Notes to Accounts of Salzer Electronics Ltd.

Mar 31, 2025

Provision for warranty:

Provision for expected cost of warranty obligations
are recognized based on management''s best
estimate of the expenditure required to settle the
obligations which takes into account the empirical
data on the nature, frequency and average cost of
warranty claims and regarding possible future
incidents.

Xxiii.Contingent liabilities and Contingent Assets:

A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of
one or more uncertain future events beyond the
control of the company or a present obligation that
is not recognized because it is not probable that an
outflow of resources will be required to settle the
obligation. A contingent liability also arises in
extremely rare cases where there is a liability that
cannot be recognized because it cannot be
measured reliably. The company does not recognize
a contingent liability but discloses its existence in
the financial statements.

Contingent Assets are not recognized but are
disclosed when the inflow of economic benefits are
probable.

Xxiv.Earnings per share:

Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable to
equity shareholders by the weighted average
number of equity shares outstanding during the
period. Partly paid equity shares (if any) are
treated as a fraction of an equity share to the
extent that they were entitled to participate in
dividends relative to a fully paid equity share during
the reporting period. The weighted average
number of equity shares outstanding during the
period is adjusted for events of bonus issue; bonus
element in a rights issue to existing shareholders;
share split; and consolidation of shares if any

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

Xxv.Taxes on Income:

Tax expense comprises of current and deferred tax.

a. Current income tax:

Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted,
at the reporting date. Current income tax relating
to items recognized directly in equity is recognized
in other comprehensive income / equity and not in
the statement of profit and loss. Management
periodically evaluates positions taken in the tax
returns with respect to situations in which
applicable tax regulations are subject to
interpretation and establishes provisions where
appropriate.

b. Deferred tax

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

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

The carrying amount of deferred tax assets are
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilized.

Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognized to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset to
be recovered.

Deferred tax assets and liabilities are measured
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting
date.

xxvi.Cash and cash equivalents:

Cash and cash equivalents for the purposes of cash
flow statement comprise cash at bank and in 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, net of
outstanding bank overdrafts as they are considered
an integral part of the Company''s cash
management.

Xxvii.Segment Reporting

An operating segment is a component of the
Company that engages in business activities from
which it may earn revenues and incur expenses,
including revenues and expenses that relate to
transactions with any of the Company''s other

components, and for which discrete financial
information is available. All operating segments''
operating results are reviewed regularly by the
Company''s Chief Executive Officer (CEO), who is the
Chief Operating Decision Maker (CODM), to make
decisions about resources to be allocated to the
segments and assess their performance.
Information reported to the CODM for the purpose
of resource allocation and assessment of segment
performance focuses on the type of goods or
services delivered or provided.

The Company is primarily engaged in manufacturing
of wide range of electrical installation products
including devices for energy efficiencies services
which all fall under One segment by name Electrical
Installation Products for any reporting
requirements.

Material accounting judgments, estimates and
assumptions:

The preparation of financial statements in
conformity with the recognition and measurement
principles of Ind AS requires management to make
judgments, estimates and assumptions that affect
the reported balances 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.

The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period
in which the estimate is revised if the revision
affects only that period or in the period of the
revision and future periods if the revision affects
both current and future periods.

The following are the areas of estimation
uncertainty and critical judgments that the
management has made in the process of applying
the Company''s accounting policies:

a) Recognition of deferred tax assets:

The extent to which deferred tax assets can be
recognized is based on an assessment of the
probability of the future taxable income against
which the deferred tax assets can be utilized.

b) Revenue recognition, contract costs:

The Company uses the percentage of completion
method for recognition of revenue, accounting for
unbilled revenue and contract cost thereon for its
contractual projects. The percentage of completion
is measured by reference to the stage of the
projects and contracts determined based on the

proportion of contract costs incurred for work
performed to date bear to the estimated total
contract costs. Use of the percentage-of-
completion method requires the Company to
estimate the efforts or costs expended to date as a
proportion of the total efforts or costs to be
expended. Significant assumptions are required in
determining the stage of completion, the extent of
the contract cost incurred to the estimated total
contract revenue and contract cost and the
recoverability of the contracts. These estimates
are based on events existing at the end of each
reporting date.

c) Provision and contingent liability:

On an ongoing basis, the Company reviews pending
cases, claims by third parties and other
contingencies. For contingent losses that are
considered probable, an estimated loss is recorded
as an accrual in financial statements. Loss
Contingencies that are considered possible are not
provided for but disclosed as Contingent liabilities in
the financial statements. Contingencies the
likelihood of which is remote are not disclosed in the
financial statements.

d) Useful lives of depreciable assets:

Management reviews the useful lives of depreciable
assets at each reporting as at March 31, 2025
management assessed that the useful lives
represent the expected utility of the assets to the
Company. Further, there is no significant change in
the useful lives as compared to previous year.

e) Evaluation of indicators for impairment of assets:

The evaluation of applicable indicators of
impairment of assets requires assessment of
several external and internal factors which could
result in deterioration of recoverable amount of the
assets.

f) Defined benefit obligation:

Management''s estimate of the Defined Benefit
obligation is based on a number of underlying
assumptions such as standard rates of inflation,
mortality, discount rate and anticipation of future
salary increases. Variation in these assumptions
may impact the obligation amount and the annual
defined benefit expenses.

g) Fair value measurements:

Management applies valuation techniques to
determine the fair value of financial instruments
(where active market quotes are not available). This
involves developing estimates and assumptions
consistent with how market participants would
price the instrument.

B. Defined Benefit plans

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit
plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the
service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided based on
actuarial valuation using the projected unit credit method as at the end of each financial year based on which the
Company contributes the ascertained liability to Life Insurance Corporation of India with whom the plan assets
are maintained.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, salary
risk and longevity risk.

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

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially
offset by an increase in the return on the plan''s debt investments.

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

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

iii. Valuation technique used to determine fair value

The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to
transfer a liability in an orderly transaction between market participants at the measurement date.

The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial
assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of
their fair values.

The investment included in Level 3 hierarchy have been valued at cost approach to arrive at the fair values.The cost of
unquoted investment approximate the fair value as there is a wide range of possible fair value measurement and the
cost represents estimate of fairvalue within that range.

The estimated fairvalue amounts as at March 31,2025 have been measured as at that date. As such, the fair values
of these financial instruments subsequent to reporting date may be different than the amounts reported at each
year-end.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due and to close out
market positions. Due to the dynamic nature of the business, the Company maintains flexibility in funding by
maintaining availability under committed credit lines. Management monitors rolling forecasts of the company''s
liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account
the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves
projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet
liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Interest rate Risks

The Company uses a mix of cash and borrowings to manage the liquidity & fund requirements of its day-to-day
operations. 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 borrowings are fixed rate borrowings and are carried at amortized
cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, ''Financial Instruments -
Disclosures'', since neither the carrying amount nor the future cash flows will fluctuate because of a change in market
interest rates.

The Company''s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and
healthy capital ratios in order to support its business and provide adequate return to shareholders through
continuing growth. The Company''s overall strategy remains unchanged from previous year.

The funding requirements are met through a mixture of equity, internal fund generation and other non-current
borrowings. The Company''s policy is to use current and non-current borrowings to meet anticipated funding
requirements.

The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net
debt).

Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances and
current investments. Equity comprises all components including other comprehensive income.

The Company, which entered into Lease Agreements with various Parties during the previous financial years for hiring
the premises at different locations for manufacturing activities, has modified those agreement with the term of 11
Months with an option to extend further period with mutual consent of the parties to the agreement and the
agreement has no clauses of controlling the let out of assets

During the year, the Company had taken a Warehouse at Ambernath on a Leave and License Basis from Kaycee
Industries Limited and has accordingly recognized Right-of-Use Asset and corresponding Lease Liability in the
Financial Statements.

