background and nature of business

Scheme of Amalgamation

A Scheme of Amalgamation (the Scheme of Amalgamation) pursuant to Sections 391 to 394 of the Companies Act, 1956 (the Act) and other applicable provisions of act was approved by the Honourable High Court of Karnataka for the merger of Solectron EMS India Limited (the transferor) with Centum Electronics Limited (the transferee).

The transferor company is engaged in the business of electronic manufacturing services (EMS), encompassing the manufacture of printed circuit boards assembly (PCBA), system assembly, repair and return business (the"EMS business").

The Scheme of Amalgamation was approved by the shareholders of the transferor and transferee companies on 26 February 2010. The Honourable High Court of Karnataka sanctioned the Scheme of Amalgamation vide its order dated 16 July 2010. The scheme became effective on 27 July 2010 on submission of the order of the High Court of Karnataka with the Registrar of Companies at Bangalore.

b. Salient features of the Scheme of Amalgamation

The salient features of the Scheme of Amalgamation are as follows:

- The appointed date of the Scheme of Amalgamation for the merger is 1 April 2009 (the appointed date).

- The transferee company shall, issue and allot to each member of the transferor company equity shares in the transferee company in the ratio of two equity shares in the transferee company of the face value of Rs 10 per equity share, credited as fully paid up, for every 3 fully paid-up equity share of Rs. 10 each held by the members in the transferor company. No fractional certificates / coupons are to be issued.

- Consequent to the issue of shares as stated above, the issued, subscribed and paid-up equity capital of the transferee company of Rs 74,000,000 comprising of 7,400,000 equity shares of the face value of Rs. 10 each, fully paid-up, shall stand increased to Rs. 123,333,330 comprising of 12,333,333 equity shares of the face value of Rs. 10 each, fully paid-up.

- The Board of Directors of the transferee company shall consolidate all fractional entitlements arising due to the issue of equity shares in terms of preceding paragraph to the shareholders of the transferor company and thereupon issue and allot equity shares in lieu thereof to a separate trust created for the purpose which shall hold the equity shares in trust for and on behalf of the members entitled to such fractional entitlements with the express understanding that such trust shall sell the same at such time or times and at such price or prices to such person or persons, as it deems fit. The said trust shall distribute such net sale proceeds to the members in the same proportion as their respective fractional entitlements bear to the consolidated fractional entitlements.

- Upon the coming into effect of the Scheme of Amalgamation, and with effect from the appointed date, the transferor company shall be deemed to have been carrying on and to be carrying on all business and activities relating to the transferor company and stand possessed of all the estates, assets, rights, title and interest of the transferor company for and on account of, and in trust for, the transferee company.

c. Accounting treatment

- The above Scheme of Amalgamation is an amalgamation in the nature of merger in accordance with the requirements of Accounting Standard 14 "Accounting for Amalgamations" and has been accounted for accordingly as per the requirements of the aforesaid standard.

- With effect from the appointed date of the Scheme of Amalgamation, the transferee company have recorded all the assets and liabilities of the transferor company at their respective book values. Further, all transactions between the transferor and the transferee post the appointed date have been eliminated on Amalgamation;

- The net assets of the transferor company acquired by the transferee company in excess of the fresh share capital issued by the transferee company to the shareholders of the transferor company after adjustments of the inter-company investment holdings and inter-company balances, if any, has been adjusted against the General Reserve account of the transferee company in accordance with the requirements of the approved Scheme of Amalgamation.

n) The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006 (‘the Act). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2011 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

o) Gratuity plan

The following table set out the status of the gratuity plan as required under AS 15 - Revised. Reconciliation of opening and closing balances of the present value of the defined benefit obligation:

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

The Company does not have any planned assets.

p) Segmental reporting

The Company operates through two divisions, component business comprising of Modules (Products segment) and Electronic Manufacturing Services (Services segment), which are considered to be the primary segments and geography as the secondary segment.

The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identified to that segment, while other items, wherever allocable, are apportioned to the segments on appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company, therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are separately disclosed as ‘unallocated.

