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Notes to Accounts of Bajaj Electricals Ltd.

Mar 31, 2023

Nature and purpose of reserves Securities Premium

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

Debenture Redemption Reserve (DRR)

The Indian Companies Act requires companies that issue debentures to create a debenture redemption reserve (DRR) from annual profits until such debentures are redeemed. Companies are required to maintain 25% as a reserve of outstanding redeemable debentures. Accordingly, the Company creates DRR at 25% in the penultimate year to the year in which the repayment obligation arises on the Company. The amounts credited to the debenture redemption reserve will not be utilised except to redeem debentures.

General Reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

Share options outstanding account

The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.

Effective Portion of Cashflow Hedges

The Company uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross currency swaps, foreign currency option contracts and interest rate swaps. To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the effective portion of cash flow hedges. Amounts recognised in the effective portion of cash flow hedges is reclassified to the statement of profit and loss when the hedged item affects profit or loss.

Amalgamation adjustment reserve

The Company creates amalgamation adjustment reserve on account of business combination pursuant to any schemes for merger/demerger, etc.

Note c: Cash credits are secured, repayable on demand and bear interest in the range of 7.90% to 13.00%.

Note d : Charge on secured borrowings is as given below

First pari passu charge by way of hypothecation of inventories, book debts and all movable assets under the head âproperty, plant and equipment

First pari passu charge on the Company''s immovable properties at

- Wardha premises - Plot no. 36, Block no. 17, Mouza no. 225, Bacharaj road, Gandhi Chowk, Wardha

- Hari Kunj - Flat No. 103 and 104, âB'' wing, Sindhi Society, Chembur East, Mumbai - 400071

Second pari passu charge over present and future property, plant and equipment of the Company, situated at

- Ranjangaon Units : Village Dhoksanghvi, Taluka Shirur, Ranjangaon, Dist. Pune - 412210;

- Chakan Unit : Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410501;

- Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.

- Office Premises No : 001, 502, 701 and 801, âRustomjee Aspiree'', Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022

- R & D centre at Plot no. 27/ pt 2/ at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai

The Company has not defaulted on any loans which were due for repayment during the year.

Note e : The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken. Further, the Company has borrowings from banks or financial institutions on the basis of security of current assets and has filed quarterly returns / statement of current assets with banks or financial institutions which are in agreement with the books of accounts.

Disclosure of defined benefit plans are as given below :

A. Gratuity :

The Company has a defined benefit gratuity plan in India (Funded) for its employees, which requires contribution to be made to a separately administered fund. Company had an unfunded Gratuity Liability towards employees of erstwhile HLL Demerged Undertaking, which has been completely paid off during FY. 2021-22 on account of their VRS from the Company. During the FY. 2022-23, the company also passed a resolution to fund the liability pertaining to employees of entities joining-in under the schemes of business combinations

The description of plans ability to affect the amount, timing and uncertainty of the entity''s future cash flows

a) Funding arrangements and Funding Policy

The scheme is managed on funded basis. Payment for present liability of future payment of gratuity is being made to approved gratuity fund, which fully covers the same under Cash Accumulation Policies of the Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Ltd. (BALIC). Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

d) Asset liability matching strategies

For gratuity, the Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance company, as part of the policy terms, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset)

B. Provident Fund (Defined Benefit Plan) :

Bajaj Electricals Limited operates in two schemes for the compliance of provident fund statute - (i) Bajaj Electricals Limited Employees'' Provident Fund Trust & Matchwel Electricals (India) Ltd Employees'' Provident Fund Trust (defined benefit plan) and (ii) RPFC Contributions for provident fund (defined contribution plan).

For exempt provident fund, the defined benefit obligation of the Company arises from the possibility that during anytime in the future, the scheme may earn insufficient investment income to meet the guaranteed interest rate declared by government / EPFO / relevant authorities as well as for fund assets shortfall as against the liabilities of the Trusts

The net defined benefit obligation as at the valuation date represents the excess of accumulated fund value (determined on actuarial basis) plus interest rate guaranteed liability over the fair value of plan assets or vice-a-versa

The company''s compliances for provident fund is governed by Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. Responsibility for governance of the plans, including investment decisions and contribution schedules lies jointly with the company and the board of trustees. The board of trustees are composed of representatives of the company and plan participants in accordance with the plan''s regulations

The present value of obligation of Bajaj Electricals Limited Employees'' Provident Fund Trust represents the aggregate of accumulated fund value of H 19,574.05 lakhs (As on March 31, 2022 - H 17,391.82 lakhs) and interest rate guarantee H 305.92 lakhs (As on March 31, 2022 - H 320.92 lakhs). Of the above, the interest rate guarantee is recognised as provision in the Company''s books, while the accumulated fund value is recognised by the Trust. The interest rate guarantee so recognised in the Company''s books is considered as non-current liability.

Since interest rate guarantee is already accounted in BEL''s books, the liability of H 19,574.05 lakhs which is Accumulated Fund Value of H 122.23 lakhs in excess of Fair Value of Plan Assets of H 19,451.82 lakhs is accounted by BEL as payable to Trust on shortfall of plan assets. During the financial year 2021-22, out of the liability which had arisen mainly on account of negative return on plan assets contributed by negative return on Trust''s investment in IL&FS as well as DHFL in past years; the partial recovery in the form of fresh debt security units and cash has happened from DHFL and the differential value is funded by BEL to the Trust. BEL has also recorded full liability towards IL&FS which is to be paid by BEL to the Trust to the extent of unrecovered balances from IL&FS

Bajaj Electricals Limited can offset an asset relating to one plan against a liability relating to another plan when, and only when, Bajaj Electricals Limited has a legally enforceable right to use a surplus in one plan to settle obligations under the other plan; and intends either to settle the obligations on a net basis, or to realize the surplus in one plan and settle its obligation under the other plan simultaneously. However the two trusts namely Matchwel Electricals (India) Ltd Employees'' Provident Fund Trust (for Chakan employees) and Bajaj Electricals Limited Employees'' Provident Fund Trust (for H.O. employees) are independent trusts.

The description of plans ability to affect the amount, timing and uncertainty of the entity''s future cash flows a) Funding arrangements and Funding Policy

Trustees as per advice and recommendations of a professional consultant and in compliance of obligatory pattern of investments as per government notification in official gazette for the pattern of investment for EPF exempted establishments. Any deficit in the assets of PF Trusts is funded by the Company. The provident fund for certain employees is a defined contribution plans covered under RPFC Contributions

Assumptions:

Stock Price: Closing price on National Stock Exchange on the date of grant has been considered

Volatility: The expected price volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publicly available information. The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange of India Ltd. (NSE), over a period prior to the date of grant corresponding with the expected life of the options.

Risk-free rate of return: The risk-free interest rate being considered for the calculation is the interest rate applicable for a maturity equal to the expected life of the options based on the zero-coupon yield curve for Government Securities

Exercise Price: Exercise Price of each specific grant has been considered.

Time to Maturity: Time to Maturity / Expected Life of options is the period for which the Company expects the options to be live.

Expected divided yield: Expected dividend yield has been calculated as an average of dividend yields for five financial years preceding the date of the grant

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

Note a

In case of Bharat Innovation Fund, the fair value has been determined based on the NAV (net asset value) as per the statement issued by Bharat Innovation Fund.

Note b

The Company has given long term loans and advances to Nirlep Appliances Private Limited. The Company has determined the amount of loss allowance as per impairment requirements of Ind AS 109. Based on independent valuation performed by an external valuer based on the discounted cash flow model, the Company has determined that no liability has materialised as at March 31, 2023. The valuation has been performed using the below stated significant unobservable inputs as at March 31,2023.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company''s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the

The Company''s principal financial liabilities comprise of trade payables, borrowings, lease liabilities and other financial liabilities. The main purpose of these financial liabilities is to finance the entity''s operations and to provide support for its operations. The Company''s principal financial assets include trade receivables, cash and cash equivalents and bank balances, loans and other financial assets, that derive directly from its operations.

The Company lays down appropriate policies and procedures to ensure that financial risks are identified, measured and managed in accordance with the entity''s policies and risk objectives.

The Company is exposed to credit risk, liquidity risk and market risk, which are explained in detail below:

(A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Credit risk encompasses the direct risk of default, the risk of deterioration of creditworthiness as well as concentration risks. The Company is exposed to credit risk from its operating activities mainly in relation to trade and other receivables and bank deposits. Further, the Company is also exposed to credit risk arising from its loans, advances and investments of its affiliate companies.

Trade and other receivables

Trade and other receivables of the Company are typically unsecured and credit risk is managed through credit approvals and periodical monitoring of the creditworthiness of customers to which the Company grants credit terms.

In respect of trade receivables, the Company typically operates in two segments:

Consumer products & Lighting Solutions

The Company sells the products mainly through various channels i.e. dealers and distributors, institutions and e-commerce and through government sector. The appointment of dealers, distributors, institutions is strictly driven as per the standard operating procedures and credit policy followed by the Company. In case of government sector, the credit risk is low.

Engineering and projects

The Company undertake projects for government institutions (including local bodies) and private institutional customers. The credit concentration is more towards government institutions. These projects are normally of long term duration of two to three years. Such projects normally are regular tender business with the terms and conditions agreed as per the tender. These projects are fully funded by the government of India through Rural Electrification Corporation, Power Finance Corporation, and Asian Development Bank etc. The Company enters into such projects after careful consideration of strategy, terms of payment, past experience etc.

In case of private institutional customers, before tendering for the projects company evaluate the creditworthiness, general feedback about the customer in the market, past experience, if any with customer, and accordingly negotiates the terms and conditions with the customer.

The Company assesses its trade and other receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the Company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from such trade and other receivables. In respect of trade receivables the Company has a provisioning policy that is commensurate to the expected losses. The provisioning policy is based on past experience, customer creditability, and also on the nature and specifics of business especially in the engineering and projects division. In case of engineering projects, the Company also provides on more case-to-case basis, since they are large projects in individuality.