• The Title deeds of the immovable properties [other than properties where the Company is the lessee and the lease
agreements are duly executed in favour of the lessee) are held in the name of the Company

• As per the Company''s accounting policy, Property, Plant and Equipment (including Right of Use Assets) and
intangible assets are carried at historical cost [less accumulated depreciation & impairment, if any), hence the
revaluation related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the
Companies Act, is not applicable.

• The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the
related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or
period of repayments.

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

• The Company has sanctioned facilities from banks on the basis of security of current assets. The periodic returns
filed by the Company with such banks are in agreement with the books of accounts of the Company.

• The Company has adhered to debt repayment and interest service obligations on time. Wilful defaulter related
disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not
applicable.

• There are no transactions with the Companies whose name are struck off under Section 248 of The Companies
Act, 2013 or Section 560 of the Companies Act, 1956 during the year ended 31st March 2025.

• All applicable cases where registration of charges or satisfaction is required to be filed with Registrar of
Companies have been filed. No registration or satisfaction is pending at the year ended 31st March 2025.

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

• No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the
Companies Act, 2013.

• 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 beneficiary

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

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

b) provide any guarantee, security orthe like on behalf ofthe Ultimate Beneficiaries

• The Company has not operated in any crypto currency or Virtual Currency transactions

• During the year the Company has not disclosed or surrendered, any income other than the income recognised in
the books of accounts in the tax assessments under Income Tax Act, 1961.

• Previous yearfigures have also been reclassified, regrouped, recast to conform to current year classification.

In terms of our report attached

N. RANGACHARY R. DORAISWAMY For SWAMY & RAVI

Chairman Managing Director Chartered Accountants

(DIN :00054437) (DIN :00003131) FRN No.004317S

D. RAJESHKUMAR K.M. MURUGESAN ^S. ^ALAMELU

p j^- nPP

Joint Managing Director & Company Secretary ¹

Chief Financial Officer (Memb. No.A25953) ^Memb. ^N°. ²²³⁵⁵⁵

(DIN: 00003126)

Coimbatore - 47
May 24, 2025

---

Mar 31, 2024

xxii. Provisions:

A provision is recognized when an enterprise has a present obligation [legal or constructive) as result of past event and it is probable that an outflow of embodying economic benefits of resources will be required to settle a reliably assessable obligation. Provisions are determined based on best estimate required to settle each obligation at each balance sheet date. 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 recognized as a finance cost.

Provision for warranty:

Provision for expected cost of warranty obligations are recognized based on management''s best

estimate of the expenditure required to settle the obligations which takes into account the empirical data on the nature, frequency and average cost of warranty claims and regarding possible future incidents.

xxiii. Contingent liabilities and Contingent Assets:

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent Assets are not recognized but are disclosed when the inflow of economic benefits are probable.

xxiv. Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares [if any) are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and consolidation of shares if any.

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

xxv. Taxes on Income:

Tax expense comprises of current and deferred tax.

a. Current income tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in other comprehensive income / equity and not in the statement of profit and loss. Management

periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

b. Deferred tax

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

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

The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

xxvi. Cash and cash equivalents:

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in 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, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

xxvii. Segment Reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company''s other components, and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Company''s Chief Executive Officer (CEO), who is the Chief Operating Decision Maker (CODM), to make decisions about resources to be allocated to the segments and assess their performance. Information reported to the CODM for the purpose of resource allocation and assessment of segment

performance focuses on the type of goods or services delivered or provided.

The Company is primarily engaged in manufacturing of wide range of electrical installation products including devices for energy efficiencies services which all fall under One segment by name Electrical Installation Products for any reporting requirements.

Material accounting judgments, estimates and assumptions:

The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make judgments, estimates and assumptions that affect the reported balances 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.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the areas of estimation uncertainty and critical judgments that the management has made in the process of applying the Company''s accounting policies:

a) Recognition of deferred tax assets:

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.

b) Revenue recognition, contract costs:

The Company uses the percentage of completion method for recognition of revenue, accounting for unbilled revenue and contract cost thereon for its contractual projects. The percentage of completion is measured by reference to the stage of the projects and contracts determined based on the proportion of contract costs incurred for work performed to date bear to the estimated total contract costs. Use of the percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Significant assumptions are required in determining the stage of completion, the extent of the contract cost incurred to the estimated total contract revenue and contract cost and the recoverability of the contracts. These estimates are based on events existing at the end of each reporting date.

c) Provision and contingent liability:

On an ongoing basis, the Company reviews pending cases, claims by third parties and other contingencies. For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial statements. Loss Contingencies that are considered possible are not provided for but disclosed as Contingent liabilities in the financial statements. Contingencies the likelihood of which is remote are not disclosed in the financial statements.

d) Useful lives of depreciable assets:

Management reviews the useful lives of depreciable assets at each reporting. As at March 31, 2024 management assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant change in the useful lives as compared to previous year.

e) Evaluation of indicators for impairment of assets:

The evaluation of applicable indicators of

impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

f) Defined benefit obligation:

Management''s estimate of the Defined Benefit obligation is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the obligation amount and the annual defined benefit expenses.

g) Fair value measurements:

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

B. Defined Benefit plans

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided based on actuarial valuation using the projected unit credit method as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India with whom the plan assets are maintained.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, salary risk and longevity risk.

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

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

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

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

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

The company''s credit risk generally arises from Cash and cash equivalents, trade receivables, and other financial assets.

Credit Risk Management

The Group assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk

B: Moderate credit risk

C: High credit risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the business, the Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Interest rate Risks

The Company uses a mix of cash and borrowings to manage the liquidity & fund requirements of its day-to-day operations. 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 borrowings are fixed rate borrowings and are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, ''Financial Instruments -Disclosures'', since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

NOTE No. 46 CAPITAL MANAGEMENT

The Company''s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company''s overall strategy remains unchanged from previous year.

The funding requirements are met through a mixture of equity, internal fund generation and other non-current borrowings. The Company''s policy is to use current and non-current borrowings to meet anticipated funding requirements.

The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net debt).

Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances and current investments. Equity comprises all components including other comprehensive income.

NOTE No. 50 LEASESAS A LESSESS :

The Company, which entered into Lease Agreements with various Parties during the previous financial years for hiring the premises at different locations for manufacturing activities, has modified those agreement with the term of 11 Months with an option to extend further period with mutual consent of the parties to the agreement and the agreement has no clauses of controlling the let out of assets

During the financial year 2023-24, the Company has also taken out lease of Land and Buildings for Rent from two more parties and the Rental Agreements have been executed for a period of 11 months with an options for extending further periods with mutual consent of the parties . The Agreement don''t have any clauses enabling the tenant to have control over the Property The Company does not have any lease within the purview of IND AS 116

• The Title deeds of the immovable properties [other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company

• As per the Company''s accounting policy, Property, Plant and Equipment (including Right of Use Assets) and intangible assets are carried at historical cost [less accumulated depreciation & impairment, if any), hence the revaluation related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.

• The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or period of repayments.

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

• The Company has sanctioned facilities from banks on the basis of security of current assets. The periodic returns filed by the Company with such banks are in agreement with the books of accounts of the Company.

• The Company has adhered to debt repayment and interest service obligations on time. Wilful defaulter related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.

• There are no transactions with the Companies whose name are struck off under Section 248 of The Companies Act, 2013 or Section 560 of the Companies Act, 1956 during the year ended 31st March 2024.

• All applicable cases where registration of charges or satisfaction is required to be filed with Registrar of Companies have been filed. No registration or satisfaction is pending at the year ended 31st March 2024.

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

• No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013.