Geographic segments:

The Companys business is organised into four geographic segments. Revenues are attributable to individual geographic segments based on the location of the customer. The Companys fixed assets are situated in India.

q) Stock option plans

Employee stock option plan 2007 (Centum ESOP - 2007)

The Centum ESOP -2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 416,666 shares (includes 166,666 shares in pursuant to the merger of Solectron EMS India Limited with the Company) to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

Pro forma accounting for stock option grants

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on"Accounting for Employee Share Based Payments" issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

Had the compensation been determined using the fair value approach described in the aforesaid Guidance Note, the Companys net profit and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

r) Related party transactions

A. Parties where control exists

Apparao V Mallavarapu (directly and indirectly exercises 55.58% voting power in the Company)

Subsidiary of the Company Centum Rakon India Private Limited

s) Leases

The Company has taken office facilities under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognized in the profit and loss for the year in respect of the aforementioned lease is Rs 10,409,541 (previous year: Rs 8,448,721).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognized in the profit and loss for the year with respect to the above is Rs 3,698,400 (previous year: Rs 2,300,400).

The above does not include compensated absences and gratuity calculated on actuarial basis, as separate figures for directors are not available.

*Value of perquisites has been computed as per the method prescribed under Income Tax Act, 1961.

Computation of net profit in accordance with Section 198, read with Section 349 of the Companies Act, 1956, and calculation of maximum managerial remuneration (including commission) payable to the Managing Director:

*Depreciation computed based on useful lives which are lower lives as mentioned in Schedule XIV of the Companies Act, 1956.

The members of the Company on 30 July 2009 approved the remuneration payable to the managing director for a period of five years with effect from 1 August 2009 to 31 July 2014, which was in excess of the limits prescribed under section 198(4), 309(3) and Schedule XIII as amended by the Companies Act, 1956. The same has been approved by Central Government of India.

w) Provision for stamp duty charges

Based on a demand notice dated 12 February 2010 received from District Registrar, Stamps and registration Department, Karnataka, the Company has estimated and provided rs 11,174,165 towards additional stamp duty liability against a claim of Rs 16,281,302 in the aforementioned demand notice, payable pursuant to the demerger of EMS business from Centum Electronics Limited (formerly known as Solectron Centum Electronics Limited) on 1 October 2006, as per the Scheme of Amalgamation approved by the Honourable High Court of Karnataka effective 13 July 2007. The differential amount of Rs 5,107,137 has been disclosed as a contingent liability [refer schedule 19(a)].

Further, the Company has provided rs 7,379,248 during the current year towards stamp duty payable pursuant to the merger of Solectron EMS India Limited with the Company.

Statement on subsidiary pursuant to Circular No: 51/12/2007-CL-III dt. February 8, 2011 issued by Ministry of Corporate Affairs

Pursuant to the said circular, The Board of Directors of the Company has passed a resolution at its meeting held on May 26, 2011 consenting for not attaching the balance sheet of the subsidiary, Centum Rakon India Private Limited and other documents required to be attached to the balance sheet as required by law to the balance sheet of the Company.

The Company hereby undertakes that annual accounts of the subsidiary, Centum Rakon India Private Limited and the related detailed information shall be made available to shareholders of the Company and the subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary company shall also be kept for inspection by any shareholders at the head office of the Company at 44, KHB Industrial Area, Yelahanka New Town, Bangalore -560106. The Company shall furnish a hard copy of details of accounts of subsidiary to any shareholder on demand.

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Mar 31, 2010

1. Background

Centum Electronics Limited ("the Company") was incorporated as a public limited company on 8 January 1993 as Centum Electronics Limited ("Centum") and commenced commercial production in 1994.

Pursuant to the Scheme of Amalgamation [refer schedule 19(b)], Solectron EMS India Limited has been amalgamated with the Company with an appointed date of 1 April 2009.

The Company is primarily involved in

- manufacture of Advanced Microelectronics Modules and Resistor Networks catering to the communications, military, aerospace and industrial electronics markets; and

- manufacture of printed circuit board assembly (PCBA) and Repair and Return business catering to the automobile, communications and industrial electronics markets

a) Capital commitment and contigent liabilities

Rs

As at As at

31 March 2010 31 March 2009

Capital commitment

Estimated amount of contracts remaining to be

executed on capital account (net of advances) 50,664,967 350,956

Contingent liabilities

Claims against the Company not acknowledged as debts in respect of:

Income tax 33,384,502 33,384,502

Sales tax 5,106,330 6,968,273

Excise duty 9,988,320 -

Stamp duty [refer schedule 19(w)] 5,107,137 -

b) Amalgamation

a. Background and nature of business

Scheme of Amalgamation

A Scheme of Amalgamation (the Scheme of Amalgamation) pursuant to Sections 391 to 394 of the Companies Act, 1956 (the Act) and other applicable provisions of act was approved by the Honourable High Court of Karnataka for the merger of Solectron EMS India Limited (the transferor) with Centum Electronics Limited (the transferee).