Bank deposits

The Company maintains its cash and bank balances with credit worthy banks and financial institutions and reviews it on an on-going basis. Moreover, the interest-bearing deposits are with banks and financial institutions of reputation, good past track record and high-quality credit rating. Hence, the credit risk is assessed to be low. The maximum exposure to credit risk as at March 31,2023 and March 31,2022 is the carrying value of such cash and cash equivalents and deposits with banks as shown in note 8 and 12 of the financials.

Loans, advances and investments with affiliate companies

The Company has given loans and advances to its affiliate company (Nirlep Appliances Private Limited) to meet their capex and working capital requirements. Further, the Company also has made strategic investments (equity investments) in this entity. All such loans / advances / investments and their respective terms and conditions are duly approved by the Board of Directors of the Company. These entities also act as a strategic source of product supply to the Company.

The exposure on these loans / advances / investments are reviewed on regular basis for their recoverability on the basis of their business plan, future profitability, cash flow projections, market value of the assets, etc. Such assessment is performed by the management through an independent external valuer based on which any expected credit losses are provided for in the books. (Refer Note 5 and 14)"

(B) Liquidity risk

he Company has a central treasury department, which is responsible for maintaining adequate liquidity in the system to fund business growth, capital expenditures, as also ensure the repayment of financial liabilities. The department obtains business plans from business units including the capex budget, which is then consolidated and borrowing requirements are ascertained in terms of long term funds and short-term funds. Considering the peculiar nature of EPC business, which is very working capital intensive, treasury maintains flexibility in funding by maintaining availability under committed credit lines in the form of fund based and non-fund based (LC and BG) limits.

The limits sanctioned and utilised are then monitored monthly, fortnightly and daily basis to ensure that mismatches in cash flows are taken care of, all operational and financial commitments are honoured on time and there is proper movement of funds between the banks from cashflow and interest arbitrage perspective.

Bank overdraft facilities are sanctioned for a period of one year which are then enhanced / renewed from time to time. Though the Bank overdrafts are repayable on demand as per the terms of sanction, these are usually renewed by all banks in normal circumstances. Hence Bank overdraft facilities are available for use throughout the year.

The Company operates in the global market and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar (âUSD''), Euro (âEUR''), Great Britain Pound (âGBP''), Chinese Yuan Renminbi (âRMB''), United Arab Emirates Dirham (âAED''), Kenyan Shillings (âKES''), Zambian Kwacha (âZMW'') and Canadian Dollar (âCAD''). Exposure is largely in exports receivables and Imports payables arising out of trade in the normal course of business. As these commercial transactions are recorded in currency other than the functional currency (INR), the Company is exposed to Foreign Exchange risk arising from future commercial transactions and recognised assets and liabilities. The Company is a net importer as its imports and other forex liabilities exceeds the exports. It ascertains its forex exposure and bifurcates the same into forex receivables and payables. These exposures are covered by taking appropriate forward cover from the banks.

The Company takes a forward cover based on the underlying liability for the estimated period which would be closed to the likely maturity date of the forex liability proposed to be hedged. On maturity date, the forward contracts are utilized for settlement of the underlying transactions or cancelled.

(C) Market Risk

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

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In case of short term borrowings, the interest rate is fixed in a large number of cases. Hence, interest rate risk is assessed to be low. Accordingly, the sensitivity / exposure to change in interest rate is insignificant

(iii) Commodity Price risk

The Company''s revenue is exposed to market risk of price fluctuations related to the sales of its products. Market forces generally determine the prices for the products sold by the Company. This prices may be influenced by the factors such as supply, demand, production cost (including the cost of raw materials) , regional and global economic conditions and growth. Adverse changes in any of the factors may reduce the revenue that Company earns from sale of its products. The Company is therefore subject to fluctuations in prices for the purpose of raw materials like Aluminium, Copper and other raw material inputs.

Commodity hedging is used primarily as a risk management tool to secure the future cash flow in case of volatility by entering into commodity forward contracts. The Company has entered into commodity forward contracts for aluminium and Copper. Hedging the price volatility of forecast aluminium and copper purchases is in accordance with the risk management strategy outlined by the Board of Directors. Hedging commodity is based on procurement schedule and price risk. Commodity is undertaken as a risk offsetting exercise and depending upon market conditions, hedges may extend beyond the financial year.

There is an economic relationship between the hedged items and the hedging instruments as the terms of the foreign exchange and commodity forward contracts match the terms of the expected highly probable forecast transactions (i.e., notional amount and expected payment date). The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange and commodity forward contracts are identical to the hedged risk components. To test the hedge effectiveness, the Company uses the hypothetical derivative method and compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks.

The hedge ineffectiveness can arise from:

â¢ Differences in the timing of the cash flows of the hedged items and the hedging instruments

â¢ Different indexes (and accordingly different curves) linked to the hedged risk of the hedged items and hedging instruments

â¢ The counterparties'' credit risk differently impacting the fair value movements of the hedging instruments and hedged items

â¢ Changes to the forecasted amount of cash flows of hedged items and hedging instruments

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves.

The primary objective of the Company''s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31,2023 and March 31,2022.

Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:

NOTE 37: Segment reporting

The Company w.e.f. July 1, 2022, pursuant to the provisions of Ind AS 108, identified its business segments as its primary reportable segments, which comprises of Consumer Products, Lighting Solutions and EPC. "Consumer Products" includes Appliances, Fans and Morphy Richards. "Lighting Solutions" includes Professional Lighting (B2B) and Consumer Lighting (B2C) and "EPC" includes Power Transmission and Power Distribution.

Note 40. Commitments and contingencies a. Contingent liabilities		(H in Lakhs)
Particulars	31-Mar-23	31-Mar-22
Particulars		(Restated)
Contingent Liabilities not provided for :
i) Claims against the Company not acknowledged as debts	1,753.31	1,582.71
(Refer Note xi, xii below)
ii) Guarantees on behalf of Subsidiaries H 2,000 Lakhs (Previous	-	2,359.41
Year H 7,200 Lakhs) (refer note x below)
iii) Excise and Customs duty matters under dispute	73.55	15.49
iv) Service Tax matters under dispute	149.40	149.40
v) Income Tax matters under dispute	625.73	4,266.70
vi) Sales Tax matters under dispute	5,020.21	5,150.43
vii) Uncalled liability in respect of partly paid Shares held as	7.20	7.20
investments
viii) Others	1,062.60	1,062.60

ix) The Company''s fluorescent and mercury containing lamps (CFL/FTL) fall within the purview of the E-waste (Management) Rules, 2016 (the "E-waste Rules") which has come in force with effect from October 01, 2016. Under the E-waste Rules the Company is responsible for collection and safe disposal of end of life CFL/FTL in terms of Extended Producer Responsibility (EPR) obligation set out therein. In the 57th meeting of Technical Review Committee of Central Pollution Control Board ("CPCB"), the compliances and implementation of EPR Authorisation conditions including targets under the E-waste Rules for the existing producers of CFL/ FTL were deferred till May 01, 2017. Electric Lamp and Component Manufacturers Association of India (ELCOMA), on behalf of all its members, has filed the Writ Petition (C) 5461 of 2016 ("Writ Petition") in the Hon''ble Delhi High Court challenging the inclusion of âfluorescent and mercury containing lamps'' under E-waste Rules. The Hon''ble Delhi High Court by its order dated September 28, 2016, directed the producers of CFL/FTL, to apply for EPR Authorisation without prejudice to their rights and contentions in the said Writ Petition. Subsequently, vide a later order (dated August 5, 2019) the Hon''ble Delhi High Court directed that the said interim order (dated September 28, 2016) shall continue to be operative during the pendency of the Writ.

There is no further update on this matter in the current year.

The Company has been granted EPR authorization under E-Waste (Management) Rules, 2016 by Central Pollution Control Board for Electricals and Electronic Equipment with a collection target of 986.67 MT for FY 2019-20. The Company has entered into agreements with Trans Thane Creek Waste Management Association and GATI Logistics for collection and disposal of E-waste."

x. The Company has investments, loans and advances given to Nirlep Appliances Private Limited (NAPL). Management has determined the enterprise value of NAPL based on the discounted cash flow projections for a period of 5 years. The enterprise value is greater than the value of the external debt of NAPL and considering the sensitivity around the assumptions used, the exposure in this regard is considered to be âpossible'' and disclosed as contingent liability (Refer Note 34). There are no guarantees outstanding as on March 31,2023.

xi. These represent legal claims filed against the Company by various parties and these matters are in litigation. Management has assessed that in all these cases the outflow of resources embodying economic benefits is not probable.

xii. The Company had in earlier years terminated employment agreements of few die casting workmen at the Chakan plant. On 3rd July, 2018, the Honourable Hight Court of Bombay had awarded the appeal in favour of the Company. On 27th June, 2019, the appeal on the matter has been admitted in the Honourable Supreme Court. Management has assessed that the outflow of resources embodying economic benefits is not probable and has accordingly considered the claim of H 323.22 lakhs as contingent liability.

b. Commitments

i. Estimated amounts of contracts remaining to be executed in capital account (net of capital advances) is H 2,876.60 lakhs (March 31,2022, H 787.45 lakhs).

ii. During the previous year the Company has successfully won bidding for the Transmission line package of Ghatampur, Hapur and Indirapuram with Substation at Mohanlalganj. The cost estimated to complete the project has significant exceeded the cost expected at the time of bidding on account of

â¢ Delay in awarding the project,

â¢ increase in metal prices,

Considering the foreseeable loss on the project basis March 31,2022 rates, the Company had recorded a loss of H 2,213 lakhs in the year ended March 31,2022. During the current year, the Company has reversed the loss if H 2,034.65 lakhs towards the same project.

The contract assets and contract liabilities balances mentioned above pertain to the EPC segment of the Company. The Company executes the work as per the terms and agreements mentioned in the contracts. The Company receives payments from the customers based on the milestone achievement and billing schedule as established in the contracts.

Contract assets are initially recognised for revenue earned from supply of materials and erection services provided when the performance obligation is met. Upon achievement and acceptance of milestones mentioned by the customer, the amounts recognised as contract assets are reclassified to trade receivables.

