Notes to Accounts of Lumax Industries Ltd.

Mar 31, 2025

N. Provisions
General

Provisions are recognized when the Company has
a present obligation (legal or constructive) as a
result of past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. The expense relating to a provision is
presented in the statement of profit and loss net of
any reimbursement.

I f 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 recognized as a finance cost.

Onerous contracts

I f the Company has a contract that is onerous, the
present obligation under the contract is recognized
and measured as a provision. However, before
a separate provision for an onerous contract
is established, the Company recognizes 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).

Warranty provisions

The Company provides warranties for general
repairs of defects that existed at the time of sale,
as required by law. Provisions related to these
assurance-type warranties are recognized when
the product is sold, or the service is provided to the
customer. Initial recognition is based on historical
experience. The initial estimate of warranty-related
costs is revised annually.

O. Taxes

Current income tax

Tax expense comprises current tax expense and
deferred tax.

Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are those
that are enacted or substantively enacted, at the
reporting date.

Current income tax relating to items recognized
outside profit or loss is recognized outside profit or
loss (either in OCI or in equity). Current tax items
are recognized in correlation to the underlying
transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable regulations are subject to interpretation
and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The
Company shall reflect the effect of uncertainty for
each uncertain tax treatment by using either most
likely method or expected value method, depending
on which method predicts better resolution of the
treatment.

Deferred tax

Deferred tax is provided using the liability method
on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable
temporary differences except:

• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss and does not give rise to equal
taxable and deductible temporary differences.

• I n respect of taxable temporary differences
associated with investments in subsidiary and
associate, when the timing of the reversal of the
temporary differences can be controlled and it
is probable that the temporary differences will
not reverse in the foreseeable future.

Deferred tax liabilities are recognized for all taxable
temporary differences, except when the deferred
tax liability arises from the initial recognition of
goodwill or an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit or loss and does not give rise to equal
taxable and deductible temporary differences.

Deferred tax assets are recognized for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred
tax assets are recognized to the extent that it is
probable that taxable profit will be available against
which the deductible temporary differences, and
the carry forward of unused tax credits and unused
tax losses can be utilized, except

• when the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects
neither the accounting profit nor taxable profit
or loss and does not give rise to equal taxable
and deductible temporary differences.

• In respect of deductible temporary differences
associated with investments in subsidiary, and
associate, deferred tax assets are recognized
only to the extent that it is probable that the

temporary differences will reverse in the
foreseeable future and taxable profit will
be available against which the temporary
differences can be utilized.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilized. Unrecognized
deferred tax assets are re-assessed at each
reporting date and are recognized to the extent that
it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting
date.

Deferred tax relating to items recognized
outside statement of profit or loss is recognized
outside statement of profit or loss (either in other
comprehensive income or in equity). Deferred tax
items are recognized in correlation to the underlying
transaction either in OCI or directly in equity.

The Company offsets deferred tax assets and
deferred tax liabil ities if and only if it has a legally
enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied
by the same taxation authority on either the same.
taxable entity which intends either to settle current
tax liabilities and assets on a net basis, or to realise
the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of
deferred tax liabilities or assets are expected to be
settled or recovered.

Goods and Services Tax (GST) / value added
taxes paid on acquisition of assets or on incurring
expenses. Expenses and assets are recognized
net of the amount of GST/ value added taxes paid,
except:

• When the tax incurred on a purchase of
assets or services is not recoverable from the
taxation authority, in which case, the tax paid
is recognized as part of the cost of acquisition
of the asset or as part of the expense item, as
applicable;

• When receivables and payables are stated
with the amount of tax included

The net amount of tax recoverable from, or payable
to, the taxation authority is included as part of other-
current/non-current assets/ liabilities in the balance
sheet.

P. Cash and cash equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months
or less, 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, net of outstanding bank
overdrafts as they are considered an integral part of
the Company’s cash management.

Q. Earnings per share (EPS)

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

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

R. Contingent liabilities

Contingent liability is:

a) a possible obligation arising from past events
and whose existence will be confirmed only
by the occurrence or non-occurrence of one
or more uncertain future events not wholly
within the control of the entity or

b) a present obligation that arises from past
events but is not recognized because;

• it is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation, or

• t he amount of the obligation cannot be
measured with sufficient reliability.

The Company does not recognize a contingent
liability but discloses its existence and other
required disclosures in notes to the standalone
financial statements, unless the possibility of any
outflow in settlement is remote.

S. Contingent Assets

A contingent asset is a possible asset that arises
from past events and whose existence will
be confirmed only by- the occurrence or non¬
occurrence of one or more uncertain future events
not wholly within the control of the entity. The
Company does not recognize the contingent asset
in its standalone financial statements since this may
result in the recognition of income that may never
be realised. Where an inflow of economic benefits is
probable, the Company disclose a brief description
of the nature of contingent assets at the end of the
reporting period. However, when the realisation of
income is virtually certain, then the related asset is
not a contingent asset and the Company recognize
such assets.

Provisions, contingent liabilities and contingent
assets are reviewed at each reporting date.

T. Dividend

The Company recognizes a liability to make cash
dividend to equ ity h olders of the Company wh en
the distribution is authorized and the distribution
is no longer at the discretion of the Company. As
per the corporate laws in India, a distribution is
authorized when it is approved by the shareholders.
A corresponding amount is recognized directly in
equity.

U. Fair value measurement

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement
is based on the presumption that the transaction
to sell the asset or transfer the liability takes place
either:

(a) In the principal market for the asset or liability,
or

(b) I n the absence of a principal market, in the
most advantageous market for the asset or
liability

The principal or the most advantageous market
must be accessible by the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset
takes into account a market participant’s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the standalone financial
statements are categorized within the fair value
hierarchy, described as follows, based on the
lowest level input that is significant to the fair value
measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognized in the
standalone financial statements on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.

The Company’s management determines the
policies and procedures for both recurring fair
value measurement, such as unquoted financial
assets measured at fair value, and for non-recurring
measurement, such as assets held for distribution in
discontinued operations.

External valuers are involved for valuation of
significant assets and significant liabilities, if any.

At each reporting date, the management analyses
the movements in the values of assets and liabilities
which are required to be re-measured or re¬
assessed as per the Company’s accounting policies.
For this analysis, the management verifies the major
inputs applied in the latest valuation by agreeing
the information in the valuation computation to
contracts and other relevant documents, if any.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the
fair value hierarchy as explained above.

V. Financial instruments

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

Financial Assets

Initial recognition and measurement

Financial assets are classified, at initial recognition,
as subsequently measured at amortized cost, fair
value through other comprehensive income (OCI),
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 determined under Ind AS 115. Refer
to the accounting policies in section “Revenue from
contracts with customers”.

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

The Company’s business model for managing
financial assets refers to how it manages its
financial assets in order to generate cash flows. The
business model determines whether cash flows
will result from collecting contractual cash flows,
selling the financial assets, or both. Financial assets
classified and measured at amortized cost are held

within a business model with the objective to hold
financial assets in order to collect contractual cash
flows while financial assets classified and measured
at fair value through OCI are held within a business
model with the objective of both holding to collect
contractual cash flows and selling.

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

Subsequent measurement

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

• Financial assets at amortized cost (debt
instruments)

• Financial assets at fair value through other
comprehensive income (FVTOCI) with
recycling of cumulative gains and losses (debt
instruments)

• Financial assets designated at fair value
through OCI with no recycling of cumulative
gains and losses upon derecognition (equity
instruments).

• Financial assets at fair value through profit or
loss.

Financial assets at amortized cost

A financial assets is measured at the amortized cost
if both the following conditions are met

(i) The asset is held within a business model
whose objective is to hold assets for collecting
contractual cash flows and

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

After initial measurement, such financial assets are
subsequently measured at amortized cost using the
effective interest rate (EIR) method and are subject to
impairment as per the accounting policy applicable
to ‘Impairment of financial assets. Amortized cost is
calculated by taking into account any discount or
premium on acquisition and fees or costs that are
an integral part of the EIR. The accretion of EIR is
recorded as an income or expense in statement of

profit and loss. The losses arising from impairment
are recognized in the statement of profit and loss.
This category generally applies to trade and other
receivables.

Financial assets at FVTOCI (debt instruments)

A ‘financial asset’ is classified as at the FVTOCI if
both of the following criteria are met:

a) The Financial assets at fair value through
other comprehensive income (FVTOCI) with
recycling of cumulative gains and losses (debt
instruments).

b) The asset’s contractual cash flows represent
SPPI.

Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. For debt instruments,
at fair value through OCI, interest income, foreign
exchange revaluation and impairment losses or
reversals are recognized in the profit or loss and
computed in the same manner as for financial
assets measured at amortized cost. The remaining
fair value changes are recognized in OCI. Upon
derecognition, the cumulative fair value changes
recognized in OCI is reclassified from the equity to
profit or loss.

Financial assets at fair value through profit or
loss

Financial assets in this category are those that are
held for trading and have been either designated
by management upon initial recognition or are
mandatorily required to be measured at fair value
under Ind AS 109 i.e. they do not meet the criteria
for classification as measured at amortized cost or
FVOCI. Management only designates an instrument
at FVTPL upon initial recognition, if the designation
eliminates, or significantly reduces, the inconsistent
treatment that would otherwise arise from
measuring the assets or liabilities or recognising
gains or losses on them on a different basis. Such
designation is determined on an instrument-by¬
instrument basis.

Financial assets at fair value through profit or loss
are carried in the balance sheet at fair value with net
changes in fair value recognized in the statement of
profit and loss.

Interest earned on instruments designated at
FVTPL is accrued in interest income, using the EIR,
taking into account any discount/ premium and

qualifying transaction costs being an integral part of
instrument. Interest earned on assets mandatorily
required to be measured at FVTPL is recorded
using the contractual interest rate. Dividend income
on listed equity investments are recognized in the
statement of profit and loss as other income when
the right of payment has been established.

Equity instruments at fair value through OCI
(FVTOCI)

Upon initial recognition, the Company can elect
to classify irrevocably its equity investments as
equity instruments designated at fair value through
OCI when they meet the definition of equity under
Ind AS 32 Financial Instruments: Presentation
and are not held for trading. The classification is
determined on an instrument-by-instrument basis.
Equity instruments which are held for trading and
contingent consideration recognized by an acquirer
in a business combination to which Ind AS103
applies are classified as at FVTPL.

Gains and losses on these financial assets are
never recycled to profit or loss. Dividends are
recognized as other income in the statement of
profit and loss when the right of payment has been
established, except when the Company benefits
from such proceeds as a recovery of part of the cost
of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at
fair value through OCI are not subject to impairment
assessment.

De-recognition

A financial asset (or, where applicable, a part of
a financial asset) is primarily derecognized (i.e.
removed from the Company’s Balance Sheet) when:

(i) The contractual rights to receive cash flows
from the asset has expired, or

(ii) The Company has transferred its contractual
rights to receive cash flows from the financial
asset or has assumed an obligation to pay the
received cash flows in full without material
delay to a third party under a ‘pass-through’
arrangement; and either (a) the Company
has transferred substantially all the risks and
rewards of the asset, or (b) the Company has
neither transferred nor retained substantially
all the risks and rewards of the asset, but has
transferred control of the asset.

When the Company has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and
to what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
Company continues to recognize the transferred
asset to the extent of the Company’s continuing
involvement. In that case, the Company also
recognizes an associated liability. The transferred
asset and the associated liability are measured on a
basis that reflects the rights and obligations that the
Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured
at the lower of the original carrying amount of the
asset and the maximum amount of consideration
that the Company could be required to repay.

Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss.

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

The Company’s financial liabilities include trade
and other payables, lease liabilities, loans and
borrowings etc.

Subsequent measurement

For purposes of subsequent measurement, financial
liabilities are classified in two categories:

• Financial liabilities at amortized cost

• Financial liabilities at fair value through profit
and loss (FVTPL)

Financial liabilities at fair value through profit or
loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing
in the near term. This category also includes

derivative financial instruments entered into by
the Company that are not designated as hedging
instruments in hedge relationships as defined by
Ind AS 109. Separated embedded derivatives are
also classified as held for trading unless they are
designated as effective hedging instruments.

Gains or losses on liabilities held for trading are
recognized in the profit or loss.

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

Financial liabilities at Amortized cost

After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortized cost using the EIR method. Gains and
losses are recognized in the profit or loss when the
liabilities are derecognized as well as through the
EIR amortization process.

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

De-recognition

A financial liability is derecognized 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 recognized in the
statement of profit and loss.

Offsetting of financial instruments

Financial assets and liabilities are offset and the
net amount is reported in the balance sheet if there

is a currently enforceable legal right to offset the
recognized amounts and there is an intention to
settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

Reclassification of financial assets

The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for
financial assets which are equity instruments and
financial liabilities. For financial assets which are
debt instruments, a reclassification is made only
if there is a change in the business model for
managing those assets. Changes to the business
model are expected to be infrequent. The Company
senior management determines change in the
business model as a result of external or internal
changes which are significant to the Company’s
operations. Such changes are evident to external
parties. A change in the business model occurs
when the Company either begins or ceases
to perform an activity that is significant to its
operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day
of the immediately next reporting period following
the change in business model. The Company does
not restate any previously recognized gains, losses
(including impairment gains or losses) or interest.

W. Impairment of financial assets

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

Financial assets that are debt instruments, and are
initially measured at fair value with subsequent
measurement at amortized cost e.g., trade and other
receivables, security deposits, loan to employees,
etc.

The Company follows ‘simplified approach’ for
recognition of impairment loss allowance for trade
receivables.

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

ECL is the difference between all contractual cash
flows that are due to the Company in accordance

with the contract and all the cash flows that the
entity expects to receive (i.e., all cash shortfalls),
discounted at the original effective interest rate.

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

ECL impairment loss allowance (or reversal)
recognized during the period is recognized as an
expense in the statement of profit and loss.

X. Business Combination and Goodwill

Business combinations are accounted for using
the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration
transferred measured at acquisition date fair value
and the amount of any non-controlling interests
in the acquiree. For each business combination,
the Company elects whether to measure the non¬
controlling interests in the acquiree at fair value
or at the proportionate share of the acquiree’s
identifiable net assets. In respect to the business
combination for acquisition of subsidiary, the
Company has opted to measure the non-controlling
interests in the acquiree at the proportionate share
of the acquiree’s identifiable net assets. Acquisition-
related costs are expensed in the periods in
which the costs are incurred, and the services are
received, with the exception of the costs of issuing
debt or equity securities that are recognized in
accordance with Ind AS 32 and Ind AS 109.

At the acquisition date, the identifiable assets
acquired, and the liabilities assumed are recognized
at their acquisition date fair values. For this purpose,
the liabilities assumed include contingent liabilities
representing present obligation and they are
measured at their acquisition fair values irrespective
of the fact that outflow of resources embodying
economic benefits is not probable. However, the
following assets and liabilities acquired in a business
combination are measured at the basis indicated as
mentioned hereinafter:

• Deferred tax assets or liabilities, and the
liabilities or assets related to employee benefit
arrangements are recognized and measured

in accordance with Ind AS 12 Income Tax and
Ind AS 19 Employee Benefits respectively.

• Potential tax effects of temporary differences
and carry forwards of an acquiree that exist at
the acquisition date or arise as a result of the
acquisition are accounted in accordance with
Ind AS 12.

• Liabilities or equity instruments related to share
based payment arrangements of the acquiree
or share - based payments arrangements
of the Group entered into to replace share-
based payment arrangements of the acquiree
are measured in accordance with Ind AS 102
Share-based Payments at the acquisition date.

• Assets (or disposal groups) that are classified
as held for sale in accordance with Ind AS
105 Non-current Assets Held for Sale and
Discontinued Operations are measured in
accordance with that Standard.

• Reacquired rights are measured at a value
determined on the basis of the remaining
contractual term of the related contract. Such
valuation does not consider potential renewal
of the reacquired right.

When the Company acquires a business, it
assesses the financial assets and liabilities assumed
for appropriate classification and designation in
accordance with the contractual terms, economic
circumstances and pertinent conditions as at the
acquisition date. This includes the separation of
embedded derivatives in host contracts by the
acquiree.

I f the business combination is achieved in stages,
any previously held equity interest is re-measured
at its acquisition date fair value and any resulting
gain or loss is recognized in profit or loss or OCI, as
appropriate.

Any contingent consideration to be transferred
by the acquirer is recognized at fair value at
the acquisition date. Contingent consideration
classified as an asset or liability that is a financial
instrument and within the scope of Ind AS 109
Financial Instruments, is measured at fair value with
changes in fair value recognized in profit or loss
in accordance with Ind AS 109. If the contingent
consideration is not within the scope of Ind AS 109,
it is measured in accordance with the appropriate
Ind AS and shall be recognized in profit or loss.

Contingent consideration that is classified as equity
is not re-measured at subsequent reporting dates
and subsequent its settlement is accounted for
within equity.

Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration
transferred and the amount recognized for non¬
controlling interests, and any previous interest
held, over the net identifiable assets acquired
and liabilities assumed. If the fair value of the net
assets acquired is in excess of the aggregate
consideration transferred, the Company re¬
assesses whether it has correctly identified all of
the assets acquired and all of the liabilities assumed
and reviews the procedures used to measure
the amounts to be recognized at the acquisition
date. If the reassessment still results in an excess
of the fair value of net assets acquired over the
aggregate consideration transferred, then the gain
is recognized in OCI and accumulated in equity
as capital reserve. However, if there is no clear
evidence of bargain purchase, the entity recognizes
the gain directly in equity as capital reserve, without
routing the same through OCI.

After initial recognition, goodwill is measured at cost
less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition
date, allocated to each of the Company’s cash¬
generating units that are expected to benefit from
the combination, irrespective of whether other
assets or liabilities of the acquiree are assigned to
those units.

A cash generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the
cash generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro rata
based on the carrying amount of each asset in the
unit. Any impairment loss for goodwill is recognized
in profit or loss. An impairment loss recognized for
goodwill is not reversed in subsequent periods.

Where goodwill has been allocated to a cash¬
generating unit and part of the operation within that
unit is disposed of, the goodwill associated with
the disposed operation is included in the carrying

amount of the operation when determining the gain
or loss on disposal. Goodwill disposed in these
circumstances is measured based on the relative
values of the disposed operation and the portion of
the cash-generating unit retained.

I f the initial accounting for a business combination
is incomplete by the end of the reporting period
in which the combination occurs, the Company
reports provisional amounts for the items for which
the accounting is incomplete. Those provisional
amounts are adjusted through goodwill during
the measurement period, or additional assets or
liabilities are recognized, to reflect new information
obtained about facts and circumstances that
existed at the acquisition date that, if known, would
have affected the amounts recognized at that date.
These adjustments are called as measurement
period adjustments. The measurement period does
not exceed one year from the acquisition date.

