Notes to Accounts of Precision Camshafts Ltd.

Mar 31, 2025

(xv) Provisions and Contingent Liabilities

The Company estimates the provisions that have
present obligations as a result of past events, and it is
probable that an outflow of resources will be required
to settle the obligations. These provisions are reviewed
at the end of each reporting date and are adjusted to
reflect the current best estimates.

The Company uses significant judgement to disclose
contingent liabilities. Contingent liabilities are disclosed
when there is a possible obligation arising from past
events, the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot
be made. Contingent assets are neither recognized nor
disclosed in the financial statements.

(xvi) Segment Reporting

Segments are identified based on the manner in which
the Chief Operating Decision Maker (''CODM'') decides
about resource allocation and reviews performance.
The company is engaged in manufacturing of auto¬
components (camshafts.& others) based on similarity
of activities/products, risk and reward structure,
organisation structure and internal reporting systems,
the company has structured its operations into a single
operating segment ; however based on the geographic
distribution of activities, the CODM has identified India
and outside India as two reportable geographical
segments. Refer Note No 34 for segment information
presented.

The Company''s investment properties consist of 11 residential Flats in Vaishnavi Multicons, 1-LGF, Saurabh Apartment, Solapur
in India which the Company intends to let out on rental basis. As of March 31, 2025, no rental agreement has been entered into
resulting in no income being booked from the investment property.

#Estimation of fair value

As at March 31,2025 , the fair values of the property is '' 317.23 Lakhs. These valuations are based on valuations performed by
M/S A.VJoshi & Associates, a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules,
2017. A valuation model in accordance with that recommended by the International Valuation Standards Committee has been
applied.

Description of valuation techniques used and key inputs to valuation on investment properties:

The Company intends to earn rental income from the property in the future. Accordingly, the fair value of the property has been
determined based on prevailing market rates, as assessed by an independent valuer which is derived from observable market
data. This valuation reflects the estimated amount for which the property could be exchanged between knowledgeable, willing
parties at the reporting date.

* The Company entered into foreign exchange forward contracts with the intention to reduce the risk in foreign exchange
exposure of trade receivables and trade payables.

# Security deposit is with electricity department; which generate interest at the rate of 4% to 7% for the Company
5D) Impairment of investment in subsidiary

During the year ended March 31, 2025, the Company evaluated indicators of impairment in accordance with Ind AS 36 -
Impairment of Assets. This assessment was prompted by factors such as a decline in operational performance and changes in
the outlook for future profitability, among other potential indicators, in relation to its investment in PCL International Holding
B.V., a wholly owned subsidiary.

The recoverable amount of the investment in PCL International Holding B.V. is primarily dependent on the operational and
financial performance of its two key step-down subsidiaries, EMOSS Mobile Systems B.V and MFT Motoren and Fahrzeugtechnik

Nature and purpose of reserves:

Securities premium account

The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity settled
share based payment transactions, the difference between fair value on grant date , exercise price and nominal value of share
is accounted as securities premium.

General reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend 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.

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 and any other adjustments.

The Board of Directors, in their meeting on May 26, 2023, proposed a final dividend of '' 1.00 per equity share and the same was
approved by the shareholders at the Annual General Meeting held on July 26, 2023. Subsequently, the dividend has been paid
by the Company in FY 2023-24.

The Board of Directors, in their meeting on May 23, 2024, proposed a final dividend of '' 1.00 per equity share and the same was
approved by the shareholders at the Annual General Meeting held on July 26, 2024. Subsequently, the dividend has been paid
by the Company in current year.

The Board of Directors, in their meeting on May 27, 2025, proposed a final dividend of '' 1.00 per equity share for the year ended
March 31, 2025. The payment of dividend is subject to approval of shareholders at the ensuing Annual General Meeting of the
Company.

Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield,
this will create a deficit. AH plan assets are maintained in a trust fund managed by Life Insurance Corporation of India (LIC) who
has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all
assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option
provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement
and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.

Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of
the plans'' bond holdings.

Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will
often result in higher future defined benefit payments resulting in higher present value of liabilities. Further, unexpected salary
increases provided at the discretion of the management may lead to uncertainties in estimating this increasing risk.

Asset-Liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the
defined benefit liabilities, the Company is successfully able to neutralise valuation swings caused by interest rate movements.
Hence, companies are encouraged to adopt asset-liability management.

NOTE 32: COMMITMENTS AND CONTINGENCIES

a. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances): As
at March 31, 2025, the Company had commitments of '' 4,403.59 Lakhs

(March 31, 2024 : '' 3,111.27 Lakhs)

(ia) Sub-Notes:

a. The Collector of stamps, Solapur has demanded payment of stamp duty of '' 31.79 Lakhs (March 31, 2024:
'' 31.79 Lakhs) for cancellation and issue of equity shares after amalgamation of Precision Valvetrain Components
Limited (PVPL) with the Company in year 2007-2008. The Company has filed an appeal against demand made by
the Collector of Stamps, Solapur with controlling revenue authority, Pune.

b. The Company had received an order from the Commisioner of Provident fund for the year May 2003 to May
2006 demanding PF liability amounting to '' 24.23 Lakhs (March 31, 2024: '' 24.23 Lakhs) excluding interest.The
Company had filed writ petition with the Hon''ble High court Mumbai against the said order and had paid '' 12.12
under protest.

c. The Company had received an order from the Commissioner of Central Excise Pune for the year 2002-03, 2003¬
04 and 2004-05 demanding excise duty amounting to '' 20.76 Lakhs (March 31, 2024: '' 20.76 Lakhs) on sales
tax retained under sales tax deferral scheme. The Company had filed apperial against the order with CESTAT and
CESTAT via its order transfer the said case to the jurisdiction commissionrate

d. The Company had received order from Assessing Officer for the assessment year 2014-15 for demand of
income tax amounting to '' 1,701.16 Lakhs (March 31, 2024''1,701.16 Lakhs) towards disallowance of ESOP
expenditures and other disallowances. The Company had filed appeal against the above order with commissioner
of income tax (Appeals) and has paid '' 335.41 Lakhs (March 31, 2024: 335.41 Lakhs) under protest.

e The Company had received an order from Assessing Officer for the assessment year 18-19 for demand of income
tax amounting to '' 7.08 Lakhs (March 31, 2024: '' 7.08 Lakhs) towards disallownce u/s 14A of the Act. The
Company has paid the said demand within due date specified by the department.Further assessing officer had
passed an order u/s 270A imposing a penalty for '' 3.47 Lakhs (March 31, 2024''3.47 Lakhs) Lakhs for under
reporting of income for incremental disallowance made u/s 14A of the act. The Company had filed appeal agianst
the penalty order with Commissioner of Income Tax (Appeals) and has paid '' 0.70 Lakhs under protest.

f The Company had received order from the commissoner of State Tax(GST) for the year 2017-18 demanding GST
amounting to '' 200.62 Lakhs (March 31, 2024: 200.62 Lakhs) (including interest and penalty) on tooling income
& Mismatch in Input tax credit. The Company had filed writ petition with the Hon''ble High court Mumbai against
the said order.

g During the previous year (FY 2023-24) , the Company has received a draft order under section 144C(1) of the
Income Tax Act, 1961, for the assessment year 2020-21.

The draft order pertains to adjustments on account of international transactions related to corporate guarantees
and disallowance under section 14A of the Act,amounting to '' 19.47 Lacs.

The Company has filed its objections with the Dispute Resolution Panel (DRP) regarding the aforementioned
adjustments and disallowance. In the current year 24-25, final order has been received from DRP, and the
Company has filed an appeal in ITAT, pune against the said order.

The appeal proceedings are under progress and the Company has paid 7.79 Lakhs in the current year under
protest agianst the liability amount.

h. During the previous year (FY 2023-24), the Company has received a draft order under section 144C(1) of the
Income Tax Act, 1961, for the assessment year 2021-22.

The draft order pertains to adjustments on account of international transactions related to corporate guarantees
amounting to '' 5.41 Lacs. The Company had filed its objections with the Dispute Resolution Panel (DRP) regarding
the aforementioned adjustments and disallowance. In the current year 24-25, final order has been received from
DRP, and the Company has filed an appeal in ITAT, pune against the said order. The appeal proceedings are under
progress and the Company has paid 5.40 Lakhs (in FY 2024-25) under protest agianst the liability amount.

In all the cases mentioned above outflow is not probable, and hence not provided by the Company.

(ii) Corporate guarantees

The Company has also given corporate gurantee on behalf of it''s wholly owned subsidiary Memco Engineering Pvt.
Ltd., to the lender bank. The outstanding amount of corporate guranteee is '' 504.89 Lakhs (March 31, 2024''409.43
Lakhs).

NOTE 33: RELATED PARTY TRANSACTIONS
A Names of the related party and related party relationship:

a) Related party where control exists

i) Subsidiary

PCL (International) Holdings B.V. (Netherlands)

Memco Engineering Pvt. Ltd. (Nashik)

ii) Step down Subsidiary ( Subsidiary of PCL (International) Holdings B.V. (Netherlands) )

MFT Motoren Und Fahrzeughecnik GMBH ( Germany)

Emoss Mobile Systems B.V., Netherlands

NOTE 36:FAIR VALUE HIERARCHY

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

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

• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

A) The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:
Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2025:

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.

The following methods and assumptions were used to estimate the fair values:

> The fair values of the quoted mutual funds are based on price (i.e. the NAV of the mutual funds) quotations at the
reporting date.

> The fair values of derivative forward contracts is determined using the marked-to-market valuation done by the banks.

> The Fair value of Level 3 is determined on the basis of best estimate & information available.

B) Fair value of financial assets and liabilities measured at amortised cost

The management assessed that cash and cash equivalents (including term deposits), trade receivables, trade payables,
borrowings, lease liability and other financial liabilities approximate their carrying amounts because of the short term
nature of these financial instruments.

The amortised cost using effective interest rate (EIR) of non-current financial assets consisting of security deposit, lease
receivables, loans to subsidiary and term deposit with more than 12 months are not significantly different from the carrying
amount.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

NOTE 37 : CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other
equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise
the shareholder value and to ensure the Company''s ability to continue as a going concern.The Company manages its capital
structure and makes adjustments for compliance with the requirements of the financial covenants. To maintain or adjust the
capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders. The Company
monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises
of short term borrowing which represents packing credit and cash credit taken from bank. The Company manages the capital
structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying
assets.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2025 and
March 31, 2024.

NOTE 38 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities, other than derivatives, comprise of short term borrowings, lease liabilities and
trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s
principal financial assets include security deposits, trade and other receivables, investments in mutual funds and cash and cash
equivalents that derive directly from its operations and loan given to subsidiary.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the
management of these risks. All derivative activities for risk management purposes are carried out by specialist teams that
have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative
purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are
summarised below.

Market risk

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

The sensitivity analysis in the following sections relate to the position as at March 31, 2025 and March 31, 2024.

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

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
short-term debt obligations with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market
environment, showing a significantly higher volatility than in prior years.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s
operating activities (when revenue or expense is denominated in a foreign currency) andloan given to subsidiary.

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to
match the terms of the hedged exposure.

For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions
are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and JPY exchange rates, with all
other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary
assets and liabilities including non-designated foreign currency derivatives and embedded derivatives.

Commodity risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture
of camshafts and therefore require a continuous supply majorly of pig iron, MS scrap and resin coated sand.

The Company''s exposure to the risk of exchange in key raw material prices are mitigated by the fact that the price increases/
decreases from the vendors are passed on to the customers based on understanding with the customers. Hence the fluctuation
of prices of key raw materials do not materially affect the statement of profit and loss. Also asat March 31, 2025, there were
no open purchase commitments/ pending material purchase order in respect of key raw materials. Accordingly, no sensitivity
analysis have been performed by the management.