Contract liabilities are relates to payments received in advance of performance under the contract and billing in excess of contract revenue recognised. Contract liabilities are recognised as revenue when the Company satisfies the performance obligation under the contract.

(iii) Performance obligations

Information about the Company''s performance obligations under CP and EPC segment are summarised below:

Consumer Product and Lighting Solutions Segment:

a) Delivery of goods:

The Company sells fans, appliances and lighting products to the customers. The performance obligation is satisfied and revenue is recognised on dispatch of the goods to the customers. The stand alone selling price of the performance obligation is determined after taking the variable consideration and right to return. The contracts do not have a significant financing component. The Company offers standard warranty on selected products. The Company makes provision for same as per the principles laid down under Ind AS 37. The payment is generally due within 30 to 60 days across various streams of customers.

b) Loyalty program:

The Company operates a customer loyalty program (for retailers), where the customer is awarded certain points on purchase of selected products from the Company. The customer (retailer) can redeem these points in future. The Company treats the redemption of customer loyalty points as a separate performance obligation. Accordingly, the revenue is recognised by allocating the total transaction price on the stand alone selling prices of sale of goods and loyalty points.

c) Extended warranties:

The Company provides a warranty beyond fixing defects that existed at the time of sale. These service-type warranties are bundled together with the sale of products. Contracts for bundled sales of products and a service-type warranty comprise two performance obligations because the product and service-type warranty are both sold on a stand-alone basis and are distinct within the context of contract. Using the relative stand-alone selling price method, a portion of the transaction price is allocated to the service-type warranty and recognised as deferred revenue. Revenue for service-type warranties is recognised over the period in which the service is provided based on the time elapsed.

Engineering, procurement and construction:

The performance obligations in EPC segment is the supply of materials and erection services. The supply of materials and erection services are promised goods and services which are not individually distinct. Hence both of them are counted as a single performance obligation under the contract. The satisfaction of this performance obligation happens over time, as the performance or enhancement of the obligation is controlled by the customer. Also, the performance of the obligation creates an asset without any alternative use to the customer. The Company uses the input method to determine the progress of the satisfaction of the performance obligation and accordingly recognises revenue.

The standalone selling price of the performance obligation is determined after taking the variable consideration and significant financing component .

Note 42: Leases:

The Company for the consumer products segment, generally takes godowns on lease to store the goods at various locations. These godowns generally have a term of 1 year to 3 years. There are few godowns with a longer lease period of 5 years or more also. Similarly, the Company also takes on lease, storage places at various EPC sites to store the inventories which are used for construction. These leases are generally short term in nature, with very few contracts having a tenure of 1-2 years. Further, the Company has few guest houses, residential premises and office premises also on leases which generally for a longer period ranging from 2-5 years.

The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Upon adoption of Ind AS 116, the Company applied a single recognition and measurement approach for all leases for which it is the lessee, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets, on the commencement of the lease. There are several lease contracts that include extension and termination options. The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The leases which the Company enters, does not have any variable payments. The lease rents are fixed in nature with gradual escalation in lease rent.

Apart from the above, the Company also has various leases which are either short term in nature or the assets which are taken on the leases are generally low value assets (e.g. printers). Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

The Company has determined leasehold lands also as, right of use assets and hence the same has been classified from property, plant and equipment to right of use assets.

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

2. The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period,

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

4. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

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

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

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

6. The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961

7. The Company has not granted any loans or advances in nature of loans to promoters, directors and KMPs either severally or jointly with any other person during the year ended March 31,2023 and March 31,2022.

8. The Company has not been declared wilful defaulter by any bank, financial institution, government or government authority.

9. The Company has not revalued its property, plant and equipment (including right-to-use assets) or intangible assets during the year ended March 31,2023 and March 31,2022."

The Company has evaluated subsequent events from the balance sheet date through May 23, 2023, the date at which the standalone financial statements were available to be issued, and determined that there are no material items to disclose.

Note 49: Previous year''s figures have been regrouped / reclassed wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2022

(ii) Property, plant and equipment pledged as security

Refer to note 18 for information on property, plant and equipment pledged as security by the Company.

(iii) Contractual obligations

Refer to note 40(b) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iv) Capital work-in-progress

Capital work-in-progress mainly comprises of Electrical Installations and Dies & Jigs amounting to H 240.60 lakhs (March 31, 2021 -H 314.20 lakhs) and H 2,363.76 lakhs (March 31, 2021 - H 543.13 lakhs) respectively, pending for installation.

(v) Impairment

The operations at Kosi unit have been discontinued since 2016. The Company is evaluating potential use of the existing facilities and is also exploring selling opportunities. Accordingly, based on assessment performed, the plant and machinery amounting to H 729.36 lakhs has been impaired in financial year 2019. In the financial year 2020, the Company has sold few of these assets and accordingly, the impairment charge of H 24.60 lakhs has been reversed and profit on sale of assets has been recognised. Further, in the current year, the Company has sold of the entire plant and machinery and hence the remaining impairment charge of H 704.76 lakhs has been reversed and loss on sale of assets has been recognised.

(vi) Title deeds

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

* In respect of Investments made in M. P Lamps Ltd., calls of H 2.50 per share on 48,000 equity shares and H 3.75 per share on 95,997 Equity Shares aggregating to H 4.80 lakhs have not been paid by the Company. On principles of prudence the entire investment in M.P Lamps Ltd. is considered as impaired and accordingly carried at H NIL.

** During the previous year, the Hon''ble National Company Law Tribunal, Mumbai Bench vide its order dated May 21, 2020 had approved the scheme of arrangement for demerger of the manufacturing undertaking of the Hind Lamps Limited (associate of the Company) into the Company, which has been filed with the Registrar of Companies on June 30, 2020. The Company has accounted for the demerger as a business combination under Ind AS 103 as per the Scheme and accounted for the fair value of assets and liabilities acquired. Consequently, the Company has derecognised its existing 19% of the proportionate invesment in the manufacturing undertaking of Hind Lamps Limited. Refer note 44 for more details

*** In the current year, Mr. Mukund Bhogale, Mrs. Rajani Bhogale, Mr. Ramchandra Bhogale, and Mr. Nityanand Bhogale (collectively, "Continuing Shareholders", of Nirlep Appliances Private Limited ("Nirlep") - a subsidiary of the Company) and the Company have completed the required procedure for transfer of the Option Shares to the Company, as per the terms of the agreement. All the above Option Shares have been acquired by the Company, against a cash consideration of H 1,017.88 lakhs. With the above purchase/acquisition, the entire 100% equity share capital of Nirlep is now legally and beneficially held by the Company along with its nominees, and consequently, Nirlep has now become a wholly-owned subsidiary company of the Company.

**** During the current year, the Company at its meeting held on April 30, 2021, (""Effective Date"") executed the Control Transfer Agreement ("CTA") with (i) Shri Ravindra Bharati and Shri Arvind Bharati (collectively, the "Outgoing Promoters"), who, along with the Company, were promoters / joint promoters of Starlite Lighting Limited ("SLL"), (ii) some other shareholders of SLL (related to the outgoing promoters or belonging to their business group), and (iii) SLL

â¢ to terminate the Shareholders Agreement dated February 22, 2007 by and between the outgoing promoters, company and SLL; and

â¢ to record the agreed terms and conditions for the relinquishment and transfer of the joint control and management rights of SLL by the outgoing promoters in favour of the Company such that the Company shall have the sole control and management rights of SLL from the start of the business hours on the Effective Date.

In consideration of the said relinquishment and transfer of joint control and management rights of SLL by outgoing promoters in favour of the Company, the Company has paid an aggregate control premium of H.1,480 lakhs, plus GST as applicable, to the outgoing promoters, subject to the terms and conditions of the said CTA. Subsequently, SLL is consolidated as a subsidiary from the said date.

Further with the approval granted by the Board of Directors at its meeting, the Share Subscription Agreement ("SSA") has been executed on April 30, 2021 (after the execution of CTA) by and amongst: (i) the Company, (ii) SLL, (iii) Shri Ravindra Bharati, and (iv) Shri Arvind Bharati, for subscribing to the 4,50,00,000 Equity Shares of SLL ("Subscription Shares") by the Company and/or by its identified purchaser(s) at a price of H.10/- per Equity Share, which are issued on a private placement / preferential allotment basis.

***** The Board of Directors ("the Board"") of the Company at its meeting held on, February 8, 2022 has inter-alia, subject to the approval of the shareholders of the Company, considered and approved the Scheme of Arrangement between Bajaj Electricals Limited (the "Demerged Company" or "Company") and Bajel Projects Limited (the "Resulting Company") and their respective shareholders under Sections 230-232 of the Companies Act, 2013 ("Scheme") involving the following:-

(a) Transfer by way of demerger of the Demerged Undertaking (as defined in the Scheme) consisting of Power Transmission and Power Distribution Business (as defined in the Scheme) of the Demerged Company into the Resulting Company and consequent issue of equity shares by the Resulting Company to the shareholders of the Demerged Company; and

(b) Various other matters consequential or otherwise integrally connected therewith.

The equity shares of the Resulting Company shall be listed on BSE Limited and National Stock Exchange of India Limited (collectively, the "Stock Exchanges"), post the effectiveness of the Scheme. The shareholders of the Company will be issued shares in the Resulting Company in the same proportion as their holding in the Company. The Scheme is subject to necessary statutory and regulatory approvals including the approval of Hon''ble National Company Law Tribunal, Mumbai Bench.

ii) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of H 2/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

iii) Issue of shares under Rights Issue:

In the financial year 2019-2020, Board of Directors of the Company at their meeting held on January 6, 2020, approved the offer and issue of 11,290,142 fully paid-up equity shares of the Company by way of a rights issue to eligible shareholders of the Company as on the record date in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure requirements) Regulations, 2018, as amended and other applicable laws, at a price of H 310 per share including a premium of H 308 per share.