The transferor company is engaged in the business of electronic manufacturing services (EMS), encompassing the manufacture of printed circuit boards assembly (PCBA), system assembly, repair and return business (the "EMS business").

The Scheme of Amalgamation was approved by the shareholders of the transferor and transferee companies on 26 February 2010. The Honourable High Court of Karnataka sanctioned the Scheme of Amalgamation vide its order dated 16 July 2010. The scheme became effective on 30 July 2010 on submission of the order of the High Court of Karnataka with the Registrar of Companies at Bangalore.

b. Salient features of the Scheme of Amalgamation

The salient features of the Scheme of Amalgamation are as follows:

• The appointed date of the Scheme of Amalgamation for the merger is 1 April 2009 (the appointed date).

- The transferee company shall, issue and allot to each member of the transferor company equity shares in the transferee company in the ratio of two equity shares in the transferee company of the face value of Rs 10 per equity share, credited as fully paid up, for every 3 fully paid-up equity share of Rs. 10 each held by the members in the transferor company. No fractional certificates / coupons are to be issued.

- Consequent to the issue of shares as stated above, the issued, subscribed and paid-up equity capital of the transferee company of Rs 74,000,000 comprising of 7,400,000 equity shares of the face value of Rs. 10 each, fully paid-up, shall stand increased to Rs. 123,333,330 comprising of 12,333,333 equity shares of the face value of Rs. 10 each, fully paid-up.

- The Board of Directors of the transferee company shall consolidate all fractional entitlements arising due to the issue of equity shares in terms of preceding paragraph to the shareholders of

the transferor company and thereupon issue and allot equity shares in lieu thereof to a separate trust created for the purpose which shall hold the equity shares in trust for and on behalf of the members entitled to such fractional entitlements with the express understanding that such trust shall sell the same at such time or times and at such price or prices to such person or persons, as it deems fit. The said trust shall distribute such net sale proceeds to the members in the same proportion as their respective fractional entitlements bear to the consolidated fractional entitlements.

- Upon the coming into effect of the Scheme of Amalgamation, and with effect from the appointed date, the transferor company shall be deemed to have been carrying on and to be carrying on all business and activities relating to the transferor company and stand possessed of all the estates, assets, rights, title and interest of the transferor company for and on account of, and in trust for, the transferee company.

c. Accounting treatment

- The above Scheme of Amalgamation is an amalgamation in the nature of merger in accordance with the requirements of Accounting Standard 14 "Accounting for Amalgamations" and has been accounted for accordingly as per the requirements of the aforesaid standard.

- With effect from the appointed date of the Scheme of Amalgamation, the transferee company have recorded all the assets and liabilities of the transferor company at their respective book values. Further, all transactions between the transferor and the transferee post the appointed date have been eliminated on Amalgamation;

- The net assets of the transferor company acquired by the transferee company in excess of the fresh share capital issued by the transferee company to the shareholders of the transferor company after adjustments of the inter-company investment holdings and inter-company balances, if any, has been adjusted against the General Reserve account of the transferee company in accordance with the requirements of the approved Scheme of Amalgamation.

The amalgamation has been accounted for in the books of the transferee company on 1 April 2009 in the following manner:

n) The Ministry of Micro, Small and Medium Enterprises has issued an office memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum in accordance with the ‘Micro, Small and Medium Enterprises Development Act, 2006 (‘the Act). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2010 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier as at the balance sheet date.

p) Segmental reporting

The Company operates through two divisions, component business comprising of Modules (Products segment) and Electronic Manufacturing Services (Services segment), which are considered to be the primary segments and geography as the secondary segment.

The accounting principles used in the preparation of the financial statements are also consistently applied to record income and expenditure in individual segments.

Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identified to that segment, while other items, wherever allocable, are apportioned to the segments on appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company, therefore, believes that it is not practicable to provide segment disclosures relating to such items, and accordingly such items are separately disclosed as ‘unallocated.