Credit risk

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

Trade receivables

Customer credit risk is managed subject to the Company''s established policy, procedures and control relating to customer
credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this
assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure
to credit risk at the reporting date is the carrying value of trade receivables disclosed in note 8. The Company does not hold
collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers
are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance
with the Company''s policy.

The investment of surplus funds is made in mutual funds and fixed deposits which are approved by the Director.

The Company''s maximum exposure to credit risk for the components of the balance sheet at March 31, 2025 and March 31,
2024 is the carrying amounts as illustrated in note 9.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligation as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liability when due.

The table below summarises the maturity profile of the Company''s financial liabilities:

NOTE 41 : TITLE DEEDS OF IMMOVABLE PROPERTIES NOT HELD IN NAME OF THE COMPANY

There are no title deeds of immovable property which are not held in the name of the Company.

NOTE 42 : LEASES WHERE COMPANY IS A LESSEE

During FY 2021-22, Company has obtained office premises on lease from Redbrick Offices Limited for a period of 3 years.
Payment of lease rentals has been made in accordance with the rentals specified in Schedule. Lease liabiliy has been recognised
in the books of accounts by Company at present value of lease payments and Right of use asset at cost in accordance with the
requirements of IND AS 116.

During the FY 2024-25, Company has obtained land at Mangalwedha on lease for a period of 29 years. Payment of lease rentals
has been made in accordance with the rentals specified in the schedule agreed. Lease Liability has been recognised in the
books of accounts by the Company at present value of the lease payments and Right of Use asset at cost in accordance with the
requirements of IND AS 116.

NOTE 47 : WILFUL DEFAULTER

The Company has not being declared as wilful defaluter by any bank or financials instiution or any government authority.

NOTE 48 : RELATIONSHIP WITH STRUCK OFF COMPANIES UNDER SECTION 248 OF THE COMPANIES ACT, 2013 OR
SECTION 560 OF COMPANIES ACT, 1956,

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.

NOTE 49 : REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
NOTE 50 : COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES

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

NOTE 51 : UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(intermediaries) with the understanding that the

Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (ultimate beneficiaries) or

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

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

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the funding party (ultimate beneficiaries) or

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

NOTE 53 : UNDISCLOSED INCOME

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or
disclosed as income during the year and previous 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.)

NOTE 54 : DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY:

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

NOTE 55 : SOCIAL SECURITY CODE

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment,
has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the
Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date
from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued.
The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in
which, the Code becomes effective and the related rules to determine the financial impact are published. Based on a preliminary
assessment, the entity believes the impact of the change will not be significant.

NOTE 56 : PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped/reclassified, where necessary, to correspond with the current year''s classification/
disclosure.

NOTE 57 : EVENTS AFTER THE REPORTING PERIOD

No Significant Subsequent events have been observed which may require an adjustments to the financial statements.

NOTE 58 : AUDIT TRAIL

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the
Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which
uses accounting software for maintaining its books of accounts, shall use only such accounting software which has a feature of
recording audit trail of each and every transaction, creating an edit log of each change made in the books of accounts along with
the date when such changes were made and ensuring that the audit trail cannot be disabled. Companies must also now ensure
daily backups of their financial data, to be stored on servers physically located within India.

Pursuant to the above requirements, the Company uses two primary software systems:

a. Maintaining books of Accounts

b. Payroll Processing

In respect of the accounting software used for maintaining the books of account, the Company, after thorough testing and
validation, did not enable audit trail functionality for direct data changes at the database level, considering the potential adverse
impact on system performance. However, the Company has established and maintained an adequate internal control framework
over financial reporting. Based on its internal assessment, management has concluded that the internal controls were effective
for the year ended March 31, 2025. The Company is currently in the process of upgrading its systems to fully comply with the
database-level audit trail requirements.

With respect to the payroll software, which is operated by third party vendor and the Management has placed reliance on the
independent service organisation audit report submitted by the respective service providers for compliance of the aforesaid
requirements. The independent service organisation audit report of the accounting software used for maintaining its books of
account do not specifically address compliance with the daily backup and audit trail features as mandated by the MCA. The
Management is actively engaging with the service provider to obtain the necessary confirmations and documentation to ensure
full compliance with the MCA''s requirements going forward.

As per our report attached of even date

For MSKA & Associates For and on behalf of the Board of Directors of

Chartered Accountants Precision Camshafts Limited

Firm Regn. Number: 105047W CIN : L24231PN1992PLC067126

Nitin Manohar Jumani Yatin S. Shah Ravindra R. Joshi Karan Y. Shah Harshal J. Kher

Partner Managing Director Whole-time Director & CFO Whole-time Director Company Secretary

Membership Number: 111700 DIN: 00318140 DIN: 03338134 DIN. 07985441 Membership Number :

A69147

Place: Pune Place: Solapur Place: Solapur Place: Solapur Place: Pune

Date: May 27, 2025 Date: May 27, 2025 Date: May 27, 2025 Date: May 27, 2025 Date: May 27, 2025

---

Mar 31, 2024

(xiii) Provisions and Contingent Liabilities

The Company estimates the provisions that have present obligations as a result of past events, and it is probable that an outflow of resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting date and are adjusted to reflect the current best estimates.

The Company uses significant judgement to disclose contingent liabilities. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognized nor disclosed in the financial statements.

(xiv) Segment Reporting

Segments are identified based on the manner in which the Chief Operating Decision Maker (''CODM'') decides about resource allocation and reviews performance. The company is engaged in manufacturing of auto-components (camshafts & others) based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into a single operating segment ; however based on the geographic distribution of activities, the CODM has identified India and outside India as two reportable geographical segments. Refer Note No 34 for segment information presented.

NOTE 29: EARNINGS PER SHARE (EPS)

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

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

NOTE 31: DISCLOSURE PURSUANT TO EMPLOYEE BENEFITS

A. Defined contribution plans:

Amount of '' 504.05 Lakhs (31^st March 2023: '' 478.69 Lakhs) is recognised as expenses and included in note no. 23 "Employee benefit expense"

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

Gratuity

The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan which requires contributions to be made to a separately administered fund.

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.

Risk Exposure Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. AH plan assets are maintained in a trust fund managed by Life Insurance Corporation of India (LIC) and Birla Sun Life Insurance Company Limited who have been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.

Changes in bond yields

A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.

Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in higher present value of liabilities. Further, unexpected salary increases provided at the discretion of the management may lead to uncertainties in estimating this increasing risk.

Asset-Liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralise valuation swings caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.

NOTE 32: COMMITMENTS AND CONTINGENCIES

a. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances):

at 31^st March 2024, the Company had commitments of '' 3,111.27 Lakhs ( 31^st March 2023 : '' 1,875.75 Lakhs)

b. Contingent liabilities

(i) Claims against the Company not acknowledged as debts (legal claims)

a. The Collector of stamps, Solapur has demanded payment of stamp duty of '' 31.79 Lakhs (31^st March 2023: '' 31.79 Lakhs) for cancellation and issue of equity shares after amalgamation of Precision Valvetrain Components Limited (PVPL) with the Company in FY 2007-08. The Company has filed an appeal against demand made by the Collector of Stamps, Solapur with controlling revenue authority, Pune.

b. The Company had received an order from the Commisioner of Provident fund for the year May 2003 to May 2006 demanding PF liability amounting to '' 24.23 Lakhs (31^st March 2023: '' 24.23 Lakhs) excluding interest. The Company had filed writ petition with the Hon''ble High court Mumbai against the said order and had paid '' 12.12 Lakhs under protest.

c. The Company had received an order from the Commissioner of Central Excise Pune for the year 2002-03, 200304 and 2004-05 demanding excise duty amounting to '' 20.76 Lakhs (31^st March 2023: '' 20.76 Lakhs) on sales tax retained under sales tax deferral scheme. The Company had filed apperial against the order with CESTAT and CESTAT via its order transfer the said case to the jurisdiction commissionrate

d. The Company had received order from Assessing Officer for the assessment year 2014-15 for demand of income tax amounting to '' 1,701.16 Lakhs (31^st March 2023''1,701.16 Lakhs) towards disallowance of ESOP expenditures and other disallowances. The Company had filed appeal against the above order with commissioner of income tax (Appeals) and has paid ''335.41 Lakhs (31^st March 2023: 200.00 Lakhs) under protest.

e The Company had received an order from Assessing Officer for the assessment year 18-19 for demand of income tax amounting to '' 7.08 Lakhs towards disallownce u/s 14A of the Act. The Company has paid the said demand within due date specified by the department. Further assessing officer had passed an order u/s 270A imposing a penalty for '' 3.47 Lakhs (31^st March 2023''3.47 Lakhs) for under reporting of income for incremental disallowance made u/s 14A of the act. The Company had filed appeal against the penalty order with Commissioner of Income Tax (Appeals) and has paid '' 0.70 Lakhs under protest.

f The Company had received an order from Industrial Court, Solapur towards employees dispute and allowed 4 workers reinstatement with full back wages from 2014 for demand of '' 49.96 Lakhs (31^st March 2023 '' 42 Lakhs). The Company had filed writ petition with the Hon''ble High court Mumbai against the said order.

g During the current year company has received order from the commissoner of State Tax(GST) for the year 201718 demanding GST amounting to '' 200.62 Lakhs(including interest and penalty) on tooling income & Mismatch in Input tax credit .The Company had filed writ petition with the Hon''ble High court Mumbai against the said order.

h. During the current year, the Company has received a draft order under section 144C(1) of the Income Tax Act, 1961, for the assessment year 2020-21. The draft order pertains to adjustments on account of international transactions related to corporate guarantees and disallowance under section 14A of the Act, amounting to '' 19.47 Lakhs. The Company has filed its objections with the Dispute Resolution Panel (DRP) regarding the aforementioned adjustments and disallowance.

i. During the current year, the Company has received a draft order under section 144C(1) of the Income Tax Act, 1961, for the assessment year 2021-22. The draft order pertains to adjustments on account of international transactions related to corporate guarantees amounting to '' 5.41 Lakhs. The Company has filed its objections with the Dispute Resolution Panel (DRP) regarding the aforementioned adjustments and disallowance.

In all the cases mentioned above outflow is not probable, and hence not provided by the Company.

(ii) Corporate guarantees

The Company has also given corporate gurantee for it''s wholly owned subsidiary Memco Engineering Pvt. Ltd. to the

lender bank. The outstanding amount of corporate guranteee is ''409.43 Lakhs (31^st March 2023''468.37 Lakhs).

NOTE 33: RELATED PARTY TRANSACTIONS A Names of the related party and related party relationship:

a) Related party where control exists

i) Subsidiary

PCL (International) Holdings B.V. (Netherlands)

Memco Engineering Pvt. Ltd. (Nashik)

ii) Step down Subsidiary ( Subsidiary of PCL (International) Holdings B.V. (Netherlands) )

MFT Motoren Und Fahrzeughecnik GMBH ( Germany)

Emoss Mobile Systems B.V., Netherlands

b) Key management personnel (KMP)

Mr. Yatin S. Shah, Managing Director Mr. Ravindra R. Joshi, Director Mr. Karan Y. Shah, Director

Mr. Sarvesh N. Joshi, Independent Director (upto 26^th July 2023)

Mr. Vaibhav S. Mahajani, Independent Director (upto 21^st September 2022)

Dr. Suhasini Y. Shah, Non executive Director Mrs. Savani A. Laddha Independent Director Mr. Gautam V. Wakankar, Company Secretary (up to 30^th April 2023)

Mr. Madan M. Godse, Independent Director (up to 1^st February 2023)

Dr. Ameet N Dravid, Independent Director (w.e.f. 10 August 2022)

Mr. Suhas J. Ahirrao, Independent Director (w.e.f. 29^th March 2023)

Ms. Apurva P. Joshi, Independent Director (w.e.f. 29^th March 2023)

Mrs. Anagha S. Anasingaraju, Independent Director (w.e.f. 29^th March 2023)

Mr. Tanmay M. Pethkar, Company Secretary (w.e.f. 10^th August 2023)

c) Relatives of key management personnel (RKMP)

Ms. Tanvi Y. Shah, daughter of Mr. Yatin S. Shah Mrs. Mayura K. Shah, Wife of Mr. Karan Y. Shah

d) Enterprises owned or significantly influenced by key management personnel or their relatives with whom transactions have taken place during the period:

Chitale Clinic Private Limited

Precision Foundation & Medical Research Trust

Yatin S. Shah (HUF)

Cams Technology Limited

NOTE 36:FAIR VALUE HIERARCHY

The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

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

• Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

A) The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis: Quantitative disclosures fair value measurement hierarchy for assets as at 31^st March 2024:

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.