Y. Events after the reporting period

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

3. New and amended standards

The Company applied for the first-time certain standards
and amendments, which are effective for annual periods
beginning on or after 01 April 2024. The Company
has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.

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

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

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

The amendment is effective for annual reporting periods
beginning on or after 01 April 2024 and must be applied
retrospectively to sale and leaseback transactions
entered into after the date of initial application of Ind AS
116.

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

(ii) Ind AS 117 Insurance Contracts

The Ministry of Corporate Affairs (MCA) notified the Ind
AS 117, Insurance Contracts, vide notification dated 12
August 2024, under the Companies (Indian Accounting
Standards) Amendment Rules, 2024, which is effective
from annual reporting periods beginning on or after 01
April 2024.

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

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

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

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

4. Standards notified but not yet effective

The new and amended standards and interpretations
that are issued, but not yet effective, up to the date
of issuance of the Company’s standalone financial
statements are disclosed below. The Company will
adopt this new and amended standard, when it become
effective.

Lack of exchangeability - Amendments to Ind AS 21

The Ministry of Corporate Affairs notified amendments to
Ind AS 21 The Effects of Changes in Foreign Exchange
Rates to specify how an entity should assess whether a
currency is exchangeable and how it should determine a
spot exchange rate when exchangeability is lacking. The
amendments also require disclosure of information that
enables users of its standalone 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 April 01, 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 standalone financial statements.

Note:

1. Certain items of property, plant and equipment have been pledged as security against the borrowings of the Company
(refer note 19).

2. Title deeds are held in the name of the Company.

3. On transition to Ind AS (i.e. April 01, 2016), the Company has elected to continue with the carrying value of all Property,
plant and equipment measured as per the previous GAAP and use that carrying value as the deemed cost of Property,
plant and equipment.

4. The Company started the construction of a new manufacturing facility at Sanand, Gujarat in previous year. This project
is expected to be completed in June 2025. The manufacturing facility is financed by the Company from a bank. The
amount of borrowing costs capitalised in capital work in progress during the year ended March 31, 2025 is '' 306.25
Lakhs (March 31, 2024: '' 21.97 Lakhs). The rate used to determine the amount of borrowing costs eligible for capitalisation
is the effective interest rate of the specific borrowing.

Further during, the previous year, the Company has capitalised its manufacturing facility at Chakan Maharashtra. The
manufacturing facility is financed by the Company from a bank. The amount of borrowing costs capitalised in property
plant and equipment during the year ended March 31, 2025 is '' Nil (March 31, 2024: '' 249.02 Lakhs). The rate used to
determine the amount of borrowing costs eligible for capitalisation is the effective interest rate of the specific borrowing.

5. Capital work in progress includes assets in transit of '' 55.31 Lakhs (March 31, 2024''1,426.29 Lakhs)

5 Right-of-use assets

The Company has lease contracts for lands and buildings, solar power plants, vehicles and guest houses generally
have lease terms ranging from 12 months to 99 years. The Company’s obligations under its leases are secured by the
lessor’s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.
The Company also has certain leases with lease terms of 12 months or less and low value assets. The Company applies the ‘short¬
term lease’ and ‘low value assets’ recognition exemptions for these leases.

On 1 April 2019, the Company purchased certain assets from Lumax Auto Technologies Limited at a consideration of
'' 2,245.41 lakhs, pursuant to which, the Company has setup in-house Electronic facility at Manesar on 1 April 2019 for designing
and manufacturing of Electronics Printed Circuit Boards Assembly (‘PCB’). The said acquisition was primarily done to optimize
cost by indigenization of Printed Circuit Board (‘PCB’). The above mentioned purchase of assets had been accounted as
Business Combination in accordance with Ind AS 103.

The fair values of assets (i.e. Property, plant and equipment and other intangible assets) acquired amounts to '' 1,267.83 lakhs.
Further, Goodwill arising from the acquisition amounts to '' 977.58 lakhs which is attributable to synergies expected to be
achieved from integrating PCB into the Company’s existing business.

For the purpose of impairment testing, Goodwill is allocated to the Company as a whole since the performance of the
Company is monitored at that level for internal management purposes. The recoverable amount of the CGU was based on its
value in use and was determined by discounting the future cash flows to be generated from the continuing use of the CGU.
These calculations use cash flow projections over a period of five years, based on next year financial budgets estimated by
management, with extrapolation for the remaining period, and an average of the range of assumptions as mentioned below.

The cash flow projections included specific estimates for five years and a terminal growth rate thereafter. The terminal growth
rate and EBITDA margins were determined based on management’s estimate. Budgeted EBITDA margin was based on
expectations of future outcomes taking into account past experience. The estimation of value in use reflects numerous
assumptions that are subject to various risks and uncertainties, including key assumptions regarding expected growth
rates and operating margin, expected length and the shape and timing of the subsequent recovery, as well as other key
assumptions with respect to matters outside of the Company’s control. It requires significant judgments and estimates, and
actual results could be materially different than the judgments and estimates used to estimate value in use.

The Company has used the discount rate which is based on the Weighted Average Cost of Capital (WACC) of comparable
market participant, adjusted for specific risks. These estimates are likely to differ from future actual results of operations and
cash flows. Based on the above, no impairment was identified as at March 31, 2025 and March 31, 2024 as the recoverable
value of the CGU exceeded the carrying value. Management has performed a sensitivity analysis with respect to changes in
assumptions for assessment of ‘value in use’ of respective CGUs. Based on this analysis, management believes that change
in any of the above assumption would not cause any material possible change in carrying value of unit’s CGUs over and
above its recoverable amount.

d) Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled
to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of
Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.

18.1 Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited
purposes in accordance with the provisions of the Companies Act,2013.

b) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a
specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013,
the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.
However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific
requirements of Companies Act, 2013.

c) Retained earnings

Retained earnings are the profits that the Company has earned 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.

d) Capital reserve

The reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

Term Loan:

a) Term loan amounting to '' 2,222.16 lakhs (March 31, 2024''3,999.90 lakhs) from bank is secured by way of exclusive

charge on Land of Bawal plant (Haryana) along with plant & machinery of Sanand plant (Gujurat), which is financed from

the proceeds of Term Loan. This loan is repayable in 18 equal quarterly installment. The interest rate range between
8.00% to 8.25% (March 31, 2024: 8.25%).

b) Term loan amounting to '' 13,959.41 lakhs (March 31, 2024''11,832.15 lakhs) from bank is secured by way of exclusive

charge on Land of Bawal plant (Haryana) along with plant & machinery of New Chakan plant (Maharashtra), and Bawal

plant (Haryana), which is financed from the proceeds of Term Loan. This loan is repayable in 15 equal quarterly installment.
The interest rate range between 8.00% to 9.13% (March 31, 2024 8.47% to 9.31%).

c) Term loan amounting to '' 12,316.35 lakhs (March 31, 2024''2,262.42 lakhs) from bank is secured by way of exclusive

charge on secured by way of exclusive charge on Land and Building of Bawal plant (Haryana) along with all present and

future plant & machinery of New Chakan plant (Maharastra), Sanand plant (Gujurat) and Bawal plant (Haryana). This loan
is repayable in equated 5% quarterly installment, starting from second year.The interest rate range between 7.41% to
8.25% (March 31, 2024 8.25%).

Vehicle Loans:

Vehicle loans amounting to '' 592.48 Lakhs (March 31, 2024''681.21 Lakhs) from bank carrying interest rate 7.60% to 9.10%

(March 31, 2024 8.65% to 9.15%) is secured by way of hypothecation of the respective vehicles acquired out of proceeds

thereof. These loans are repayable over a period of thirty nine months from the date of availment.

c) Undrawn committed borrowing facility

The Company has availed fund based and non fund based limits amounting to '' 1,18,110.00 Lakhs (March 31, 2024 :
'' 96,160.00 Lakhs) from banks and financial institutions. An amount of '' 22,267.66 Lakhs remain undrawn as at March 31,
2025 (March 31, 2024 : '' 27,819.94 Lakhs).

d) Loan covenants

The Company has satisfied all debt covenants prescribed in the terms of rupee term loans. The other loans do not carry any
debt covenant. The Company has not defaulted on any loans payable and term loans were applied for the purpose for which
the loans were obtained.

e) Wilful defaulter

The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government
authority.

f) The Company has been sanctioned working capital limits from banks and financial institution during the year on the basis of
security of current assets of the Company. The quarterly returns/statements filed by the Company for each quarter with such
banks and financial institution are in agreement with the books of accounts of the Company.

39 Gratuity and other post-employment benefit plans

The Company has a defined gratuity plan (funded) and the gratuity plan is governed by The Payment of Gratuity Act 1972
(“Act”). Under the Act, employees who have completed five years of service are entitled for gratuity benefit of

---

Mar 31, 2024

- Property, plant and equipment representing land and building amounting to '' 4,313.26 Lakhs (March 31, 2023: '' 4,433.18 Lakhs) have been pledged as security by the Company.

- Title deed are held in the name of the Company.

- On transition to Ind AS (i.e. April 01, 2016), the Company has elected to continue with the carrying value of all Property, plant and equipment measured as per the previous GAAP and use that carrying value as the deemed cost of Property, plant and equipment.

iv) The Company has made payment of lease liabilities '' 1,013.10 Lakhs for the year ended March 31, 2024 (March 31, 2023 '' 521.88 Lakhs).

v) Extension and termination options: Extension and termination options are included in property lease agreements. These are used to maximise operational flexibility in terms of managing the assets used in the Company’s operations. Extension and termination options held are exercisable only by the Company and not by the lessor.

vi) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

i) Contractual obligations

There are no contractual obligations to purchase, construct or develop investment property.

ii) Estimation of Fair Value

Fair value of investment property is ascertained on the basis of market rates as determined by the independent registered valuer. Fair value hierarchy disclosures for investment properties have been provided.

*In the earlier year, the Company classified certain items of Property Plant and Equipment (which includes plant and machinery '' 28.94 Lakhs, furniture and fixtures '' 195.09 Lakhs and office equipments '' 0.38 Lakhs) and intangible assets of '' 127.40 Lakhs as held for sale which was recognized and measured in accordance with Ind-AS 105 “Non-Current Assets Held for Sale and Discontinued operations” at lower of its carrying amount and the fair value less cost to sell. During the current year, the said assets have been sold to wholly owned subsidiary for '' 198.03 Lakhs and other party for '' 153.78 Lakhs at cost .

d) Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

20.1 Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013.

b) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

c) Retained earnings

Retained earnings are the profits that the Company has earned 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.

d) Capital reserve

The reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

c) Undrawn committed borrowing facility

The Company has availed fund based and non fund based limits amounting to '' 58,000.00 Lakhs (March 31, 2023 : '' 49,350.00 Lakhs) from banks and financial institutions. An amount of Rs 7,754.00 Lakhs remain undrawn as at March 31, 2024 (March 31, 2023 : '' 13,813.00 Lakhs)

d) Loan covenants

The Company has satisfied all debt covenants prescribed in the terms of rupee term loans. The other loans do not carry any debt covenant. The Company has not defaulted on any loans payable and term loans were applied for the purpose for which the loans were obtained.

e) Wilful defaulter

The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government authority.

‘Provision for warranties

A provision is recognized for expected warranty claims on products sold in past year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in the next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and information available about warranty. The table below gives information about movement in warranty provisions.

Terms and conditions of the above financial liabilities:

- Trade payables are non-interest bearing and are normally settled on 30 to 120 day terms. For explanations on the Company’s credit risk management processes, refer note 51.

For terms and conditions with related parties, refer to Note 41

* The Company has Tax rate change impact of '' 73.77 Lakhs (March 31, 2023''156.26 Lakhs) which is calculated on the basis of difference between old tax regime i.e. 34.944% and lower tax rate i.e. 25.168% (which has been measured only for calculating the deferred tax on the basis of management best estimate of falling in lower tax in next years).

29.5 Reconciling the amount of revenue recognized in the statement of profit and loss with the contracted price

The aggregate amount of transaction price allocated to the unsatisfied performance obligations as at March 31, 2024 amounts to '' 5072.45 Lakhs - (March 31, 2023: '' 529.05 Lakhs). This will be recognized as revenue when the moulds will be sold to the customer, which is expected to occur post March 31, 2025.

*The above amount does not include the value of performance that have an original expected duration of one year or less, as required by Ind AS 115.

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 3 May 2023. However, 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.

40 Earnings per share (EPS)

a) Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Basic and diluted EPS are same as there are no convertible financial instruments outstanding as on March 31, 2024

42 Gratuity and other post-employment benefit plans

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.

43 Commitments and Contingencies

a) Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for:

Capital commitments are '' 7,862.12 Lakhs (As at March 31, 2023''7,694.71 Lakhs), net of advances.

b)	Contingent Liabilities
		As at March 31, 2024	As at March 31, 2023
	Claims against the Company not acknowledged as debts
	Custom Duty*
	i) During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that Company had incorrectly classified of certain imported goods. The Company had submitted reply to the Show Cause Notice and the matter is pending for adjudication. The Company is of the view that the final outcome of the case would be in the favor of the Company.	6.51	6.51
	ii) During the earlier years, the Company had received demand cum show cause notice from the indirect tax department alleged that Company had availed duty drawback and not submitted the proof of realization of export within time. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The matter was remanded back for re-adjudication vide Order in Appeal No. MUM-CUSTM/ AXP-APP-30 Dated April 23, 2018. The Company is of the view that the final outcome of the case would be in the favor of the Company.	1.16	1.16
	iii) A Show Cause-Cum-Demand Notice dated September 17, 2021 was issued based on the allegation of non-realisation of export proceeds. The Company had submitted reply to the Show Cause Notice and the matter is pending for adjudication. The Company is of the view that the final outcome of the case would be in the favor of the Company.	0.20
	iv) The Department had issued the Show Cause-Cum-Demand Notice alleged that the Company had not included the cost of drawing, design and testing charges paid to M/s Stanley Electric Co. Limited for the value of moulds/ tools/ dies imported by it and has therefore not paid customs duty on the value of such design, drawings and testing charges and '' 500 Lakhs was duly deposited under protest by the Company on February 01, 2021. The Show Cause Notices were adjudicated vide Order in Original No. 336/ 2023-24/ Commr/ NS-V/ CAC/ JNCH dated March 30, 2024 wherein the demand was confirmed along with interest and penalty. The Company is in the process of preparing & finalising the Appeal which is to be filed before the CESTAT. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company.	1,315.56	1,315.56

	As at March 31, 2024	As at March 31, 2023
v) A Show Cause-Cum-Demand Notice Dated April 30, 2021 was issued based on the allegation that the Company had wrongly classifed the imported goods. The matter was confirmed vide Order-In-Original dated April 28, 2022 and an appeal was filed on June 24, 2022 and Rs 3.40 Lakhs was duly deposited under protest by the Company. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favor of the Company.	45.03	45.03
vi) Demand was raised by the Director General of Central Excise Intelligence dated 23.11.2019 for Excise Duty on Drawing & Design / specification provided by MSIL on free of cost and amortization cost thereon. Appeal was filed before the CESTAT against the demand confirmed by the Adjudicating Authority and the said appeal was allowed vide Final Order Dated 12.03.2024 and demand was dropped.		48.77
	1,368.46	1,417.03
Goods and Services Tax (GST)/ Central Sales Tax (CST)*
vii) During current year, the Company has received Show Cause-Cum-Demand Notice dated December 08, 2023 based on the allegation that there is excess claim of ITC. The Company has submitted Reply to the Show Cause Notice on January 08, 2024. The Company is of the view, that the final outcome of the case would be in the favor of the Company.	10.87
viii) During the earlier year, The Company had received demand from the department alleged that excess Input Tax Credit (ITC) had been claimed dated March 24, 2023. The Show Cause Notice was adjudicated and the demand was dropped vide Order issued dated February 12, 2024.		102.64
ix) During the earlier year, the Company had received demand cum show cause notice from the indirect tax department non submission of C form. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The Company has settled the amount under AMENESTY Scheme 2023 during the current year.		35.64
x) During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that the Company has wrongfully obtained the ITC. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The Company has settled the amount under AMENESTY Scheme 2023 during the current year.		90.79
xi) During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that the Company has wrongfully obtained the ITC. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The Company has settled the amount under AMENESTY Scheme 2023 during the current year.		31.48
	10.87	260.55
xii) Outstanding Export Obligations Outstanding export obligations for '' 5,380.46 Lakhs (March 31, 2023 '' 6,776.62 Lakhs), which is six times of the duty saved are to be fulfilled over a period of 6 years from the date of respective licences under the EPCG scheme against import of plant and machinery.	896.74	1,129.44

	As at March 31, 2024	As at March 31, 2023
Income Tax*
xiii) In respect of A.Y. 2018-19, the Assessing officer had made addition of '' 3,991.85 Lakhs vide assessment order u/s 143(3) dated December 30, 2019 on account of search and seizure operation and raised the demand amounting to '' 2,572.15 Lakhs including interest u/s 234 A/B/C. Against the addition made by Assessing officer, the Company had preferred an appeal on January 18, 2020 with Commissioner of Income Tax (Appeals), CIT(A) Demand was corrected by AO to zero u/s 154 vide order dated August 6, 2020. During the F.Y 2020-21, the Company had received a favorable order in this regard from CIT(A) and Appeal effect order dated October 27, 2020 was passed by AO. However, the appeal filed by the department with the Income Tax Appellate Tribunal (ITAT) on November 10, 2020 against the said order of CIT(A),decided in favor of the Company vide order dated April 04,2024.		3,083.71
xiv) In respect of A.Y. 2021-22, the Assessing officer has made addition of 2,672.41 Lakhs vide assessment order u/s 143(3) rws 144C(3) dated February 26, 2024 on account of transfer pricing adjustment and raised the demand amounting to 1,396.66 Lakhs including interest u/s 234 A/B/C without setting off of MAT Credit available with the Company. Against the addition made by Assessing officer, the Company has filed application for rectification u/s 154 on February 29, 2024 for credit of MAT available and also preferred an appeal on March 20, 2024 with Commissioner of Income Tax (Appeals), CIT(A). The department has adjusted the refund of '' 711.61 Lakhs (Inclusive of Interest) for AY-23-24 dated May 15, 2024 against the above demand. Based on the opinion of the advocate, the Company is of the view that the final outcome of the case would be in the favor of the Company.	933.85
Other cases*
xv) During the earlier year, suit was instituted by Company against the vendor for recovery of dues and vendor also filed a frivolous counter claim against the Company along with his written statement with regard to DG Set installed by the vendor. The suit has been decreed in favor of the Company, however appeal as a pauper has been instituted against the order by the vendor. The Company is of the view that the final outcome of the case would be in the favor of the Company.	222.75	300.00
xvi) During the earlier year, the Company had received a notice from Charodi Gram panchayat towards payment of property tax amounting to 250.00 Lakhs from the period from FY 2010-11 to FY 2019-20 in respect to the factory situated at Sanand, Ahmedabad in response to which Hon''ble High Court has directed the Company vide order dated September 22, 2022 to submit a supporting documents to village gram panchayat for reassessment of case. Company had deposited the supporting documents to village gram panchayat and now it is pending adjudication before the village gram panchayat.	250.00	250.00

Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/ or regulatory inspections, inquiries, investigations and proceedings, including commercial matters that arise from time to time in the ordinary course of business. The Company believes that none of these matters, either individually or in aggregate, are expected to have any material adverse effect on its financial statements.