Pursuant to the finalisation of the basis of allotment of the Issue in consultation with BSE Limited, the designated stock exchange for the Issue, the Rights Issue Committee at its meeting held on March 13, 2020 considered and approved the allotment of 1 1,287,956 Rights Equity Shares, at an issue price of H.310 per Rights Equity Share, including a premium of H308 per Rights Equity Share to the eligible applicants in the Issue.

In light of the Ministry of Finance (Department of Financial Services) (Banking Division) and Reserve Bank of India imposing a moratorium on Yes Bank Limited ("Yes Bank") with effect from 18.00 hours on March 5, 2020 until April 3, 2020, 2186 Rights Equity Shares of applicants who have made application in the Rights Equity Shares using Applications Supported by Blocked Amount ("ASBA") facility of Yes Bank, have been kept in abeyance which shall be allotted post receipt of the requisite funds. The Company has received funds for 7 shares, which is lying in share application money pending allotment account. The Company has allotted these shares at the subsequent rights issue committee meeting held on May 14, 2020. The Company has forfeited the remainder 2,179 shares.

Further, with regards to 55 shares, the Company has received final certificates from the Banks who have blocked the funds using ASBA Facility. However these Banks are yet to transfer the funds to the Company.

v) Share reserved for issue under employee stock option scheme

For details of shares reserved for issue under the employee share based payment plan of the Company, please refer Note 33.

vi) Issue of shares under demerger scheme

Debenture Redemption Reserve (DRR)

General Reserve

Share options outstanding account

The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding Account.

Effective Portion of Cashflow Hedges

a First pari passu charge by way of hypothecation of inventories, book debts and all movable assets under the head ''property, plant and equipment''

b First pari passu charge on the Company''s immovable properties at

i) Wardha premises - Plot no. 36, Block no. 17, Mouza no. 225, Bacharaj road, Gandhi Chowk, Wardha

ii) Hari Kunj - Flat No. 103 and 104, ''B'' wing, Sindhi Society, Chembur East, Mumbai - 400071

c Second pari passu charge over present and future property, plant and equipment of the Company, situated at;

i) Ranjangaon Units : Village Dhoksanghvi, Taluka Shirur, Ranjangaon, Dist. Pune - 412210;

ii) Chakan Unit : Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410501; iii Wind Farm : Village Vankusawade, Tal. Patan, Dist. Satara, Maharashtra 415206;

iv) Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.

v) Office Premises No : 001,502, 701 and 801, ''Rustomjee Aspiree'', Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022

vi) Kosi Factory Unit at Khasra No.647,648, NH 02, Km 109 Mile Stone, Village Dautana, Chhatta, Kosi Kallan, Mathura 281403.

vii) R & D centre at Plot no. 27/ pt 2/ at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai The Company has not defaulted on any loans which were due for repayment during the year.

A. Gratuity :

a) Funding arrangements and Funding Policy

d) Asset liability matching strategies

B. Provident Fund (Defined Benefit Plan) :

Note 21 : Employee Benefit Obligations (Contd..)

The present value of obligation of Matchwel Electricals (India) Ltd Employees'' Provident Fund Trust represents the aggregate of accumulated fund value of H 433.36 lakhs (As on March 31, 2021 - H 412.07 lakhs) and interest rate guarantee H 8.00 lakhs (As on March 31, 2021 - H 10.92 lakhs). Of the above, the interest rate guarantee is recognised as provision in the Company''s books, while the accumulated fund value is recognised by the Trust. The interest rate guarantee so recognised in the Company''s books is considered as non-current liability

The present value of obligation of Bajaj Electricals Limited Employees'' Provident Fund Trust represents the aggregate of accumulated fund value of H 17,391.82 lakhs (As on March 31, 2021 - H 16,274.54 lakhs) and interest rate guarantee H 320.92 lakhs (As on March 31, 2021 - H 431.35 lakhs). Of the above, the interest rate guarantee is recognised as provision in the Company''s books, while the accumulated fund value is recognised by the Trust. The interest rate guarantee so recognised in the Company''s books is considered as non-current liability.

Since interest rate guarantee is already accounted in BEL''s books, the liability of H 163.68 lakhs which is Accumulated Fund Value of H 17,391.82 lakhs in excess of Fair Value of Plan Assets of H 17,227.94 lakhs is accounted by BEL as payable to Trust on shortfall of plan assets. During the year, out of the liability which had arisen mainly on account of negative return on plan assets contributed by negative return on Trust''s investment in IL&FS as well as DHFL in past years; the partial recovery in the form of fresh debt security units and cash has happened from DHFL and the differential value is funded by BEL to the Trust. BEL has also recorded full liability towards IL&FS which is to be paid by BEL to the Trust

The description of plans ability to affect the amount, timing and uncertainty of the entity''s future cash flows a) Funding arrangements and Funding Policy

The scheme is managed on funded basis. Payment for present liability of future payment of PF is made by the Company towards shortfall of Bajaj Electricals Limited Employees'' Provident Fund Trust and Matchwel Electricals (India) Ltd Employees'' Provident Fund Trust. The investments for the same are managed by Trustees as per advice and recommendations of a professional consultant and in compliance of obligatory pattern of investments as per government notification in official gazette for the pattern of investment for EPF exempted establishments. Any deficit in the assets of PF Trusts is funded by the Company. The provident fund for certain employees is a defined contribution plans covered under RPFC Contributions

Assumptions:

Stock Price: Closing price on National Stock Exchange on the date of grant has been considered

Exercise Price: Exercise Price of each specific grant has been considered.

Time to Maturity: Time to Maturity / Expected Life of options is the period for which the Company expects the options to be live.

Expected divided yield: Expected dividend yield has been calculated as an average of dividend yields for five financial years preceding the date of the grant

Note 35: Financial risk management objectives and policies

The Company lays down appropriate policies and procedures to ensure that financial risks are identified, measured and managed in accordance with the entity''s policies and risk objectives.

The Company is exposed to credit risk, liquidity risk and market risk, which are explained in detail below:

(A) Credit risk

Trade and other receivables

In respect of trade receivables, the Company typically operates in two segments:

Consumer products

The Company sells the consumer products mainly through various channels i.e. dealers and distributors, institutions and e-commerce and through government sector. The appointment of dealers, distributors, institutions is strictly driven as per the standard operating procedures and credit policy followed by the Company. In case of government sector, the credit risk is low.

Engineering and projects

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by the government of India through Rural Electrification Corporation, Power Finance Corporation, and Asian Development Bank etc. The Company enters into such projects after careful consideration of strategy, terms of payment, past experience etc.

The maximum exposure to credit risk as at March 31, 2022 and March 31, 2021 is the carrying value of such trade and other receivables as shown in note 6, 8 and 13 of the standalone financial statements.

Note 35: Financial risk management objectives and policies (Contd..)(B) Liquidity risk

The Company has a central treasury department, which is responsible for maintaining adequate liquidity in the system to fund business growth, capital expenditures, as also ensure the repayment of financial liabilities. The department obtains business plans from business units including the capex budget, which is then consolidated and borrowing requirements are ascertained in terms of long term funds and short-term funds. Considering the peculiar nature of EPC business, which is very working capital intensive, treasury maintains flexibility in funding by maintaining availability under committed credit lines in the form of fund based and nonfund based (LC and BG) limits.

Bank deposits

The Company maintains its cash and bank balances with credit worthy banks and financial institutions and reviews it on an on-going basis. Moreover, the interest-bearing deposits are with banks and financial institutions of reputation, good past track record and high-quality credit rating. Hence, the credit risk is assessed to be low. The maximum exposure to credit risk as at March 31,2022 and March 31,2021 is the carrying value of such cash and cash equivalents and deposits with banks as shown in note 12 of the financials.

Loans, advances and investments with affiliate companies

The Company has given loans and advances to its affiliate companies (Nirlep Appliances Pvt Ltd and Starlite Lighting Limited) to meet their capex and working capital requirements. Further, the Company also has made strategic investments (equity and preference investments) in these entities. All such loans / advances / investments and their respective terms and conditions are duly approved by the Board of Directors of the Company. These entities also act as a strategic source of product supply to the Company.

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

The Company operates in the global market and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar (''USD''), Euro (''EUR''), Great Britain Pound (''GBP''), Chinese Yuan Renminbi (''RMB''), United Arab Emirates Dirham (''AED''), Kenyan Shillings (''KES''), Zambian Kwacha (''ZMW'') and Canadian Dollar (''CAD''). Exposure is largely in exports receivables and Imports payables arising out of trade in the normal course of business. As these commercial transactions are recorded in currency other than the functional currency (INR), the Company is exposed to Foreign Exchange risk arising from future commercial transactions and recognised assets and liabilities. The Company is a net importer as its imports and other forex liabilities exceeds the exports. It ascertains its forex exposure and bifurcates the same into forex receivables and payables. These exposures are covered by taking appropriate forward cover from the banks.

(ii) Interest rate risk

(iii) Commodity Price risk

The Company''s revenue is exposed to market risk of price fluctuations related to the sales of its products. Market forces generally determine the prices for the products sold by the Company. These prices may be influenced by the factors such as supply, demand, production cost (including the cost of raw materials) , regional and global economic conditions and growth. Adverse changes in any of the factors may reduce the revenue that Company earns from sale of its products. The Company is therefore subject to fluctuations in prices for the purpose of raw materials like Aluminium, Copper and other raw material inputs.

The hedge ineffectiveness can arise from:

â¢ Differences in the timing of the cash flows of the hedged items and the hedging instruments

â¢ Different indexes (and accordingly different curves) linked to the hedged risk of the hedged items and hedging instruments

â¢ The counterparties'' credit risk differently impacting the fair value movements of the hedging instruments and hedged items

â¢ Changes to the forecasted amount of cash flows of hedged items and hedging instruments

Note 36: Capital Management

For the purpose of capital management, capital includes issued equity share capital, securities premium and all other equity reserves attributable to the equity shareholders.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders. The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. Management considers the amount of capital in proportion to risk and manages the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders (buyback) or issue new shares.

The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The management monitors the return on capital as well as the level of dividends to shareholders.