The following methods and assumptions were used to estimate the fair values:

> The fair values of the quoted mutual funds are based on price (i.e. the NAV of the mutual funds) quotations at the reporting date.

> The fair values of derivative forward contracts is determined using the marked-to-market valuation done by the banks.

> The Fair value of Level 3 is determined on the basis of best estimate & information available.

B Fair value of financial assets and liabilities measured at amortised cost

The management assessed that cash and cash equivalents (including term deposits), trade receivables, lease receivables, trade payables, borrowings, lease liability and other financial liabilities approximate their carrying amounts because of the short term nature of these financial instruments.

The amortised cost using effective interest rate (EIR) of non-current financial assets consisting of security deposit, lease receivables, loans to subsidiary and term deposit with more than 12 months are not significantly different from the carrying amount.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

NOTE 37 : CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value and to ensure the Company''s ability to continue as a going concern.The Company manages its capital structure and makes adjustments for compliance with the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders. The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt comprises of short term borrowing which represents packing credit and cash credit taken from bank. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

NOTE 38 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities, other than derivatives, comprise of short term borrowings; and trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, investments in mutual funds and cash and cash equivalents that derive directly from its operations and loan given to subsidiary.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

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

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

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

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 short-term debt obligations with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) and loan given to subsidiary.

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure.

For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Commodity risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of camshafts and therefore require a continuous supply majorly of pig iron, MS scrap and resin coated sand.

The Company''s exposure to the risk of exchange in key raw material prices are mitigated by the fact that the price increases/ decreases from the vendors are passed on to the customers based on understanding with the customers. Hence the fluctuation of prices of key raw materials do not materially affect the statement of profit and loss. Also as at 31^st March 2024, there were no open purchase commitments/ pending material purchase order in respect of key raw materials. Accordingly, no sensitivity analysis have been performed by the management.

Credit risk

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

Trade receivables

Customer credit risk is managed subject to the Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in note 8. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy.

The investment of surplus funds is made in mutual funds and fixed deposits which are approved by the Director.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31^st March 2024 and 31^st March 2023 is the carrying amounts as illustrated in note 9.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligation as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liability when due.

NOTE 41 : TITLE DEEDS OF IMMOVABLE PROPERTIES NOT HELD IN NAME OF THE COMPANY

There are no title deeds of immovable property which are not held within the name of the Company.

NOTE 42 : LEASES WHERE COMPANY IS A LESSEE

During FY 2021-22, company has obtained office premises on lease from Redbrick Offices Limited for a period of 3 years. Payment of lease rentals has been made in accordance with the rentals specified in Schedule. Lease liabiliy has been recognised in the books of accounts by company at present value of lease payments and Right of use asset at cost in accordance with the requirements of IND AS 116.

NOTE 49 : WILFUL DEFAULTER

The Company has not being declared as wilful defaluter by any bank or financials instiution or any government authority.

NOTE 50 : RELATIONSHIP WITH STRUCK OFF COMPANIES UNDER SECTION 248 OF THE COMPANIES ACT, 2013 OR SECTION 560 OF COMPANIES ACT, 1956,

The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

NOTE 51 : REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. NOTE 52 : COMPLIANCE WITH NUMBER OF LAYERS OF COMPANIES

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

NOTE 53 : UTILISATION OF BORROWED FUNDS AND SHARE PREMIUM:

(i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (intermediaries) with the understanding that the

Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

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

NOTE 55 : UNDISCLOSED INCOME

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year and previous 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.)

NOTE 56 : DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY:

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

NOTE 57 : SOCIAL SECURITY CODE

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on 28^th September 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on 13^th November 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.

NOTE 58 : PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped/reclassified, where necessary, to correspond with the current year''s classification/ disclosure.

NOTE 59 : EVENTS AFTER THE REPORTING PERIOD

No Significant Subsequent events have been observed which may require an adjustments to the financial statements.

The accompanying notes are an integral part of the financial statements.

As per our report attached of even date

For MSKA & Associates For and on behalf of the Board of Directors of

Chartered Accountants Precision Camshafts Limited

Firm Regn. Number: 105047W CIN : L24231PN1992PLC067126

Nitin Manohar Jumani Yatin S. Shah Ravindra R. Joshi Karan Y. Shah Tanmay M. Pethkar

Partner Managing Director Whole-time Director & CFO Whole-time Director Company Secretary

Membership Number: 111700 DIN: 00318140 DIN: 03338134 DIN. 07985441 Membership Number :

A53618

Place: Pune Place: Solapur Place: Solapur Place: Solapur Place: Pune

Date: 23^rd May 2024 Date: 23^rd May 2024 Date: 23^rd May 2024 Date: 23^rd May 2024 Date: 23^rd May 2024

---

Mar 31, 2023

l) Provisions

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

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the

liability. When discounting is used, the increase in the

provision due to the passage of time is recognised as a

finance cost.

m) Retirement and other employee benefits

a) Short term employee benefits

The distinction between short term and long term employee benefits is based on expected timing of settlement rather than the employee''s entitlement benefits. All employee benefits payable within twelve months of rendering the service are classified as short term benefits.

Such benefits include salaries, wages, bonus, short term compensated absences, awards, ex-gratia, performance pay, etc. and are recognised in the period in which the employee renders the related service.

b) Post employement benefits

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

The Company operates a defined benefit gratuity plan , which requires contributions to be made to a separately administered fund. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net

interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.

Remeasurements are not reclassified to profit or loss in subsequent periods.

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

I The date of the plan amendment or curtailment, and

II The date that the Company recognises related restructuring costs

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

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

II Net interest expense or income

Accumulated leave, which is expected to be utilised within the next 12 months, is treated as a short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as a long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method as at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

n) Share-based payments

Employees of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions

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

That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company''s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

No expense is recognised for awards that do not ultimately vest because non-market performance and/ or service conditions have not been met.

Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms had not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

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

o) Investments in subsidiaries:

Investments in subsidiaries are measured at cost as per Ind AS 27 -Separate Financial Statements.

p) Financial instruments:

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

Financial assets

Initial recognition and measurement

At initial recognition, financial asset is measured at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. However, trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent measurement

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

> Debt instruments at amortised cost

> Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

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

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

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

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

This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to loans. trade receivables and other financial assets. For more information on receivables, refer note 5A, 5B, 5C and 8.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortised cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL.

However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). The Company has designated certain investments at FVTPL. (refer note 5)

Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the P&L.

Equity instrument

All equity instruments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument byinstrument basis. The classification is made on initial recognition and is irrevocable.

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

Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

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

> The Company has transferred its rights to receive cash flows from the 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 passthrough 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 recognise the transferred asset to the extent of the company''s continuing involvement. In that case, the Company also recognises 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.

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:

i) Financial assets that are debt instruments, and are measured at amortised cost e.g. deposits, loans,trade receivables, bank balance and other financial assets.

ii) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115;

iii) Loan commitments which are not measured as at FVTPL.

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

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

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, twelve-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on twelve-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The twelve-month ECL is a portion of the lifetime ECL which results from default events that are possible within twelve months after the reporting date.

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 EIR.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head ''other expenses'' in the statement of profit and loss. The balance sheet presentation for ECL on financial assets measured at amortised cost is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on

the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

Financial liabilities

Initial recognition and measurement

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

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

The Company''s financial liabilities include trade and other payables, loans and borrowings, lease liabilities and derivative financial instruments.

Subsequent measurement

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

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR (effective interest rate) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

The EIR amortisation is included as finance costs in the statement of profit and loss.

Derecognition

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

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

q) 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 financial statement of cash flows, cash and cash equivalents consist of cash and shortterm deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

r) Cash dividend

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

s) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

t) Segment reporting

Operating segments are reporting in a manner consistent with the internal reporting to the chief operating decision maker (CODM).

The board of directors of the group assess the financial performance and position of the group and makes strategic decisions.

The Board of Directors, which are identified as a CODM, consists of , chief financial officer and all other executive directors.

The group is engaged in manufacturing of autocomponents (camshafts.& others) based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into a single operating segment;

however based on the geographic distribution of activities, the CODM has identified India and outside India as two reportable geographical segments. Refer Note No 35 for segment information presented.

u) Earnings per share (EPS)

Basic EPS is calculated by dividing the profit for the year attributable to equity holders of the parent company by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements, if any, in equity shares issued during the year and excluding treasury shares.

Diluted EPS adjusts the figures used in the determination of basic EPS to consider :

> The after-income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

> The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

v) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the group.

A contingent liability can arise for obligations that are possible, but it is yet to be confirmed whether there is present obligation that could lead to an outflow of resources embodying economic benefits.

The Company does not recognise a contingent liability but only makes disclosures for the same in the financial statements when the Company has:

> a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; or

> present obligation arising from past events, when no reliable estimate is possible; or

> a possible obligation arising from past events where the probability of outflow of resources is not remote

Contingent liabilities are reviewed at each balance sheet date.

w) Standards issued but not yet effective

The Ministry of Corporate Affairs ("MCA") has notified Companies (Indian Accounting Standard) Amendment Rules, 2023 dated 31^st March, 2023 to amend certain Ind ASs which are effective from 1^st April, 2023. Below is a summary of such amendments:

(i) Disclosure of Accounting Policies - Amendment to Ind AS 1 Presentation of financial statements

The MCA issued amendments to Ind AS 1, providing guidance to help entities meet the accounting policy disclosure requirements. The amendments aim to make accounting policy disclosures more informative by replacing the requirement to disclose ''significant accounting policies'' with ''material accounting policy information''. The amendments also provide guidance under what circumstance, the accounting policy information is likely to be considered material and therefore requiring disclosure. The amendments are effective for annual reporting periods beginning on or after 1^st April, 2023.

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

(ii) Definition of Accounting Estimates -Amendments to Ind AS 8 Accounting policies, changes in accounting estimates and errors

The amendment to Ind AS 8, which added the definition of accounting estimates, clarifies that the effects of a change in an input or measurement technique are changes in accounting estimates, unless resulting from the correction of prior period errors. These amendments clarify how entities make changes in accounting estimates are applied prospectively to the distinction between changes in accounting estimate, changes in accounting policy and prior period errors. The distinction is important, because future transactions and other future events, but changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the current period.

The amendments are effective for annual reporting periods beginning on or after 1^st April, 2023. The amendments are not expected to have a material impact on the Company''s financial statements.

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

The amendment to Ind AS 12, requires entities to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations and will require the recognition of additional deferred tax assets and liabilities.

The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognise deferred tax assets (to the extent that it is probable that they can be utilised) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:

• right-of-use assets and lease liabilities, and

• decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the related assets.

The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of equity, as appropriate. Ind AS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions and various approaches were considered acceptable. Some entities may have already accounted forsuch transactions consistent with the new requirements. These entities will not be affected by the amendments.