*excludes interest and penalty

44 Event after the reporting date

The Board of Directors of the Company has proposed dividend @ 350% i.e. '' 35 per equity share of face value of '' 10 each (March 31, 2023 @ 270% i.e. '' 27 per equity share of face value of '' 10 each) which is subject to shareholder’s approval in forthcoming annual general meeting.

45 Material accounting judgements, estimates and assumptions

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

(i) Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:

a) Operating lease commitments - Company as lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an valuation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

b) Assessment of lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

c) Revenue from contracts with customers

The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:

• Determining method to estimate variable consideration and assessing the constraint

Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/ purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.

(ii) 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.

a) Property, plant and equipment

The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.

b) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the longterm nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

c) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions 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. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 42.

d) Fair value measurement of financial instrument

When the fair value 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 Discounted Cash Flow (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.

e) Impairment of financial assets

The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

f) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of non-financial assets as appearing in the financial statements.

g) Lease incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore its incremental borrowing rate (IBR) to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the Right-to-use assets in as similar economic environments. The IBR therefore effects what the Company “would have to pay” which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of the lease. The Company estimates the IBR using observable inputs such as market interest rates when available.

46 Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholders’ value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2024 and March 31, 2023.

Discount rate used in determining fair value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

48 Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly

Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.

49 On April 01, 2019, the Company purchased certain assets from Lumax Auto Technologies Limited at a consideration of '' 2,245.41 Lakhs, pursuant to which, the Company has setup in-house Electronic facility at Manesar on 1 April 2019 for designing and manufacturing of Electronics Printed Circuit Boards Assembly (‘PCB’). The said acquisition was primarily done to optimize cost by indigenization of Printed Circuit Board (‘PCB’). The abovementioned purchase of assets has been accounted as Business Combination in accordance with Ind AS 103.

The fair values of assets (i.e. Property, plant and equipment and other intangible assets) acquired amounts to '' 1,267.83 Lakhs. Further, Goodwill arising from the acquisition amounts to '' 977.58 Lakhs which is attributable to synergies expected to be achieved from integrating PCB into the Company’s existing business.

For the purpose of impairment testing, Goodwill is allocated to the Company as a whole since the performance of the Company is monitored at that level for internal management purposes. The recoverable amount of the CGU was based on its value in use and was determined by discounting the future cash flows to be generated from the continuing use of the CGU. These calculations use cash flow projections over a period of five years, based on next year financial budgets estimated by management, with extrapolation for the remaining period, and an average of the range of assumptions as mentioned below.

The key assumptions used in the estimation of value in use were as follows:

*EBITDA growth rate in 2024-25 is 41% which is higher than normal rate ie 15%, due to New Chakan plant operational for 12 months in 2024-25.

The cash flow projections included specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate and EBITDA margins were determined based on management’s estimate. Budgeted EBITDA margin was based on expectations of future outcomes taking into account past experience. The estimation of value in use reflects numerous assumptions that are subject to various risks and uncertainties, including key assumptions regarding expected growth rates and operating margin, expected length and the shape and timing of the subsequent recovery, as well as other key assumptions with respect to matters outside of the Company’s control. It requires significant judgments and estimates, and actual results could be materially different than the judgments and estimates used to estimate value in use.

The Company has used the discount rate which is based on the Weighted Average Cost of Capital (WACC) of comparable market participant, adjusted for specific risks. These estimates are likely to differ from future actual results of operations and cash flows. Based on the above, no impairment was identified as at March 31, 2024 and March 31, 2023 as the recoverable value of the CGU exceeded the carrying value. No reasonably possible change in any of the above key assumptions would cause the carrying amount of these CGU to exceed their recoverable amount.

51 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise of trade and other payables, borrowings, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

A. Market risk

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

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

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

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

i) Interest rate risk

I nterest 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 interest bearing financial liabilities includes borrowings with fixed interest rates.

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

ii) Foreign currency risk

Foreign currency risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivative to manage market risks. All such transactions are carried out within the guideline as prescribed in the Company’s risk management policy.

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated. The functional currency for the Company is ''.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in foreign 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 including non-designated foreign currency derivatives and embedded derivatives.

iii) Equity Price Risk

The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to listed equity securities at fair value was '' 48.08 Lakhs. A decrease of 10% on the NSE market index could have an impact of approximately '' 4.81 Lakhs on the profit or loss. An increase of 10% in the value of the listed securities would also impact profit or loss.

B. Credit risk

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

Trade receivables

Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.

Further, the Company’s customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL).

C. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimised cost.

52 Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customers. In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be passed on/ received from the customers, based on various cost parameters like raw material and other costs. The total estimated other liabilities and unbilled revenue outstanding/ receivables as at March 31, 2024 is '' 3,636.51 Lakhs (March 31, 2023: '' 2,964.83 Lakhs), '' 837.68 Lakhs (March 31, 2023: '' 3,252.28 Lakhs) respectively, which management believes is sufficient to discharge liabilities/accrue income.

53 Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

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

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

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

(v) The Company have 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 have 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 does not have any 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.

54 In earlier years, the Company had entered into an agreement to sell with Lumax Ancillary Limited (LAL) for purchase of land and building for Printed Circuit Board (PCB) plant at Bawal (Haryana) for which the approval from the Haryana State Industrial & Infrastructure Development Corporation (HSIIDC) was pending. In the current year, LAL has got the conveyance deed of said land parcel from HSIIDC on payment of transfer fees, stamp duty and other charges. In consequences of the above, the sale deed has been executed for Rs 5,556 Lakhs (including stamp duty and other taxes) in the name of the Company. Accordingly it has been capitalised as land and building respectively.

55 The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail feature is not enabled at the database level insofar as it relates to accounting software and the audit trail feature is also not enabled for certain changes made using privileged/ administrative access rights to the applications. The Company is in the process of enabling the audit trail feature completely.

56 Standards notified but not yet effective

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

57 The Company’s business activity falls within a single business segment i.e. manufacturing and trading of Automotive Components and therefore, segment reporting in terms of Ind AS 108 on Segmental Reporting is not applicable.

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Mar 31, 2023

i) The Company has made payment of lease liability '' 521.88 Lakhs for the year ended March 31, 2023 (March 31, 2022 '' 398.52 Lakhs).

ii) Extension and termination options: Extension and termination options are included in property lease agreements. These are used to maximize operational flexibility in terms of managing the assets used in the Company’s operations. Extension and termination options held are exercisable only by the Company and not by the lessor.

iii) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

i) Contractual obligations

There are no contractual obligations to purchase, construct or develop investment property.

ii) Estimation of Fair Value

Fair value investment property is ascertained on th e basis of market rates as determined by the ind ependent registered valuer. Fair value hierarchy disclosures for investment properties have been provided.

Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

20.1 Nature and purpose of reserves

a) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes in accordance with the provisions of the Companies Act, 2013.

b) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilized only in accordance with the specific requirements of Companies Act, 2013.

c) Retained earnings

Retained earnings are the profits that the Company has earned 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.

d) Capital reserve

The Company had transferred forfeited share application money to Capital reserve in accordance with the provision of the Companies Act, 1956. The reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

c) Undrawn committed borrowing facility

The Company has availed fund based and non fund based limits amounting to '' 49,350.00 Lakhs (March 31, 2022: '' 49,350.00 Lakhs) from banks and financial institutions. An amount of '' 13,813.00 Lakhs remain undrawn as at March 31, 2023 (March 31, 2022: '' 17,190.00 Lakhs)

d) Loan covenants

The Company has satisfied all debt covenants prescribed in the terms of bank loans. The other loans do not carry any debt covenant. The Company has not defaulted on any loans payable and term loans were applied for the purpose for which the loans were obtained.

e) Wilful defaulter

The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government authority.

‘Provision for warranties

A provision is recognized for expected warranty claims on products sold in past year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in the next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and information available about warranty. The table below gives information about movement in warranty provisions.

Terms and conditions of the above financial liabilities:

-Trade payables are non-interest bearing and are normally settled on 30 to 120 day terms.

For explanations on the Company’s credit risk management processes, refer note 52.

For terms and conditions with related parties, refer to Note 41

Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended March 31, 2023 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

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 and the final rules/interpretation have not yet been issued. 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.

42 Gratuity and other post-employment benefit plans

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.

43 Commitments and Contingencies

a) Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for:

Capital commitments are '' 7,694.71 Lakhs (As at March 31, 2022''1,669.40 Lakhs), net of advances.

b)	Contingent Liabilities
			As at March 31, 2023	As at March 31, 2022
	Claims against the Company not acknowledged as debts
	Custom Duty
	i)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that Company had incorrectly classified of certain imported goods. The Company has submitted reply to the Show Cause Notice and the matter is pending for adjudication. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	6.51	6.51
	ii)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that Company has availed duty drawback and not submitted the proof of realization of export within time. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The matter was remanded back for re-adjudication vide Order in Appeal No. MUM-CUSTM/ AXP-APP-30 Dated 23.04.2018. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	1.16	1.16
	iii)	During the earlier year, the Company had received Show Cause-Cum-Demand Notice based on the allegation of non-realization of export proceeds. The Company had already submitted the reply along with TR-6 challan. Therefore, the case is closed now.		0.20
	iv)	The Department had issued the notices alleged that the Company has not included the cost of drawing, design and testing charges paid to M/S. Stanley Electric Co. Limited for the value of moulds/ tools/dies imported by it and has therefore not paid customs duty on the value of such design, drawings and testing charges and demanded '' 500 Lakhs which wad duly deposited under protest by the Company February 01, 2021. The matter is presently pending for adjudication as no personal hearing in held so far. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	1,315.56	1,132.26
	v)	A Show Cause Notice was issued based on the allegation that the Company has wrongly classified the imported goods. The matter was confirmed and an appeal was filed on June 24, 2022. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	45.03	45.03

		As at March 31, 2023	As at March 31, 2022
vi)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that the Company has wrongfully obtained the duty drawback and said case has been closed now.		2.00
vii)	Demand was raised by the department for Excise Duty on Drawing & Design / specification provided by MSIL on free of cost and amortization cost thereon. The matter was adjudicated and demand was partially dropped by the Adjudicating Authority. Appeal filed before CESTAT for the demand confirmed by the Adjudicating Authority. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	48.77	1,237.80
		1,417.03	2,424.96
	Good and Services Tax (GST)/ Central Sales Tax (CST)
viii)	During the current year, The Company has received demand from the department alleged that excess Input Tax Credit (ITC) has been claimed. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	102.64
ix)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department for non submission of C form. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	35.64	35.64
x)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department for non submission of C form. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The said case has been closed now.		20.23
xi)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that the Company has wrongfully obtained the ITC. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	90.79	90.79
xii)	During the earlier year, the Company had received demand cum show cause notice from the indirect tax department alleged that the Company has wrongfully obtained the ITC. The matter was adjudicated and an Appeal was filed against the said Adjudication Order. The Company is of the view that the final outcome of the case would be in the favor of the Company and hence, no provision has been made in the books of accounts.	31.48	31.48
		260.55	178.14

		As at March 31, 2023	As at March 31, 2022
xiii)	Outstanding Export Obligations Outstanding export obligations for '' 6,776.62 Lakhs (March 31, 2022''5,589.49 Lakhs), which is six times of the duty saved are to be fulfilled over a period of 6 years from the date of respective licenses under the EPCG scheme against import of plant and machinery and the related custom duty, interest if any has not been considered.	1,129.44	931.58
	Income Tax
xiv)	In respect of A.Y. 2018-19, the Assessing officer had made addition of '' 3,991.85 Lakhs vide assessment order u/s 143(3) dated December 30, 2019 on account of search and seizure operation and raised the demand amounting to '' 2,572.15 Lakhs including interest u/s 234 A/B/C. Against the addition made by Assessing officer, the Company had preferred an appeal on January 18, 2020 with Commissioner of Income Tax (Appeals), CIT(A). Demand was corrected by AO to zero u/s 154 vide order dated August 6, 2020. During the F.Y 2020-21, the Company had received a favourable order in this regard from CIT(A) and Appeal effect order dated October 27, 2020 was passed by AO. However, against the said order of CIT(A), the department has filed an appeal on November 10, 2020 with the Income Tax Appellate Tribunal (ITAT). Based on the opinion of the advocate, the Company is of the view that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts.	3,083.71	3,083.71
	Other cases
xv)	During the earlier year, the vendor has filed a frivolous counter claim suit against the Company for restraining the DG set installed by him. The Company is of the view that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts.	300.00	300.00
xvi)	During the earlier year, The Company had received a notice from Charodi Gram panchayat towards payment of property tax amounting to '' 250.00 Lakhs from the period from 2010-11 to 201920 in respect to the factory situated at Sanand, Ahmedabad in response to which Hon''ble High Court has directed the Company dated September 22, 2022 to submit a supporting documents to village gram panchayat for reassessment of case.	250.00	250.00

Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/ or regulatory inspections, inquiries, investigations and proceedings, including commercial matters that arise from time to time in the ordinary course of business. The Company believes that none of these matters, either individually or in aggregate, are expected to have any material adverse effect on its financial statements.

45 Event after the reporting date

The Board of Directors of the Company has proposed dividend @ 270% i.e. '' 27 per equity share of face value of '' 10 each (March 31, 2022 @ 135% i.e. '' 13.5 per equity share of face value of '' 10 each) which is subject to shareholder’s approval in forthcoming annual general meeting.

46 Significant accounting judgements, estimates and assumptions

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

(i) Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:

a) Operating lease commitments - Company as lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an valuation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

b) Assessment of lease term

I n determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

c) Revenue from contracts with customers

The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:

• Determining method to estimate variable consideration and assessing the constraint

Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/ purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.

(ii) 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. a) Property, plant and equipment

The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.

b) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the longterm nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

c) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions 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. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 42.

d) Fair value measurement of financial instrument

When the fair value 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 Discounted Cash Flow (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.

e) Impairment of financial assets

The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

f) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of non-financial assets as appearing in the financial statements.

g) Lease incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore its Incremental Borrowing Rate (IBR) to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the Right-to-use assets in as similar economic environments. The IBR therefore effects what the Company “would have to pay” which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of the lease. The Company estimates the IBR using observable inputs such as market interest rates when available.

47 Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholders’ value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and March 31, 2022.

Discount rate used in determining fair value

The interest rate used to discount estimated future cash flows, where applicable, are based on the incremental borrowing rate of borrower which in case of financial liabilities is average market cost of borrowings of the Company and in case of financial asset is the average market rate of similar credit rated instrument. The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

49 Fair value hierarchy

All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.

50 On April 01, 2019, the Company purchased certain assets from Lumax Auto Technologies Limited at a consideration of '' 2,245.41 Lakhs, pursuant to which, the Company has setup in-house Electronic facility at Manesar on April 01, 2019 for designing and manufacturing of Electronics Printed Circuit Boards Assembly (‘PCB’). The said acquisition was primarily done to optimize cost by indigenization of Printed Circuit Board (‘PCB’). The above mentioned purchase of assets has been accounted as Business Combination in accordance with Ind AS 103.

The fair values of assets (i.e. Property, plant and equipment and other intangible assets) acquired amounts to '' 1,267.83 Lakhs. Further, Goodwill arising from the acquisition amounts to '' 977.58 Lakhs which is attributable to synergies expected to be achieved from integrating PCB into the Company’s existing business.

For the purpose of impairment testing, Goodwill is allocated to the Company as a whole since the performance of the Company is monitored at that level for internal management purposes. The recoverable amount of the CGU was based on its value in use and was determined by discounting the future cash flows to be generated from the continuing use of the CGU. These calculations use cash flow projections over a period of five years, based on next year financial budgets estimated by management, with extrapolation for the remaining period, and an average of the range of assumptions as mentioned below. The key assumptions used in the estimation of value in use were as follows:

	March 31, 2023	March 31, 2022
Terminal value growth rate	3%	3%
EBITDA growth rate	15.00%-17.00%	8.5%-10.5%
Discount rate	17.00%	17.00%

The cash flow projections included specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate and EBITDA margins were determined based on management’s estimate. Budgeted EBITDA margin was based on expectations of future outcomes taking into account past experience. The estimation of value in use reflects numerous assumptions that are subject to various risks and uncertainties, including key assumptions regarding expected growth rates and operating margin, expected length and the shape and timing of the subsequent recovery, as well as other key assumptions with respect to matters outside of the Company’s control. It requires significant judgments and estimates, and actual results could be materially different than the judgments and estimates used to estimate value in use.

The Company has used the discount rate, which is based on the Weighted Average Cost of Capital (WACC) of comparable market participant, adjusted for specific risks. These estimates are likely to differ from future actual results of operations and cash flows. Based on the above, no impairment was identified as at March 31, 2023 and March 31, 2022 as the recoverable value of the CGU exceeded the carrying value. No reasonably possible change in any of the above key assumptions would cause the carrying amount of these CGU to exceed their recoverable amount.

52 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise of trade and other payables, borrowings, security deposits and payables for property, plant and equipment. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, cash, fixed deposits and security deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instrument effected by market risk include loans and borrowings, deposits, FVTOCI instrument. The sensitivity analyzes in the following sections relate to the position as at March 31, 2023 and March 31, 2022.

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

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

i) 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 interest bearing financial liabilities includes borrowings with fixed interest rates.

The Company’s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

ii) Foreign currency risk

Foreign currency risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company uses derivative to manage market risks. All such transactions are carried out within the guideline as prescribed in the Company’s risk management policy.

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated. The functional currency for the Company is ''.

EUR: Euro, GBP: Great Britain Pound, JPY: Japanese Yen, USD: US Dollar, TWD: New Taiwan dollar, CZK: Czech Koruna, CHF: Swiss franc

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in foreign 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 including non-designated foreign currency derivatives and embedded derivatives.

iii) Equity Price Risk

The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to listed equity securities at fair value was '' 25.09 Lakhs. A decrease of 10% on the NSE market index could have an impact of approximately '' 2.51 Lakhs on the profit or loss. An increase of 10% in the value of the listed securities would also impact profit or loss.

B. Credit risk

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

Trade receivables

Customer credit risk is managed by the Company subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.

Further, the Company’s customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL).

C. Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimized cost.

53 Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customers. In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be passed on/ received from the customers, based on various cost parameters like raw material and other costs. The total estimated other liabilities and unbilled revenue outstanding/ receivables as at March 31, 2023 is '' 2,964.83 Lakhs (March 31, 2022: '' 1,382.52 Lakhs), '' 3,252.28 Lakhs (March 31, 2022: '' 1,471.75 Lakhs) respectively, which management believes is sufficient to discharge liabilities/accrue income.

54 Other Statutory Information

(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

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

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

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

(v) The Company have 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 have 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 does not have any 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.

55 The Company’s business activity falls within a single business segment i.e. manufacturing and trading of Automotive Components and therefore, segment reporting in terms of Ind AS 108 on Segmental Reporting is not applicable.

56 With respect to agreement entered by the Company for purchase of land for the Printed Circuit Board (PCB) with Lumax Ancillary Limited (LAL), LAL has applied for obtaining approval of Haryana State Industrial & Infrastructure Development Corporation (HSIIDC) for implementation of the project of PCB in the name of the Company. The approval from the HSIIDC is pending at this stage. Further, based on independent opinion from consultants, the Company is confident that such approval shall be granted. Further, the Company has been indemnified by LAL in case approval is not obtained. In view of this, no provision is considered in these financials statements.

57 Previous year financials have been audited by a firm of Chartered Accountants other than S.R. Batliboi & Co. LLP. Further, figures for the corresponding previous year have been regrouped/ reclassified, wherever considered necessary including requirements of the amended Schedule III to the Companies Act 2013, to make them comparable with current year classification.

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Mar 31, 2022

14 B Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(a) The Company had transferred forfeited share application money to Capital reserve in accordance with the provision of the Companies Act, 1956. The reserve will be utilized in accordance with the provisions of the Companies Act, 2013.

(b) Securities premium reserve is used to record the premium on issue of shares. The reserve is utilized in accordance with the provisions of the Companies Act, 2013.

(c) General Reserves are free reserves of the Company which are kept aside out of Company’s profits to meet the future requirements as and when they arise. The Company had transferred a portion of the profit after tax (PAT) to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

(d) Retained earnings are the accumulated profits earned by the Company till date, less transfer to general reserves, dividend and other distributions made to the shareholders.

C. Capital Management

The Company’s objectives when managing capital are to:

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders; and

• maintain an optimal capital structure to reduce the cost of capital.

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the future development of the business.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt, consistent with others in the industry. The Company monitors capital using a gearing ratio, which is calculated as:

(a) Provision for warranties

A provision is recognised for expected warranty claims on products sold in past year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in the next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and information available about warranty. The table below gives information about movement in warranty provisions.

31.2 Corporate Social Responsibility (CSR)

As per the provisions of section 135 of the Companies Act, 2013, the Company had to spend at least 2% of the average profits of the preceding three financial years towards CSR which amounts to '' 128.87 Lakhs (31 March 2021: '' 163.81 Lakhs). Accordingly, a CSR committee had been formed for carrying out the CSR activities as per Schedule VII of the Companies Act, 2013. The Company has spent an amount of '' 134.45 Lakhs (31 March 2021''163.81 Lakhs(including unutilized amount of '' 46.54 Lakhs pertaining to ongoing projects)} and has accordingly charged the same to the Statement of Profit and Loss.

(a) The operations of the Company were severely affected in the last year due to COVID-19 resulting in significant decline in net sales and profits. Despite second and Third wave of COVID-19 in the current year, Net sales and Net profits have improved significantly.

(b) The variance is on account of increase in fair value gain on Investment in Caparo Power Limited and PNB Gilt Limited in the current year vis-a-vis previous year

B. Leases as lessor

The Company is not required to make any adjustments on transition to Ind AS 116 for leases in which it acts as a lessor. The Company has leased out portions of its buildings under operating lease arrangements. These leases may be renewed for a further period based on mutual agreement of the parties. During the year, an amount of '' 26.84 Lakhs (previous year '' 20.41 Lakhs) was recognised as rental income in the Statement of Profit and Loss.

35 Segment

An operating segment is a component that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the other components, and for which discrete financial information is available. The Company is engaged in the business of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications and related activities. The Company’s activities/business is regularly reviewed by the Company’s Managing Director assisted by an executive committee from an overall business perspective, rather than reviewing its products/services as individual standalone components. Thus, the Company has only one operating segment, and no reportable segments in accordance with Ind AS - 108 Operating Segments.

A. Information about the Defined contribution plans

The Company’s approved Superannuation Scheme, Employee Provident Fund and Employee State Insurance Scheme are defined contribution plans. A sum of '' 1,099.23 Lakhs (previous year '' 950.95 Lakhs) has been recognised as an expense in relation to these schemes and shown under Employee benefits expense in the Statement of Profit and Loss.

B. Information about the Defined benefit plan and Funding arrangements

The Company has a defined benefit gratuity plan governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

These defined benefit plan expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. The plan is funded with an insurance company in the form of a qualifying insurance policy. The Company expects to pay '' 379.64 Lakhs in contributions to its defined benefit plans in 2022-23.

Reconciliation of the net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) liability and its components.

1. Fair value of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, trade payables, lease liabilities, other financial liabilities and borrowings approximate their carrying amount, largely due to the short-term nature of these instruments.

2. I nterest rates on long-term borrowings are equivalent to the market rate of interest . Accordingly, the carrying value of such long-term debt approximates fair value.

(ii) Transfers between level 1 and level 2

There have been no transfers between Level 1 and Level 2 during the year ended 31 March 2022 and 31 March 2021.

(iii) Level 3 fair values

There have been no transfers to and from Level 3 during the year ended 31 March 2022 and 31 March 2021. c) Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk

- Liquidity risk

- Market risk

- Interest rate risk

(i) Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyze the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. The Company’s risk management is carried out by a central treasury team department under policies approved by the board of directors.

The Company’s audit committee oversees how management monitors compliance with Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to risk faced by the Company.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial asset fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans and other deposits etc. The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivable. It recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from initial recognition.

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy with regard to credit limits, control and approval procedures. The Company provides for expected credit losses on trade receivables based on a simplified approach as per Ind AS 109. Under this approach, expected credit losses are computed basis the probability of defaults over the lifetime of the asset. This allowance is measured taking into account credit profile of the customer, geographical spread, trade channels, past experience of defaults, estimates for future uncertainties etc.

Loans and other financial assets

a) The Company has given security deposits to Government departments and vendors for securing services from them. As these are well established organizations and have strong capacity to meet the obligations, risk of default is negligible or nil.

b) The Company provides loans to employees and recovers the same by deduction from the salary of the employees. Loans are given only to those employees who have served a minimum period as per the approved policy of the Company. The expected probability of default is negligible or nil.

Cash and cash equivalents

Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with international and domestic banks with high repute.

Derivatives

Derivatives are entered into with banks and financial institution counterparties, as per the approved guidelines for entering derivative contracts. The Company considers that its derivatives have low credit risk as these are taken with international and domestic banks with high repute.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Long term cash flow requirement is monitored through long term plans. In the line of long term planning, short term plans are reviewed on quarterly basis and compared with actual position on monthly basis to assess the performance of the Company and liquidity position.

The Company monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities. In addition to this, the Company maintains the following line of credit to meet the short term funding requirement:

- Short term loans/cash credit/working capital limit of '' 20,000 Lakhs.

- Vendor and customer finance facility limit of '' 15,800 Lakhs.

- Credit/bank guarantee limit of '' 13,500 Lakhs.

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company uses derivative to manage market risks. All such transactions are carried out within the guideline as prescribed in the Company’s risk management policy.

Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated. The functional currency for the Company is INR. The currencies in which these transactions are primarily denominated are US dollars and Euro.

Sensitivity analysis

A reasonably possible strengthening (weakening) of USD, JPY and other currencies against INR (?) at the end of the year, would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amount shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

(v) 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 long-term debt obligations with floating interest rates. The Company tries to manage the risk partly by entering into fixed-rate instruments and partly by borrowing at a floating rate:

40	Contingent liabilities
	S. Particulars	As at	As at
	No.	31 March 2022	31 march 2021
	(i) Income tax cases*	3,083.71	3,083.71
	(ii) Excise, customs and Service tax*	1,924.77	1,249.79
	(iii) Sales tax and VAT*	169.80	105.13
	(iv) Export obligation#	5,589.49	4,519.61
	(v) Claims not acknowledged as debts	550.00	300.00

*The Company is of the firm belief that above demands are not tenable and are unlikely to be retained and is therefore not carrying any provision in its books in respect of such demands.

Additionally, the Company is involved in other disputes, lawsuits, claims, governmental and/ or regulatory inspections, inquiries, investigations and proceedings, including commercial matters that arise from time to time in the ordinary course of business. The Company believes that none of these matters, either individually or in aggregate, are expected to have any material adverse effect on its financial statements.

During the previous year, the Directorate of Revenue Intelligence (‘DRI’) conducted an inquiry at the Head office and Gurugram plant of the Company. Based on its inquiry, DRI contended that the design fee paid to Stanley for the past 5 years, in respect of moulds imported by the Company, is chargeable to custom duty and GST and demanded '' 500.00 Lakhs which was duly deposited under protest by the Company on 1 February 2021. As at 31 March 2022, the Company has received the show cause cum demand notices amounting to '' 1,132.26 Lakhs and is awaiting notices amounting to '' 183.31 Lakhs from the authorities . Based on its assessment, it believes any demand as per above mentioned contentions shall not be tenable.

#Outstanding export obligations are to be fulfilled over a period of 6 years from the date of respective licenses under the EPCG scheme against import of plant and machinery and the related customs duty of '' 931.58 Lakhs (31 March 2021: '' 753.27 Lakhs).

I n February 2019, the Supreme Court of India in its judgement, clarified the applicability of allowances that should be considered to measure the contribution payable under Employees Provident Fund Act, 1952. The Company is of the view that, since there are many interpretative challenges on the retrospective application of the judgement, accordingly, the probable obligation relating to the earlier periods cannot be reliably estimated. Hence, the Company made provision for provident fund contribution from the date of Supreme Court Order.

44 Disclosure required by Ind AS 115

1. The aggregate amount of transaction price allocated to the unsatisfied performance obligations as at 31 March 2022 amounts to '' Nil (31 March 2021: '' 116.57 Lakhs). This will be recognised as revenue when the moulds will be sold to the customer, which is expected to occur post March 31, 2023*.

*The above amount does not include the value of performance that have an original expected duration of one year or less, as required by Ind AS 115.

2. Revenue from contracts with customers is disaggregated by major products and service lines and is disclosed in Note no. 23 to the standalone financial statements. Further, the revenue is disclosed in the said note is gross of '' 799.37 Lakhs (31 March 2021: '' 616.94 Lakhs) representing cash discount to customers.

45 On 1 April 2019, the Company purchased certain assets from Lumax Auto Technologies Limited at a consideration of '' 2,245.41 Lakhs, pursuant to which, the Company has setup in-house Electronic facility at Manesar on 1 April 2019 for designing and manufacturing of Electronics Printed Circuit Boards Assembly (‘PCB’). The said acquisition was primarily done to optimize cost by indigenization of Printed Circuit Board (‘PCB’).

The abovementioned purchase of assets has been accounted as Business Combination in accordance with Ind AS 103. The consideration for above transaction was transferred through Bank. Further, the Company incurred acquisition-related costs of '' 9.00 Lakhs on legal fees and due diligence costs. These costs have been included in legal and professional fees under other expenses. The fair values of assets (i.e. Property, plant and equipment and other intangible assets) acquired amounts to '' 1,267.83 Lakhs. Further, Goodwill arising from the acquisition amounts to '' 977.58 Lakhs which is attributable to synergies expected to be achieved from integrating PCB into the Company’s existing business. The Goodwill is not deductible for income tax purposes vide Finance Act 2021.

For the purpose of impairment testing, Goodwill is allocated to the Company as a whole since the performance of the Company is monitored at that level for internal management purposes. The recoverable amount of the CGU was based on its value in use and was determined by discounting the future cash flows to be generated from the continuing use of the CGU. These calculations use cash flow projections over a period of five years, based on next year financial budgets estimated by management, with extrapolation for the remaining period, and an average of the range of assumptions as mentioned below. The key assumptions used in the estimation of value in use were as follows:

(in percent)	31 March 2022	31 march 2021
Terminal value growth rate	3%	3%
EBITDA growth rate	8.5%-10.5%	8.5%-10.5%

The cash flow projections included specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate and EBITDA margins were determined based on management’s estimate. Budgeted EBITDA margin was based on expectations of future outcomes taking into account past experience. The estimation of value in use reflects numerous assumptions that are subject to various risks and uncertainties, including key assumptions regarding expected growth rates and operating margin, expected length and severity of the impact from the COVID-19 pandemic and the shape and timing of the subsequent recovery, as well as other key assumptions with respect to matters outside of the Company’s control. It requires significant judgments and estimates, and actual results could be materially different than the judgments and estimates used to estimate value in use.

The Company has used a discount rate of 17% for the current year and previous year which is based on the Weighted Average Cost of Capital (WACC) of comparable market participant, adjusted for specific risks. These estimates are likely to differ from future actual results of operations and cash flows. Based on the above, no impairment was identified as at 31 March 2022 and 31 March 2021 as the recoverable value of the CGU exceeded the carrying value. No reasonably possible change in any of the above key assumptions would cause the carrying amount of these CGU to exceed their recoverable amount.

46 The Company has considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of property, plant and equipment, Investments, Inventories, receivables and other current assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial results has used internal and external sources on the expected future performance of the Company. The Company has performed sensitivity analysis on the assumptions used and based on current estimates expects the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company’s financial statements may differ from that estimated as at the date of approval of these financial statements.

47 Additional information pursuant to changes in Schedule III

(i) No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(ii) The Company has not been declared as willful defaulter by any bank or financial Institution or other lender.

(iv) There are no transaction which has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(v) There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

(vi) There are no funds which have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

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

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

(vii) There are no funds which have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), 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 (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or

b) provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

(viii) The Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) does not have CIC as part of the Group.

---

Mar 31, 2018

1. Reporting entity

Lumax Industries Limited (‘the Company’) is engaged in the business of manufacture, trading and supply of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications. The Company is domiciled in India, with its registered office situated at 2nd Floor, Harbans Bhawan-II, Commercial Complex, Nangal Raya, New Delhi -110046. The Company has been incorporated under the provisions of Indian Companies Act and its equity shares are listed on both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India.

2. Basis of preparation

A. Statement of compliance

The Standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provisions of the Act.

The Standalone financial statements up to and for the year ended 31 March 2017 were prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (previous GAAP), notified under Section 133 of the Act and other relevant provisions of the Act.

As these are the Company’s first standalone financial statements prepared in accordance with Indian Accounting Standards (Ind AS) , Ind AS 101, First-time Adoption of Indian Accounting Standards, has been applied. An explanation of how the transition to IND AS has affected the previously reported financial position, financial performance and cashflows of the Company is provided in Note 38.

These standalone financial statements are approved by the Company’s Board of Directors on 28 May 2018.

Details of Company’s accounting policies are included in Note 3.

B. Functional and presentation currency

These standalone Ind AS financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to nearest lakhs and two decimals thereof, unless otherwise indicated.

C. Basis of measurement

The standalone Ind AS financial statements have been prepared on a historical cost basis, except for the following items:

a. Certain financial assets and liabilities (including derivative instruments) - measured at fair value.

b. Net defined benefit (asset)/ liability - measured at fair value of plan assets less present value of defined benefit obligations.

c. Other financial assets and liabilities - measured at amortised cost.

D. Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions. In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Assumptions and estimation uncertainties and judgements

Information about judgements, assumptions and estimation uncertainties that have significant risk of resulting in a material adjustment in the year ending 31 March 2018 and judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the standalone financial statements is included in the following notes:

i) Recognition of deferred tax assets - note 23- The Company has recognized deferred tax assets and concluded that the deferred tax assets will be recoverable using the estimated future taxable income based on the experience and future projections. The Company is expected to generate adequate taxable income for liquidating these assets in due course of time.

ii) Write down of inventories - note 14 - Inventories measured at the lower of cost and net realizable value. Write-down of inventories are calculated based on an analysis of foreseeable changes in demand, technology or market conditions to determine obsolete or excess inventories.

iii) Impairment of financial assets - note 39 - The impairment provisions for financial assets are based on certain judgements made by the Management in making assumptions and selecting the inputs to the impairment calculation, based on the Company’s history, existing market conditions as well as forward looking estimates at the end of each reporting period. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

iv) Provision for employee benefits - note 37 - The measurement of obligations and assets related to defined benefit plans makes it necessary to use several statistical and other factors that attempt to anticipate future events. These factors include assumptions about the discount rate, the rate of future compensation increases, withdrawal, mortality rates etc. The management has used the past trends and future expectations in determining the assumptions which are used in measurements of obligations.

v) Provision for warranty - note 21 - The provision is based on historical warranty data and a weighting of all possible outcomes by their associated probabilities. Provisions for warranties are adjusted regularly to take account of new circumstances and the impact of any changes recognised in the income statement.

vi) Classification between property, plant & equipment and investment property - The Company has certain vacant land and building . The management has currently classified such property as property, plant & equipment since the management believes that the property is held for future use as an “owner occupied property”.

vii) Tools, mould and dies - Revenue from sale of tools, mould and dies is recognised on a completed contract method considering that substantial activity for preparation of mould is outsourced to sub-contractors constituting more than 90% of costs. Further, development of such tools, moulds and dies does not take the substantial time period, unless due to procedural delays from the customer’s end. In-house designing is required only in those cases where models are not existing & the process is deemed not to be complex.

E. Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The Company regularly reviews significant unobservable inputs and valuation adjustments.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

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

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

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

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

Further information about the assumptions made in measuring fair values is included in the following notes: Note 39 - financial instruments; and Note 15 - assets held for sale.

Notes:

1. The Company has availed deemed cost exemption for the valuation of plant, property and equipment, hence, the carrying amount as at 31 March 2016 (gross block less accumulated depreciation) was taken as the gross block as at 01 April 2016.

2. During the current year, the Company has capitalised borrowing cost relating to construction of Plant and Machinery amounting to Rs.190.43 lakhs (31 March 2017 - Rs.11.46 lakhs).

3. Property, plant and equipment amounting to Rs.737.35 lakhs (31 March 2017 - Rs.6,528.94 lakhs) have been pledged as security by the Company.

*Gross value and Accumulated amortisation of Technical know amounts to Rs.344.42 lakhs as at 01 April 2016.

The Company has availed deemed cost exemption for the valuation of Intangible assets, hence, the carrying amount as at 31 March 2016 (gross block less accumulated depreciation) was taken as the gross block as at 01 April 2016.