• 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 beneficiary

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

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

b) provide any guarantee, security orthe like on behalf ofthe Ultimate Beneficiaries

• The Company has not operated in any crypto currency or Virtual Currency transactions

• During the year the Company has not disclosed or surrendered, any income other than the income recognised in the books of accounts in the tax assessments under Income Tax Act, 1961.

• Previous year figures have also been reclassified, regrouped, recast to conform to current year classification.

In terms of our report attached

N. RANGACHARY R. DORAISWAMY For. JDS ASSOCIATES

Chairman Managing Director Chartered Accountants

(DIN :00054437) (DIN :00003131) FRN: 008735S

D. RAJESHKUMAR K.M. MURUGESAN B. JAYARAM

Joint Managing Director & Company Secretary Partner

Chief Financial Officer (Memb. No.A25953) Memb.No. 028346

(DIN: 00003126)

Coimbatore - 47 May 28, 2024

---

Mar 31, 2023

c) Provision and contingent liability:

On an ongoing basis, the Company reviews pending cases, claims by third parties and other contingencies. For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial statements. Loss Contingencies that are considered possible are not provided for but disclosed as Contingent liabilities in the financial statements. Contingencies the likelihood of which is remote are not disclosed in the financial statements.

dl Useful lives of depreciable assets:

Management reviews the useful lives of depreciable assets at each reporting. As at March 31, 2023 management assessed that the useful lives represent the expected utility of the assets to the Company. Further, there is no significant change in the useful lives as compared to previous year.

el Evaluation of indicators for impairment of assets:

The evaluation of applicable indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

fl Defined benefit obligation:

Management''s estimate of the Defined Benefit obligation is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the obligation amount and the annual defined benefit expenses.

gl Fair value measurements:

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.

hi Standards notified but not yet effective

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated March 31, 2023, to amend the following IND AS which are effective from April 1,2023.

il Definition of Accounting estimates Amendments to IND AS 8

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

The amendments are effective for annual reporting periods beginning on or after April 01, 2023 and apply changes in accounting policies and changes in accounting estimates that occur on or after the start of the period.

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

iil Disclosure of Accounting Policies Amendments to IND AS 1

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

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

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

Mil Deferred Tax related to Assets and Liabilities arising from single transaction Amendments to Ind AS 12

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its consolidated financial statement.

b. Terms/ Rights attached to the Equity Shares

i. Only Equity Shanes of Rs.10/- are outstanding and each holder of Equity Shares is entitled to one vote per share. The company declares and pays Dividend in Indian Rupees and

ii. 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

iii. There are no restrictions attached to equity shares except 2,00,000 shares allotted to the Promoters upon conversion of warrants during the year which have been subjected to lock-in in accordance with SEBI (Issue of Capital and Disclosures Requirements) Regulation 2018

e) Information regarding issue of shares in the last five years

(a) Details of Shares issued without payment being received in cash.

In pursuance of Business Transfer Agreement dated March 08,2018, the Company issued 10,30,000 Shares of Rs.10/- each credited as fully paid-up at an issue price of Rs.197 per share for a total value of Rs.20.29 Crs on March 16,2018 to Salzer Magnet Wires Limited as a consideration for acquisition of its whole of its business undertaking

Cb] On December 07,2022, The Company allotted 17,00,000 shares warrants convertible into equity over the period of 18 months on preferential basis to the Promoters’ bodies corporate at an issue price of Rs.278.50 per share. During the year, 2,00,000 warrants have been converted into equity shares

(c) The Company has not issued any Bonus Shares or undertaken any buy back of Shares

fl Details of Shares held by Holding Company :

There are no Shares held by Holding Company/Subsidiaries of ultimate Holding Company as on 31st March 2023.

Notes

* Security : Assets purchased under the Term Loans, Extension of the equitable mortgage of Land and Building of the Company (Unit III] and guaranteed by Mr. R Doraiswamy, Managing Director and Mr. ? Rajesh Kumar, Joint Managing Director S.CFO

Terms of the repayment: Plant and Machinery Term Loan Repayable within 5 EMIs of ^15,00,000.00 ** Building, Plant and Machinery Term Loan

Secured by the First Charge on Land and Building, Plant and Machinery of Unit IV and Gunaranteed by Mr. R Doraiswamy, Managing Director and Mr. D Rajesh Kumar, Joint Managing Director S.CFO

Terms of the repayment : Plant and Machinery Term Loan Repayable within 29 EMIs of ? 23,55,128.00 and 1 EMI of ?20,07,752.00

B. Defined Benefit plans

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided based on actuarial valuation using the projected unit credit method as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India with whom the plan assets are maintained.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, salary risk and longevity risk.

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

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments.

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

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

The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of their fair values. Accordingly, the fair values of such financial assets and financial liabilities have not been disclosed separately.

iii. Valuation technique used to determine fair value

• The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date.

• The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of their fairvalues.

• The investment included in Level 3 hierarchy have been valued at cost approach to arrive at the fairvalues. The cost of unquoted investment approximate the fair value as there is a wide range of possible fair value measurement and the cost represents estimate of fairvalue within that range.

• The estimated fairvalue amounts as at March 31,2023 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end.

• There were no transfers between Level 1, Level 2 and Level 3 during the year.

NOTE No. 4^ FINANCIAL RISK MANAGEMENT

The Company''s activities expose it to credit risk, liquidity risk, market risk - interest rate risk and foreign currency risk. The Board of Directors has overall responsibility for the establishment and oversight of the Group''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

The company''s credit risk generally arises from Cash and cash equivalents, trade receivables, and other financial assets.

Credit Risk Management

The Group assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

The Company''s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company''s overall strategy remains unchanged from previous year.

The funding requirements are met through a mixture of equity, internal fund generation and other non-current borrowings. The Company''s policy is to use current and non-current borrowings to meet anticipated funding requirements.

The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net debt).

NOTE No. 4^ RELATED PARTY DISCLOSURES

il Related party transactions

Related Party Relationships iil Key Management Personnel

a. Mr. R. Doraiswmay - Managing Director

b. Mr. ?. Rajeshkumar - Joint Managing Director & Chief Financial Officer

c. Mr. R Ramachandran - Whole Time Director and

d. Mr. S. Baskarasubramanian - Director (Corporate Affairs) & Company Secretary iiil Subsidiary Company

a. Kaycee Industries Limited

b. Salzer EV Infra Private Limited ivl Post-employment benefit plans

a. Salzer Electronics Limited Employees Gratuity Trust (vl Other related Parties

i. Board Members relative to Key Management Personnel

1. Dr. (Mrs.) Thilagam Rajeshkumar - Non Executive & Non Independent Director - Spouse of Mr. ? Rajesh Kumar, Jt MD and CFO

The Company, which entered into Lease Agreements with various Parties during the previous financial years for hiring the premises at different locations for manufacturing activities, has modified those agreement with the term of 11 Months with an option to extend further period with mutual consent of the parties to the agreement and the agreement has no clauses of controlling the let out of assets

During the financial year 2022-23, the Company has also taken out lease of Land and Buildings for Rent from two more parties and the Rental Agreements have been executed for a period of 11 months with an options for extending further periods with mutual consent of the parties. The Agreement don’t have any clauses enabling the tenant to have control over the Property The Company does not have any lease within the purview of IND AS 116

• The Title deeds of the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

• As per the Company''s accounting policy, Property, Plant and Equipment (including Right of Use Assets) and intangible assets are carried at historical cost (less accumulated depreciation & impairment, if any), hence the revaluation related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.

• The Company has not granted Loans or Advances in the nature of loan to any promoters, Directors, KMPs and the related parties (As per Companies Act, 2013) , which are repayable on demand or without specifying any terms or period of repayments.

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

• The Company has sanctioned facilities from banks on the basis of security of current assets. The periodic returns filed by the Company with such banks are in agreement with the books of accounts of the Company.