The Company is currently assessing the impact of the amendments.

iv) The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.

w) Standards that became effective during the year

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standard) Amendment Rules 2022 dated 23^rd March, 2022 to amend the following Ind AS which are effective from 1^st April, 2022 :

(i) Onerous Contracts- Cost of Fulfilling a Contract -Amendments to Ind AS 37

Ind AS 37 defines an onerous contract as a contract in which the unavoidable costs (costs that the Company has committed to pursuant to the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

The amendments to Ind AS 37 clarify, that the costs relating directly to the contract consist of both:

• The incremental costs of fulfilling that contract- e.g. direct labour and material; and

• An allocation of other costs that relate directly to fulfilling contracts: e.g. Allocation of depreciation charge on property, plant and equipment used in fulfilling the contract.

(ii) References to the Conceptual Framework -Amendments to Ind AS 103

The amendments update a reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. The amendment also add a new exception in Ind AS 103 for liabilities and contingent liabilities.

(iii) Property, Plant and Equipment: Proceeds Before Intended Use- Amendment to Ind AS 16

The amendment to Ind AS 16 clarifies that any excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment.

These amendments had no impact on the year-end financial statements of the Company as there were no sales of such items.

(iv) Ind AS 109 Financial Instruments - Fees in the ‘10 %’ test for derecognition of financial liability

The amendment clarifies which fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other''s behalf.

These amendments had no impact on the financial statements of the Company as there were no modifications of the Company''s financial instruments during the year.

33. | COMMITMENTS AND CONTINGENCIES

a. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances): at 31^st March, 2023, the Company had commitments of ^ 1875.75 Lakhs ( 31^st March, 2022 : ^ 1,198.80 Lakhs)

b. Contingent liabilities

(i) Claims against the Company not acknowledged as debts (legal claims)

a. The Collector of stamps, Solapur has demanded payment of stamp duty of ^ 31.79 Lakhs (31^st March, 2022: ^ 31.79 Lakhs) for cancellation and issue of equity shares after amalgamation of Precision Valvetrain Components Limited (PVPL) with the Company in FY 2007-08. The Company has filed an appeal against demand made by the Collector of Stamps, Solapur with controlling revenue authority, Pune.

b. The Company had received an order from the Commisioner of Provident fund for the year May 2003 to May 2006 demanding PF liability amounting to ^ 24.23 Lakhs (31^st March, 2022: ^ 24.23 Lakhs) excluding interest. The Company had filed writ petition with the Hon''ble High court Mumbai against the said order and had paid ^ 12.12 under protest.

c. The Company had received an order from the Commissioner of Central Excise Pune for the year 2002-03, 2003-04 and 2004-05 demanding excise duty amounting to ^ 20.76 Lakhs (31^st March, 2022: ^ 20.76 Lakhs) on sales tax retained under sales tax deferral scheme. The Company had filed apperial against the order with CESTAT and CESTAT via its order transfer the said case to the jurisdiction commissionrate

d. The Company had received the show cause notice from The Directorate General of Goods and Service Tax Intelligence, Gurgaon (Haryana) for the cost of drawing/desigin/specifications was not included in components at the time of supply to MSIL for the year 2013-14 to 2017-18 amounting to ^ 83.95 Lakhs. (31^st March, 2022 ^ 83.95 Lakhs). The Company had filed a reply aginst said show cause notice to the Directorate General of Goods and Service Tax Intelligence, Gurgaon (Haryana) . The assessment order yet to receive from the respective authority.

e. The Company had received order from Assessing Officer for the assessment year 2014-15 for demand of income tax amounting to ^ 1,428.71 Lakhs (31^st March, 2022 ^ 1,428.71 Lakhs) towards disallowance of ESOP expenditures and other disallowances. The Company has filed appeal against the above order with commissioner of income tax (Appeals) and has paid ^ 200.00 Lakhs under protest.

f During the year ended 31^st March, 2022, the Company had received an order from Assessing Officer for the assessment year 18-19 for demand of income tax amounting to ^ 7.08 Lakhs towards disallownce u/s 14A of the Act. The Company has paid the said demand within due date specified by the department. Further assessing officer has passed an order u/s 270A imposing a penalty for ^ 3.47 Lakhs (31^st March, 2022 ^ 3.47 Lakhs) Lakhs for under reporting of income for incremental disallowance made u/s 14A of the act. The Company had filed appeal agianst the penalty order with Commissioner of Income Tax (Appeals) and has paid ^ 0.70 Lakhs under protest.

g During the year ended 31^st March, 2022, the Company had received an order from Industrial Court, Solapur towards employees dispute and allowed 4 workers reinstatement with full back wages from 2014 for demand of ^ 42 Lakhs (31^st March, 2022 ^ 36 Lakhs). The Company had filed writ petition with the Hon''ble High court Mumbai against the said order

In all the cases mentioned above outflow is not probable, and hence not provided by the Company.

(ii) Corporate guarantees

The Company had given corporate guarantee of € 19.6 million (^ 14,900 Lakhs) to Bank of Baroda, London in respect of term loan given by Bank of Baroda to its wholly owned subsidiary company PCL International Holdings, B.V. Netherlands for strategic acquisitions in FY 2017-18.

Subsequently due to cancellation of bank guarantee & repayment of loans the amount of corporate guarantee is nil (31^st March, 2022- 2,292.84 Lakhs).

The Company has also given corporate gurantee of it''s wholly owned subsidiary Memco Engineering Limited Limited to the lender bank. The outstanding amount of corporate guranteee is ^ 468.3 7 Lakhs (31^st March, 2022 ^ 453.55 Lakhs).

34. | RELATED PARTY TRANSACTIONS

A Names of the related party and related party relationship:

a) Related party where control exists

i) Subsidiary

PCL (International) Holdings B.V. (Netherlands)

Memco Engineering Limited Limited (Nashik)

ii) Step down Subsidiary ( Subsidiary of PCL (International) Holdings B.V. (Netherlands) )

MFT Motoren Und Fahrzeughecnik GMBH ( Germany)

Emoss Mobile Systems B.V., Netherlands

b) Related parties under ‘Ind AS 24- Related Party Disclosures’, with whom transactions have taken place during the period

PCL (International) Holdings B.V. (Netherlands)

Chitale Clinic Private Limited Cams Technology Limited

MFT Motoren Und Fahrzeughecnik GMBH ( Germany)

Emoss Mobile Systems B.V.

Precision Foundation & Medical Research Trust

c) Key management personnel (KMP)

Mr. Yatin S. Shah , Managing Director

Mr. Ravindra R. Joshi, Director

Mr. Karan Y. Shah, Director

Mrs. Mayuri I. Kulkarni (upto 18^th March, 2022)

Mr. Sarvesh N. Joshi, Independent Director

Mr. Pramod H. Mehendale, Independent Director (upto 27^th July, 2021)

Mr. Vedant V. Pujari, Independent Director (upto 27^th July, 2021)

Mr. Vaibhav S. Mahajani, Independent Director (upto 21^st September, 2022)

Dr. Suhasini Y. Shah, Non executive Director Mrs.Savani A. Laddha Independent Director

Mr. Gautam V. Wakankar (w.e.f. 19^th March, 2022 up to 30^th April, 2023)

Mr. Madan M. Godse, Independent Director (w.e.f. 3^rd September, 2021 up to 1^st February, 2023)

Mr. Ameet N Dravid, Independent Director (w.e.f. 10^th August, 2022)

Mr. Suhas J. Ahirrao, Independent Director (w.e.f. 29^th March, 2023)

Ms. Apurva P. Joshi, Independent Director (w.e.f. 29^th March, 2023)

Mrs. Anagha S. Anasingaraju, Independent Director (w.e.f. 29^th March, 2023)

d) Relatives of key management personnel (RKMP)

Ms. Tanvi Y. Shah, daughter of Mr. Yatin S. Shah

Late Dr. Manjiri V. Chitale, mother of Dr. Suhasini Y. Shah Mrs. Mayura K. Shah, Wife of Mr. Karan Y. Shah

e) Enterprises owned or significantly influenced by key management personnel or their relatives:

Chitale Clinic Private Limited

Precision Foundation & Medical Research Trust

Yatin S. Shah (HUF)

Cams Technology Limited

f) Individual having significant influence Mr. Jayant V. Aradhye

g) Relative of individual having significant influence

Mr. Maneesh J. Aradhye, son of Mr. Jayant V. Aradhye Dr. Sunita J. Aradhye, wife of Mr. Jayant V. Aradhye Mrs. Rama M. Aradhye, wife of Mr. Maneesh J. Aradhye Mr. Vijay V. Aradhye, brother of Mr. Jayant V. Aradhye

39. | 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.

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.

Share-based payments

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an Black and Scholes valuation model. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 32.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for the plans ,the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about gratuity obligations are given in note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 36 and 37 for further disclosures.

Revenue Recognition:

For tooling contracts, The Company has enforceable right to payment for tools developed when the tool is approved by the customer and accordingly the revenue from tooling is recognised at a point in time post approval by the customer.

40. | FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities, other than derivatives, comprise of short term borrowings; and trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, investments in mutual funds and cash and cash equivalents that derive directly from its operations and loan given to subsidiary.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

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

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

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

57. | UNDISCLOSED INCOME

The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous 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.)

58. | DETAILS OF CRYPTO CURRENCY OR VIRTUAL CURRENCY

The Company has not traded or invested in crypto currency or virtual currency during the financial year.

59. | CASUAL VACANCY OF COMPANY SECRETARY

The Company is in the process of filling up the vacancy for the position of Company Secretary who resigned on 30^th April, 2023.

60. | PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped/reclassified to correspond with the current year''s classification/disclosure.

The accompanying notes are an integral part of the financial statements As per our report attached of even date

For MSKA & Associates For and on behalf of the Board of Directors of

Chartered Accountants Precision Camshafts Limited

Firm Regn. Number: 105047W

Nitin Manohar Jumani Yatin S. Shah Ravindra R. Joshi Karan Y. Shah

Partner Managing Director Whole-time Director & CFO Whole-time Director

Membership Number: 111700 DIN: 00318140 DIN: 03338134 DIN. 07985441

Place: Pune Place: Pune Place: Pune Place: Pune

Date: 26^th May, 2023 Date: 26^th May, 2023 Date: 26^th May, 2023 Date: 26^th May, 2023

---

Mar 31, 2018

Note 1. Corporate Information

The financial statements comprise of financial statements of Precision Camshafts Limited (''the Company'') for the year ended 31 March 2018. Precision Camshafts Limited is a Public Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The shares of the Company are listed in two stock exchanges in India. The Company is primarily engaged in the manufacture and sale of camshaft castings and machined camshafts to the Auto industry and the Railways. The Company has its office registered at E 102/103 MIDC Akkalkot road Solapur, Maharashtra, 413006 .

The financial statements were authorised for issue in accordance with the resolution of the Board of Directors of the Company on 28 May 2018.

Exchange Differences on borrowing costs

Company has continued the policy of capitalising exchange differences arising from translation of long-term foreign currency monetary items as per exemption available under Ind AS 101- First time Adoption of Indian Accounting Standards.

Asset under construction

Capital work-in-progress (CWIP) comprises cost of assets that are not yet installed and ready for their intended use at the balance sheet date. Capital work in progress as at 31 March 2018 comprises expenditure for the plant and machinery in the course of construction. Balance of CWIP as at March 31,2018 amounts to Rs. 857.38 Lakhs (31 March 2017: Rs. 890.20 Lakhs)

Property, plant and equipment

The entire block of property, plant and equipment comprising of immovable assets with a carrying amount of Rs. 8,215.06 Lakhs (31 March, 2017: Rs. 8,393.81 Lakhs) and movable assets with a carrying amount of Rs. 15,989.45 Lakhs (31 March, 2017: Rs. 13,165.72 Lakhs ) are subject to first charge to secure the Company''s foreign currency term loan. (Refer Note No. 12)

The company has acquired 95% Equity shares of Memco Engineering Pvt. Ltd.,Nashik On 10 Oct 2017 for Rs. 3,804.35 Lakhs. The enterprise value of the company is negotiated based on a future EBITA multiple. Remaining 5% of the shares will be acquired in September 2018 based on audited financials of March 2018. The entire funding for the above has been done through internally generated profits of the company.