Due to the fact that certain products were slow moving and were sold below net realisable value, the Company made a write down amounting to ‘ Nil (31 March 2017: Rs.17.43 lakhs). Further, following a change in estimates, write-down amounting Rs.0.09 lakhs (31 March 2017: ‘ Nil) has been reversed. The write-down and reversal are included in cost of materials consumed or changes in inventories of finished goods and work-in-progress.

3. Assets held for sale

The assets held for sale has been stated at lower of its carrying amount and fair value less costs to sell and comprises the following assets:

In past years, the Management had decided to discontinue the use of machinery based in Sohna plant amounting to Rs.65.65 lakhs. Such assets have been disclosed separately under “Assets classified as held for Sale”. These assets have been sold for Rs.1.8 lakhs subsequent to the year end.

a. Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of 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 shareholders.

(a) Capital reserve comprises amounts generated on forfeiture of shares.

(b) Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Act.

(c) General reserve to be utilized as per provisions of the Act.

B. dividends

The following dividends were declared and paid by the Company during the years:

After the reporting dates the following dividends (excluding dividend distribution tax) were proposed by the directors subject to the approval of shareholders at the annual general meeting; the dividends have not been recognised as liabilities. Dividends would attract dividend distribution tax when declared or paid.

C. Capital Management

The Company’s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders; and

- maintain an optimal capital structure to reduce the cost of capital.

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the future development of the business.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt, consistent with others in the industry. The Company monitors capital using a gearing ratio, which is calculated as:

Net debt (total liabilities net of cash and cash equivalents) divided by “Total equity” (as shown in the Balance Sheet).

(a) Provision for warranties

A provision is recognized for expected warranty claims on products sold in past year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in the next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and information available about warranty. The table below gives information about movement in warranty provisions.

4.1 Corporate social responsibility (CSR)

As per the provisions of section 135 of the Companies Act, 2013, the Company had to spend atleast 2% of the average profits of the preceding three financial years towards CSR which amounts to Rs.71.26 lakhs (31 March 2017: Rs.37.42 lakhs). Accordingly, a CSR committee had been formed for carrying out the CSR activities as per Schedule VII of the Companies Act, 2013. The Company has spent an amount of Rs.73.58 lakhs (31 March 2017 Rs.33.62 lakhs) and has accordingly charged the same to the statement of Profit and Loss.

5. Operating leases

A. Leases as lessee

The Company has taken office premises, warehouses and residential accommodation for some of its employees on operating lease, with an option of renewal at the end of the lease term. Lease expense charged during the year to the Statement of Profit and Loss aggregate to Rs.318.92 lakhs (previous year Rs.266.45 lakhs).

Future minimum lease payments under non-cancellable operating lease are as under:

B. Leases as lessor

The Company has leased out a portion of its building under a operating lease arrangement. The leases may be renewed for a further period based on mutual agreement of the parties. During the year, an amount of Rs.48.36 lakhs (previous year Rs.154.65 lakhs) was recognised as rental income in the Statement of Profit and Loss. As at 31 March 2018, there are no future minimum lease payments under non-cancellable operating lease as receivable.

6. Segment

An operating segment is a component that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the other components, and for which discrete financial information is available. The Company is engaged in the business of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications and related activities. Accordingly, the Company’s activities/ business is regularly reviewed by the Company’s Managing Director assisted by an executive committee from an overall business perspective, rather than reviewing its products/services as individual standalone components. Thus, the Company has only one operating segment, and no reportable segments in accordance with Ind AS - 108 Operating Segments.

7. Assets and liabilities relating to employee benefits

A. Information about the defined contribution plans

The Company’s approved Superannuation Scheme, Employee Provident Fund and Employee State Insurance Scheme are defined contribution plans. A sum of Rs.656.70 lakhs (previous year Rs.584.36 lakhs ) has been recognized as an expense in relation to these schemes and shown under Employee benefits expense in the Statement of Profit and Loss.

B. Information about the defined benefit plan and Funding arrangements

The Company has a defined benefit gratuity plan governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

These defined benefit plan expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk. The plan is funded with an insurance company in the form of a qualifying insurance policy. The Company expects to pay Rs.220.18 lakhs in contributions to its defined benefit plans in 2018-19.

Reconciliation of the net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit (asset) liability and its components.

D. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

8. explanation of transition to Ind AS

As stated in Note 2A, these are the Company’s first standalone financial statements prepared in accordance with Ind AS. For the year ended 31 March 2017, the Company had prepared its standalone financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’).

The accounting policies set out in Note 3 have been applied in preparing these standalone financial statements for the year ended 31 March 2018 including the comparative information for the year ended 31 March 2017 and the opening standalone Ind AS balance sheet on the date of transition i.e. 01 April 2016.

In preparing its standalone Ind AS balance sheet as at 01 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in standalone financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Group in restating its standalone financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

I. Optional exemptions availed and mandatory exceptions

In preparing these standalone financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A. exemptions availed

1. Property plant and equipment, intangible assets and investment properties

As per Ind AS 101 an entity may elect to:

(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date.

(ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:

- fair value;

- or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market).

(iii) use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets. The carrying values of property, plant and equipment as aforesaid are after making adjustments relating to decommissioning liabilities.

B. Mandatory exceptions

1. estimates

As per Ind AS 101, an entity’s estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entity’s first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Company’s estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the standalone financial statements that were not required under the previous GAAP are listed below:

- Fair valuation of financial instruments carried at FVTPL and/ or FVOCI.

- Impairment of financial assets based on the expected credit loss model.

- Determination of the discounted value for financial instruments carried at amortised cost.

2. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

II. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Notes to the reconciliation a) Revaluation reserve

In the previous year, the Company decided to measure earlier revalued Land, Building and Plant & Machinery as per cost model. Accordingly, the balance of revaluation reserve appearing as at 01 April 2016 amounting to Rs.770.67 lakhs was adjusted with respective carrying amount of Land, Building and Plant & Machinery. However, under Ind AS, since the Company has elected to continue with the carrying values under previous GAAP as deemed cost, hence such adjustment of revaluation reserve have been reversed. Further, the revaluation reserve has been transferred to General reserve on the transition date.

b) Deferred income

Under previous GAAP, the Company had recognised government grants related to capital assets and were presented as net from the cost of property, plant and equipment. As per Ind AS 20, the Company has presented government grants related to assets, in balance sheet by setting up the grant as deferred income.

c) Sales incentive and Excise duty

Sales incentive

The Company provides cash discounts to its customer to get prompt payment. Under previous GAAP, these discounts were shown as expenses under the head “other expenses”. Under Ind AS, revenue from sales of goods shall be measured at the fair value of the consideration received or receivable. Therefore, these discounts have been netted off from revenue from sales of goods. This has resulted in an decrease in the revenue from operations and expenses for the year ended 31 March 2017. The total comprehensive income for the year ended and equity as at 31 March 2016 has remain unchanged.

Excise duty

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the Statement of Profit and Loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended 31 March 2017. The total comprehensive income for the year ended and equity as at 31 March 2017 has remained unchanged.

d) Fair valuation of investments

In accordance with Ind AS, financial assets representing investment in equity shares of entities other than subsidiaries, associates and joint ventures as well as debt securities have been fair valued. The Company has designated certain investments classified as fair value through profit or loss. Under the previous GAAP, the application of the relevant accounting standard resulted in all these investments being carried at cost.

e) Remeasurement of defined benefit liability(asset)

Under Ind AS, remeasurement of defined benefit liability (asset) are recognised in other comprehensive income. Under the previous GAAP, the Company recognised such remeasurements in profit or loss. However, this has no impact on the total comprehensive income and total equity as on 01 April 2016 or as on 31 March 2017.

f) Property, Plant and equipment and Depreciation

Under Ind AS, Property, plant and equipment (“PPE”) includes machine spares that meet the criteria of PPE are capitalised as part of cost of PPE. The Company, in accordance with Ind AS 16 - Property, Plant and Equipment, has identified certain spare parts and stand-by equipment as these meet the definition of PPE, which were earlier charged to Statement of Profit and Loss in the previous GAAP. These have been capitalised as Property, plant and equipment.

g) Lease arrangement

Upon performing re-evaluation of lease arrangement of land at Sanand, the land was classified as operating lease from finance lease. Hence, the land has been decapitalised and provision for lease equilisation as required under operating lease has been recognised as on 01 April 2016.

Further, the Company was setting up a plant at Sanand during the year ended 31 March 2017. The land and building located at Sanand were erroneously reclassified to Capital work in progress as at 31 March 2017 . The building amounting to Rs.1,345.27 lakhs has been reclassified to Property, plant and equipment since no construction activity was being performed on such building.

h) Others

i) Under previous GAAP, raw material sold to vendors amounting to Rs.262.79 lakhs was grouped under revenue from operations. However, same is appearing as netted off with consumption.

ii) Under previous GAAP, recovery of notice pay amounting to Rs.18.69 lakhs were grouped under revenue and bank charges amounting to Rs.74.59 lakhs were grouped in Finance cost. However, same have been reclassified to other income and other expenses respectively.

Assets and liabilities which are measured at amortised cost

1. Fair value of cash and cash equivalents, other bank balances, trade receivables, short term loans, current other financial assets, trade payables, current other financial liabilities and borrowings approximate their carrying amount, largely due to the short-term nature of these instruments.

2. Interest rates on long-term borrowings are equivalent to the market rate of interest . Accordingly, the carrying value of such long-term debt approximates fair value.

3. Fair value of margin money with banks and claims recoverable included in non-current other financial assets are equivalent to their carrying amount, as the interest rate on them is equivalent to market rate.

4. Fair value of all other non-current assets have not been disclosed as the change from carrying amount is not significant.

b) Measurement of fair values

(i) Valuation techniques and significant unobservable inputs

The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values for financial instruments measured at fair value in the balance sheet, as well as the significant unobservable inputs used. Related valuation processes are described in note no. 2(E).

(ii) Transfers between level 1 and level 2

There have been no transfers between Level 1 and Level 2 during the year.

(iii) Level 3 fair values

There are no financial assets and liabilities valued at Level 3 fair values. There have been no transfers to and from Level 3 during the year.

c) Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk

- Liquidity risk

- Market risk

(i) Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. The Company’s risk management is carried out by a central treasury team department under policies approved by the board of directors.

The Company’s audit committee oversees how management monitors compliance with Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to risk faced by the Company.

(ii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial asset fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers, loans and other deposits etc.

The carrying amounts of financial assets represent the maximum credit risk exposure.

Trade receivables

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivable. It recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from initial recognition.

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy with regard to credit limits, control and approval procedures. The Company provides for expected credit losses on trade receivables based on a simplified approach as per Ind AS 109. Under this approach, expected credit losses are computed basis the probability of defaults over the lifetime of the asset. This allowance is measured taking into account credit profile of the customer, geographical spread, trade channels, past experience of defaults, estimates for future uncertainties etc.

Loans and other financial assets

a) The Company has given security deposits to Government departments and vendors for securing services from them. As these are well established organisations and have strong capacity to meet the obligations, risk of default is negligible or nil.

b) The Company provides loans to employees and recovers the same by deduction from the salary of the employees. Loans are given only to those employees who have served a minimum period as per the approved policy of the Company. The expected probability of default is negligible or nil.

Cash and cash equivalents

Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with international and domestic banks with high repute.

Derivatives

Derivatives are entered into with banks and financial institution counterparties, as per the approved guidelines for entering derivative contracts. The Company considers that its derivatives have low credit risk as these are taken with international and domestic banks with high repute.

(iii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Long term cash flow requirement is monitored through long term plans. In the line of long term planning, short term plans are reviewed on quarterly basis and compared with actual position on monthly basis to assess the performance of the Company and liquidity position.

The Company monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities. In addition to this, the Company maintains the following line of credit:

- The Company is having short term/working capital limit of INR 19,050 lakhs to meet short term funding requirement.

- The Company is also having vendor financing /bill discounting limit ofINR 14,350 lakhs to meet the funding requirement. Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements:

The Company has secured bank loans that contain loan covenants. A future breach of covenant may require the Company to repay the loan earlier than indicated in the above table.

(iv) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivative to manage market risks. All such transactions are carried out within the guideline as prescribed in the Company’s risk management policy.

Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated. The functional currency for the company is INR. The currencies in which these transactions are primarily denominated are US dollars and Euro.

The Company’s exposure to foreign currency risk at the end of the reporting period are as follows:

EUR: Euro, GBP: Great Britain Pound, JPY: Japanese Yen, USD: US Dollar, CHF: Swiss Franc, SGD: Singapore Dollar, THB: Thai Bhat, CNY: Chinese Yuan, IDR: Indonesian Rupiah.

Sensitivity analysis

A reasonably possible strengthening (weakening) of USD, JPY and other currencies against INR (?) at the end of the year, would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amount shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

(v) 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 long-term debt obligations with floating interest rates. The Company tries to manage the risk partly by entering into fixed-rate instruments and partly by borrowing at a floating rate:

exposure to Interest rate risk

The Company has the following exposure in interest bearing borrowings as on reporting date:

The Company’s fixed rate borrowings are carried at amortised cost. They are, therefore, not subject to interest rate risk since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. However, as these are short term in nature, there is no exposure to interest rate risk.

*The Company is of the firm belief that above demands are not tenable and are unlikely to be retained and is therefore not carrying any provision in its books in respect of such demands.

Further, the Company is directly or indirectly involved in other lawsuits, claims and proceedings, which arise in the ordinary course of business. The Company have challenged these litigation with respective authorities. Based on the facts currently available, management believes that likelihood of outflow of resources is remote and hence the Company has not recognised these litigations under contingent liability as well. ‘Outstanding export obligation of Rs.9,935.23 lakhs (31 March 2017: Rs.6,915.98 lakhs; 01 April 2016: Rs.5,674.46 lakhs) to be fulfilled over a period of 6 years from the date of respective licenses under the EPCG scheme against import of plant and machinery and the related customs duty of Rs.1,655.87 lakhs (31 March 2017: Rs.1152.66 lakhs; 01 April 2016: Rs.945.74 lakhs).

9. Details of Research and development expenses are as follows:

A. The Company has incurred expenses on its research and development centre at Gurugram approved and recognised by the Ministry of Science & Technology, Government of India.

B. The Company has incurred expenses on its research and development centre at Pune approved and recognised by the Ministry of Science & Technology, Government of India.

10. Claim recoverable represents receivables from West Bengal Industrial Development Corporation in relation to Singur Land. The Company has relied on legal opinion for ascertaining the recoverability of the claim.

11. Government grant

A. Waiver of payment of Import duty under Export Promotion Capital Goods (EPCG) scheme

Under EPCG scheme, the government allows waiver of import duty on import of certain specified capital goods subject to fulfilment of certain export obligation over a period of time. The Company has treated the same as capital grant. During the year, the Company has recognised income of Rs.57.51 lakhs (previous year: Rs.46.16 lakhs) under the scheme.

B. Export incentives

The Company is availing export incentives under duty drawback rules and Merchandise Export from India Scheme (MEIS) of Central government. These incentives are availed in case of export of cars and specified parts to specified destinations. During the year, the Company has recognised income of Rs.91.69 lakhs (previous year Rs.46.21 lakhs) under the above schemes.

12. Post applicability of Goods and Services Tax (GST) w.e.f. 01 July 2017, Revenue from Operations are required to be disclosed net of GST in accordance with the requirement of Ind AS. Accordingly, the Revenue from Operations for the year ended 31 March 2018 are not comparable with the immediately preceding year ended 31 March 2017 which are reported inclusive of Excise Duty. The following additional information is being provided to facilitate such understanding :

13. Recent accounting pronouncement

A. Amendment to Ind AS 21:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28 March 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This amendment will come into force from 01 April 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

B. Amendment to Ind AS 115:

Ind AS 115- Revenue from Contracts with Customers: On 28 March 2018, Ministry of Corporate Affairs (“MCA”) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

Moreover, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard permits two possible methods of transition:

- Retrospective approach-Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors.

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)The effective date for adoption of Ind AS 115 is financial periods beginning on or after 01 April 2018.

The Company will adopt the standard on 01 April 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended 31 March 2018 will not be retrospectively adjusted.

While, the Company is in the process of implementing Ind AS 115 on financial statement, the effect on adoption of Ind AS 115 is expected to be insignificant.

14. The company held the following specified Bank Notes (SBNs) and the following transactions were incurred during the period from 08 November 2016 to 30 December 2016 as provided in the table below:

15. The Company has established a comprehensive system on maintenance of information and documents required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for transactions entered into with the associated enterprises during the financial year and expects such records to be in existence latest by the due date as required under law. The Management is of the opinion that its transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements particularly on the amount of income tax expense and that of provision of taxation.

16. The figures relating to previous years as per previous IGAAP were audited by another firm of Chartered Accountants. Those figures, as adjusted for the differences in the accounting principles adopted by the Company on transition to Ind-AS, have been audited by B S R & Associates LLP.

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Mar 31, 2017

b. terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of 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 shareholders.

As per records of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

Notes:

1 Indian Rupee Loan from Bank includes:

(a) Rs. 27,937,500/- (Previous year Rs. 50,287,500/-) taken in the Financial Year 2013-14 carries interest @ 10% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 5,587,500/- (excluding interest) after one year moratorium period from the disbursement date i.e. from 04.04.2013. The Loan is secured by way of first pari passu charge on the land and building situated at Sohna, Gurgaon (Haryana) unit.

(b) Rs. 12,968,750/- (Previous year Rs. 23,343,750/-) taken in the FinancialYear 2014-15 carries interest @ 10.70% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 2,593,750/- (excluding interest) from the disbursement date i.e. from 10.06.2014. The Loan is secured by way of first pari passu charge on the land and building situated at Sohna, Gurgaon (Haryana) unit.

(c) Rs. 52,366,746/- (Previous year Rs. 40,607,754/-) vehicle loans from banks at interest @ 7.90% - 11.50% aggregating to are secured by way of hypothecation of the respective vehicles acquired out of the proceeds thereof. These loans are repayable over a period of three years from the date of availment.

2 Foreign Currency Loan from Bank includes:

(a) Rs. Nil (Previous year Rs. 20,704,683/-) taken in the financial year 2011-12 carried interest @ LIBOR plus 260 BSP The loan was secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future. The amount has been repaid during the year.

(b) Rs. Nil (Previous year Rs. 82,818,750/-) taken in the financial year 2011-12 carried interest @ LIBOR plus 260 BSP The loan was secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future. The amount has been repaid during the year.

(c) Rs. Nil (Previous year Rs. 82,818,750/-) taken in the financial year 2011-12 carried interest @ LIBOR plus 350 BSP The loan was secured by way of first and exclusive pari passu charge on the land and building along with all other moveable fixed assets, situated at Pant Nagar (Uttrakhand) unit both present and future. The amount has been repaid during the year.