• The Company has adhered to debt repayment and interest service obligations on time. Wilful defaulter related disclosures required as per Additional Regulatory Information of Schedule III (revised) to the Companies Act, is not applicable.

• There are no transactions with the Companies whose name are struck off under Section 248 of The Companies Act, 2013 or Section 560 of the Companies Act, 1956 during the year ended 31st March 2023.

• All applicable cases where registration of charges or satisfaction is required to be filed with Registrar of Companies have been filed. No registration or satisfaction is pending at the year ended 31st March 2023.

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

• No scheme of arrangement has been approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013.

• 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 beneficiary

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

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

b) provide any guarantee, security orthe likeon behalf of the Ultimate Beneficiaries

• The Company has not operated in any crypto currency or Virtual Currency transactions

• During the year the Company has not disclosed or surrendered, any income other than the income recognised in the books of accounts in the tax assessments underincome Tax Act, 1961.

• Previous yearfigures have also been reclassified, regrouped, recast to conform to current year classification.

In terms of our report attached

N. RANGACHARY R. DORAISWAMY For. JDS ASSOCIATES

Chairman Managing Director Chartered Accountants

(DIN :00054437) (DIN :00003131) FRN: 008735S

D. RAJESHKUMAR S. BASKARA SUBRAMANIAN B. JAYARAM

Joint Managing Director & Director (Corporate Affairs) & Partner

Chief Financial Officer Company Secretary Memb.No. 028346

(DIN: 00003126) (DIN :00003152& FCS No.4605)

Coimbatore - 47 May 24, 2023

---

Mar 31, 2018

Details of properties pledged as security - Refer Note No. 20

- The Company has elected to measure items of property, plant and equipment on the date of transition and designate the same as deemed cost on the date of transition at its carrying value, except for certain class of assets which are measured at fair value as deemed cost.

The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all its intangible assets as recognized in the financial statements as at the date of transition to Ind AS(s), measured as per previous GAAP and use that as its deemed cost as at the date of transition.

The Reconciliation of Carrying value as per previous GAAP with Deemed cost as per Ind AS:

* Unbilled revenue represents revenue from projects recognized under the percentage of completion method. Revenue is recognized in proportion that the contract costs incurred for work performed up to the reporting date bears to the estimated total contract costs.

Note:-

1. For method of valuation of inventories, refer Note.1. XII

2. Inventories with the above mentioned carrying amount have been hypothecated as security against certain bank.

3. Cost of inventory recognized as expenses:

a. Amount of inventory charged off to Statement of Profit and Loss

b. Amount of inventories stated at fair value less cost to sell and

c. Value of inventory written down

During the year 2017-18, the authorized share capital of the Company Rs.20,00,00,000 Comprising of 2,00,00,000 equity shares of Rs. 10/- has been re-classified as under

i) Rs.19,00,00,000 comprising of 1,90,00,000 Equity Shares of Rs.10/- each

ii) Rs.1,00,00,000 Comprising of 10,00,000 Non Cumulative Convertible Preference Shares of Rs.10/- each

a) The following allotment of shares made to Salzer Magnet Wires Limited on March 16, 2018 as a consideration for other than cash as per the terms of business transfer agreement (BTA) towards acquisition of the whole of the business undertaking as a going concern on slump sale basis:-

- 5,00,000 Equity Shares of Rs.10/- each credited as fully paid-up for a total value of Rs.9.85 Crs

- 5,30,000 Non Cumulative 5% Convertible Preference Shares (NCCPS) of Rs.10/- each credited as fully paid-up for a total value of Rs.10.44 Crs

b) NCCPS are convertible into equity shares of Rs.10/- each credited as fully paid-up over the period of two years from the allotment;

c) Holder of NCCPS are not entitled for any voting rights till its conversion

d) The Company has two class of Shares having par value of Rs.10/- per share namely Equity Shares and NCCPS. Each holder of Equity Shares is entitled to one vote per share.

e) The Company declares and pays Dividend in Indian Rupees.

f) 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

g) Shares held by Holding Company or Ultimate Holding Company - NIL

h) Shareholders holders holding more than 5% shares (equity)

Securities Particulars

*Security: Assets purchased under Term Loan, Extension of equitable mortgage of Land and Building of the Company (Unit-I) Availment: Rs.4,70,58,642/- is availed against sanctioned limit of Rs.5,00,00,000/-.

**Security: Assets purchased under Term Loans, Extension of equitable mortgage of Land and Building of the Company (Unit-I) and guaranteed by Mr. D. Rajeshkumar, Joint Managing Director. Availment: Rs.18,49,78,591/- is availed against sanctioned limit of Rs.29,00,00,000/-. Terms of Repayment: Term Loan Repayable in 12 EMI of Rs.50,00,000 and 1 EMI of Rs.16,72,000/-

# For Citibank Phase I: Terms of Repayment: Plant & Machinery Term Loan Repayable in 7 EMI of Rs.3,48,333/- and 1 EMI of Rs.3,48,670/-

# For Citibank Phase II: Terms of Repayment: Plant & Machinery Term Loan Repayable in 10 EMI of Rs.1,32,500/-

# For Citibank Phase III: Terms of Repayment: Plant & Machinery Term Loan Repayable in 11 EMI of Rs.1,50,000/-

# For Citibank Phase IV: Terms of Repayment: Plant & Machinery Term Loan Repayable in 11 EMI of Rs.1,33,333/- and 1 EMI of Rs.1,33,337

# For Citibank Phase V: Terms of Repayment: Plant & Machinery Term Loan Repayable in 12 EMI of Rs.99,000 and 1 EMI of Rs.1,45,000/-

# For Citibank Phase VI: Terms of Repayment: Plant & Machinery Term Loan Repayable in 14 EMI of Rs.46,667/- and 1 EMI Rs.46,662/-

## Security: Assets purchased under Term Loans, Extension of equitable mortgage of Land and Building of the Company (Unit-III) and guaranteed by Mr. D. Rajeshkumar, Joint Managing Director Terms of Repayment: Plant & Machinery Term Loan Repayable within 27 EMI of Rs.1,10,417/-

### Security: Assets purchased under Term Loans, Extension of equitable mortgage of Land and Building of the Company (Unit-III) and guaranteed by Mr. D. Rajeshkumar, Joint Managing Director Terms of Repayment: Plant & Machinery Term Loan Repayable within 27 EMI of Rs.97,917/$ Plant & Machinery Term Loan

$$ Plant & Machinery Term Loan Repayable in 9 EMI of ''3,28,000

@ Security: First charge on Land & Building and Plant and Machinery of Unit IV and Guaranteed by Mr R. Doraiswamy, Managing Director and Mr. D. Rajeshkumar, Joint Managing Director Availment: Rs.3,46,99,917/- is availed against sanctioned limit of Rs.9,00,00,000/- Terms of repayment: Plant & Machinery Term Loan Repayable in 1 EMI of Rs.14,27,000

There are no interest amounts paid / payable to Micro, Small and Medium Enterprises. The information in relation to dues to Micro Enterprises and Small Enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company, which has been relied upon by the auditors. (Refer Note No. 33)

Note no.1. gratuity

The details of various employee benefits provided to employees are as under:

B. Defined Benefit plans

In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, as defined benefit plan. The gratuity plan provides for a lump sum payment to the employees at the time of separation from the service on completion of vested year of employment i.e. five years. The liability of gratuity plan is provided based on actuarial valuation using the projected unit credit method as at the end of each financial year based on which the Company contributes the ascertained liability to Life Insurance Corporation of India with whom the plan assets are maintained.

These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, salary risk and longevity risk.

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

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan''s debt investments

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

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

Principal actuarial assumptions

Sensitivity Analysis

Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined benefit obligations and based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant.