The company has contributed as equity since 06 May 2017 to its wholly owned subsidary in PCL International Holding BV. The equity contribution has been done solely for acquiring the companies in Europe. On 23 March 2018 PCL International Holding BV has acquired MFT Motoren und Fahrzeugtechnik GmbH (MFT) - Germany''s 76% shares by combination of equity & loan. The loan is taken from Bank of Baroda London. The total cost of acquisition is Rs. 2,044.57 Lakhs based on a projected EBITA multiple and remaining 24% will be acquired in 2021 based on financial performance of the year 2021.

The company has contributed Rs. 100 lakhs as 6% cumulative non-convertible preference shares to Memco Engineering Pvt. Ltd.,Nashik. Considering the present lending rates for similar companies, the 6% dividend is not at fair value. The difference between the present lending rate i.e 10.5% and the fixed dividend rate i.e 6% which has given to Memco Engineering Pvt. Ltd. has been derived based on the Net present value for 5 years. The difference between the rates has been considered as Deemed Investment as equity.

Cash at banks earns interest at fixed rates based on fixed deposit receipts made by the company. Fixed deposits are made for varying periods of between 1 month to 48 months, depending on the immediate cash requirements of the Company, and earn interest at the respective short term / long term deposit rates.

As at 31^st March 2018 the Company had available Rs. 4945.78 Lakhs (31^st March 2017 Rs. 1032.11 Lakhs) of undrawn committed borrowing facilities.

Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share (31 March 2017: 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 31^st Mar 2018 , the amount of per share dividend proposed by Board of Directors in the board meeting held on 28^th May 2018 as distribution to equity share holders amounted to Rs. 1 (31 March 2017: Rs. 1.5) per equity share. Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as liability ( including dividend distribution tax thereon ) as on 31^st Mar 2018.

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.

Pursuant to the Initial Public Offering (IPO) on 08 February 2016, equity shares having par value of Rs. 10 per share were allotted at a price of Rs. 186 per equity share comprising of fresh issue of 12,903,225 equity shares and offer for sale of 9,150,000 equity shares by selling shareholders. The equity shares of the Company were listed on the BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") with effect from 08 February 2016.

Employees (including senior executives) of the Company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions).

In accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the IND AS 102 Share based payments, the cost of equity-settled transactions is measured using the fair value method. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

2. Foreign currency loan 1 carries interest at the rate of LIBOR plus 330 bps p.a. The tenure of the loan is 7 years and the loan is repayable in 20 quarterly instalments commencing after 24 months of the weighted average draw down date, viz 1 August 2013. The loan is secured by pari passu charge on all movable and immovable property, plant and equipment (PPE) created by the loan and also includes mortgage of Plot No. D-7, MIDC Chincholi, Solapur. The loan has been secured by the personal guarantee of directors Mr. Yatin S. Shah and Dr. Suhasini Y. Shah.

3 Foreign currency loan 2 carries interest at the rate of LIBOR plus 295 bps p.a. The tenure of the loan is 5 years and 2 months and the loan is repayable in 20 quarterly instalments commencing after 7 months from the sanction of the loan by the bank. viz., 2 November 2013. The loan is secured by pari passu charge on all movable and immovable PPE created by the loan and also includes mortgage of Plot No. D-7, MIDC Chincholi, Solapur. The loan has been secured by the personal guarantee of directors Mr. Yatin S. Shah and Dr. Suhasini Y. Shah. The Company does not have any continuing defaults in repayment of loans and interest during the year and as at the reporting date.

4 Cash credit and packing credit in foreign currency are secured by first pari passu charge by way of hypothecation of current assets including inventories and trade receivables. Further, the facilities are collaterally secured by extension of pari passu charge by way of hypothecation of plant and machinery and equitable mortgage of factory land and building situated at Plot No D5, MIDC Chincholi, Solapur, Unit I situated at Plot No. E-102, 103, Akkalkot Road, MIDC, Solapur and Unit II situated at Plot No. E-90, Akkalkot road, Solapur

5 The carrying amounts of PPE pledged as security for non-current borrowings are disclosed in note 3. And carrying amount of inventories, trade receivables and fixed deposits are pledged as security for short term borrowings.

6. Term loan from banks contain certain covenants relating to debt service coverage ratio, total debt gearing ratio, interest Coverage ratio and Fixed asset coverage ratio. All the ratios mentioned above are within the level stipulated by the banks in its prescribed sanctions. The Company has also satisfied all other debt covenants prescribed in the terms of bank loan.

Note 7: Earnings per share (EPS)

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

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

Note 8: Disclosure pursuant to Employee benefits

A. Defined contribution plans:

Amount of Rs. 333.99 Lakhs (March 31, 2017: Rs. 345.23 Lakhs) is recognised as expenses and included in note no. 22 "Employee benefit expense"

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund. 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.

Plan assets - Gratuity Fund Rs. 437.54 Lakhs

* The amount debited to statement of profit and loss includes gratuity expenses on account of full and final settlement of left employees whose gratuity payments have not been considered for actuarial valuation amounting to Rs. 4.85 Lakhs and Rs. 132.39 Lakhs for the year ended March 31, 2018 and March 31, 2017 respectively. For the year ended March 31, 2018; the amount debited to statement of profit and loss also includes gratuity expenses of Rs. 40 Lakhs provided for promoter director whose gratuity payments have not been considered for actuarial valuation.

Note 9: Share Based Payments

The Company provides share-based payment schemes to its employees. During the year ended 31 March 2018, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

On 6 February 2015,the board of directors approved the PCL Employee Stock Option Scheme 2015 ( PCL ESOS 2015 ) for issue of stock options to the employees of the Company. According to the PCL ESOS 2015,the employee selected by the remuneration committee from time to time will be entitled to options. The contractual life (comprising the vesting period and the exercise period) of options granted under PCL ESOS 2015 is 6 years.

The fair value of the share options is estimated at the grant date using Black Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. The exercise price of the share options is the face value i.e. Rs. 10. The contractual term of each option granted is 6 years.

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

Note 10: Commitments and contingencies

a. Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances): At 31 March 2018, the Company had commitments of Rs. 3,806.92 Lakhs (31 March 2017: Rs. 556.97 Lakhs)

(ii) The company has a commitment to purchase 5% equity shares of Memco Engineering Pvt. Ltd., Nashik for which it has earmarked bank balance of Rs. 150 Lakhs.

b. Contingent liabilities

(i) Claims against the company not acknowledged as debts (Legal claims)

a. The Collector of Stamps, Solapur has demanded payment of stamp duty of Rs. 31.79 Lakhs (March 31, 2017: Rs. 31.79 Lakhs) for cancellation and issue of equity shares after amalgamation of Precision Valvetrain Components Limited (PVPL) with the Company in year 2007-2008. The Company has filed an appeal against demand made by the Collector of Stamps, Solapur with Controlling Revenue Authority, Pune.

b. The Company is in appeal and the application is pending with "Hon''ble High Court of Judicature Appellate" against the claim made under Employees provident Funds and Miscellaneous Provision Act, 1952 for Rs. 24.23 Lakhs (March 31, 2017: Rs. 24.23Lakhs). The Company has deposited an amount of Rs. 12.12 Lakhs (March 31, 2017: Rs. 12.12 Lakhs) under protest which has been shown under ''Other Assets''.

c. The Company has received an order from the Commissioner of Central Excise Pune for the year 2002-03, 2003-04 and 2004-05 demanding excise duty amounting to Rs. 20.76 Lakhs (March 31, 2017: Rs. 20.76 Lakhs) on sales tax retained under sales tax deferral scheme. The Company has deposited an amount of Rs. 1.56 Lakhs (March 31, 2017: 1.56 Lakhs) under protest.

d. The Company has filled an appeal to CESTAT during the year against the order of service tax appeals for inadmissible cenvat credit amounting to Rs. 11.83 Lakhs on outward transportation for the financial years 2011-12 to 2014-15.

e. The Company has received order from Commissioner of Central Excise for demand of service Tax and interest on payment of bank charges, facilities fees, and legal expenses paid during the year 2011-12 for the availment of ECB loan amounting to Rs. 26.16 Lakhs.

f. The Company has received order from Assessing Officer for demand of income tax amounting to Rs. 1,597.17 Lakhs towards disallowance of ESOP expenditures and other disallowances. The Company has filed appeal against the above order with Commissioner of Income Tax (Appeals) and has paid Rs. 200.00 Lakhs under protest and has adjusted refund due of Rs. 39.60 Lakhs with respect to FY 2006-07.

In all cases the cases mentioned above outflow is not probable, and hence not provided by the Company.

(ii) Corporate Guarantees

Company has given corporate guarantee of Rs. 14,900 Lakhs (approx) on behalf of PCL (International) Holdings B.V. (Netherlands) to the lender bank.

c. Leases

The Company has entered into commercial leases for office premises and guest house. These leases have an average life of between three years with no renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases.

During the year the company has given Corporate Guarantee of Rs 14,900 Lakhs (Approx) on behalf of its Wholly Owned Subsidiary PCL (International) Holdings Netherlands to Lender Bank.

Terms and conditions of transactions with related parties.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for or from any related party trade receivables or trade payables.

Note 11: Segment information

The Company is engaged in manufacturing of Camshafts. Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into a single operating segment ; however based on the geographic distribution of activities, the chief operating decision make identified India and outside India as two reportable geographical segments.

Note 12: Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

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.

The following methods and assumptions were used to estimate the fair values:

- The fair values of the quoted mutual funds are based on price (i.e. the NAV of the mutual funds) quotations at the reporting date.

- The fair values of derivative forward contracts is determined using the marked-to-market valuation done by the banks.

Note 13: Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders and borrowings. The primary objective of the Company''s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments for compliance with the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company had issued equity shares in the financial year 2015-16 in order to raise funds for the purpose of building an additional machine shop for machining of various types of camshafts. The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company''s policy is to keep the gearing ratio within 60%. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

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

Note 14: 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

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.

Share-based payments

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an Black and Scholes valuation model. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 32.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increase and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for the plans ,the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about gratuity obligations are given in note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 36 and 37 for further disclosures.

Note 15: Financial risk management objectives and policies

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings; and trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, investments in mutual funds and cash and cash equivalents 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. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

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

The sensitivity analysis in the following sections relate to the position as at 31^st March 2018 and 31^st March 2017.

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

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

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 and short-term debt obligations with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency) and borrowings of the Company.

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and GBP 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. The impact on the Company''s pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges and net investment hedges. The Company''s exposure to foreign currency changes for all other currencies is not material.

Commodity risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of Camshafts and therefore require a continuous supply majorly of Pig iron, MS Scrap and Resin coated sand. The Company''s exposure to the risk of exchange in key raw material prices are mitigated by the fact that the price increases/decreases from the vendors are passed on to the customers based on understanding with the customers. Hence the fluctuation of prices of key raw materials do not materially affect the statement of profit and loss. Also as at March 31, 2018, there were no open purchase commitments/ pending material purchase order in respect of key raw materials. Accordingly, no sensitivity analysis have been performed by the management.

Credit risk

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

Trade receivables

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

An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables disclosed in note 8. The Company does not hold collateral as security. The company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. The investment of surplus funds is made in mutual funds and fixed deposits which are approved by the Director. The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018 and 31 March 2017 is the carrying amounts as illustrated in note 9.

Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans, . The Company''s policy is that not more than Rs. 3,500 Lakhs of borrowings should mature in the next 12-month period.