Note 40. Commitments and contingencies a. Contingent liabilities

(H in Lakhs)
	31-Mar-22	31-Mar-21
Contingent Liabilities not provided for :
i) Claims against the Company not acknowledged as debts (Refer Note xi, xii below)	1,582.71	2,067.20
ii) Guarantees on behalf of Subsidiaries H 7,200 Lakhs (Previous Year H 26,700.00 Lakhs) (refer note x below)	2,359.41	22,986.70
iii) Excise and Customs duty matters under dispute	15.49	15.49
iv) Service Tax matters under dispute	149.40	149.40
v) Income Tax matters under dispute	4,266.70	385.76
vi) Sales Tax matters under dispute	5,150.43	4,655.82
vii) Uncalled liability in respect of partly paid Shares held as investments	7.20	7.20
viii) Others	1,062.60	181.60

ix. The Company''s fluorescent and mercury containing lamps (CFL/FTL) fall within the purview of the E-waste (Management) Rules, 2016 (the "E-waste Rules") which has come in force with effect from October 01,2016. Under the E-waste Rules the Company is responsible for collection and safe disposal of end of life CFL/FTL in terms of Extended Producer Responsibility (EPR) obligation set out therein. In the 57th meeting of Technical Review Committee of Central Pollution Control Board ("CPCB"), the compliances and implementation of EPR Authorisation conditions including targets under the E-waste Rules for the existing producers of CFL/ FTL were deferred till May 01, 2017. Electric Lamp and Component Manufacturers Association of India (ELCOMA), on behalf of all its members, has filed the Writ Petition (C) 5461 of 2016 ("Writ Petition") in the Hon''ble Delhi High Court challenging the inclusion of ''fluorescent and mercury containing lamps'' under E-waste Rules. The Hon''ble Delhi High Court by its order dated September 28, 2016, directed the producers of CFL/FTL, to apply for EPR Authorisation without prejudice to their rights and contentions in the said Writ Petition. Subsequently, vide a later order (dated August 5, 2019) the Hon''ble Delhi High Court directed that the said interim order (dated September 28, 2016) shall continue to be operative during the pendency of the Writ.

The matter was supposed to be listed in March, 2020 but progress of the case was stalled due to lockdown as courts were only taking up extremely urgent cases through video conferences and since then no development has taken place in the matter.

x. The Company has investments, loans and advances given to Starlite Lighting Limited (SLL) and Nirlep Appliances Private Limited (NAPL). Management has determined the enterprise value of SLL & NAPL based on the discounted cash flow projections for a period of 5 years. The enterprise value is greater than the value of the external debt of SLL & NAPL and considering the sensitivity around the assumptions used, the exposure in this regard is considered to be ''possible'' and disclosed as contingent liability (Refer Note 34).

b. Commitments

i. Estimated amounts of contracts remaining to be executed in capital account (net of capital advances) is H 787.45 lakhs (March 31, 2021, H 1,474.86 lakhs).

ii. The Company has entered into an agreement with Bharat Innovation Fund (Category 1 Alternative Investment Fund - Venture Capital Fund) amongst IDBI Trusteeship Services Limited (the trustee) and CIIE Advisors Private Limited (the fund manager), for a contribution of H 1,300 lakhs. As on March 31,2022, only H 418.94 Lakhs has been drawn down by Bharat Innovation Fund.

iii. During the year the Company has successfully won bidding for the Transmission line package of Ghatampur, Hapur and Indirapuram with Substation at Mohanlalganj. The cost estimated to complete the project has significant exceeded the cost expected at the time of bidding on account of

â¢ Delay in awarding the project;

â¢ increase in metal prices,

Considering the foreseeable loss on the project basis March 31, 2022 rates, the Company has recorded a loss of H 2,213 lakhs in the year ended March 31, 2022

(iii) Performance obligations

Information about the Company''s performance obligations under CP and EPC segment are summarised below:

Consumer Product Segment:

a) Delivery of goods:

The Company sells fans, appliances and lighting products to the dealers and distributors. The performance obligation is satisfied and revenue is recognised on delivery of the goods to the dealer and distributor. The stand alone selling price of the performance obligation is determined after taking the variable consideration and right to return. The contracts do not have a significant financing component. The Company offers standard warranty on selected products. The Company makes provision for same as per the principles laid down under Ind AS 37. The payment is generally due within 30 to 60 days across various streams of dealers and distributors.

b) Loyalty program:

c) Extended warranties:

Engineering, procurement and construction:

The standalone selling price of the performance obligation is determined after taking the variable consideration and significant financing component .

Note 42: Leases:

Note 44: Business combination on demerger of manufacturing undertaking of the Hind Lamps Limited into the Group

During the previous year, the Hon''ble National Company Law Tribunal, Mumbai Bench vide its order dated May 21, 2020 had approved the scheme of arrangement for demerger of the manufacturing undertaking of the Hind Lamps Limited (associate of the Company) into the Company, which has been filed with the Registrar of Companies on June 30, 2020. The Company has accounted for the demerger as a business combination under Ind AS 103 as per the Scheme and accounted for the fair value of assets and liabilities acquired. Consequently, the Company has derecognised its existing 19% of the proportionate investment in the manufacturing undertaking of Hind Lamps Limited, resulting in a gain of H 1,176.12 lakhs which has been disclosed as an exceptional items in the financial statements. As per the Ind AS 103 and the Scheme, the difference of H 165.18 lakhs, between the fair value of the assets acquired, liabilities assumed and the consideration has been credited to other comprehensive income and accumulated in equity as capital reserve.

Note 47: Other statutory information

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

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

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

4. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

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

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

8. The Company has not granted any loans or advances in nature of loans to promoters, directors and KMPs either severally or jointly with any other person during the year ended March 31, 2022 and March 31, 2021.

9. The Company has not been declared wilful defaulter by any bank, financial institution, government or government authority.

10. The Company has not revalued its property, plant and equipment (including right-to-use assets) or intangible assets during the year ended March 31, 2022.

The Company has made an assessment of the impact of continuing COVID-19 pandemic on it current and future operations, liquidity position and cashflow giving due consideration to internal and external factors. The Company is continuously monitoring the situation and does not foresee any significant impact on its operations and the financial position as at March 31, 2022.

Note 49: Subsequent events

The Company has evaluated subsequent events from the balance sheet date through May 17, 2022, the date at which the standalone financial statements were available to be issued, and determined that there are no material items to disclose.

Note 50: Previous year''s figures have been regrouped / reclassed wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2018

1A GENERAL INFORMATION.

Bajaj Electricals Limited (âthe Companyâ) is an existing public limited company incorporated on July 14, 1938 under the provisions of the Indian Companies Act, 1913 and deemed to exist within the purview of the Companies Act, 2013, having its registered office at 45/47, Veer Nariman Road, Mumbai-400 001. The Company deals in Consumer Segments (CP) (which includes appliances, fan and consumer lighting products). The Company also deals in Engineering and projects (EPC) (which includes supply and erection of transmission line towers, telecommunication towers, high masts, poles,special projects including rural electrification projects and luminaires. The equity shares of the Company are listed on BSE Limited (âBSEâ) and National Stock Exchange of India Limited (âNSEâ). The financial statements are presented in Indian Rupee (â).

The financial statements are approved for issue by the Companyâs Board of Directors on May 23, 2018

1B ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

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

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

Issue of Ind AS 115 - Revenue from Contracts with Customers

Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 on March 28, 2018, which has notified the following new Ind AS 115 - Revenue from Contracts with Customers accounting standard and is applicable for accounting periods commencing on or after April 01, 2018

Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue, Ind AS 11 Construction Contracts when it becomes effective. The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Specifically, the standard introduces a 5-step approach to revenue recognition:

- Step 1: Identify the contract(s) with a customer

- Step 2: Identify the performance obligation in contract

- Step 3: Determine the transaction price

- Step 4: Allocate the transaction price to the performance obligations in the contract

- Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 April 2018.

The Company is in the process of evaluating the impact of the same on the financial statements.

Amendments to Ind AS 112 - disclosure of Interests in Other Entities

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

The requirements of the amendment have no impact on the financial statements as there are no subsidiary, joint venture or an associate that has been classified as held for sale.

Amendments to Ind AS 12 Recognition of deferred Tax Assets for unrealised Losses

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

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

These amendments are effective for annual periods beginning on or after April 01, 2018. These amendments are not expected to have any material impact on the Company.

Transfers of Investment Property â Amendments to Ind AS 40

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in managementâs intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectively to changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

The amendments are effective for annual periods beginning on or after April 01, 2018. The Company does not have any investment property. Accodingly there is no impact.

Ind AS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that:

- An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.

- If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associateâs or joint ventureâs interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised;

(b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent.

The amendments should be applied retrospectively and are effective from April 01, 2018. These amendments are not applicable to the Company.

Appendix B to Ind AS 21 Foreign Currency Transactions and Advance Consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or nonmonetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration.

Entities may apply the Appendix requirements on a fully retrospective basis. Alternatively, an entity may apply these requirements prospectively to all assets, expenses and income in its scope that are initially recognised on or after:

(i) The beginning of the reporting period in which the entity first applies the Appendix, or

(ii) The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting period in which the entity first applies the Appendix.

The Appendix is effective for annual periods beginning on or after April 01, 2018. However, the Company does not expect any significant effect on its financial statements.

1C SUMMARY OF CRITICAL ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. The management also needs to exercise judgment in applying the Companyâs accounting policies. This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included below.

1 Warranty provision

The Company generally offers 1 to 2 year warranties for its consumer products. Based on the evaluation of the past warranty trends, management has estimated that warranty costs for 25% of sales arises in the year of sale itself, warranty costs for 50% of the sales in Year 1 and the balance 25% in Year 2. Based on the same, the related provision for future warranty claims has been determined. The assumptions made in relation to serviceable sales and related warranty provision estimation for the current period are consistent with those in the prior years.