Note no 2. employees STOCK OPTION SCHEME 2012-13

- Pursuant to the decision of the shareholders, at their meeting held on 11.08.2012, the Company had established an “Employees'' Stock Option Scheme 2012-13" (ESOS 2012-13 or the Scheme) being administered by the Employees'' Compensation Committee (ECC) of the Board of Directors.

- Under the Scheme, option not exceeding 10,28,000 have been reserved to be issued to the eligible employees. The option granted under the scheme vest not less than 1 year from the date of grant of option. The option granted to the employees would be capable of being exercised within a period of 5 years from the date of vesting.

- Accordingly, 10,28,000 options were granted to the employees on November 19, 2013 with vesting period of one year at a grant price Rs.40/- against the closing market price of Rs.48.60/- on November 18, 2013 resulting in an employee compensation cost of Rs.88,40,800/- which has duly been written off during the vesting period.

- All the granted options vested on November 19, 2014 with the exercise period of five years therefrom. During the year, the Company has allotted 148500 shares upon exercise of stock options by the employees and an amount of Rs.38.82 Lakhs received from the Employees on exercise of options and against which, allotment is pending as at March 31,2018.

- Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2016.

- Accordingly, the Employees'' Compensation Cost as determined under Intrinsic Value Method, had been written off over the vesting period and credited to Reserve & surplus Account under the head “Employees Compensation Cost." As and when the shares are being allotted against exercise of options, the relevant amount is transferred from this head and credited to Share Premium Account.

- There were no modifications to the Scheme during the year ended March 31, 2018 and March 31, 2017. As at the end of the financial year, details and movements of the outstanding options are as follows:

Cash dividends on equity shares proposed - Rs.308.28 Lakhs

The disclosure in respect of the amounts payable to Micro, Small and Medium enterprises as at March 31, 2018 has been made in the financial statements based on information received and available with the Company. Also, the Company has not received any claim for interest from any supplier as at the balance sheet date.

ii. Fair Value Hierarchy

The Company has classified its financial instruments into three levels in order to provide an indication about the reliability of the inputs used in determining fair values.

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

(ii) 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).

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

The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of their fair values. Accordingly, the fair values of such financial assets and financial liabilities have not been disclosed separately.

iii. Valuation technique used to determine fair value

- The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date.

- The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities are a reasonable approximation of their fair values.

- The investment included in Level 3 hierarchy have been valued at cost approach to arrive at the fair values. The cost of unquoted investment approximate the fair value as there is a wide range of possible fair value measurement and the cost represents estimate of fair value within that range.

- The estimated fair value amounts as at March 31, 2018 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end.

- There were no transfers between Level 1, Level 2 and Level 3 during the year

Note No. 3 FINANCIAL RISK MANAGEMENT

The Company''s businesses are subject to several risks and uncertainties including financial risks.

The Company''s activities expose it to credit risk, liquidity risk, market risk - interest rate risk and foreign currency risk. The Board of Directors has overall responsibility for the establishment and oversight of the Group''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

The Company''s credit risk generally arises from Cash and cash equivalents, trade receivables, and other financial assets.

Credit Risk Management

The Group assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk

B: Moderate credit risk

C: High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions. Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables based on past experiences to mitigate the risk of default in payments and makes appropriate provision at each reporting date wherever outstanding is for longer period and involves higher risk.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the business, the Company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates etc. could affect the Company''s income or the value of its holdings of financial instruments including cash flow. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while maximising the return.

Interest rate Risks

The Company uses a mix of cash and borrowings to manage the liquidity & fund requirements of its day-to-day operations. 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 borrowings are fixed rate and / or Variable rate borrowings and are carried at amortized cost. The Fixed Rate borrowings therefore not subject to interest rate risk as defined in Ind AS 107, ‘Financial Instruments - Disclosures'', since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Interest rate risk exposure

The following table provide the break-up of the co. fixed and floating rate borrowing

Interest rate sensitivity analysis:

The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year

If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company''s profit for the year ended 31 March 2018 would decrease / increase by Rs.145.63 Lakhs (for the year ended 31 March 2017: decrease / increase by Rs.125.55 Lakhs). This is mainly attributable to the Company''s exposure to interest rates on its variable rate borrowings.

Foreign Currency Risk

The Company''s exposure to currency risk relates primarily to the Company''s operating activities including anticipated sales & purchase and borrowings where the transactions are denominated in a currency other than the Company''s functional currency The risk is measured through a forecast of highly probable foreign currency cash flows.

Note No. 4. CAPITAL MANAGEMENT

The Company''s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company''s overall strategy remains unchanged from previous year

The funding requirements are met through a mixture of equity, internal fund generation and other non-current borrowings. The Company''s policy is to use current and non-current borrowings to meet anticipated funding requirements.

The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net debt).

Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances and current investments. Equity comprises all components including other comprehensive income.

Note No.5 FIRST TIME ADOPTION OF IND AS

The Company has adopted Ind AS with effect from April 01, 2017 with comparatives being restated. Accordingly, the impact of transition has been provided in the Opening Reserves as at April 01, 2016. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.

Ind AS 101 First-time Adoption of Indian Accounting Standards allows first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

IND AS - Optional Exemptions

i. Fair valuation as deemed cost for certain items of Property, Plant and Equipment,

The Company has elected to measure the items of property, plant and equipment and intangible assets at its carrying value at the date of transition except for certain class of assets which are measured at fair value as deemed cost.

ii. Designation of previously recognized financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVTOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has designated certain investments in equity share as held at FVTOCI on the basis of the facts and circumstances that existed at the transition.

iii. Share based payments

Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2016.

IND AS - Mandatory Exceptions

i. Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error Ind AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP

The Group made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investments in equity instruments carried at FVOCI

- Other investments carried at FVTPL or FVOCI; and

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

Notes to reconciliation

1. Revenue from Projects

Under the previous GAAP, revenue from Public-Private-Partnership Contracts, which involve supply of materials and services over the contract period, were recognized after successful installation. Where the contract involves a deferred consideration payable contingent on a future performance obligation, revenue was recognized only after successful fulfilment of such future obligation. As per Appendix A of IND AS -11 read with IND AS 18, the revenue from such contracts shall be recognized based on percentage of completion method. The amount receivable shall be recognized as a financial asset and valued at amortized cost.

2. Fair Valuation of Investments

Under the previous GAAP, the non-current investments were valued at cost less any permanent diminution in the value of investments. Current investments were valued at lower of cost and fair value. IND AS 109 requires Financial Assets to be designated as Fair Value through Profit and Loss/ Fair value through Other Comprehensive Income/Amortized Cost. The Value of Investments have been measured at fair value.

3. Provisions

a. For Proposed Dividend

Prior to 1.4.2016, dividend proposed by the Board of Directors, but before the approval of the financial statements were considered as adjusting events, under previous GAAP However under IND AS, such dividend are recognised when the same is approved by the shareholders at Annual General Meeting (AGM). Accordingly, the liability for proposed dividend recognised as on transition date has been reversed with corresponding adjustment to opening retained earnings and recognised in the year of approval in the AGM.

b. For warranty

Under the previous GAAP, provisions were not recognized for constructive obligations. Under IND AS, provisions are measured for present obligations (both legal and constructive) as a result of past events, where it is possible that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made out of the obligation.

c. For Expected Credit Loss

IND AS 109 requires a provision to be made for Expected Credit Losses on an unbiased basis, considering the time value of money, and with reasonable and supportable information and forecasts, and the economic conditions as on the reporting date. The provision shall be reviewed as at each reporting period, with respect to its sufficiency and appropriateness.

4. Revaluation of Property, Plant and Equipment

Ind AS 101 permits an entity to elect to measure an item of property, plant and equipment at the date of transition to Ind AS at its fair value and use that fair value as its deemed cost at that date.

Accordingly, the Company has elected to use the fair value of certain items of property, plant and equipment on the date of transition and designate the same as deemed cost on the date of transition.