Approximately 100% of the Company''s debt will mature in less than one year at 31 March 2018 (31 March 2017: 63%) based on the carrying value of borrowings reflected in the financial statements. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low.The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

Note 16: Utilisation of money raised through public issue

During the year ended 31 March 2016,the Company had raised Rs. 24,000.00 Lakhs through public issue of fresh equity shares (refer note 10), mainly with an objective of setting-up a new machining facility of ductile Iron and other Camshafts at Solapur and for general corporate purposes. The Company had incurred expenses aggregating Rs. 2,387.33 Lakhs towards the initial public offering which included both issue of fresh equity shares as well as offer for sale of equity shares by existing share holders. Out of the same an amount of Rs. 1,028.12 Lakhs has been recovered from existing share holders in regard to offer for sale. Given below are the details of utilisation of proceeds raised through public issue. During the year ended 31 March 2017, the Company has transferred an amount equivalent to the recovery from selling share holders from IPO account to the normal bank accounts since the same was spent by the Company before such recovery.

The Company has setup a building for new machine shop and started setting up line of machines for machining of ductile iron camshafts from IPO proceeds. Due to delay in OEMS project the schedule of order has been delayed, hence the Company has deferred the purchase of requisite machines as stated in the offer document. As such, the utilisation of IPO Proceeds will get deployed accordingly to the confirmation of schedule from the OEMs.

Note 17: Standards issued but not yet effective

Standards issued but not yet effective up to the date of issuance of the company''s financial statements are listed below. This listing is of standards and interpretations issued, which the company reasonably expects to be applicable at a future date. The company intends to adopt those standards when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) (Amendment) Rules, 2018 amending Ind AS 115 Revenue from Contracts with Customers, Appendix D to Ind AS 115 Service Concession Arrangements and Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration (corresponding to IFRIC 22). Ind AS 11 Construction Contracts and Ind AS 18 Revenue will be omitted.

Note 18: Previous year comparatives

Previous year''s figures have been regrouped/reclassified to correspond with the current year''s classification/disclosure.

The accompanying notes are an integral part of the financial statements As per our report attached of even date

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Mar 31, 2017

Note 1. Corporate Information

The financial statements comprise of financial statements of Precision Camshafts Limited (‘the Company’) for the year ended 31 March 2017. Precision Camshafts Limited is a Public Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The shares of the company are listed in two stock exchanges in India. The Company is primarily engaged in the manufacture and sale of camshaft castings and machined camshafts to the Auto industry and the Railways. The Company has its office registered at E 102/103 MIDC Akkalkot road Solapur, Maharshtra, 413006 .

The financial statements were authorised for issue in accordance with the resolution of the Board of Directors on May 22, 2017.

Note 2. Significant accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended thereafter (“the Rules”). For all periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) as amended thereafter. These financial statements for the year ended 31 March 2017 are the first the Company has prepared in accordance with Ind AS. Refer note 39 for information on how the Company adopted Ind AS.

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Derivative financial instruments,

- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments Note ‘o’ of summary of significant accounting policies )

The financial statements are presented in INR and all values are rounded to the nearest rupee, except when otherwise indicated.

Disclosure of EBITDA

Ind AS compliant Schedule III allows line items, sub-line items and sub-totals to be presented as an addition or substitution on the face of the financial statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to industry/sector-specific disclosure requirements. For example, a company may present EBITDA as a separate line item on the face of the statement of profit and loss.

Measurement of EBITDA

The Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, interest income, finance costs and tax expense.

Capitalised borrowing costs

“Company has continued the policy of capitalising exchange differences arising from translation of long-term foreign currency monetary items as per exemption available under IND AS” 101-Ind AS 101- First time Adoption of Indian Accounting Standards.

Asset under construction

Capital work-in-progress (CWIP) comprises cost of assets that are not yet installed and ready for their intended use at the balance sheet date. Capita work in progress as at 31 March 2017 comprises expenditure for the plant and machinery in the course of construction. Balance of CWIP as at March 31, 2017 amounts toRs. 89,020,156 (31 March 2016: Rs. 144,332,847,1 April 2015: Rs. 88,055,581).

Property, plant and equipment

The entire block of property, plant and equipment comprising of immovable assets with a carrying amount of Rs. 839,381,192 ( 31 March, 2016: Rs. 612,336,444, 01 April, 2015: Rs. 606,580,164) and movable assets with a carrying amount of Rs. 1,316,572,461 ( 31 March, 2016: Rs. 1,296,165,643 , 01 April, 2015: Rs. 1,397,368,898) are subject to first charge to secure the Company’s foregin currency term loan. ( Refer note 12 ) Also refer note 43 on first time adoption of Ind AS.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

For terms and conditions relating to related party receivables, refer note 34.

Trade receivables are non-interest bearing and are generally on terms of 30 to 150 days.

Cash at banks earns interest at fixed rates based on FD receipts made by the company. Fixed deposits are made for varying periods of between one month to 36 months, depending on the immediate cash requirements of the Company, and earn interest at the respective short term/long term deposit rates.

At 31 March 2017, the Company had available ‘1,032,118,188 (31 March 2016: Rs.1,268,890,825; 1 April 2015: Rs.1,619,748,550 ) of undrawn committed borrowing facilities

The Company has pledged a part of its short-term deposits to fulfil collateral requirements. Refer note 12 for details

Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share (31 March 2015: 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 31 March 2017, the amount of per share dividend proposed by board of directors in the board meeting held on May 22, 2017 as distribution to equity share holders amounted to Rs.1.50 per equity share. Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability (including DDT thereon) as at 31 March 2017.

During the year ended 31 March 2016, the amount of per share interim dividend recognised as distribution to equity share holders amounted to Rs.1 per equity share.

During the year ended 31 March 2015, the amount of per share dividend recognised as distribution to equity shareholders was Rs.0.05 per equity share.

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.

Pursuant to the Initial Public Offering (IPO) on February 08, 2016, equity shares having par value of Rs.10 per share were allotted at a price of Rs.186 per equity share comprising of fresh issue of 12,903,225 equity shares and offer for sale of 9,150,000 equity shares by selling shareholders. The equity shares of the Company were listed on the BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) with effect from February 08, 2016.

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 ownerships of shares.

Aggregate number of equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

Employees (including senior executives) of the Company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). In accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the IND AS 102 Share based payments, the cost of equity-settled transactions is measured using the fair value method. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.

Refer to note 32 for further details of these plans.

Foreign currency loan 1 carries interest at the rate of LIBOR plus 380 bps p.a. The tenure of the loan is 7 years and the loan is repayable in 20 quarterly installments commencing after 24 months of the weighted average draw down date, viz 1 August 2013. The loan is secured by pari passu charge on all movable and immovable Property, plant and equipment (PPE) created by the loan and also all future PPE, mortgage of Plot No. D-7, MIDC Chincholi, Solapur. The loans have been secured by the personal guarantee of directors Mr. Yatin S. Shah and Dr. Suhasini Y. Shah.

Foreign currency loan 2 carries interest at the rate of LIBOR plus 405 bps p.a. The tenure of the loan is 5 years and 2 months and the loan is repayable in 20 quarterly installments commencing after 7 months from the sanction of the loan by the bank. viz., 2 November 2013. The loan is secured by pari passu charge on all movable and immovable (PPE) created by the loan and also all future PPE, mortgage of Plot No. D-7, MIDC Chincholi, Solapur. The loans has been secured by the personal guarantee of directors Mr. Yatin S. Shah and Dr. Suhasini Y. Shah.

The Company does not have any continuing defaults in repayment of loans and interest during the year and as at the reporting date.

Cash credit and packing credit in foreign currency are secured by first pari passu charge by way of hypothecation of current assets including inventories and trade receivables. Further, the facilities are collaterally secured by extension of pari passu charge by way of hypothecation of plant and machinery and equitable mortgage of factory land and building situated at Plot No.s D5, MIDC Chincholi, Solapur, Unit I situated at Plot No. E-102, 103, Akkalkot Road, MIDC, Solapur and Unit II situated at Plot No. E-90, Akkalkot road, Solapur

Overdraft against fixed deposits oustanding as of March 31, 2016 is secured by fixed deposit of Rs.110,500,000 made with Bank of India and carries interest at the rate of 10.05% p.a. which has been fully repaid during the current year.

The carrying amounts of PPE pledged as security for non-current borrowings are disclosed in note 3. And carrying amount of inventories, trade receivables and fixed deposits are pledged as security for short term borrowings.

Term loan from banks contain certain covenants relating to debt service coverage ratio, total debt gearing ratio, interest Coverage ratio, Fixed asset coverage ratio. All the ratios mentioned above are within the level stipulated by the banks in its prescribed sactions. The Company has also satisfied all other debt covenants prescribed in the terms of bank loan.

Interest payable as per section 16 of the Micro, Small and Medium Enterprises Act, 2006 is Rs.44,617,873 (31 March 2016: Rs.34,610,211) and same is not accrued in the books of accounts.

Sale of goods includes excise duty collected from customers of INR 240,299,494 (31 March 2016: INR 166,320,805). Sale of goods net of excise duty is INR 4,327,014,664 (31 March 2016: INR 4,202,926,491)

Note 3: Income Tax

The major components of income tax expense for the years ended 31 March 2017 and 31 March 2016 are:

The amount relates to deferred tax impact on additional depreciation charged to opening balance of retained earnings on account of re-estimation of useful lives and residual values of all its PPE as at March 31, 2015, to comply with the requirements of Schedule II to Companies Act, 2013.

The Company offsets tax assets and liabilities 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 tax authority.

Note 4: Earnings per share

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

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

The following reflects the profit and share data used in the basic and diluted EPS computation

Note 5: Disclosure pursuant to Employee benefits

A. Defined contribution plans:

Amount of Rs.34,522,651 (March 31, 2016: Rs.28,002,178) is recognised as expenses and included in Note No. 22 “Employee benefit expense”

B. Defined benefit plans:

The Company has following post employment benefits which are in the nature of defined benefit plans:

(a) Gratuity

The Company has a defined benefit gratuity plan in India (funded). The Company’s defined benefit gratuity plan is a final salary plan for India employees, which requires contributions to be made to a separately administered fund.

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 fund is governed by Life Insurance Corporation of India (LIC). LIC is liable for administration of the plan assets.

Plan assets - Gratuity Fund Rs.47,233,354

The following table summarise the components of net benefit expense recognised in the statement of consolidated profit or loss and the funded status and amounts recognised in the consolidated balance sheet for the respective plans.

* The amount debited to statement of profit and loss includes gratuity expenses on account of full and final settlement of left employees whose gratuity payments have not been considered for actuarial valuation amounting to Rs. 13,238,542 and Rs. 587,090 for the year ended March 31, 2017 and March 31, 2016 respectively.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligations as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The followings are the expected future benefit payments for the defined benefit plan :

Note 6: Share Based Payments

The Company provides share-based payment schemes to its employees. During the year ended 31 March 2016, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

On 6 February 2015, the board of directors approved the PCL Employee Stock Option Scheme 2015 (PCL ESOS 2015) for issue of stock options to the employees of the Company.

According to the PCL ESOS 2015, the employee selected by the remuneration committee from time to time will be entitled to options. The contractual life (comprising the vesting period and the exercise period) of options granted under PCL ESOS 2015 is 6 years.

The fair value of the share options is estimated at the grant date using Black Scholes pricing model, taking into account the terms and conditions upon which the share options were granted. The exercise price of the share options is the face value i.e. Rs.10 . The The contractual term of each option granted is 6 years.

There were no cancellations or modifications to the awards in 31 March 2017 or 31 March 2016.

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year

The weighted average share price at the date of exercise of these options was Rs.10

The weighted average remaining contractual life for the share options outstanding as at 31 March 2017 was one year (31 March 2016: two years).

The weighted average fair value of options granted during the year was ‘117.46 (31 March 2016: ‘117.27).