(d) Rs. 40,531,250/- (Previous year Rs. 124,228,125/-) taken in the financial year 2012-13 carries interest @ LIBOR plus 350 BSP The loan is repayable in 16 quarterly installments of Rs. 17,437,500/- after one year moratorium period from the disbursement date i.e. from 28.08.2013.The loan is secured by way of first and exclusive pari passu charge on the land and building along with all other moveable fixed assets, situated at Haridwar (Uttrakhand) and all other movable fixed assets of Bangalore (Karnataka) unit both present and future.

(a) Provision for warranties

A provision is recognized for expected warranty claims on products sold during the last one year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in the next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about warranty based on the one-year period for all products sold.

The table below gives information about movement in warranty provisions.

Notes:

(a) Cash credit facility of Rs. Nil (Previous year Rs. 8,670,747/-) was secured by way of first pari passu charge on all current assets of the Company. This facility was further secured by extension of charge by way of hypothecation on the Plant and Machinery along with the UREM on Land and Building situated at Chakan Unit of the Company & carried interest @ 10.20%. The amount has been repaid during the year.

(b) WCDL Facility of Rs. Nil (Previous year Rs. 150,000,000/-) & Cash Credit facility of Rs. Nil (Previous year Rs. Nil) is secured by way of first pari passu charge on all current assets of the Company. This facility was further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company & carried interest @ 9.35%. and 8.95%

(c) Cash Credit facility of Rs. 76,998,098/- (Previous year Rs. 92,220,667/-) & WCDL Facility of Rs. Nil (Previous year Rs. Nil) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company repayable on demand & carries interest @ 9.25% for the current year & 9.65% respectively for the previous year.

(d) WCDL Facility of Rs. Nil (Previous year Rs. 200,000,000/-) was secured by way of first pari passu charge on all current assets of the Company. This facility was further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company repayable on demand & carried interest @ 9.50%.

(e) Vendor Finance Facility from MSIL of Rs. 193,429,152/- (Previous year Rs. 397,362,227/-) is repayable on 60 days from respective drawdown & carries interest @ 8.45%.

(f) Vendor Finance Facility from MSIL of Rs 100,000,000/- (Previous year Rs. Nil) is repayable on 60 days from respective drawdown & carries interest @ 8.10 %.

(g) Commercial paper issued to Bank amounting to Rs. 400,000,000/- (previous year Nil) carrying interest rate ranging from 6.95 % p.a. to 7.25 % p.a. Commercial paper is payable by 31 May 2017. This facility is unsecured short term borrowing. Unexpired discount on commercial papers is Rs. 46,83,467/- (Previous year Nil), towards interest accrued but not due.

(h) Cash credit facility of Rs. 19,793,872/- (Previous year Nil ) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by extension of charge by way of hypothecation on the Plant and Machinery along with the UREM on Land and Building situated at Chakan Unit of the Company, repayable on demand & carries interest @ 8.52 %.

* Refer note 32 for related party transactions

# Customer deposits are repayable on demand.

(a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. Accordingly, the Company has transferred Rs. 141,107/- during the current year (Previous year Rs. 426,572/-) to the Investor Education and Protection Fund.

(b) Other liabilities (net) represents amount towards rate provision payable to the customers net off amounts receivable from customers in respect of price increase not yet debited.

Notes :

i) Depreciation for the year includes Rs. 735,787/- (Previous Year Rs. 140,245/-) being depreciation either capitalized / transferred on in-house development of tools.

ii) Written down Value of Building constructed on Leasehold land is Rs. 67,908,193/- (Previous Year'' 208,380,634/-)

iii) Building given on operating lease

Gross Block Rs. 30,801,326/- (Previous Year Rs. 183,141,215/-)

Depreciation Charge for the year Rs. 3,042,054/- (Previous Year Rs. 5,521,529/-)

Accumulated Depreciation Rs. 21,323,938/- (Previous Year Rs. 35,822,220/-)

Net Book Value Rs. 9,477,388/- (Previous Year Rs. 147,318,995/-)

iv) Adjustment of revaluation reserve

Pursuant to transition provisional of revised AS 10, the Company has decided to carry earlier revalued Land, Building and Plant & Machinery as per cost model. Accordingly, the Company has adjusted the balance in revaluation reserve with the related carrying amount of Land, Building and Plant & Machinery. Accordingly, Land is reduced by Rs. 76,729,725 and Building by Rs. 58,275.

3. GRATUITY BENEFIT PLAN

The Company operates defined benefit plan for gratuity for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @ 15 days of last drawn basic salary including DA for each completed year of service, subject to a maximum amount of Rs. 1,000,000. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following tables summarize the components of net (benefit) / expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

Statement of profit and loss

Net employee (benefit) / expense recognized in the employee cost

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

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

4. capitalization of expenditure

(a) A project to set up a manufacturing plant in Sanand has started from October, 2016. The detail of Pre-operating expenses included in Capital work in progress in respect of project work are shown below. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

(b) The following expenses have been reduced from the respective heads and have been included in the cost of moulds, tools and dies capitalized. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

5. SEGMENT INFORMATION

Business Segments:

The Company produces various types of automotive lighting systems. Since the Company''s business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 ''Segment Reporting'' other than those already provided in the Financial Statements.

Geographical Segments

The geographical segment comprises of domestic and overseas market. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced:

The current year amount relating to income tax does not include interest. Based on the favorable decisions in similar cases/advice taken by the Company & based on management''s internal assessment, the Company believes that it has good case in respect of all the items listed above and hence no provision there against is considered necessary.

6. DISCLOSURE IN RESPECT OF CASH TRANSACTIONS

The company held the following specified Bank Notes (SBNs) and the following transactions were incurred during the period from 8 November, 2016 to 30 December, 2016 as provided in the table below:

*Above disclosure is excluding money held in Taiwan Doller (TWD) in Taiwan.

B. The Company has incurred expenses on its in-house research and development center at Pune approved and recognized by the Ministry of Science & Technology, Government of India.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of section 135 of the Companies Act, 2013, the Company has to spend at least 2% of the average net profits of the company made during three immediately preceding financial years towards CSR. Accordingly, a CSR committee has been formed for carrying out the CSR activities as specified in Schedule VII of the Companies Act, 2013.The specified percentage of aforesaid net profit amounts to Rs. 3,742,223 (Previous year Rs. 2,016,882). However, the Company has spent an amount of Rs. 3, 361,859 (Previous year Rs. 3, 259,049) and has accordingly charged the same to the statement of Profit & Loss.

8. Claim recoverable represents receivables from West Bengal Industrial Development Corporation in relation to Singur Land. The Company has relied on legal opinion for ascertaining the recoverability of the claim.

9. The assets of Rs. 350,783,068 (Previous year Rs. 239,219,298) recognized by the Company as ''MAT Credit Entitlement'' under '' Loans and Advances'' represents that portion of MAT, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961.The management, based on present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

10. Previous year''s figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

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Mar 31, 2016

b Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of RS,10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

During the year ended March 31, 2016, the Company declared and paid an interim dividend of RS,12 per share which is considered to be final (Previous year dividend: H5.50).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes:

1 Indian Rupee Loan from Bank includes:

(a) RS, 50,287,500/- (Previous year RS, 72,637,500/-) taken in the Financial Year 2013-14 carries interest @ 10% p.a. at present. The loan is repayable in 16 equal quarterly installments of RS, 5,587,500/- (excluding interest) after one year moratorium period from the disbursement date i.e. from 04.04.2013. The Loan is secured by way of first pari passu charge on the land and building situated at Sohna, Gurgaon (Haryana) unit.

(b) RS, 23,343,750/- (Previous year RS, 33,718,750) taken in the Financial Year 2014-15 carries interest @ 10.70% p.a. at present. The loan is repayable in 16 equal quarterly installments of RS, 2,593,750/- (excluding interest) from the disbursement date i.e. from 10.06.2014. The Loan is secured by way of first pari passu charge on the land and building situated at Sohna, Gurgaon (Haryana) unit.

c) RS, 40,607,754/- (Previous year RS, 17,057,152/-) vehicle loans from banks at interest @ 9.35% - 11.50% aggregating to are secured by way of hypothecation of the respective vehicles acquired out of the proceeds thereof. These loans are repayable over a period of three years from the date of a ailment.

2 Foreign Currency Loan from Bank includes:

(a) RS, 20,704,683/- (Previous year RS, 97,656,246/-) taken in the financial year 2011-12 carries interest @ LIBOR plus 260 BSP. The loan is repayable in 16 quarterly installments of RS, 14,026,563/- after one year moratorium period from the disbursement date i.e. from 03.06.2012. The loan is secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future.

(b) RS, 82,818,750/- (Previous year RS, 234,375,000/-) taken in the financial year 2011-12 carries interest @ LIBOR plus 260 BSP. The loan is repayable in 16 quarterly installments of RS, 30,568,750/- after one year moratorium period from the disbursement date i.e. from 29.09.2012. The loan is secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future.

(c) RS, 82,818,750/- (Previous year RS, 156,250,000/-) taken in the financial year 2011-12 carries interest @ LIBOR plus 350 BSP. The loan is repayable in 16 quarterly installments of RS, 15,521,875/- after one year moratorium period from the disbursement date i.e. from 31.01.2013. The loan is secured by way of first and exclusive pari passu charge on the land and building along with all other moveable fixed assets, situated at Pant Nagar (Uttrakhand) unit both present and future.

(d) RS, 124,228,125/- (Previous year RS, 195,312,500/-) taken in the financial year 2012-13 carries interest @ LIBOR plus 350 BSP. The loan is repayable in 16 quarterly installments of RS, 17,437,500/- after one year moratorium period from the disbursement date i.e. from 28.08.2013. The loan is secured by way of first and exclusive pari passu charge on the land and building along with all other moveable fixed assets, situated at Haridwar (Uttrakhand) and all other movable fixed assets of Bangalore (Karnataka) unit both present and future.

(a) Provision for warranties

A provision is recognized for expected warranty claims on products sold during the last one year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in the next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about warranty based on the one-year period for all products sold.

Notes:

(a) Cash credit facility of RS, Nil (Previous year RS, 2,466,665/-) was secured by way of first pari passu charge on all current assets of the Company. This facility was further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carried interest @ 12.30%. The amount has been repaid during the year.

(b) Cash credit facility of RS, 8,670,747/- (Previous year RS, 38,468,402/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by extension of charge by way of hypothecation on the Plant and Machinery along with the UREM on Land and Building situated at Chakan Unit of the Company, repayable on demand & carries interest @ 10.45%.

(c) WCDL Facility of RS, 150,000,000/- (Previous year RS, 100,000,000/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 9.35%.

(d) Cash Credit Facility of RS, Nil (Previous year RS, 97,169,179/-) was secured by way of first pari passu charge on all current assets of the Company. This facility was further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carried interest @ 11.75%. The amount has been repaid during the year.

(e) Cash Credit facility of RS, 92,220,667/- (Previous year RS, Nil) & WCDL Facility of RS, Nil (Previous year RS, 150,000,000/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 9.65% for the current year & 10.60% respectively for the previous year.

(f) WCDL Facility of RS, 200,000,000/- (Previous year RS, Nil) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 9.50%

(g) Vendor Finance Facility from MSIL of RS, 397,362,227/- (Previous year RS, 399,600,090/-) is repayable on 60 days from respective drawdown & carries interest @ 9.90%.

* Refer note 33 for related party transactions

# Customer deposits are repayable on demand.

(a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. Accordingly, the Company has transferred RS, 426,572/- during the current year (Previous year RS, 447,526/-) to the Investor Education and Protection Fund.

(b) Other liabilities (net) represents amount towards rate provision payable to the customers net of amounts receivable from customers in respect of price increase not yet debited.

Notes :

i) Fixed Assets comprising of Land, Buildings and Plant & Machinery were revalued by a firm of values on different dates in earlier years, resulting in increase in their net values by RS, 82,669,280, RS, 1,351,067 and RS, 24,251,565 respectively, which was credited to Revaluation Reserve.

ii) Depreciation for the year includes RS, 140,245 (Previous Year RS, 242,175) being depreciation either capitalized / transferred on in-house development of tools.

iii) Leasehold land includes RS, 16,050,000 (Previous Year RS, 16,050,000) pending registration in the name of the company (refer note 45).

iv) Written down value of Building constructed on Leasehold land is RS, 208,380,634 (Previous Year RS, 216,532,997).

3. Gratuity benefit plan

The Company operates defined benefit plan for gratuity for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @ 15 days of last drawn basic salary including DA for each completed year of service, subject to a maximum amount of RS, 1,000,000. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following tables summarize the components of net (benefit) / expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

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

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

4. Leases

Operating lease: Company as lessee

The Company had entered into commercial leases on Plant & machinery (DG Set). There were no contingent rents in the lease agreements. The lease terms was for 1-5 years and were renewable at the mutual agreements of both the parties. There were no restrictions imposed by lease arrangements. There was no sublease and all the leases were non-cancellable in nature. The lease tenure has been completed in the current Financial Year.

5. Segment information

Business Segments:

The Company produces various types of automotive lighting systems. Since the Company’s business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 ‘Segment Reporting’ other than those already provided in the Financial Statements.

Geographical Segments

The geographical segment comprises of domestic and overseas market. The following table shows the distribution of the Company’s consolidated sales by geographical market, regardless of where the goods were produced:

The Company has common fixed assets and other assets situated in India only for producing goods for Domestic and Overseas markets.

6. Related party disclosures

Names of related parties and related party relationship

Related parties with whom transactions have taken place during the year

S. Particulars Name of Related Parties

No.

1. Enterprise having significant influence Stanley Electric Co. Ltd., Japan

2. Associate SL Lumax Limited

3. Key Management Personnel Mr. D. K. Jain (Chairman)

Mr. Deepak Jain (Managing Director)

Mr. Anmol Jain (Joint Managing Director)

Mr. E. Hirooka (Sr. Executive Director)

Mr. N. Sato (Executive Director)

4. Relatives of Key Management Personnel Mr. U. K. Jain (Brother of Chairman)

Mr. M. K. Jain (Brother of Chairman)

Mrs. Usha Jain (Spouse of Chairman)

5. Enterprise owned or significantly influenced by Key Lumax Auto Technologies Limited Management Personnel or their Relatives Lumax DK Auto Industries Limited

Lumax Tours & Travels Limited Lumax Finance Private Limited Lumax Ancillary Limited Mahavir Udyog

D.K. Jain & Sons (HUF)

Lumax Automotive Systems Limited Bharat Enterprises

Lumax Cornaglia Auto Technologies Private Limited

Lumax Mannoh Allied Technologies Limited Lumax Management Services Private Limited Lumax Energy Solutions Private Limited

7. Corporate Social Responsibility (CSR)

As per the provisions of section 135 of the Companies Act, 2013, the Company had to spend atleast 2% of the average profits of the preceding three financial years towards CSR. Accordingly, a CSR committee has been formed for carrying out the CSR activities as per Schedule VII of the Companies Act, 2013 which amounts to RS,2,016,882 (Previous year RS,2,188,228). The Company has spend an amount of RS,3,259,049 (Previous year RS,1,279,372) and has accordingly charged the same to the statement of Profit & Loss.

8. The Company has filed the writ petition against Government of West Bengal challenging Singur Land Rehabilitation & Development Act, 2011 for cancellation of allotment of land allotted by West Bengal Industrial Development Corporation. The court has clubbed the vendors’ petitions with Tata Motors Petition and the matter is pending for decision. The management is confident that no losses are expected in this regard.

9. The assets of RS,239,219,298 (Previous year RS,151,375,402) recognized by the Company as ‘MAT Credit Entitlement’ under ‘ Loans and Advances’ represents that portion of MAT, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

10. Previous year’s figures have been regrouped / reclassified, where necessary, to conform to this year’s classification

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Mar 31, 2015

1. Corporate Information

Lumax Industries Limited (''the Company'') is a leading manufacturer and supplier of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications. The Company has technical as well as financial collaboration with Stanley Electric Co. Ltd., Japan. Its shares are listed on two exchanges in India.

2. Basis of preparation

The financial statements of the Company have been prepared and presented in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply with all material respects with the accounting standards specified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Com- panies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except for the change in accounting policy explained below.

3. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31,2015, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 5.50 (Previous year: Rs. 3.50).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

4 Indian Rupee Loan from Bank includes:

(a) Rs. 72,637,500/- (Previous year Rs. 89,400,000/-) taken in the Financial Year 2013-14 carries interest @ 10% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 5,587,500/- (excluding interest) after one year moratorium period from the disbursement date i.e. from 04.04.2013. The Loan is secured by way of first pari passu charge on the land and building situated at Sohna, Gurgaon (Haryana) unit.

(b) Rs. 33,718,750/- (Previous year Rs. Nil) taken in the Financial Year 2014-15 carries interest @ 10.70% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 2,593,750/- (excluding interest) from the disbursement date i.e. from 10.06.2014. The Loan is secured by way of first pari passu charge on the land and building situated at Sohna, Gurgaon (Haryana) unit.

(c) Rs. Nil (Previous year Rs. 52,044,266/-) taken in the financial year 2010-11 carried interest @ base Rate 10.25 3% i.e. 13.25% p.a. The loan was repayable in 16 equal quarterly installments of Rs. 10,410,750/- (excluding interest) after one year moratorium period from the disbursement date i.e. from 10.05.2011. The Loan was secured by way of first pari passu charge on the land and building along with all the plant and machineries, situated at Sanand (Gujarat) unit both present and future. The loan has been repaid during the year.

(d) Rs. 17,057,152/- (Previous year Rs. 12,442,265/-) vehicle loans from banks at interest @ 8% - 12% aggregating to are secured by way of hypothecation of the respective vehicles acquired out of the proceeds thereof. These loans are repayable over a period of three years from the date of availment.

5 Foreign Currency Loan from Bank includes:

(a) Rs. 97,656,246/- (Previous year Rs. 168,510,935/-) taken in the financial year 2011-12 carries interest @ LIBOR plus 260 BSP. The loan is repayable in 16 quarterly installments of Rs. 14,026,563/- after one year moratorium period from the disbursement date i.e. from

03.06.2012. The loan is secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future.

(b) Rs. 234,375,000/- (Previous year Rs. 374,468,750/-) taken in the financial year 2011-12 carries interest @ LIBOR plus 260 BSP. The loan is repayable in 16 quarterly installments of Rs. 30,568,750/- after one year moratorium period from the disbursement date i.e. from

29.09.2012. The loan is secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future.

(c) Rs. 156,250,000/- (Previous year Rs. 224,681,250/-) taken in the financial year 2011-12 carries interest @ LIBOR plus 350 BSP. The loan is repayable in 16 quarterly installments of Rs. 15,521,875/- after one year moratorium period from the disbursement date i.e. from 31.01.2013. The loan is secured by way of first and exclusive pari passu charge on the land and building alongwith all other moveable fixed assets, situated at Pant Nagar (Uttrakhand) unit both present and future.