2 Impairment allowance for trade receivables

The Company makes allowances for doubtful accounts receivable using a simplified approach which is a dual policy of an ageing based provision and historical / anticipated customer experience. Management believes that this simplified model closely represents the expected credit loss model to be applied on financial assets as per Ind AS 109.

3 Project revenue and costs

Revenue from construction contracts is recognised based on the stage of completion determined with reference to the actual costs incurred up to reporting date on the construction contract and the estimated cost to complete the project. The percentage-of-completion method places considerable importance on accurate estimates to the extent of progress towards completion and may involve estimates on the scope of deliveries and services required for fulfilling the contractually defined obligations. These significant estimates include total contract costs, total contract revenues, contract risks, including technical, political and regulatory risks, and other judgments. The Company re-assesses these estimates on periodic basis and makes appropriate revisions accordingly.

4 Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments. Refer Note 34 of financial statements for the fair value disclosures.

5 Employee benefits

The cost of the defined benefit gratuity plan and other post-employment leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases are based on expected future inflation rates.

6 For judgements relating to contingent liabilities, refer note 40(a).

(i) Leased assets

The Company has given the following assets on operating lease to third parties, the gross block, accumulated depreciation and net book value is as mentioned below:

(ii) Property, plant and equipment pledged as security

Refer to note 42 for information on property, plant and equipment pledged as security by the Company.

(iii) Contractual obligations

Refer to note 40(b) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iv) Capital work-in-progress

Capital work-in-progress mainly comprises of IT Hardware amounting to Rs.248.04 lakh, pending for installation

* in respect of Investments made in M. P. Lamps Ltd., calls of Rs.2.50 per share on 48,000 equity shares and Rs.3.75 per share on 95,997 Equity Shares aggregating to Rs.4.80 lakh have not been paid by the Company. On principles of prudence the entire investment in M.P. Lamps Ltd. is considered as impaired and accordingly carried at Rs. NIL.

** The board of directors of the Company on November 23, 2015 have approved the proposed scheme of demerger of the manufacturing business of Hind Lamps Limited (Demerged undertaking) into the Company. The scheme of arranagement is drawn up pursuant to the provisions of section 230-232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the Income Tax Act, 1961 as may be applicable. The Company is in the process of filing the scheme with the National Company Law Tribunal. The board of directors in the meeting held on November 09, 2017 further approved the revised swap ratio of equity shares for the proposed demerger pursuant to the SEBI regulations and the directions of the stock exchanges.

The Company is in the process of filing the scheme with the National Company Law Tribunal.

Transferred receivables

The carrying amount of trade receivables, include receivables which are subject to factoring arrangements and channel financing facilities. Under this arrangement the Company has transferred the relevant receivables to the factor in exchange for cash. The said facilities are with recourse to company. The Company therefore continues to recognise the transferred assets in their entirety in its balance sheet. The amount repayable under the factoring agreement is presented as unsecured borrowings / other current liabilities.

For breakup of financial assets carried at amortised cost, refer note 34.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. For trade and other receivables due from firms or private companies in which any director is a partner, a director or a member, refer note 38

The Company has not recognised deferred tax assets of Rs.2,847.31 lakh on the impairment allowance made on financial assets / investments of Starlite Lighting Limited and Hind Lamps Limited since it is not probable that the long term capital gains will be available against which such deferred tax assets can be utilised.

Amounts recognised in profit or loss

Write-downs of inventories to net realisable value amounted to Rs.711.75 lakh (March 31, 2017 - Rs.800.69 lakh) was recognised as an expense during the year.

Upon relocation of Companyâs employees to new office premises in Mumbai, the leasehold immovable property together with buildings and structure standing thereon was lying vacant. Therefore, the Board of Directors of the Company approved the sale and transfer of leasehold rights therein in favour of the purchaser vide Resolution dated March 23, 2015 subject to the permissions from the appropriate authorities and accordingly the said transaction of sale and transfer of leasehold rights was to be completed within one (1) year. However, on account of delay in getting the requisite permissions from the appropriate authorities the transaction is yet pending. The purchaser and the Company are committed for the transaction to sail through. The asset held for sale are not attached to any reported business segment but part of other unallocable assets. The Company has received an amount of Rs.800 lakh pertains to the advances received from the party in relation to this sale. The same is shown as a liability under other current liabilities.

Further, on March 29, 2017, the Board of Directors of the Company had approved the sale of Company owned residential premises to unlock the investment therein as the usage thereof was minimum. The sale of this residential premises was completed in this financial year.

ii) terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

iv) Share reserved for issue under employee stock option scheme

For details of shares reserved for issue under the employee share based payment plan of the Company, please refer Note 33

Note h: Sales bill discounting and Hundi acceptances

The Company has arrangements with HSBC Bank, Kotak Mahindra Bank and BNP Paribas Bank for sales bill discounting. These loans are unsecured and carry interest in the range of 7.5% to 8.7% and for a period of 45 to 60 days.

The Company also has arrangement with various banks for purchase bill discounting. These are also unsecured and carry an interest in the range of 6.9% to 8% and for a period of 90 days.

Note I : Charge on secured borrowings is as given below

a First pari passu charge by way of hypothecation of inventories and book debts.

b First pari passu charge on the Companyâs immovable properties at

i) Wardha premises - Plot no. 36, Block no. 17, Mouza no. 225, Bacharaj road, Gandhi Chowk, Wardha

ii) Hari Kunj - Flat No. 103 and 104, âBâ wing, Sindhi Society, Chembur East, Mumbai - 400071 c Second pari passu charge over present and future Fixed Assets of the Company, situated at;

i) Ranjangaon Units : Village Dhoksanghvi, Taluka Shirur, Ranjangaon, Dist. Pune - 412210;

ii) Chakan Unit : Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410501; iii Wind Farm : Village Vankusawade, Tal. Patan, Dist. Satara, Maharashtra 415206;

iv) Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.

v) Delhi Office : No. DSM-514 to DSM-521, DLF Tower, 5th Floor, 15 Shivaji Marg, Nazafgarh Road Industrial Area, Delhi - West, Delhi -110015

vi) Office Premises No : 001, 502, 701 and 801, âRustomjee Aspireeâ, Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022

vii) Kosi Factory Unit at Khasra No.647,648, NH 02, Km 109 Mile Stone, Village Dautana, Chhatta, Kosi Kallan, Mathura 281403.

viii) R & D centre at Plot no. 27/ pt 2/ at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai

These securities also extend to the various credit facilities including Bank Guarantees and Letters of Credit of Rs.155,799.05 lakh (Previous year Rs.156,469.16 lakh) executed on behalf of the Company in the normal course of business.

The carrying amounts of financial and non-financial assets pledged as security for current and non-current borrowings are disclosed in note 42

The Company has not defaulted on any loans payable during the year.

All the above financial liabilities are carried at amortised cost except for derivative liabilities (forward exchange contracts) which are fair valued through profit and loss and financial guarantee contracts which are initially recognised at fair value.

Disclosure of defined benefit plans are as given below :

A. Gratuity :

The Company has a defined benefit gratuity plan in India (Funded) for its employees, which requires contribution to be made to a separately administered fund.

The gratuity benefit payable to the employees of the Company is greater of the two : (i) The provisions of the Payment of Gratuity Act, 1972 or (ii) The Companyâs gratuity scheme as described below.

* Reimbursement right is a non-qualifying insurance policy under Ind AS 19 as it is with Bajaj Allianz Life Insurance Co. Ltd. (a related party of Bajaj Electricals Limited). The same has been dislcosed in note 9 and note 13 of the financials statements

* The standard retirement date for executive employees is June 30 and the April 1st for the staff employees. In case of employees with age above the normal retirement age indicated above, the retirement is assumed to happen immediately and valuation is done accordingly.

Sensitivity Analysis

The sensitivity analysis is determined based on reasonably possible changes of the assumptions occuring at the end of the reporting period, while holding all other assumptions constant.

The description of plans ability to affect the amount, timing and uncertainty of the entityâs future cash flows

a) Funding arrangements and Funding Policy

b) Expected Contribution during the next annual reporting period

c) Maturity Profile of Defined Benefit Obligation

d) Asset Liability Matching Strategies

B. Provident Fund (Defined Benefit Plan) :

Bajaj Electricals Limited operates in two schemes for the compliance of provident fund statute - (i) Bajaj Electricals Limited Employeesâ Provident Fund Trust & Matchwel Electricals (India) Ltd Employeesâ Provident Fund Trust (defined benefit plan) and (ii) RPFC Contributions for provident fund (defined contribution plan).

For exempt provident fund, the defined benefit obligation of the Company arises from the possibility that during anytime in the future, the scheme may earn insufficient investment income to meet the gauranteed interest rate declared by government / EPFO / relevant authorities.

The net defined benefit obligation as at the valuation date represents the excess of accumlated fund value (determined on actuarial basis) plus interest rate guaranteed liability over the fair value of plan assets or vice-a-versa The benefit valued under PF obligation are summarised below:

A deterministic approach is considered to estimate the value of Interest Rate Guarantee on the Exempt Provident Fund. The per annum cost of guarantee at which Interest Rate Guarantee Liability has been valued is mentioned below

The companyâs compliances for provident fund is governed by Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952. Responsibility for governance of the plans, including investment decisions and contribution schedules lies jointly with the company and the board of trustees. The board of trustees are composed of representatives of the company and plan participants in accordance with the planâs regulations

The present value of obligation of provident fund of trusts represents the aggregate of accumulated fund value of Rs.1,233,622,385 (As on March 31, 2017 - Rs.1,089,833,403) and interest rate guarantee Rs.20,443,944 (As on March 31, 2017 - Rs.17,272,606). Of the above, the interest rate guarantee is recognised as provision in the Companyâs books, while the accumulated fund value is recognised by the Bajaj Electricals Limited Employeesâ Provident Fund Trusts. The interest rate guarantee so recognised in the Companyâs books is considered as non-current liability

The description of plans ability to affect the amount, timing and uncertainty of the entityâs future cash flows

a) Funding arrangements and Funding Policy

The scheme is managed on funded basis. Payment for present liability of future payment of PF is made by the Company towards shortfall of Bajaj Electricals Limited Employeesâ Provident Fund Trust and Matchwel Electricals (India) Ltd Employeesâ Provident Fund Trust. The investments for the same are managed by Trustees as per advice and recommendations of a professional consultant and in compliance of obligatory pattern of investments as per government notification in official gazette for the pattern of investment for EPF exempted establishments. Any deficit in the assets of PF Trusts is funded by the Company. The provident fund for certain employees is a defined contribution plans covered under RPFC Contributions

b) Expected Contribution during the next annual reporting period

c) Asset Liability Matching Strategies

For PF Trust Investments, the same are managed by Trustees as per advice and recommendations of a professional consultant. The Employeesâ Provident Fund Organisation, Ministry of Labour, Government of India, vide its notification in official gazette notified the pattern of investment for EPF exempted establishments, which depicts the obligatory pattern of investments of PF contributions and interests. The pattern mandates to invest as below :

The Leave Encashment Schemes, superannuation and pension schemes are managed on unfunded basis, hence Asset Liability Matching Strategies are not applicable

Trade payables are non-interest bearing and are normally settled within 60 days from the time they are contractually due.