The following tables list the inputs to the models used for the plans for the years ended 31 March 2017 and 31 March 2016, respectively

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

Note 7: Commitments and contingencies

a. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances): At 31 March 2017, the Company had commitments of INR 55,697,053 (31 March 2016: INR 193,953,623, 1 April 2015: INR 74,049,469)

b. Contingent liabilities Legal claim contingency

a. The Collector of Stamps, Solapur has demanded payment of stamp duty of Rs.3,178,389 (March 31, 2016: Rs.3,178,389) for cancellation and issue of equity shares after amalgamation of Precision Valvetrain Components Limited (PVPL) with the Company in year 2007-2008. The Company has filed an appeal against demand made by the Collector of Stamps, Solapur with Controlling Revenue Authority, Pune.

b. The Company is in appeal and the application is pending with “Hon’ble High Court of Judicature Appellate” against the claim made under Employees provident Funds and Miscellaneous Provision Act, 1952 for Rs.2,423,488 (March 31, 2016: Rs.2,423,488). The Company has deposited an amount of Rs.1,211,744 (March 31, 2016: Rs.1,211,744) under protest which has been shown under ‘Other Assets’.

c. The Company has received an order from the Commissioner of Central Excise Pune for the year 2002-03, 2003-04 and 2004-05 demanding excise duty amounting to Rs.2,076,478 (March 31, 2016: Rs.2,076,478) on sales tax retained under sales tax deferral scheme. The Company has deposited an amount of Rs.155,736 (March 31, 2016: 155,376) under protest.

d. The Company has filled an appeal to CESTAT during the year against the order of service tax appeals for inadmissible cenvat credit amounting to Rs.238,329 on outward transportation for the financial years 2013-14 and 2014-15.

e. The Company has received order from Commissioner of Central Excise for demand of service Tax and interest on payment of bank charges, facilities fees, and legal expenses paid during the year 2011-12 for the availment of ECB loan amounting to Rs.2,616,002.

f. The Company has received order from Commissioner of Central Excise for demand of interest towards the reversal cenvat credit against Shri Pandurang Bus Service amounting to Rs.2,720,347 for the financial year 201112 to 2013-14

g. The Company has received order from Assesing Officer for demand of income tax amounting to 159,716,941 towards disallowance of ESOP expenditures and other disallowances. The Company has filed appeal against the above order with Commissioner of Income Tax (Appeals) and has paid Rs.20,000,000 under protest.

In all cases the cases mentioned above outflow is not probable, and hence not provided by the Company.

c. Leases

The Company has entered into commercial leases for office premises and guest house. These leases have an average life of between three years with no renewal option included in the contracts. There are no restrictions placed upon the Company by entering into these leases.

The Company has paid Rs.1,614,640 (31 march 2016: INR1,398,400) during the year towards minimum lease payment. Future minimum rentals payable under non-cancellable operating leases are as follows:

Note 8: Related party transactions

A Names of the related party and related party relationship:

a) Related party where control exists i) Subsidiary

PCL (Shanghai) Co. Ltd (China)

b) Related parties under ‘Ind AS 24- Related Party Disclosures’, with whom transactions have taken place during the period

i) Key management personnel (KMP)

Mr. Yatin S Shah , Managing Director Dr. Suhasini Y Shah, Director Mr. Ravindra R. Joshi, Director Mr. Jayant V Aradhye

Mr. Sarvesh N Joshi, Independent Director Mr. Pramod H Mehendale, Independent Director Mr. Vedant V Pujari, Independent Director Mr. Vaibhav S Mahajani, Independent Director

ii) Relatives of key management personnel (RKMP)

Mr. Karan Y Shah, son of Mr. Yatin S Shah Ms. Tanvi Y Shah, daughter of Mr. Yatin S Shah Dr. Manjiri Chitale, mother of Dr. Suhasini Y Shah

iii) Enterprises owned or significantly influenced by key management personnel or their relatives: Kimaya Construction Private Limited

Chitale Clinic Private Limited

Precision Foundation & Medical Research Trust

Yatin S. Shah (HUF)

Cams Technology Limited

iv) Individual having significant influence:

Mr. Jayant Aradhye

v) Relative of individual having significant influence:

Mr. Maneesh Aradhye, son of Mr. Jayant Aradhye Dr. Sunita Aradhye, wife of Mr. Jayant Aradhye Mrs. Rama Aradhye, wife of Mr. Maneesh Aradhye Mr. Vijay Aradhye, brother of Mr. Jayant Aradhye

vi) Joint venture

Ningbo Shenglong PCL Camshaft Co Ltd, China.

PCL Shenglong (Huzhou) Specialized Casting Co Ltd, China.

c) Additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year

i) Company secretary

Mr. Swapneel S Kuber

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: INR Nil, 1 April 2015: Nil) except the amount of investment of subsidiary has been provided for entirely as impairment amounting to Rs.11,048,275. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note 9: Segment information

The Group is engaged in manufacturing of Camshafts. Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into one operating segment ; however based on the geographic distribution of activities, the chief operating decision make identified India and outside India as two reportable geographical segments.

Country wise bifurcation of sales - outside India

Asia

China

Europe

Others

Note 10: Fair values

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amounts that are reasonable approximations of fair values:

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Note 11: Fair value hierarchy

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

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.

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. The following methods and assumptions were used to estimate the fair values:

- The fair values of the unquoted Preference shares (Investment in Cams Technology) have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for these unquoted equity investments.

- The fair values of the quoted mutual funds are based on price (i.e. the NAV of the Mutual funds) quotations at the reporting date.

- The fair values of derivative forward contracts is determined using the Mark-to-market valuation done by the Banks.

Note 12: Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders and borrowings. The primary objective of the Company’s capital management is to maximise the shareholder value. The Company manages its capital structure and makes adjustments for complaince with the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company has issued equity shares in the Financial year 2015-16 in order to raise funds for the purpose building an additional machine shop for machining of various types of camshafts.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio between 60% and 70%. The Group includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

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

Note 13: 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

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.

Share-based payments

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an Black and Scholes valuation model. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 32.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for the plans ,the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Further details about gratuity obligations are given in note 31.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See note 36 and 37 for further disclosures.

Note 14: Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade and other receivables, investments in mutual funds and cash and cash equivalents 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. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

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

The sensitivity analyses in the following sections relate to the position as at 31 March 2017 and 31 March 2016.

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

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

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 and short-term debt obligations with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency) and borrowings of the company.

When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR and GBP 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. The impact on the Company’s pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges and net investment hedges. The Company’s exposure to foreign currency changes for all other currencies is not material.

Commodity risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of Camshafts and therefore require a continuous supply majorly of Pig iron, MS Scrap and Resin coated sand. As on March 31, 2017; no open material purchase order were existed with respect to above mentioned items. Hence the fluctuation of prices in above mentioned items; wont affect materially affect statement of profit and loss. Accordingly no sensitivity analysis has been done by the management.

Credit risk

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

Trade receivables

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

An impairment analysis is performed at each reporting date on an individual basis for major clients. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 8. The Company does not hold collateral as security. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. The investment of surplus funds is made in mutual funds and fixed deposits which are approved by the Director.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2017 and 31 March 2016 is the carrying amounts as illustrated in note 9.

Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans, . The Company’s policy is that not more than Rs.450,000,000 of borrowings should mature in the next 12-month period.

Approximately 63% of the Company’s debt will mature in less than one year at 31 March 2017 (31 March 2016: 34%, 31 March 2015: 21%) based on the carrying value of borrowings reflected in the financial statements. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

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

Note 15: Utilisation of money raised through public issue

During the year ended 31 March 2016, the Company has raised Rs.2,399,999,850 through public issue of fresh equity shares (refer note 10), mainly with an objective of setting-up a new manufacturing facility of ductile Iron Camshafts at Solapur, Maharashtra. The Company has incurred expenses aggregating Rs.238,733,579 towards the initial public offering which included both issue of fresh equity shares as well as offer for sale of equity shares by existing share holders. Out of the same an amount of Rs.102,812,297 has been recovered from existing share holders in regard to offer for sale. Given below are the details of utilisation of proceeds raised through public issue. During the year ended 31 March 2017, the Company has transferred an amount equivalent to the recovery from selling share holders from IPO account to the normal bank accounts since the same was spent by the Company before such recovery.

Note 16: Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the Company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and noncash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102:

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

Since the Company does not have cash settled awards or awards with net settlement features, this amendment does not have any effect on the financial statements of the Company.

Note 17: First-time adoption of IND AS

These financial statements, for the year ended 31 March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016.

Exemptions applied

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

1. Property, plant and equipment and intangible assets were carried in the consolidated balance sheet prepared in accordance with Indian GAAP at historical cost . The Company has elected to regard those carrying values of property, plant and equipment and intangible assets as the deemed cost at the date of the transition, since there is no change in the functional currency.

2. Ind AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before 1 April 2015.

3. The Company has continued the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP.

4. The foreign currency translation reserve as at April 01, 2015 has been taken as zero in accordance with Ind AS-101.

5. Estimates

The estimates at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

The investment in CAMS Technology Limited has been designated as FVTPL and accordingly, the fair valuation of the investment has been done using discounted cash flow method. For the purpose of estimating the fair value, the amount and timing of the cash flow has been estimated using the best available data and management expectations at the time of investment as revised from time to time.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April 2015, the date of transition to Ind AS and as of 31 March 2016.

1) Investments carried at Fair value through P & L:

Under Indian GAAP, the Company accounted for long term investments as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Company has designated the investment in CAMS Technology Ltd. as FVTPL investments based on business model. Ind AS requires FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognised in retained earnings.

2) Reclassification of Loans & Advances

The IND AS compliant schedule III specifies the nature and type of assets to be classified as Loans/ Other financial assets. Under IGAAP, certain financial statement line items like capital advances, prepaid expenses etc. were classified under Loan and Advances based on the previous applicable Schedule III. Based on the revised disclosure specification requirements, the line items mentioned above have been reclassified from Loans and advances and Other current assets to Other Financial Assets.

3) Capital Reserve

Under Indian GAAP, the incentives received for specific purpose have to be shown as separate reserve while, and general incentive or grant received can be shown as a part of the general reserve. Under IND AS any general purpose grants or incentives received shall be considered as revenue, while and specific grants received will have to be adjusted to match the valuation of the assets for which it has been used. However, SICOM grant had been received and utilised before March 31, 2015. Therefore, the same has been transferred to Retained earnings.

4) Dividend

Under Indian GAAP, the provision for dividend was recognised if the dividend was decided by the Board prior to the approval of Financials at the AGM. Under IND AS, if an entity declares dividends to holders of equity instruments (as defined in Ind AS 32, Financial Instruments: Presentation) after the reporting period, the entity shall not recognise those dividends as a liability at the end of the reporting period. If dividends are declared after the reporting period but before the financial statements are approved for issue, the dividends are not recognised as a liability at the end of the reporting period since no obligation exists at that time. Such dividends are disclosed in the notes in accordance with Ind AS 1, Presentation of Financial Statements. Accordingly, the interim dividend as on March 31, 2015 had been approved by the Board on June 23, 2015. Hence, the same shall be recognised as a liability in the year ended March 31, 2016.

5) Amortisation of Prepaid ECB Charges

Under Indian GAAP, the loan processing fees were amortised over the repayment period of the loan. Under Ind AS, the Company is required to measure the borrowings using Effective interest rate method. Accordingly, the amount of Long term borrowings has been recalculated under the EIR method and the ECB charges and interest accrued on borrowings have been covered within the revised measurements done under the method.

6) Provisions pertaining to expenses of prior years

Under IND AS, an entity shall correct material prior period errors retrospectively in the first set of financial statements approved for issue after their discovery by either restating the comparative amounts for the prior period presented in which the error occurred or if the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented. In the year ended March 31, 2016, the Company had provided for certain expenses relating to financial years prior to financial year 2014-15. Since the error relates to the period before the earliest period presented (i.e. profit and loss account for year ended March 31, 2016) the amount has been adjusted in the Retained earnings of opening balance sheet. The corresponding effect of the entry was taken in other provisions which gets clubbed under trade payables.