5. Deferred Tax

The previous GAAP permits accounting of Deferred taxes under the Income Approach as well as the Balance sheet Approach. Hence, the Company had followed the Income Approach. However, IND AS 12 requires the tax consequences to be recognized as a difference between the carrying amount of assets and liabilities and their tax base.

6. Other Comprehensive Income

Under previous GAAP, deferred tax was accounted using the income statement approach on timing difference between taxable profit and accounting profit. Under IND AS, deferred tax is recognised following Balance sheet approach on temporary differences between the carrying amount of asset or liability and its tax base.

7. Reclassification under IND AS

Assets and Liabilities have been regrouped/reclassified where ever required to conform to the requirements of Ind ASs.

Note No.6 BUSINESS COMBINATION WITH SALZER MAGNET WIRES LIMITED

During the year, Salzer Electronics Limited (“Buyer”) has acquired the whole of the business undertaking of Salzer Magnet Wires Limited (“Seller”) as a going concern on a Slump Sale basis in terms of Business Transfer Agreement executed by the Buyer and Seller on March 08, 2018. In pursuance of the Business Transfer Agreement the seller paid a consideration of Rs.20.29 Crores, as valued by an independent chartered accountant and the buyer paid the consideration by other than cash by allotment of 5,00,000/- Equity shares of Rs.10/- each at an issue price of Rs.197/- per share credited as fully paid-up and also 5,30,000/- Non cumulative 5% convertible Preference share of Rs.10/- each at an issue price of Rs.197/- per share, convertible over a period of 2 years , and credited as fully paid, on preferential basis. Accordingly, all the assets and liabilities of the Seller have duly been duly combined/dealt in the books of Accounts of the Buyer effective March 08, 2018 which is reflecting state of affairs of business undertaking acquired from Seller for a period of 24 days in the reporting Financial year under Report.

Note No.7 SEGMENT INFORMATION

The Company is engaged in manufacture of Electrical Installation Products which is considered to be the only reportable business segment as per Ind AS 108, ‘Segment Reporting''. The Company operates primarily in India and there is no other significant geographical segment. The Company has widespread customer base and hence the Company does not have any concentration risk.

Note No. 8 Previous year figures have also been reclassified, regrouped, recast to conform to current year classification.

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Mar 31, 2016

d. Terms/rights attached to the Equity Shares.

- The Company has only one class of Equity Shares having par value of RS,10/- per share. Each holder of Equity Shares is entitled to one vote per share. The company declares and pays Divided in Indian Rupees.

- The Dividend Proposed is as recommended by the Board of Directors and subject to the approval of the Shareholders'' in the ensuring Annual General Meeting.

- For the year Ended 31st March,2016, The amount of dividend per share recognized as distributions to Equity is RS,1.60.(31st March, 2015 : RS,1.50)

- In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts.

- The distribution will be in proportion to the number of equity shares held by the shareholders

c. Terms of offer

- the allotment of shares against warrants shall only be made in dematerialized form and shall be subject to the provisions of Memorandum of Association and Articles of Association of the Company;

- The price of each equity share to be issued in lieu of the Warrants will be calculated in accordance with the provisions of Regulation 76(1) of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 (shortly "SEBI (ICDR) Regulations”) on the basis of the relevant date;

- Amount equivalent to at least 25% of the consideration determined in terms of Regulation 76 of the SEBI ICDR Regulations shall be paid against each Warrant on the date of allotment of Warrants and the balance consideration i.e. 75% shall be paid on or before allotment of equity shares pursuant to exercise of option against each such Warrant;

- In case the option to subscribe to equity shares against such Warrants is not exercised by the Allottee within 18 (eighteen) months from the date of allotment of the warrants, the warrants shall lapse and the consideration paid by the Allottee in respect of such Warrant shall be forfeited by the Company;

- The Warrants issued and allotted will be transferable within the Promoter Group subject to provisions of the SEBI (ICDR) Regulations and subject to receipt of such other approvals as may be necessary.

- Pursuant to Regulation 78 of the SEBI ICDR Regulations, the entire pre-preferential allotment shareholding of the Allottee, if any, shall be locked-in from the relevant date up to a period of six months from the date of trading approval granted by the Stock Exchange.

During the period under review, the Company issued 10,00,000 share warrants to the Promoters and Promoters group on July 14, 2015 at an issue price of RS,251.45 per warrant, having option to apply for and be allotted an equivalent number of equity shares of a face value of RS,10 each at a premium of RS,241.45 each within 18 months from the date of allotment of such warrants,

In terms of the issue, an amount equivalent to at least 25% of the issue price of H251.45 paid upfront and balance 75% paid on or before allotment of equity shares against exercise of 4,20,000 warrants, Upon the receipt of full consideration, the Company allotted 4,20,000 equity shares against exercise of warrants by the Promoters during the year.

c. Terms of Grant

- Granting Stock options constituting 10% of the Total paid up shares as at March 31, 2012,

- Options carry one year vesting period and five years exercise period from the date of vesting,

- The shares being so allotted upon exercise of stock options will carry two years lock in period,

- Promoters, Independent Directors and Nominee Directors are not entitled for any stock options,

- Options are not transferrable, not entitled for dividend and will not carry any voting rights and

- Grant price of the option fixed as RS,40/-.

NOTE :1

Employees'' "tock option "cheme 2012-2013

Pursuant to the decision of the shareholders, at their meeting held on 1 1.08.2012, the company has established an "Employees Stock Option Scheme 2012-2013” (ESOS 2012-2013 or the Scheme) being administered by the Employees Compensation Committee (ECC) of the Board of Directors.

Under the Scheme, option not exceeding 10,28,000 have been reserved to be issued to the eligible employees. The option granted under the scheme vest not less than 1 year from the date of grant of option. The option granted to the employees would be capable of being exercised within a period of 5 years from the date of vesting.

Accordingly, 10,28,000 granted to the employees on November 19,2013 with vesting period of one year at a grant price RS,40/-against the closing market price of RS,48.60/- on November 18,2013 resulting in a employees compensation cost of RS,88,40,800/-which has duly been written off during the vesting period.

All the granted options vested on November 19,2014 with the exercise period of five years there from. During the year, the Company has allotted 2,98,450 shares upon exercise of stock options by the employees. Upon the allotted aforesaid shares, an amount of RS,25,66,670/-, being the employees compensation cost for 2,98,450 shares, has been reversed from the total such compensation cost and added to the share premium account in accordance with Accounting Standards and the Company has received RS,10.60 Lacs on 26,500 options having been exercised by the employees during the quarter January to March 2016 and against which, allotment of equivalent shares are pending.

NOTE: 2

Energy Saver Projects (PPP)

During the financial year, the company has commenced executing contracts with corporations/ municipal authorities in Tamilnadu with obligations over five year period. In accordance with the contractual terms, the company has recognized revenue after supply of materials, installation and commissioning. Amount receivable in future years is shown under Other Non-Current Assets. Service revenues attributable to these contracts will be recognized on certification by corporation/municipal authorities on fulfillment of performance obligations.

NOTE: 3 RELATED PARTY DISCLOSURE

Related parties with whom transactions have taken place during the year:

a. Key Management Personnel

b. Relative of Key Management Personnel

c. Enterprise owned or significantly influenced by key management personnel or their relatives

The following table provides the total amount of transactions that have been entered into with related parties for the financial year 2015-2016

NOTE 4 : IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.

NOTE 5 :

In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

NOTE 6 : PENDING LITIGATION

CESTAT Appeal regarding dispute between notification for amount of RS,36,94,921/-, out of whicRs, H12 Lakhs has been paid condition of CESTAT Appeal No.C.CUS.No.675/2014 dt.15.04.2014

Appeal bearing No. 1/2011 before the Labour court at Coimbatore filed by the Employee is pending in the Labour Court at Coimbatore.