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

* Sale of products includes excise duty collected from customers of Rs.894.05 lakh (March 31, 2017 - Rs.3,654.68 lakh). Sale of goods net of excise duty is Rs.280,882.80 lakh (March 31, 2017 - Rs.287,179.82 lakh). Revenue from operations for periods upto June 30, 2017 includes excise duty. From July 01, 2017 onwards, the excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in revenue from operations. In view of the aforesaid change in indirect taxes, revenue from operations for the year ended March 31, 2018 is not comparable to March 31, 2017.

** Other operating revenue mainly comprises of scrap sales amounting to Rs.1,097.77 lakh (March 31, 2017 -Rs.725.43 lakh)

Assumptions:

Stock Price: Closing price on National Stock Exchange on the date of grant has been considered

Volatility: The expected price volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publically available information. The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange of India Ltd. (NSE), over a period prior to the date of grant corresponding with the expected life of the options.

Exercise Price: Exercise Price of each specific grant has been considered.

Time to Maturity: Time to Maturity / Expected Life of options is the period for which the Company expects the options to be live.

Expected divided yield: Expected dividend yield has been calculated as an average of dividend yields for five financial years preceding the date of the grant

All other current financial assets and current financial liabilities have fair values that approximate to their carrying amounts due to their short term nature. Further all other non-current financial assets and non-current financial liabilities have fair values that approximates to their carrying amounts as it is based on the net present value of the anticipated future cash flows.

NOTE 2 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Companyâs principal financial liabilities comprise of borrowings, trade and other payables, channel financing liability and financial guarantee contracts. The main purpose of these financial liabilities is to finance the entityâs operations and to provide guarantees to support its operations. The Companyâs principal financial assets include trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company also holds investments (measured at FVTPL and amortised cost) and enters into derivative transactions (other than for speculative purposes).

The risk management committee of the Company lays down appropriate policies and procedures to ensure that financial risks are identified, measured and managed in accordance with the entityâs policies and risk objectives.

The Company is exposed to credit risk, liquidity risk and market risk, which are explained in detail below :

(A) Credit risk

Trade and other receivables

Consumer products

The company sells the consumer products mainly through three channels i.e. dealers and distributors, institutions and e-commerce and through government sector. The appointment of dealers, distributors, institutions is strictly driven as per the standard operating procedures and credit policy followed by the company. In case of government sector, the credit risk is low.

Engineering and projects

The company assesses its trade and other receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from such trade and other receivables. In respect of trade receivables the Company has a provisioning policy that is commensurate to the expected losses. The provisioning policy is based on past experience, customer creditability, and also on the nature and specifics of business especially in the engineering and projects division. In case of engineering projects, the Company also provides on more case-to-case basis, since they are large projects in individuality.

The maximum exposure to credit risk as at March 31, 2018 and March 31, 2017 is the carrying value of such trade and other receivables as shown in note 5, 7 and 12 of the financials.

Bank deposits

The company maintains its cash and bank balances with credit worthy banks and financial institutions and reviews it on an on-going basis. Moreover, the interest-bearing deposits are with banks and financial institutions of reputation, good past track record and high-quality credit rating. Hence, the credit risk is assessed to be low. The maximum exposure to credit risk as at March 31, 2018 and March 31, 2017 is the carrying value of such cash and cash equivalents and deposits with banks as shown in note 11 of the financials.

Loans, advances and investments in preference shares with affiliate companies

The Company has given loans and advances to its affiliate companies (Starlite Lighting Limited and Hind Lamps Limited). Further, the Company also has made strategic investments (equity and preference investments) in these entities. All such loans / advances / investments and their respective terms and conditions are duly approved by the Board of Directors of the Company. These entities also act as a strategic source of product supply to the Company.

As on the date of reporting, the Company does not have any expected credit loss on its loans / advances / investments in Hind Lamps Limited except for those provided in the books, based on the asset valuation done by the external valuer. In respect of Starlite Lighting Limited, the Company has fully impaired its exposure as at March 31, 2018 in its financial statements (Refer Note 43).

(B) Liquidity risk

The company has a central treasury department, which is responsible for maintaining adequate liquidity in the system to fund business growth, capital expenditures, as also ensure the repayment of financial liabilities. The department obtains business plans from business units including the capex budget, which is then consolidated and borrowing requirements are ascertained in terms of Long term funds and short-term funds. Considering the peculiar nature of EPC business, which is very working capital intensive, treasury maintains flexibility in funding by maintaining availability under committed credit lines in the form of fund based and non-fund based (LC and BG) limits.

(i) Financing arrangements

The company had access to the following undrawn borrowing facilities at the end of the reporting period Bank overdraft facilities are sanctioned for a period of one year which are then enhanced / renewed from time to time. Though the Bank overdrafts are repayable on demand as per the terms of sanction, these are usually renewed by all banks in normal circumstances. Hence Bank overdraft facilities are available for use throughout the year.

(ii) Maturities of financial liabilities

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments:

(i) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.

The company operates in the global market and is therefore exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar (âUSDâ), Euro (âEURâ), Great Britain Pound (âGBPâ), Chinese Yuan Renminbi (âRMBâ) and United Arab Emirates Dirham (âAEDâ). Apart from exports receivables and Imports payables arising out of trade in the normal course of business, the company also has foreign exchange exposures in terms of buyerâs credit, packing credit, foreign currency term loans, etc. As these commercial transactions are recorded in currency other than the functional currency (â), the company is exposed to Foreign Exchange risk arising from future commercial transactions and recognised assets and liabilities. The company is a net importer as its imports and other forex liabilities exceeds the exports. It ascertains its forex exposure and bifurcates the same into forex receivables and payables. The export collections are received in EEFC account, which provides some natural hedge. Other exposures are covered by taking appropriate forward cover from the banks.

The company has a forex policy, which is duly approved by the Board of Directors. All forex hedging is done as per the said approved forex policy. The company has also taken Board approval for authorising certain company officials for entering into hedge transactions. The forex policy is flexible in terms of the hedging the overall forex exposure, as also the instrument to be used for hedging. The company takes a forward cover for the period which matches the maturity date of the forex liability which is proposed to be hedged. On maturity date, the forward contracts are utilised for settlement of the underlying transactions.

(a) Foreign currency risk exposure:

The Companyâs exposure to foreign currency risk at the end of the reporting period expressed in â, are as follows :

b) Sensitivity

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments is given below

The company also has an exposure in EUR, CAD, RMB, JPY and AUD, the impact of sensitivity of which is very negligible.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any long term borrowings except sales tax deferral loan which is interest free. Also in case of short term borrowings, the interest rate is fixed in a large number of cases and linked to the LIBOR in a few cases. Hence, interest rate risk is assessed to be low. Accordingly, the sensitivity / exposure to change in interest rate is insignificant

(iii) Price risk

I n case of the consumer product business, the company manufactures LED bulbs and Tubes and small quantity of ceiling fans. All other products are procured from the vendors. The terms of payment with vendors is on cost plus basis. Hence, the price risk is assessed to be low.

The Company is also into EPC segment, wherein it takes turnkey contracts for transmission line towers, rural electrification, high masts and poles, street lighting, etc. This exposes the Company to commodity price risk for products such as copper, aluminium, plastic, steel, zinc etc. The company has contractual right to pass the commodity price risk to the customer, hence the price risk is assessed to be low.

NOTE 3 : CAPITAL MANAGEMENT

For the purpose of capital management, capital includes issued equity share capital, securities premium and all other equity reserves attributable to the equity shareholders.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders. The capital structure of the Company is based on managementâs judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. Management considers the amount of capital in proportion to risk and manages the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders (buy-back) or issue new shares.

The Companyâs policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure. The management monitors the return on capital as well as the level of dividends to shareholders.

Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:

Total debt (total borrowings including current maturities of long term borrowings) divided by total equity (as shown in the balance sheet excluding debenture redemption reserve, capital reserve and capital redemption reserve)

note 4 : segment reporting

The Company has, pursuant to the provisions of Ind AS 108, identified its business segments as its primary reportable segments, which comprises of Consumer Products; Engineering & Projects and Others. âConsumer Productsâ includes Appliances, Fans and Consumer Lighting Products; âEngineering & Projectsâ includes Transmission Line Towers, Telecommunication Towers, High Masts, Poles, Special Projects including Rural Electrification Projects and Luminaires; and âOthersâ includes Wind Energy.

The operating segment results includes depreciation and amortisation of Rs.1,551.16 lakh (March 31, 2017 -Rs.1,557.54 lakh) for consumer products, Rs.1,676.25 lakh (March 31, 2017 - Rs.1,391.33 lakh) for EPC and Rs.38.26 lakh (March 31, 2017 - Rs.72.02 lakh) for others.

1) Segment Assets :

Segment assets are measured on the same principles as they have been for the purpose of these financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.