(d) Rs. 195,312,500/- (Previous year Rs. 262,128,125/-) taken in the financial year 2012-13 carries interest @ LIBOR plus 350 BSP. The loan is repayable in 16 quarterly installments of Rs. 17,437,500/- after one year moratorium period from the disbursement date i.e. from 28.08.2013. The loan is secured by way of first and exclusive pari passu charge on the land and building alongwith all other moveable fixed assets, situated at Haridwar (Uttrakhand) and all other movable fixed assets of Bangalore (Karnataka) unit both present and future.

6 Indian Rupee Loan from other than Bank includes Vehicle loans at interest @ 8% - 12% aggregating to Rs. Nil (Previous year Rs. 14,546/-) are secured by way of hypothecation of the respective vehicles acquired out of the proceeds thereof. These loans are repayable over a period of three years from the date of availment.

7 Deferred sales tax loan was interest free and repayable monthly after seven year from its due months respectively starting from July, 2007. The loan has been repaid during the year.

(a) Provision for warranties

A provision is recognized for expected warranty claims on products sold during the last one year, based on past experience of the level of repairs and returns. It is expected that all of these costs will be incurred in next financial year after the reporting date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about warranty based on the one-year period for all products sold.

(a) Cash credit facility of Rs. Nil (Previous year Rs. 50,081,965/-) was secured by way of first pari passu charge on all current ssets of the Company. This facility was further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carried interest @ 13.50% . The amount has been repaid during the year.

(b) Cash credit facility of Rs. 2,466,665/- (Previous year Rs. 35,079,855/-) is secured by way of first pari passu charge on all current as- sets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 12.30% .

(c) Cash credit facility of Rs. 38,468,402/- (Previous year Rs. 97,714,016/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by extension of charge by way of hypothecation on the Plant and Machinery along with the UREM on Land and Building situated at Chakan Unit of the Company, repayable on demand & carries interest @ 11%.

(d) WCDL Facility of Rs. 100,000,000/- (Previous year Rs. 75,000,000/-) & Cash Credit facility of Rs. Nil (Previous year Rs. 23,630,829/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 10.10% & 11% respectively.

(e) Cash Credit Facility of Rs. 97,169,179/- (Previous year Rs. 98,458,752/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 11.75%.

(f) WCDL Facility of Rs. 150,000,000/- (Previous year Rs. Nil) & Cash Credit facility of Rs. Nil (Previous year Rs. Nil) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinchwad Unit of the Company, repayable on demand & carries interest @ 10.60% & 11% respectively.

(g) Vendor Finance Facility from MSIL of Rs.399,600,090 /- (Previous year Rs. NIL) is repayable on 60 days from respective drawdown & carries interest @ 10.70%.

8. Gratuity benefit plan

The Company operates defined benefit plan for gratuity for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn basic salary including DA for each completed year of service, subject to a maximum amount of Rs. 1,000,000. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following tables summarize the components of net (benefit) / expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

9. Depreciation

(a) Till 31st March, 2014, depreciation was being provided on straight line method as per the rates prescribed in Schedule XIV of the Companies Act, 1956. The Schedule XIV has been replaced by Schedule II of the Companies Act, 2013 and the depreciation has been charged on straight line method on the basis of useful lives of the assets in the manner as prescribed in Schedule II of Companies Act, 2013.

(b) Till 31st March, 2014, the assets for a value not exceeding Rs. 5000/- were written off in the year of purchase as per Schedule

XIV of the Companies Act, 1956. Schedule II of the Companies Act, 2013 does not recognize such practice. The depreciation on assets for a value not exceeding Rs. 5000/- has been provided on the basis of their useful lives in the manner as prescribed in the Schedule II of the Companies Act, 2013.

10. Segment information

Business Segments:

The Company produces various types of automotive lighting systems. Since the Company''s business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 ''Segment Reporting'' other than those already provided in the Financial Statements.

Geographical Segments

The geographical segment comprises of domestic and overseas market. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced:

11. Related party disclosures

Names of related parties and related party relationship

Related parties with whom transactions have taken place during the year

S. Particulars Name of Related Parties No.

1. Enterprise having significant influence

Stanley Electric Co. Ltd., Japan

2. Associate SL Lumax Limited

3. Key Management Personnel Mr. D. K. Jain (Chairman)

Mr. Deepak Jain (Managing Director)

Mr. Anmol Jain (Joint Managing Director)

Mr. E. Hirooka (Sr. Executive Director)

Mr. N. Sato (Executive Director)

4. Relatives of Key Management Personnel

Mr. U. K. Jain (Brother of Chairman)

Mr. M. K. Jain (Brother of Chairman)

Mrs. Usha Jain (Spouse of Chairman)

5. Enterprise owned or significantly influenced

Lumax Auto Technologies Limited

by Key Management Personnel or their Relatives

Lumax DK Auto Industries Limited

Lumax Tours & Travels Limited Lumax Finance Private Limited Lumax Ancillary Limited Mahavir Udyog D.K. Jain & Sons (HUF)

Lumax Automotive Systems Limited Bharat Enterprises

Lumax Cornaglia Auto Technologies Private Limited Lumax Gill Austem Auto Technologies Limited Lumax Mannoh Allied Technologies Limited

12. Contingent liabilities

S. Particulars March March No. 31, 2015 31,2014 (Rs.) (Rs.)

(i) Bills of exchange discounted from a bank 569,689,110 357,107,357

(ii) Demand raised by ESIC department against short contribution paid by the Company, being disputed by the Company - 1,480,605

(iii) Demand raised by Sales Tax authorities against purchase tax on inter unit stock transfers, being disputed by the Company - 781,111

(iv) Various other claims of Sales Tax Matters made against the Company not 1,488,551 1,318,497 acknowledged as debts, being disputed by the Company

(v) Various other claims of Sales Tax Matters made against the Company on account of non-submission of statutory forms etc. being disputed by the Company. 2,520,457 2,520,457

(vi) Demand of Central Sales Tax for FY 2010-11 which is subject to submission of C-Form & H-Form. 2,140,602 -

(vii) Demand in respect of non-reversal of proportionate cenvat credit @ 0.6% against providing exempt services i.e. trading 986,000 -

(viii) In respect of additions made by the Assessing officer for Assessment Year 2004-05 for which the department has filed an appeal before Hon''ble High Court against the order of Income Tax Appellate Tribunal (ITAT). 1,243,823 1,243,823

(ix) In respect of additions made by the Assessing officer for Assessment Year 2005-06 for which the department has filed an appeal before Hon''ble High Court against the order of ITAT. 11,535,338 11,535,338

(x) In respect of additions made by the Assessing officer for Assessment Year 2006-07 and confirmed by DRP for which the Company has filed an appeal before ITAT. 4,022,761 4,319,110

(xi) In respect of additions made by the Assessing officer for Assessment Year 2007-08 for which the department has filed an appeal before Hon''ble High Court against the order of ITAT. 14,444,388 14,444,388

(xii) In respect of additions made by the Assessing officer for Assessment Year 2008-09 for which the department has filed an appeal before Hon''ble High Court against the order of ITAT. 20,973,571 26,851,164

(xiii) In respect of additions made by the Assessing officer for Assessment Year 2009-10 and confirmed by DRP for which the Company has filed an appeal before ITAT 23,322,834 27,806,888

(xiv) In respect of additions made by the Assessing officer for Assessment Year 2010-11 and confirmed by DRP for which the Company has filed an appeal before ITAT 31,909,776 32,334,792

(xv) In respect of additions made by the Assessing officer in his draft order for Assessment Year 2011-12 in relation to transfer pricing for which the Company has filed its objection before DRP. 40,567,463 -

(xvi) Liability of Customs duty towards export obligation undertaken by the Company under EPCG licenses 184,810,876 115,591,506

(xvii) Letter of credit 17,845,664 156,407,683

(xviii) Bank Guarantees 349,747,839 183,075,350

*The current year amount relating to income tax does not include interest.

Based on the favourable decisions in similar cases/advice taken by the Company& based on management''s internal assessment, the Company believes that it has good case in respect of all the items listed above and hence no provision there against is considered necessary.

13. Corporate Social Responsibility ( CSR)

As per the provisions of section 135 of the Companies Act, 2013, the Company had to spend atleast 2% of the average profits of the preceding three financial years towards CSR. Accordingly, a CSR committee has been formed for carrying out the CSR activities as per Schedule VII of the Companies Act, 2013 which amounts to Rs. 2,188,228. The Company has been able to spend an amount of Rs. 1,279,372 and has accordingly charged the same to the statement of Profit & Loss.

14. The Company has filed the writ petition against Government of West Bengal challenging Singur Land Rehabilitation & Development Act, 2011 for cancellation of allotment of land allotted by West Bengal Industrial Development Corporation. The court has clubbed the vendors'' petitions with Tata Motors Petition and the matter is pending for decision. The management is confident that no losses are expected in this regard.

15. The assets of Rs.151,375,402 (Previous year Rs.125,633,410) recognized by the Company as ''MAT Credit Entitlement'' under ''Loans and Advances'' represents that portion of MAT, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

16. Previous year''s figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

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Mar 31, 2014

1. Gratuity benefit plan

The Company operates defined benefit plan for gratuity for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn basic salary including DA for each completed year of service, subject to a maximum amount of Rs.1,000,000. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following tables summarize the components of net (benefit) / expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

Statement of profit and loss

Net employee (benefit) / expense recognized in the employee cost

2. Segment information

Business Segments

The Company produces various types of automotive lighting systems. Since the Company''s business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 ''Segment Reporting'' other than those already provided in the Financial Statements.

Geographical Segments

The geographical segment comprises of domestic and overseas market. The following table shows the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced:

3. Contingent liabilities

S. No. Particulars March 31, 2014 March 31, 2013

(Rs.) (Rs.)

(i) Bills of exchange discounted from a bank 357,107,357 343,269,211

(ii) Demand raised by ESIC department against short contribution paid by the Company, being disputed by the Company 1,480,605 1,480,605

(iii) Demand raised by Sales Tax authorities against purchase tax on inter unit stock transfers, being disputed by the Company 781,111 906,111

(iv) Various other claims of Sales Tax Matters made against the Company not acknowledged as debts, being disputed by the Company 1,318,497 1,318,497

(v) Various other claims of Sales Tax Matters made against the Company on account of non-submission of statutory forms etc. being disputed by the Company. 2,520,457 7,014,753

(vi) In respect of additions made by the Assessing officer for Assessment Year 2004-05 for which the department has filed an appeal before Honble High Court against the order of Income Ta x Appellate Tribunal (ITAT). 1,243,823 1,441,121

(vii) In respect of additions made by the Assessing officer for Assessment Year 2005-06 for which the department has filed an appeal before Honble High Court against the order of ITAT. 11,535,338 27,884,526

(viii) In respect of additions made by the Assessing officer for Assessment Year 2006-07 for which the department has filed an appeal before ITAT against the additions confirmed by DRP. 4,319,110 5,699,097

(ix) In respect of additions made by the Assessing officer for Assessment Year 2007-08 for which the department has filed an appeal before Honble High Court against the order of ITAT. 14,444,388 30,685,279

(x) In respect of additions made by the Assessing officer for Assessment Year 2008-09 for which the department has filed an appeal before Honble High Court against the order of ITAT. 26,851,164 38,855,315

(xi) In respect of additions made by the Assessing officer for Assessment Year 2009-10 for which the department has filed an appeal before ITAT against the additions confirmed by DRP. 27,806,888 84,556,059*

(xii) The Company is currently under litigation against the draft order of Assessing Officer in relation to transfer pricing additions and disallowances of leave encashment expense, provision for warranty and expenses under section 14A of the Income Tax Act, 1961 in relation to Assessment year 2010-11. The Company has filed an appeal before DRP against the said order. 32,334,792 -

(xiii) Liability of Customs duty towards export obligation undertaken by the Company under EPCG licenses 115,591,506 112,689,546

(xiv) Letter of credit 156,407,683 57,691,315

(xv) Bank Guarantees 183,075,350 133,960,218

* The amount reflects disallowances made by the assessing officer.

The current year amount relating to income tax does not include interest.

Based on the favourable decisions in similar cases/advice taken by the Company & based on management''s internal assessment, the Company believes that it has good case in respect of all the items listed above and hence no provision there against is considered necessary.

4. The Company has filed the writ petition against Government of West Bengal challenging Singur Land Rehabilitation & Development Act, 2011 for cancellation of allotment of land allotted by West Bengal Industrial Development Corporation. The court has clubbed the vendors'' petitions with Tata Motors Petition and the matter is pending for decision. The management is confident that no losses are expected in this regard.

5. The assets of Rs. 125,633,410 (Previous year Rs.123,500,000) recognized by the Company as ''MAT Credit Entitlement'' under Loans and Advances'' represents that portion of MAT, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Ta x Act, 1961. The management, based on present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

6. Previous year''s figures have been regrouped / reclassified, where necessary, to conform to this year''s classification.

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Mar 31, 2013

1. Corporate Information

Lumax Industries Limited (''the Company'') is a leading manufacturer and supplier of auto components'' mainly automotive lighting systems for four wheeler and two wheeler applications. The Company has technical as well as financial collaboration with Stanley Electric Co. Ltd.'' Japan. Its shares are listed on two exchanges in India.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects in accordance with the notified Accounting Standards issued under Companies (Accounting Standards) Rules'' 2006 (as amended) and the relevant provisions of the Companies Act'' 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which revaluation is carried out.

The accounting policies have been consistently applied by the Company and are consistent with those applied in the previous year

3. Gratuity benefit plan

The Company operates defined benefit plan for gratuity for its employees. Under the gratuity plan'' every employee who has com- pleted atleast five years of service gets a gratuity on departure @ 15 days of last drawn basic salary including DA for each completed year of service'' subject to a maximum amount of Rs. 1''000''000. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following tables summarize the components of net (benefit) / expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

4. Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on Plant & machinery (DG Set) and warehouse. There are no contingent rents in the lease agreements. The lease terms is for 1-5 years and are renewable at the mutual agreements of both the parties. There are no restrictions imposed by lease arrangements. There are no sublease and all the leases are non cancellable in nature.

5. Details of Research and Development expenses are as follows:

A. The Company has incurred expenses on its research and development centre at Gurgaon approved and recognised by the Ministry of Science & Technology'' Government of India.

6. The Company has filed the writ petition against Government of West Bengal challenging Singur Land Rehabilitation & Development Act'' 2011 for cancellation of allotment of land allotted by West Bengal Industrial Development Corporation. The court has clubbed the vendors'' petitions with Tata Motors Petition and the matter is pending for decision. The management is confident that no losses are expected in this regard.

7. The assets of Rs.123''500''000 (Previous year Rs. 93''500''000) recognized by the Company as ''MAT Credit Entitlement'' under '' Loans and Advances'' represents that portion of MAT'' which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act'' 1961. The management'' based on present trend of profitability and also the future profitability projections'' is of the view that there would be sufficient taxable income in foreseeable future'' which will enable the Company to utilize MAT credit assets.

8. Previous year''s figures have been regrouped / reclassified'' where necessary'' to conform to this year''s classification.

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Mar 31, 2012

1. Corporate Information

Lumax Industries Limited ('the Company') is a leading manufacturer and supplier of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications. The Company has technical as well as financial collaboration with Stanley Electric Co. Ltd., Japan. Its shares are listed on two exchanges in India.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects in accordance with the notified Accounting Standards issued under Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which revaluation is carried out.

The accounting policies have been consistently applied by the Company and are consistent with those applied in the previous year, except for the change in accounting policy explained below.

a Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 6 (Previous year: Rs. 6).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes :

1 Indian Rupee Loan from Bank includes:

(a) Rs. 87,529,965/- (Previous year Rs. 175,053,938/-) taken in financial year 2008-09 carries interest @ PLR -2.50% i.e. 12.50% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 21,875,000/- (excluding interest) after one year moratorium period from the disbursement date 27.03.2008. The Loan is secured by way of first charge on the plant and machineries along with the unregistered equitable mortgage (UREM) on land and building, situated at Chakan-ll unit (except assets exclusively hypothecated to banks and body corporate).

(b) Rs. 118,143,216/- (Previous year Rs. 202,533,294/-) taken in Financial Year 2008-09 carries interest @ PLR -0.5% i.e. 14.50% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 16,875,000/- after one year moratorium period from disbursement date 01.11.2008. The Loan is secured by extension of charges by way of hypothecation on the plant and machineries along with the UREM on land and building, situated at Chakan-ll Unit. This facility is further secured by UREM of land and building of Dharuhera Unit along with hypothecation on plant & machinery of Dharuhera (both present and future) and those of Gurgaon Unit (acquired from proceeds of this facility).

(c) Rs. 135,330,266/- (Previous year Rs. 166,572,000/-) taken in the financial year 2010-11 carries interest @ Base Rate 3% i.e. 13.50% p.a. at present. The loan is repayable in 16 equal quarterly installments of Rs. 10,410,750/- (excluding interest) after one year moratorium period from the disbursement date 10.05.2010. The Loan is secured by way of first pari passu charge on the land and building along with all the plant and machineries, situated at Sanand (Gujarat) unit both present and future.

(d) Vehicle loans from banks at interest @ 10% - 13% aggregating to Rs. 9,408,057 (Previous year Rs 5,528,737). These are secured by way of hypothecation of the respective vehicles acquired out of the proceeds thereof.

2 Foreign Currency Loan from Bank includes :

(a) Rs. 257,400,000/- (Previous year Rs. Nil) taken in the financial year 2011-12 carries interest @ LIBOR plus 260 BSP. The loan is repayable in 16 quarterly installments of Rs. 14,026,563/- after one year moratorium period from the disbursement date i.e.

03.06.2012. The loan is secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future.

(b) Rs. 514,800,000/- (Previous year Rs. Nil) taken in the financial year 2011-12 carries interest @ LIBOR plus 260 BSP. The loan is repayable in 16 quarterly installments of Rs. 30,568,750/- after one year moratorium period from the disbursement date i.e.

29.09.2012. The loan is secured by way of first & exclusive charge on the land and building along with all the plant and machineries, situated at Bawal (Haryana) unit both present and future.

(c) Rs. 257,400,000/- (Previous year Rs. Nil) taken in the financial year 2011-12 carries interest @ LIBOR plus 475 BSP. The loan is repayable in 16 quarterly installments of Rs. 15,521,875/- after one year moratorium period from the disbursement date i.e.

31.01.2013. The loan is secured by way of first and exclusive pari passu charge on the land and building along with all other moveable fixed assets, situated at Pant Nagar (Uttrakhand) unit both present and future.