NOTE 7 :

In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an on-going process.

NOTE 8:

Previous year''s figures have been regrouped/rearranged wherever necessary, to confirm with current year''s presentation.

NOTE 9 :

Figures have been rounded off to the nearest rupee.

NOTE 10 : RESEARCH AND DEVELOPMENT

The capital expenditure on R&D incurred during the year by the Company was RS,50.13 lakhs and shown as additions to fixed assets of the Company. The revenue expenditure RS,143.64 lakhs is charged to the Profit & Loss account, is incurred for new products & process development. Further RS,61.10 lakhs represented the salary and other expenses of R&D personal which is included under Note No.22 - Employees Benefit expenses

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Mar 31, 2014

NOTE 1: Corporate information & history:

Salzer Electronics Ltd is incorporated on 08.0I.I985 for manufacture of electrical installation products such as CAM operated rotary switches, switch gear products and allied products and is an ongoing concern since then. The company is listed in the Bombay Stock Exchange Limited.

NOTE 2: ESOS - 2013:

Pursuant to the decision of the shareholders at their meeting held on 11.08.2012, the company has established "Salzer Electronics Limited Employees Stock Option Scheme 2012-13 (Salzer ESOS-2012-13) and the Scheme is being administered by the Employees Compensation Committee" of the Board of Directors. Since the vesting period runs over two financial years (2013-14 & 2014-15) and the employees have not yet exercised their right to vest on option till 31.03.2014, there is no impact on the financials of the company during the relevant financial year 2013-14 and hence the same has not been dealt with the accounts. The same will be suitably dealt with in the accounts relating to the financial year 2014-15, being the relevant financial year, wherein the vesting date falls and attains finality.

NOTE 3: CONTINGENT LIABILITIES

1. Towards Import obligation under EPCG Scheme is Rs.2909.10 Lakhs

2. Letter of credit (foreign and inland) for import and purchase of raw materials is Rs.610.63 Lakhs

3. Obligation towards Bank Guarantee is Rs.23.80 Lakhs.

NOTE 4: IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.

NOTE 5:

In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

NOTE 6:

In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an ongoing process.

NOTE 7:

The outstanding debtors for more than six months include Rs.30.04 lakhs due from M/s. Crompton Greaves Ltd, Mumbai.

NOTE 8:

Previous year''s figures have been regrouped/rearranged wherever necessary, to confirm with current year''s presentation.

NOTE 9:

Figures have been rounded off to the nearest rupee.

NOTE 9:

Research and Development:

The capital expenditure on R&D incurred during the year by the Company was Rs.435.26 lakhs and shown as additions to fixed assets of the Company. The revenue expenditure Rs.133.62 lakhs is charged to the Profit & Loss account, of which Rs.80.35 lakhs is incurred for new products & process development. Rs.52.47 lakhs represented the salary and other expenses of R&D personnel which is included under Note No.22 - Employees Benefit expenses.

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Mar 31, 2013

NOTE 1: Corporate information & history:

Salzer Electronics Ltd is incorporated on 08.01.1985 for manufacture of electrical installation products such as CAM operated rotary switches, switch gear products and allied products and is an ongoing concern since then. The company is listed in the Bombay Stock Exchange Limited.

NOTE: 2. RELATED PARTY DISCLOSURE

Related parties with whom transactions have taken place during the year:

a. Key Management Personnel :

b. Relative of Key Management Personnel :

c. Enterprise owned or significantly influenced by key management personnel or their relatives:

NOTE: 3. CONTINGENT LIABILITIES

1. Towards Import obligation under EPCG Scheme is Rs.2016.05 Lakhs

2. Letter of credit (foreign and inland) for import and purchase of raw materials is Rs.272.40 Lakhs

3. Obligation towards Bank Guarantee is Rs.17.00 Lakhs.

NOTE: 4. IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.

NOTE: 5.

In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

NOTE: 6.

In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an ongoing process.

NOTE: 7.

The outstanding debtors for more than six months include Rs.70.00 lakhs due from M/s.Crompton Greaves Ltd, Mumbai. The company has already taken legal course of action in the matter for recovery of the same. The company is confident of recovering this amount in full and so considered the debt as good.

NOTE: 8.

Previous year''s figures have been regrouped/rearranged wherever necessary, to confirm with current year''s presentation.

NOTE: 9.

Figures have been rounded off to the nearest rupee.

NOTE: 10. Research and Development:

The capital expenditure on R&D incurred during the year by the Company was Rs.400.91 lakhs and shown as additions to fixed assets of the Company. The revenue expenditure Rs. 133.62 lakhs is charged to the Profit & Loss account, of which Rs.85.47 lakhs is incurred for new products & process development. Rs.48.15 lakhs represented the salary and other expenses of R&D personal which is included under Note No.22 Employees Benefit expenses.

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Mar 31, 2012

NOTE 1: Corporate information & history:

Salzer Electronics Ltd is incorporated on 08.01.1985 for manufacture of electrical installation products such as CAM operated rotary switches, switch gear products and allied products and is an ongoing concern since then. The company is listed in the Bombay Stock Exchange Limited and Coimbatore Stock Exchange Limited.

a. Terms/rights attached to the Equity Shares.

* The Company has only one class of Equity share having par value of Rs. 10/- per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays Divided in Indian Rupees.

* The Dividend Proposed is as recommended by the Board of Directors and subject to the approval of the Shareholders' in the ensuing Annual General Meeting.

* For The year Ended 31st March 2012, The Amount of Dividend per share recognized as distributions to Equity is Rs. 1.20/- (31st March, 2011 : Rs. 1.60/-)

NOTE: 2. RELATED PARTY DISCLOSURE

Related parties with whom transactions have taken place during the year:

a. Key Management Personnel :

b. Relative of Key Management Personnel :

c. Enterprise owned or significantly influenced by key management personnel or their relatives:

NOTE: 3. CONTINGENT LIABILITIES

1. Towards Import obligation under EPCG Scheme is Rs.169.58 Lakhs

2. Letter of credit (foreign and inland) for import and purchase of raw materials is Rs.803.28 Lakhs

3. Obligation towards Bank Guarantee is Rs.192.24 Lakhs.

NOTE: 4. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

The Company has sent request letter to all its suppliers calling for their status under MSMED Act, 2006 and since many of them have not responded, the amount payable to these parties could not be disclosed. However, no party has claimed any interest for the due payable by the Company details furnished below:

NOTE: 5. IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.

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Mar 31, 2010

(A) A list of related parties and relationships (as identified and certified by the Management).

1. Parties where control exists: NIL

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

Party Name Relationship

Micro Instruments Ltd : Directors Interested Company

Salzer Exports Ltd : Directors Interested Company

Salzer Spinners Ltd : Directors Interested Company

Plitron Mfg. Inc : Directors Interested Firm (Collaborator)

K.Rangaswamy Naidu : Directors Interested Firm & Sons

Plitron Global Corp. : Directors Interested Company

Key Management Personnel :

R.Doraiswamy : Managing Director

D.Rajeshkumar : Joint Managing Director

P.Ramachandran : Whole Time Director

(g) Contingent Liabilities not provided for in the accounts :

1. Towards Import obligation Rs.6.14 lakhs under EPCG Scheme Bank guarantees (expiring in 2013-14)

2. Letter of credit (foreign and inland) Nil for Import And purchase of raw materials

3. Obligation towards Bank Rs.329.39 lakhs Guarantee

(h) Estimated amount of the contracts remaining to be executed on capital account and not provided for (net of advances )-Rs. NIL (Previous Year - Rs. NIL)

(i) Open Cash Credit facility from Canara Bank has been secured on hypothecation of Raw materials, Stock-in- process and Finished goods and first charge on Land & Building and Plant & Machinery. (Unit-I)

(j) Term Loan from Canara Bank, IF Branch, Coimbatore, includes funding of Wind Mill-IV, funding of Energy Saver Project. Loan is secured by assets purchased on the loans and extension of equitable mortgage of land and building of the Company.