Geographic segments:

The Companys business is organised into four geographic segments. Revenues are attributable to individual geographic segments based on the location of the customer. The Companys fixed assets are situated in India.

q) Stock option plans

Employee stock option plan 2007 (Centum ESOP - 2007)

The Centum ESOP -2007 was approved by the board of directors of the Company in October 2007 and by the shareholders in December 2007. The 2007 plan provides for the issue of 250,000 shares to the employees. The plan is administered by a compensation committee. Options will be issued to employees of the Company and also its subsidiary at an exercise price, which shall not be less than the market price immediately preceding the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months from the date of grant. The exercise period is ten years from the date of vesting.

Pro forma accounting for stock option grants

The Company applies the intrinsic value method of accounting for determining compensation cost for its stock based compensation plan. The Company has therefore adopted the pro forma disclosure provisions as required by the Guidance Note on "Accounting for Employee Share Based Payments" issued by the Institute of Chartered Accountants of India with effect from 1 April 2005.

Had the compensation been determined using the fair value approach described in the aforesaid Guidance Note, the Companys net profit and basic and diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

r) Related party transactions

A. Parties where control exists

Apparao V Mallavarapu (directly and indirectly exercises 55.58% voting power in the Company)

Subsidiary of the Company Centum Rakon India Private Limited

B. Other related parties where transactions have taken place during the year

Parties under common control

Centum Industries Private Limited

Solectron EMS India Limited (upto 31 March 2009)

C. Key executive management personnel represented on the Board Mr. Apparao V Mallavarapu – Managing Director

s) Leases

The Company has taken office facilities under cancelable operating lease agreement. The Company intends to renew the agreement in the normal course of its business. Total lease rentals recognized in the profit and loss for the year in respect of the aforementioned lease is Rs 8,448,721 (previous year: Rs 1,362,998).

The Company has also given office facilities under cancelable operating lease agreement to its subsidiary. Total lease rental income recognized in the profit and loss for the year with respect to the above is Rs 2,300,400 (previous year: Rs 2,300,400).

t) Deferred taxes

The composition of net deferred tax assets and liabilities of the Company as at 31 March 2010 and 31 March 2009, respectively are as under:

The above does not include compensated absences and gratuity calculated on actuarial basis, as separate figures for directors are not available.

*Value of perquisites has been computed as per the method prescribed under Income Tax Act, 1961.

Computation of net profit in accordance with Section 198, read with Section 349 of the Companies Act, 1956, and calculation of maximum managerial remuneration (including commission) payable to the Managing Director:

The members of the Company on 30 July 2009 approved the remuneration payable to the managing director for a period of five years with effect from 1 August 2009 to 31 July 2014, which was in excess of the limits prescribed under section 198(4), 309(3) and Schedule XIII as amended by the Companies Act, 1956. The same has been approved by Central Government of India.

v) Un-hedged foreign currency disclosures:

The Companys foreign currency exposure on account of foreign currency denominated payables not hedged is as follows:

w) Provision for stamp duty charges

Based on a demand notice dated 12 February 2010 received from District Registrar, Stamps and Registration Department, Karnataka, the Company has estimated and provided Rs 11,174,165 towards additional stamp duty liability against a claim of Rs 16,281,302 in the aforementioned demand notice, payable pursuant to the demerger of EMS business from Centum Electronics Limited (formerly known as Solectron Centum Electronics Limited) on 1 October 2006, as per the Scheme of Amalgamation approved by the Honourable High Court of Karnataka effective 13 July 2007. The differential amount of Rs 5,107,137 has been disclosed as a contingent liability [refer schedule 19(a)].

x) The tax liability of the Company is higher than the net profits due to the higher depreciation allowance in the books as compared with the allowance allowed under the Indian Income Tax rules. The above difference in depreciation is not fully offset by a deferred tax asset as the deferred tax asset to the extent it gets reversed during the tax holiday period is not recognized as at the current balance sheet date.

y) The Board of Directors have proposed a dividend of 10% for the year ended 31 March 2010 on the total issued capital including the equity shares to be issued pursuant to the Scheme of Amalgamation. Accordingly, the proposed dividend of Rs 12,333,333 as at 31 March 2010 includes the dividend proposed and accrued on the 4,933,333 shares which are to be issued pursuant to the Scheme of Amalgamation.

z) Previous years figures have been re-grouped/re-arranged wherever necessary to conform to current years presentation and are not strictly comparable with the current year figures [refer schedule 19(b).