3 Indian Rupee Loan from other than Bank includes Vehicle loans at interest @ 10% -13% aggregating to Rs 2,567,256 (Previous year Rs. 4,433,537). These are secured by way of hypothecation of the respective vehicles acquired out of the proceeds thereof.

4. Deferred sales tax loan is interest free and repayable monthly after seven year from its due months respectively started from July, 2007.

Provision for warranties

A provision is recognized for expected warranty claims on products sold during the last one year, based on past experience of the level of repairs and returns. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about warranty based on the one-year period for all products sold.

The table below gives information about movement in warranty provisions.

Notes:

(a) Cash credit/Buyer's Credit facility of Rs. 15,516,105/- (Previous year Rs. 127,238,132/-) is secured by way of first pari passu charge on all present and future stock and book debts along with pari passu charge on all fixed assets at Chinch wad Unit and equitable mortgage on Land and Building at Chinch wad Unit, repayable on demand & carries interest @ 13.00%.

(b) Cash credit facility of Rs. 97,596,643/- (Previous year Rs. 63,560,948/-) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinch wad Unit of the Company, repayable on demand & carries interest @ 13% to 14.25%.

(c) Cash credit facility of Rs. 87,395,160/- (Previous year Rs. 69,079,356/-) is secured by way of first pari passu charge on all the Stock and Book Debts of the Company, both present and future. This facility is further secured by extension of charge by way of hypothecation on the Plant and Machinery along with the UREM on Land and Building situated at Chakan -II Unit, repayable on demand & carries interest @ 11%-14.50%.

(d) WCDL Facility of Rs. 100,000,000/- (Previous year Rs. NIL) is secured by way of first pari passu charge on all current assets of the Company. This facility is further secured by way of equitable mortgage on Land and Buildings and first pari passu charges against movable Fixed Assets at Chinch wad Unit of the Company, repayable on demand & carries interest @ 11.55%.

Notes:

i) Leasehold land includes Rs. 10,461,489 (Previous year Rs. 10,461,489) paid to the developer as land development charges.

ii) Fixed Assets comprising of Land, Buildings and Plant & Equipment were revalued by a firm of valuers on different dates in earlier years, resulting in increase in their net values by Rs.82,669,280, Rs.1,351,067 and Rs. 24,251,565 respectively, which was credited to Revaluation Reserve.

iii) Depreciation for the year includes Rs. 247,915 (Previous year Rs. 451,320) being depreciation either capitalized / transferred on in-house development of tools.

iv) Leasehold land includes Rs. 16,050,000 (Previous Year Rs.16,050,000) & Freehold land includes Rs. Nil (Previous year Rs. 41,683,814) & software includes Rs. Nil (Previous Year Rs. 7,296,391) pending registration in the name of the Company.

v) Cost of building constructed on Leasehold land is Rs. 88,619,782 (Previous year Rs 102,756,569).

vi) The borrowing cost capitalized during the year ended 31 March 2012 was Rs. 24,986,571 (Previous year: Rs. Nil).

vii) Leasehold land includes Gross block Rs. 232,916,250 (Previous year Rs. 232,916,250) and WDV of Rs. 213,584,201 (Previous year Rs. 220,245,606) lease rights for use of land.

Margin money deposits given as security

Margin money deposits with a carrying amount of Rs. 26,300,496 (Previous year Rs. 18,009,138) are subject to first charge to secure the Company's cash credit facility.

3. Gratuity benefit plan

The Company operates defined plan for gratuity for its employees. Under the gratuity plan, every employee who has completed atleast five years of service gets a gratuity on departure @ 15 days of last drawn basic salary including DA for each completed year of service, subject to a maximum amount of Rs. 1,000,000. The scheme is funded with an insurance Company in the form of qualifying insurance policy.

The following tables summarize the components of net (benefit) expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

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

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

4. Leases

Operating lease: Company as lessee

The Company has entered into commercial leases on Plant & machinery (DG Set) and warehouse. There are no contingent rents in the lease agreements. The lease terms is for 1-5 years and are renewable at the mutual agreements of both the parties. There are no restrictions imposed by lease arrangements. There are no sublease and all the leases are non cancellable in nature.

Finance lease commitments - Company as lessor

The Company has entered into commercial property leases on its plant & machinery and furniture on finance lease. The lease term is for three years after which the legal title is passed to the lessee. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

5. Segment information

Business Segments:

The Company produces various types of automotive lighting systems. Since the Company's business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 'Segment Reporting' other than those already provided in the Financial Statements.

6. Contingent liabilities

S.No. Particulars March 31, 2012 March 31, 2011 (Rs.) (Rs)

(i) Bills of exchange discounted from a bank 155,433,577 155,278,747

(ii) Demand raised by ESIC department against short contribution 2,880,138 2,880,138 paid by the Company, being disputed by the Company

(iiii) Demand raised by Sales Tax authorities against purchase tax 906,111 906,111 on inter unit stock transfers, being disputed by the Company

(iv) Various other claims of Sales Tax Matters made against the Company1, 402,682 1,402,682 not acknowledged as debts, being disputed by the Company

(v) Demand raised by Sales Tax authorities on account of non-submission 6,964,753 - of statutory forms etc., being disputed by the Company _

(vi) Income Tax demand on trans fer pricing additions and disallowance 1,441,121 1,441,121 of foreign travelling expense and demerger expense in respect of Assessment Year 2004-05 for which the department has filed an appeal with ITAT

(vii) Income Tax demand on transfer pricing additions and other 27,884,526 27,884,526 disallowances in respect of Assessment Year 2005-06 for which the Department has filed an appeal with ITAT

(viii) Income Tax demand on transfer pricing additions and disallowance 5,699,097 5,699,097 of provision for warranty and expense under section 14A of the

Income Tax Act, 1961, in respect of Assessment Year 2006-07 for which the Company has filed an appeal before ITAT

(ix) Income Tax demand on transfer pricing additions and disallowance 30,685,279 31,275,736 of leave encashment expense, provision for warranty and other

expenses in respect of Assessment Year 2007-08 for which the Company has filed an appeal before Dispute Resolution Panel against the Draft Assessment order

(x) Income Tax demand on transfer pricing additions and disallowance 38,855,315 - of leave encashment expense, PF on leave encashment expense,

provision for warranty and other expenses in respect of Assessment Year 2008-09 for which the Company has filed an appeal before Dispute Resolution Panel against the Draft Assessment order

(xi) Liability of Customs duty towards export obligation undertaken 80,890,487 22,665,071 by the Company under EPCG licenses

Based on the favorable decisions in similar cases/advice taken by the Company, the Company believes that it has good cases in respect of all the items listed under (ii) to (x) above and hence no provision there against is considered necessary.

7. Transfer pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under section 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the financial year and expects such records to be in existence as required under law. The management is of the opinion that its international transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and the provision for taxation.

8. During the year, in respect of remuneration of Rs. 17,079,085 paid to certain directors, an amount of Rs. 2,679,085 is in excess of the limits specified by the relevant provisions of the Companies Act, 1956. The Company has made an application to the appropriate regulatory authorities for approval regarding the payment of such excess remuneration. The Company is confident that the approval will be received in due course. Further, the Company has obtained undertaking from directors that they will refund such excess amount paid to them if the concerned authority does not accord its approval. Hence, no adjustments have been made in the financial statements.

Further, due to inadequacy of profits during the year, directors have waived off their rights to receive commission and therefore, the same has not been provided for in the books of account.

9. The Company has filed the writ petition against Government of West Bengal challenging Singur Land Rehabilitation & Development Act, 2011 for cancellation of allotment of land allotted by West Bengal Industrial Development Corporation. The court has clubbed the vendors' petitions with Tata Motors Petition and the matter is pending for decision. The management is confident that no losses are expected in this regard.

10. The assets of Rs. 93,500,000 (Previous year Rs. 66,500,000) recognized by the Company as "MAT Credit Entitlement' under Loans and Advances' represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

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Mar 31, 2011

1. Nature of operations

Lumax Industries Limited (the Company) is a leading manufacturer and supplier of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications. The Company has technical as well as financial collaboration with Stanley Electric Co. Ltd., Japan.

2. Segment Information

Business Segments:

The Company produces various types of automotive lighting systems. Since the Companys business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 Segment Reporting other than those already provided in the Financial Statements.

Geographical Segments*

The geographical segment comprises of domestic and overseas market. The following table shows the distribution of the Companys consolidated sales by geographical market, regardless of where the goods were produced:

3. Related Party Disclosure

Key Management Personnel

Mr. D. K. Jain (Chairman & Managing Director)

Mr. Deepak Jain (Sr. Executive Director)

Mr. Anmol Jain (Sr. Executive Director)

Mr I. Abe (Sr. Executive Director)

Mr A. Ishii (Executive Director)

Relatives of Key Management Personnel

Mr. U. K. Jain (Brother of Chairman)

Mr. M. K. Jain (Brother of Chairman)

Mrs. Usha Jain (Spouse of Chairman)

Mr. Rajan Jain (Nephew of Chairman)

Enterprise significantly influenced by

Key Management Personnel or their Relatives

Lumax Auto Technologies Ltd.

Lumax DK Auto Industries Ltd.

Lumax Tour & Travels Ltd.

Lumax Investment and Finance (P) Ltd. (Merged with Sheela

Finance Pvt. Ltd.)

Lumax Finance Private Limited (Formerly Sheela Finance Pvt. Ltd)

Deepak Auto Ltd.

Mahavir Udyog

D.K. Jain & Sons (HUF)

Lumax Automotive Systems Ltd.

Lumax International (P) Ltd.

Lumax Auto (P) Ltd.

Bharat Enterprises

Lumax Cornaglia Auto Technologies Pvt. Ltd.

Associate Stanley Electric Co. Ltd., Japan

Joint Venture SL Lumax Ltd.

In case of assets given on Lease

a) Finance Lease

The Company has leased out plant and machinery and furniture on finance lease. The lease term is for three years after which the legal title is passed to the lessee. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

4. Contingent Liabilities not provided for

S.No. Particulars 2010-11 2009-10 (Rs.) (Rs.)

(i) Bills of exchange discounted from a bank. 155,278,747 136,109,465

(ii) Demand raised by ESIC department against short contribution paid by the Company, being disputed by the Company. 2,880,138 2,880,138

(iiii) Demand raised by Sales Tax authorities against purchase tax on inter unit stock transfers, being disputed by the Company. 906,111 1,736,251

(iv) Various other claims made against the Company not acknowledged as debts, being disputed by the Company. 1,402,682 391,081

(v) Income Tax demand in respect of Assessment Year 2004-05 for which the Department has filed an appeal with ITAT. 93,072 934,369

(vi) In respect of additions made by the Assessing officer for Transfer Pricing for Assessment Year 2004-05 for which the 1,441,121 1,441,121 department has filed an appeal with ITAT.

(vii) Income Tax demand in respect of Assessment Year 2005-06 for which the Department has filed an appeal with ITAT. 27,884,526 27,884,526

(viii) Income Tax demand in respect of Assessment Year 2006-07 for which the Company has filed an appeal before ITAT. 5,699,097 -

(ix) Income Tax demand in respect of Assessment Year 2007-08 for which the Company has filed an appeal before Dispute Resolution Panel 31,275,736 - against the Draft order

(x) Demand raised by BSES Rajdhani Power Ltd for which the Company has filed a writ petition in High Court of Delhi. - 2,260,541

(xi) Export Obligation to be undertaken by the Company under EPCG licenses. 22,665,071 17,677,486

(xii) Claims against the Company not acknowledged as debts. - 6,870,264

Based on the favourable decisions in similar cases/legal opinions taken by the Company, the Company believes that it has good cases in respect of all the items listed under (ii) to (ix)above and hence no provision there against is considered necessary.

5. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for gratuity.

6. Details of Research and Development expenses are as follows:

A. The Company has incurred expenses on its research and development centre at Gurgaon, approved and recognised by the Ministry of Science & Technology, Government of India.

7. Pursuant to completion of negotiations with its customer in relation with the Companys investment in a plant at Singur, West Bengal and after giving consideration to its alternative plans, management has assessed the carrying value of its assets and made adequate provisions as considered necessary in the last year.

8. At the instance of a customer who has initiated International Financial Reporting Standards (IFRS) implementattion, the Company has negotitated and has, at the year end, sold certian moulds which were financed by the said customer. For the settlement of transaction, moulds of the net book value of Rs. 2,616.81 lacs have been sold for Rs. 1,797.28 lacs resulting in loss on sale of fixed assets amounting to Rs. 819.53 lacs.

9. Excise duty on sales amounting to Rs. 883,819,416 (Previous year Rs.570,947,081) has been reduced from Sales in Profit & Loss Account and Excise Duty on Decrease/ (Increase) in Stock amounting to Rs.(605,466) (Previous year Rs. 5,547,489) has been considered as (income)/ expense in Schedule 18 of the financial statements.

10. Previous Year Comparatives

Previous years figures have been regrouped where necessary to conform to this years classification.

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Mar 31, 2010

1. Nature of operations

Lumax Industries Limited (the Company) is a leading manufacturer and supplier of auto components, mainly automotive lighting systems for four wheeler and two wheeler applications. The Company has technical as well as financial collaboration with Stanley Electric Co. Ltd., Japan.

2. Segment Information

Business Segments:

The Company produces various types of automotive lighting systems. Since the Companys business activity falls within a single business segment, there are no additional disclosures to be provided under Accounting Standard-17 Segment Reporting other than those already provided in the Financial Statements.

Geographical Segments *

The geographical segment comprises of domestic and overseas market. The following table shows the distribution of the Companys consolidated sales by geographical market, regardless of where the goods were produced:

3. Related Party Disclosure

S.No. Particulars Names of Related Parties

1. Key Management Personnel Mr. D. K. Jain (Chairman & Managing Director)

Mr. Deepak Jain (Sr. Executive Director) Mr. Anmol Jain (Sr. Executive Director) Mr I. Abe (Sr. Executive Director) Mr A. Ishii (Executive Director)

2. Relatives of Key Management Personnel Mr. S.C. Jain (Father of Chairman)

Mr. U. K. Jain (Brother of Chairman) Mr. M. K. Jain (Brother of Chairman) Mrs. Usha Jain (Spouse of Chairman) Mr. Rajan Jain (Nephew of Chairman)

3. Enterprise significantly influenced by Lumax Auto Technologies Ltd.

Key Management Personnel or their Relatives ( Formerly Dhanesh Auto Electricals Ltd.)

Lumax DK Auto Industries Ltd. Lumax Tour & Travels Ltd.

Lumax Investment and Finance Pvt. Ltd. Sheela Finance Pvt. Ltd. Deepak Auto Ltd. Mahavir Udyog D.K. Jain & Sons (HUF) Lumax Automotive Systems Ltd. Lumax International Pvt Ltd. Lumax Auto Pvt Ltd. Bharat Enterprises

4. Associate Stanley Electric Co. Ltd., Japan

5. Joint Venture SL Lumax Ltd.

5. Leases

In case of assets taken on lease

a) Finance Lease

The Company has acquired plant and machinery, moulds and vehicles under finance leases, the cost of which is included in the gross block of Plant and Machinery and Vehicles respectively under Fixed Assets. The lease term is for 5 years in case of moulds and 3 years in case of vehicles, after which the legal title will pass on to the Company. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. There are no sub leases:

b) Operating Leases

Lease payments of Rs 24,378,217 (previous year - Rs 12,020,108) have been recognised as an expense in the profit and loss account for the year ended March 31, 2010.

a) Finance Lease

The Company has leased out plant and machinery and furniture on finance lease. The lease term is for three years after which the legal title is passed to the lessee. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

5. Contingent Liabilities not provided for

S.No. Particulars 2009-10 2008-09 (Rs.) (Rs.)

(i) Bills of exchange discounted from a bank. 136,109,465 130,523,592

(ii) Demand raised by Central Excise department against the rejected goods sent on 57(f) (4) challans, being disputed by the Company. 7,755,448 7,755,448

(iii) Other Excise Duty Demands, being disputed by the Company. 2,026,701 2,422,335

(iv> Demand raised by Service Tax department for the service tax on Royalty and Technical know how, being disputed by the Company. 3,451,809 3,451,809

(v) Demand raised by ESIC department against short contribution paid by the Company, being disputed by the Company. 2,880,138 2,880,138

(vi) Demand raised by Sales Tax Authorities against purchase tax on inter-unit stock transfers, being disputed by the Company. 1,736,251 1,736,251

(vii) Various other claims made against the Company not acknowledged as debts, being disputed by the Company. 391,081 391,081

(viii) Income Tax demand in respect of Assessment Year 2004-05 for which the Company has filed an appeal with CIT (Appeals). 2,375,490 2,375,490

(ix) Income Tax demand in respect of Assessment Year 2005-06 for which the Company has filed an appeal with CIT (Appeals). 27,884,526 27,884,526

(x) Income Tax demand in respect of Assessment Year 2006-07 for which the Company has filed an appeal before Dispute Resolution Panel against the draft order. 12,831,256 -

(xi) Demand raised by BSES Rajdhani Power Ltd for which the Company has filed a writ petition in High Court of Delhi. 2,260,541 -

(xii) Export Obligation to be undertaken by the Company under EPCG licenses. 17,677,486 -

(xiii) Claims against the Company not acknowledged as debts. 6,870,264 -

Based on the favourable decisions in similar cases/legal opinions taken by the Company, the Company believes that it has good cases in respect of all the items listed under (ii) to (xi) above and hence no provision there against is considered necessary.

6. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for gratuity.

7. Derivative Instruments and Unhedged Foreign Currency Exposure a. Forward contract outstanding as at Balance Sheet date

No Forward Contract is outstanding as at 31st March2010 (Previous year JPY 63,925,554).

8. Details of Research and Development expenses are as follows:

The Company has incurred expenses on its research and development centre approved and recognised by the Ministry of Science & Technology, Government of India.

9. During the year, an amount of Rs Nil (Previous Year Rs. 303,152,581) has been utilized by the Company for modernisation / expansion of its existing plants out of the Preferential Issue proceeds, in line with the objects of the Preferential Issue and the unutilized money is Rs. Nil (Previous Year Rs Nil).

10. Pursuant to completion of negotiations with its customer in relation with the Companys investment in a plant at Singur, West Bengal and after giving consideration to its alternative plans, management has assessed the carrying value of its assets and made adequate provisions as considered necessary.

11. Excise duty on sales amounting to Rs. 570,947,081 (Previous year Rs. 675,618,715) has been reduced from Sales in Profit & Loss Account and Excise Duty on Decrease/ (Increase) in Stock amounting to Rs. 5,547,489 (Previous year Rs. (10,567,029)) has been considered as (income)/ expense in Schedule 19 of the financial statements.

12. Previous Year Comparatives

Previous years figures have been regrouped where necessary to conform to this years classification.