(k) Term Loan from Bank of India, Saibaba Colony branch is for funding Windmill-Ill and purchase of Plant & Machineries. Loans are secured by the assets purchased under the loan and extension of equitable mortgage of land and building ofthe Company

(l) Term loan for L & T Finance Ltd is secured by first charge on Plant & Machineries of Unit IV purchased outofL&Tfunding.

(m) Working Capital facilities from Bank of India is secured by First Charge on Land, Building and Plant & Machinery of the Company and hypothecation of Stocks and Debtors and extension of Hypothecation of Wind Mill-Ill. (Unit-II)

(n) Working capital facility from Union Bank of India is secured by First Charge on inventories including imported stocks of Unit IV and first charge on Fixed Assets of Unit - IV except machineries items financed by L&T.

(o) All the Term loans and working capital loans are guaranteed by Mr.R.Doraiswamy, Managing Director and Mr.D.Rajeshkumar, Joint Managing Director.

(p) There is no overdue interest or principal amount as on 31st March 2010 in respect of Term loan and working Capital loan.

(q) In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

(r) In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an ongoing process.

(s) Sales include direct export of Rs. 1009.52 lakhs, indirect export of Rs.608.18 lakhs.

(u) Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006.

The Company has sent request letter to all its suppliers calling for their status under MSMED Act, 2006 and since many of them have not responded, the amount payable to these parties could not be disclosed. However, no party has claimed any interest for the due payable by the Company

w) Salary & Wages include Remuneration of Rs.3086633/- paid to Whole time Directors - Managing Director, Joint Managing Director and Whole time Director, as stated under note 2(a) on accounts. No person was paid remuneration of Rs.200000/- per month or Rs.2400000/- per annum during the year.

(x) In the opinion of the Management there is no impairment loss on fixed assets during the year.

(y) The income tax assessment has been completed upto the Financial Year 2006 - 2007 (Assessment Year 2007 - 2008) and there is no disputed liability or arrears of tax to be paid. The Sales tax Assessment has been completed upto the year 2007 - 2008 and there is no disputed liability or pending appeals.

(z) Previous years figures have been regrouped/ rearranged wherever necessary, to confirm with current years presentation.

(za) Figures have been rounded off to the nearest rupee

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Mar 31, 2009

A Scheme of Amalgamation (Schem) of SCL with the Company was sanctioned by the Honble High Court of Judicature at Madras vide its order dated 04.11.2009. The amalgamation is an amaglgamation in the nature of pooling of interest method as defined by Accounting Standard (AS)-14 "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India. Entries have been passed in the books of account to give effect to the scheme, as follows:

(i) With effect from the Appointed date i.e., 1st April, 2008, all the assets and liabilities of SCL are transferred to and recorded in the books of the Company at their fair values, aggregating to Rs. 15.45 crores.

(ii) 36,58,737 equity shares of Rs.10/- each at par are allotted to the equity share holders of SCL in the ratio of 9 equity shares of the Company for every 38 equity shares of SCL.

(iii) The difference of Rs.11.79 crores between (i) the net assets as stated in paragraph (a) above, and (ii) the values of equity shares, as stated in paragraphs (b) above respectively is credited to Amalgamation Reserve Account.

(iv) The Amalgamation Reserve of Rs.11.79 Crores in the books is credited to the General Reserve Account. Had the Scheme not prescribed the above treatment, the amount would have been treated as Capital Reserve as prescribed by AS-14.

(v) Accordingly, the brought forward balance of the Amalgamation Reserve of the Company has also been transferred to Reserve Account.

(vi) Inter company balances are cancelled.

(e) Previous years figures have been regrouped, wherever necessary, to conform with current years presentation. Current years figures include the figures of SCL (see Note 4 above) and hence not comparable with that of the previous year.

(a) Figures have been rounded off to the nearest rupee.

(b) There is no amount due from the Directors.

(c) Contingent Liabilities not provided for in the accounts :

1. Towards Import obligation under EPCG Scheme Bank guarantees (expiring in 2013-14) ] Rs.6.14 lakhs

2. Letter of credit (foreign and inland) for Import ] Rs.202.47 lakhs And purchase of raw materials

3. Obligation towards Bank Guarantee ] Rs.35.88 lakhs

(i) Estimated amount of the contracts remaining to be executed on capital account and not provided for (net of advances ) - Rs. NIL (Previous Year - Rs. NIL)

(j) As on 31st March 2009, there are no amounts due to be deposited with the Investor Education and Protection Fund, in respect of unclaimed matured fixed deposits and unclaimed dividends.

(k) Open Cash Credit facility from Canara Bank has been secured on hypothecation of Raw materials, Stock-in-process and Finished goods and first charge on Land & Building and Plant & Machinery. (Unit-I)

(l) Term Loan from Canara Bank, IF Branch, Coimbatore includes funding of Wind Mill-IV, funding of Energy Saver Project. Loan is secured by assets purchased on the loans and extension of equitable mortgage of land and building of the company.

(m) Term Loan from Bank of India, Saibaba Colony branch is for funding Windmill-III and purchase of Plant & Machineries. Loans are secured by the assets purchased under the loan and extension of equitable mortgage of land and building of the company.

(n) Term loan from ICICI is against hypothecation of companys car and secured by the car.

(o) Term loan for L & T Finance Ltd is secured by first charge on Plant & Machineries of Unit IV.

(p) Working Capital facilities from Bank of India is secured by First Charge on Land, Building and Plant & Machinery of the Company and hypothecation of Stocks and Debtors and extension of Hypothecation of Wind Mill-Ill. (Unit-II)

(q) Working capital facilities for Union Bank of India is secured by first charge on inventories including imported stocks of Unit-IV and second charge on machineries of Unit - IV.

(r) All the Term loans and working capital loans are guaranteed by Mr.R.Doraiswamy, Managing Director and Mr.D.Rajeshkumar, Joint Managing Director.

(s) There is no overdue interest or principal amount as on 31st March 2009 in respect of Term loan and working Capital loan.

(t) Interest on LIC loan accrued but not due is Rs.1.72 lakhs.

(u) Managing Directors remuneration Rs. 1,20,000/- per month, Joint Managing Directors remuneration Rs.1,20,000/- per month and the Whole Time Directors remuneration is Rs.8,500/- per month, excluding Bonus, Commission and PF Contribution.

(v) Sales are shown inclusive of duty and taxes collected. Sales include direct export of Rs.862.31 lakhs, Indirect export of Rs.810.91 lakhs, sale is inclusive of Excise duty of Rs.1076.34 lakhs and Sales Tax of Rs.406.39 lakhs and packing material receipts of Rs.5.23 lakhs.

(w) The sundry creditors include Rs.35.37 lakhs due to Micro and Small enterprises covered under "The Micro, Small and Medium Enterprises Act, 2006" to the extent such parties have been identified from the available information. The company has not received any claim for interest from any party covered under the said Act.

(x) Salary & Wages include Remuneration of Rs.27,80,273/- paid to Whole time Directors - Managing Director, Joint Managing Director and Whole time Director, as stated under note 2(a) on accounts. No person was paid a remuneration of Rs.2,00,000/- per month or Rs.24,00,000 per annum during the year.

(ab) The income tax assessment has been completed upto the Financial Year 2007 - 2008 (Assessment year 2008 - 2009) and there is no disputed liability or arrears of tax to be paid. The Sales tax assessment has been completed upto the year 2007 - 2008 and there is no disputed liability or pending appeals.

(ac) There is no amount due and outstanding to be credited to investor Education and Protection Fund.