7) Defined benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is increased by Rs.3,178,547 and Remeasurement gains on defined benefit plans has been recognized in the OCI net of tax impact.

8) Deferred tax on exchange differences arising on foreign currency monetary items capitalised

As per IND AS 12, the Group needs to assess and calculate the Deferred tax liability/ asset using balance sheet approach Unlike Indian GAAP, Deferred taxes have been recognised on unrealised loss on long term borrowings capitalised on property,plant and equipment (Refer Note 3). Deferred taxes have also been recognised on consolidation, adjustments such as profit eliminations and undistributed profits of joint ventures. A Deferred tax liability has been created on the balance of unrealised losses, and consolidation, profit eliminations and undistributed profits as on April 01, 2015 and the corresponding effect has been given in the opening balance of Retained earnings. Further, the tax impact on movements in these balances post April 1, 2015 has been debited to statement of profit and loss of 2015-16.

9) Reclassification of Other current liabilities

The Ind AS Compliant Schedule III, specifies the nature and type of liabilities which need to be classified under Other Financial liabilities. Accordingly, amounts shown earlier under Other current liabilities have been reclassified under Other financial liabilities.

10) Revenue from Operations

Under Indian GAAP, the disclosure of revenue was made net of excise in the Profit and loss. However, the Educational Material on Ind AS 18 issued by the ICAI, the Company has assumed that recovery of excise duty flows to the Company on its own account. This is for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the Company on its own account, revenue includes excise duty. Accordingly, the revenue from operations has been disclosed gross of excise duty. The corresponding amount of excise has been separately disclosed under expenses in the Financial statements. IND AS 18 defines revenue “as ‘Revenue is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows” result in increases in equity, other than increases relating to contributions from equity participants’. On clubbing of excise duty under the head revenue from operations, the amount of Excise duty cost borne by EOU (the incremental amount of Excise duty charged for domestic sales of EOU, not agreed to be reimbursed by customers) was also being added to Revenue from Operations. Hence, the same has been netted of against revenue by removing it from Other expenses.

11) Reclassification of Finance Income

The Company presents EBITDA in the statement of profit or loss; Ind AS complaint Schedule III allows companies to present Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the Financial Statements when such presentation is relevant to an understanding of the company’s financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Indian Accounting Standards. If the nature of expenses is in the nature of interest, tax, depreciation and amortisation, then it should be excluded from EBITDA. Accordingly; the Company has reclassified the interest income on fixed deposits and other interest income from other income to finance income in statement of profit and loss.

Note 18: Details of Specified Bank Notes (SBN):

The details of Specified Bank Notes (SBN) held and transacted during the period from 8th November, 2016 to 30^th December, 2016 are as follows:

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Mar 31, 2016

In accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total intrinsic value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Pursuant to the Initial Public Offering (IPO), equity shares having par value of Rs. 10 per share were allotted at a price of Rs. 186 per equity share comprising of fresh issue of 1,29,03,225 equity shares and offer for sale of 91,50,000 equity shares by selling shareholders. The equity shares of the Company were listed on the BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") with effect from February 08, 2016. The Company has incurred expenses of Rs.12,52,33,959 (net of service tax) relating to fresh issue of equity shares which has been adjusted to securities in terms of section 52 of the Companies Act, 2013.

During the year ended 31 March 2015, the Company had split the face value of equity shares from Rs. 100 per share to Rs. 10 per share. As a result, the number of equity shares increased from 4,09,208 equity shares having a face value of Rs. 100 each to 40,92,080 equity shares having a face value of Rs. 10 each. Post the share split, the Company further issued bonus shares in the ratio of 19 equity shares for 1 equity share held. The bonus issue was made out of the securities premium account, capital redemption reserve and partly out of general reserve. Post the bonus issue, the number of equity increased from 40,92,080 shares of Rs. 10 each to 8,18,41,600 shares of Rs. 10 each.

b. Terms/ rights attached to equity sha res

The Company has only one class of equity shares having a par value of Rs. 10 per share (31 March 2015: 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 31 March 2016, the amount of per share interim dividend recognized as distribution to equity share holders amounted to Rs. 1 per equity share.

During the year ended 31 March 2015, the amount of per share dividend recognized as distribution to equity shareholders was Rs. 0.05 per equity share.

1. Foreign currency loan amounting to Rs. 90,35,84,000/- carries interest at the rate of LIBOR plus 380 bps p.a. The tenure of the loan is 7 years and the loan is repayable in 20 quarterly installments commencing after 24 months of the weighted average draw down date, viz 1 August 2013. The loan is secured by pari passu charge on all movable and immovable fixed assets and that created by the proposed loan and also all future fixed assets, mortgage of Plot No. D-7, MIDC Chincholi, Solapur. The loans has been secured by the personal guarantee of directors Mr. Yati''n S. Shah and Dr. Suhasini Y. Shah.

2. Foreign currency loan amounting to Rs. 14,35,15,383/- carries interest at the rate of LIBOR plus 405 bps p.a. The tenure of the loan is 5 years and 2 months and the loan is repayable in 20 quarterly installments commencing after 7 months from the sanction of the loan by the bank. viz., 2 November 2013. The loan is secured by pari passu charge on all movable and immovable fixed assets and that created by the proposed loan and also all future fixed assets, mortgage of Plot No. D-7, MIDC Chincholi, Solapur. The loans has been secured by the personal guarantee of directors Mr. Yati''n S. Shah and Dr. Suhasini Y. Shah.

The Company does not have any continuing defaults in repayment of loans and interest during the year and as at the reporting date.

1. Cash credit and packing credit in foreign currency are secured by first pari passu charge by way of hypothecation of current assets including stocks and book debts. Further, the facilities are collaterally secured by extension of pari passu charge by way of hypothecation of plant and machinery and equitable mortgage of factory land and building situated at Plot No.s D5, MIDC Chincholi, Solapur, Unit I situated at Plot No. E-102, 103, Akkalkot Road, MIDC, Solapur and Unit II situated at Plot No. E-90, Akkalkot Road, MIDC, Solapur. Also, the facilities have been secured by the personal guarantee of directors Mr. Yati''n Shah and Dr. Suhasini Shah.The cash credit is repayable on demand and carries interest at the rate of 11.35% to 13.25% p.a. (31 March 2015 : 11.70% to 13.25% p.a.). Packing credit in foreign currency carries interest at the rate of 2.55% to 3.05% p.a. (31 March 2015 : 2.86% to 3.86% p.a.).

2. Overdraft against fixed deposits is secured by fixed deposit of Rs. 11,05,00,000 made with Bank of India and carries interest at the rate of 10.05% p.a.

The Company holds 6,20,00,000 5% redeemable non convertible preference shares of Cams Technology Limited ( CTL ) as at March 31, 2016.

The Management, based on a legal opinion is of the view that CTL is not a subsidiary under the provisions of the Companies Act, 2013. Accordingly, the accounting treatment and disclosures in the financial statements have been made assuming that CTL is not a subsidiary.

A. The Collector of Stamps, Solapur has demanded payment of stamp duty of Rs. 31,78,389 (March 31, 2015: Rs. 31,78,389) for cancellation and issue of equity shares after amalgamation of Precision Valvetrain Components Limited (PVPL) with the Company in year 2007-2008. The Company has filed an appeal against demand made by the Collector of Stamps, Solapur with Controlling Revenue Authority, Pune.

B. The Company is in appeal and the application is pending with "Hon''ble High Court of Judicature Appellate" against the claim made under Employees provident Funds and Miscellaneous Provision Act, 1952 for Rs.24,23,488 (March 31, 2015: Rs. 24,23,488). The Company has deposited an amount of Rs. 12,11,744 (March 31, 2015: Rs.12,11,744) under protest which has been shown under ''Loans and Advances''.

C. The Company has received an order from the Commissioner of Central Excise Pune for the year 2002-03, 2003-04 and 2004-05 demanding excise duty amounting to Rs. 20,76,478 (March 31, 2015: Rs. 20,76,478) on sales tax retained under sales tax deferral scheme. The Company has deposited an amount of Rs. 1,55,736 (March 31,2015: Nil) under protest.

D. The Company has received an showcause from Commissioner, Central Excise Solapur for inadmissible cenvat credit amounting to Rs. 9,65,186 and Rs. 2,38,329 on outward transportation for the financial years 2015-16 and 2014-15 respectively.

In all cases the cases mentioned above outflow is not probable, and hence not provided by the Company.

A Names of the related party and related party relationship:

a) Related party where control exists

i) Subsidiary

PCL (Shanghai) Co. Ltd

b) Related parties under ''Accounting Standard 18- Related Party Disclosures'', with whom transactions have taken place during the period

i) Key management personnel (KMP)

Mr. Yatin S Shah , Managing Director Dr. Suhasini Y Shah, Director Mr. Ravindra R. Joshi, Director

ii) Relatives of key management personnel (RKMP)

Mr. Karan Y Shah, son of Mr. Yatin S Shah Ms. Tanvi Y Shah, daughter of Mr. Yatin S Shah Dr. Manjiri Chitale, mother of Dr. Suhasini Y Shah Late Dr. Vinayak Chitale, father of Dr. Suhasini Y Shah

iii) Enterprises owned or significantly influenced by key management personnel or their relatives:

Kimaya Construction Private Limited Chitale Clinic Private Limited Precision Foundation & Medical Research Trust Yatin S. Shah (HUF)

Cams Technology Limited

iv) Individual having significant influence:

Mr. Jayant Aradhye

v) Relative of individual having significant influence:

Mr. Maneesh Aradhye, son of Mr. Jayant Aradhye Dr. Sunita Aradhye, wife of Mr. Jayant Aradhye Mrs. Rama Aradhye, wife of Mr. Maneesh Aradhye Mr. Vijay Aradhye, brother of Mr. Jayant Aradhye

vi) Joint venture

Ningbo Shenglong PCL Camshaft Co Ltd.

PCL Shenglong (Huzhou) Specialized Casting Co Ltd.

c) Additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year

i) Company secretary

Mr. Swapneel S Kuber

The Company has interests in two joint ventures, both in China.

The Company holds 22.5% interest in Ningo Shenglong PCL Camshafts Co. Limited, situated at Ningbo, China. The joint venture entity is involved in machining and sale of camshafts.

The Company holds 40% interest in PCL Shingling (Huzhou) Specialized Casting Co Ltd. Situated at Huzhou, China.

The Joint venture entity is involved in manufacture and sale of camshafts.

The Company provides share-based payment schemes to its employees. During the year ended 31 March 2016, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

On 6 February 2015, the board of directors approved the PCL Employee Stock Option Scheme 2015 (PCL ESOS 2015) for issue of stock options to the employees of the Company. According to the PCL ESOS 2015, the employee selected by the remuneration committee from time to time will be entitled to options. The contractual life (comprising the vesting period and the exercise period) of options granted under PCL ESOS 2015 is 6 years.

The other relevant terms of the grant are as below:

PCL ESOS 2015

Date of share holders approval 6 February 2015

Number of options granted 3,82,950

Exercise price per option Rs. 10

Intrinsic value Rs. 125.78

Vesting period 3 years

Exercise period 3 years

During the year ended 31 March 2016, the Company has raised Rs. 2,39,99,99,850 through public issue of fresh equity shares (refer note 3(a)), mainly with an objective of setting-up a new manufacturing facility of ductile Iron Camshafts at Solapur, Maharashtra. The Company has incurred expenses aggregating Rs 23,87,33,579 towards the initial public offering which included both issue of fresh equity shares as well as offer for sale of equity shares by existing share holders. Out of the same an amount of Rs. 10,28,12,297 has been recovered from existing share holders in regard to offer for sale. Given below are the details of utilization of proceeds raised through public issue.

NOTE 5: PREVIOUS YEAR FIGURES

Previous year figures have been regrouped/ reclassified wherever necessary to confirm to this year''s classification.