The capital expenditure incurred for consumer products is Rs.330.34 lakh (March 31, 2017 - Rs.355.79 lakh), for EPC is Rs.1,103.64 lakh (March 31, 2017 - Rs.1,347.04 lakh) and for others is Rs.2,659.22 lakh (March 31, 2017 - Rs.5,507.32 lakh).

2) Segment Liabilities :

Segment liabilities are measured on the same principles as they have been for the purpose of these financial statements. The Companyâs borrowings and derivative financial instruments are not considered to be segment liabilities but are managed by the treasury function.

* Outstanding balance Is net of impairment allowance created in the books.

# As the future liability for defined benefit obligations and other long term employment benefits is provided on an actuarial basis for the Company as a whole, the amounts pertaining to key managerial personnel is not ascertainable and hence not included above.

** Transactions with related parties have been made on an arm length basis and are in the ordinary course of the business of the Company. All outstanding balances are unsecured and are repayable in cash.

viii. The Companyâs fluorescent and mercury containing lamps (CFL/FTL) fall within the purview of the E-waste (Management) Rules, 2016 (the âE-waste Rulesâ) which has come in force with effect from October 01, 2016. Under the E-waste Rules the Company is responsible for collection and safe disposal of end-of life CFL/FTL in terms of Extended Producer Responsibility (EPR) obligation set out therein. In the 57^th meeting of Technical Review Committee of Central Pollution Control Board (âCPCBâ), the compliances and implementation of EPR Authorisation conditions including targets under the E-waste Rules for the existing producers of CFL/ FTL were deferred till May 01, 2017.

Electric Lamp and Component Manufacturers Association of India (ELCOMA), on behalf of all its members, has filed the Writ Petition (C) 5461 of 2016 (âWrit Petitionâ) in the Honâble Delhi High Court challenging the inclusion of âfluorescent and mercury containing lampsâ under E-waste Rules. The Honâble Delhi High Court by its order dated September 28, 2016, directed the producers of CFL/FTL, to apply for EPR Authorisation without prejudice to their rights and contention in the said Writ Petition and the Company has accordingly submitted its application for the EPR Authorisation to CPCB.

However, in view of pendency of the Writ Petition, the financial obligations which may arise in the event of the Honâble High Court passing adverse order against ELCOMA and its member, is unascertainable at this point of time and hence the same is disclosed as contingent liability.

ix. The Company has given guarantees / letter of comfort for all borrowings (long term / short term) taken by its joint venture, Starlite Lighting Limited (SLL). As at March 31, 2018, SLL is in breach of its loan covenants as per the terms of the loan agreements, resulting in the loans becoming payable on demand. However, as at the date of approval of these financial statements, the lenders of SLL have not called for the loan repayment. Further, the management of the Company has obtained loan covenant waiver from the lenders of SLL. Accordingly, the exposure in this regard is considered to be âpossibleâ and disclosed as contingent liability.

x. These represent legal claims filed against the Company by various parties and these matters are in litigation. Management has assessed that in all these cases the outflow of resources embodying economic benefits is not probable.

b. Commitments

i. Estimated amounts of contracts remaining to be executed in capital account (net of capital advances) is Rs.501.95 lakh (March 31, 2017, Rs.562.35 lakh).

c. Leases

The Company has entered into operating leases for certain warehouses / premises / vehicles, with lease term between 1 to 10 years. Some of the leases have the option to extend the lease for additional terms as per the agreements.

Lease rent recognised in statement of profit and loss is Rs.4,589.67 lakh (March 31, 2017 - Rs.4,399.11 lakh). There are no non-cancellable leases.

NOTE 5 : EXCEPTIONAL ITEMS:

Pursuant to continuous reduction in the CFL business and future outlook, Company has re-assessed the recoverability of its investments and loans provided to Starlite Lighting Limited (Joint Venture) and consequently impaired it fully in standalone financial statements.

The details of the investments and loans and advances which are impaired are as below :

* This pertains to impairment allowance on interest income accreted during the year.

The valuation has been performed by an independent external valuer based on which the equity value (enterprise value less external debt) is negative. Accordingly, all investments and loans have been fully impaired. For assumption used in valuation refer note 34.

NOTE 6 : CORPORATE SOCIAL RESPONSIBILITY

As per section 135 of the Companies Act, 2013, the gross amount to be spent by the Company during FY 2017-18 is Rs.266.70 lakh (Previous year Rs.156.87 lakh). The Company has spent Rs.195.30 lakh (Previous year Rs.108.48 lakh) on various CSR initiatives as below.

NOTE 7 : Previous yearâs figures have been regrouped / reclassed wherever necessary to correspond with the current yearâs classification / disclosure.

Mar 31, 2017

1A ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

Amendments to Ind AS 102, Share-based Payment:

The amendment to Ind AS 102 clarifies the measurement basis for cash-settled share-based payments and the accounting for modifications that change an award from cash-settled to equity-settled. It also introduces an exception to the principles in Ind AS 102 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employeeâs tax obligation associated with a share-based payment and pay that amount to the tax authority.

The amendment is effective for accounting periods beginning on or after 1 April 2017 and early adoption of the same is not permitted. The Company is evaluating the requirements of the amendment and the impact on the financial statements is being evaluated.

Amendments to Ind AS 7, Cash Flow Statements:

The amendment to Ind AS 7 introduces an additional disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. This includes changes arising from:

- Cash flows, such as drawdowns and repayments of borrowings; and

- Non-cash changes (i.e. changes in fair values), changes resulting from acquisitions and disposals of subsidiaries/businesses and the effect offoreign exchange differences.

The amendment to Ind AS 7 does not prescribe any specific disclosure format. However, it suggests that a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities would meet the disclosure requirement. Where a reconciliation is used, the disclosure should provide sufficient information to link items included in the reconciliation to the balance sheet and statement of cash flows. The amendment is effective for accounting periods beginning on or after 1 April 2017 and early adoption of the same is not permitted. The said amendment will not have any impact on the Companyâs cash flow, since the amendment requires only additional disclosures.

1B SUMMARY OF CRITICAL ESTIMATES & JUDGEMENTS

1 Share based payment

The Company operates a number of equity settled, employee share based compensation plans, under which the Company receives services from employees as consideration for equity shares of the Company. The Company has granted stock options to its employees under the Growth Plan as well as Loyalty Plan.

The fair value of the employee services received in exchange for the grant of the options is determined by reference to the grant date fair value of the options granted. The estimate also includes a forfeiture rate. At the end of each year, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates. Such assumptions and judgments may change in the future thereby causing a material adjustment to such expense in profit and loss account.

2 Warranty expenses provision

The Company generally offers 1 to 2 year warranties for its consumer products. Management estimates the related provision for future warranty claims based on historical warranty claim information, as well as recent trends that might suggest that past cost information may differ from future claims. The assumptions made in relation to the current period are consistent with those in the prior years. Factors that could impact the estimated claim information include the success of the Companyâs productivity and quality initiatives. Such assumptions and judgments may change in the future thereby causing a material adjustment to such expense in profit and loss account and carrying value of warranty provision in the balance sheet.

3 Provision for trade receivables

The Company makes allowances for doubtful accounts receivable using simplified approach. Significant judgment is used to estimate doubtful accounts. In estimating doubtful accounts historical and anticipated customer performance are considered. Changes in the economy, industry, or specific customer conditions may require adjustments to the allowance for doubtful accounts recorded in the financial statements.

4 Deferred taxes

The company recognizes that net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income, which may have a scope of causing a material adjustment to the carrying amounts ofassets and liabilities.

5 Revenue from construction contracts

a Recognition of revenue

Revenue from construction contracts is recognized based on the stage of completion determined with reference to the costs incurred on construction contracts and their estimated total costs. The determination of stage of completion requires the Company to estimate the costs incurred till date as a proportion of total costs for the construction contract and such determination of stage of completion involves critical judgment of cost incurred which is attributable to the portion of work completed.

b Provision for foreseeable loss on construction contracts

The company recognizes in full all foreseeable losses which may arise on account of the construction contract immediately in the books of account which goes well with the basic accounting principle of prudence. When it is probable that total contract costs will exceed total contract revenue, the expected losses are recognized as an expense immediately by the company. The amount of such a loss is determined irrespective of whether work has commenced on the contract; the stage of completion of contract activity; or the amount of profits expected to arise on other contracts which are not treated as a single construction contract.

In doing so, the management estimates various aspects like analysis of the total contract revenue, estimated total contract costs on a contract-by-contract basis, analysis of the cumulative progress billings, cumulative total actual costs incurred, contractually agreed timeline set out in the contracts to identify any major delays and/ or cost overruns which might result in profitable contracts becoming loss-making, expected penalty and liquidated damages estimate etc.

Such assumptions and judgments may change in the future thereby causing, either an improvement, whether material or not, to the margin and profitability or recognizing further losses in addition to recognized earlier, in respect of the said construction contracts which were earlier tested for recognition of foreseeable losses.

6 Provision for sales incentive schemes

The Company records provision for sales incentives as a reduction of revenue in its financial statements. The Company offers on-going trade promotion programmes with customers, distribution tie up programmes, festive schemes, retailer bonding schemes, etc. that require the Company to estimate and accrue the expected costs of such programmes.

Estimated sales incentives are calculated and recorded at the time related sales are made and are based primarily on historical rates and consideration of recent promotional activities. The determination of sales incentive liabilities requires the Company to use judgment for estimates that include current and past trade-promotion spending patterns, status of trade-promotional activities and the interpretation of historical spending trends by customer and category. BEL reviews the assumptions and adjust the sales incentives provision at each reporting dates. Our financial statements could be materially impacted if the actual promotion rates fluctuate from the estimated rate.

7 Impairment of investment in joint venture

The Company has invested in its joint venture, Starlite Lighting Limited through equity capital, preference capital and loans and advances. The JV manufactures lighting products and appliances viz CFL bulbs, LED bulbs, water heaters for the Company and also manufactures air conditioning units for Voltas Limited. It has plan to manufacture few more appliances viz Mixers, Room Coolers and LED fittings and luminaries for the Company.

To ascertain the recoverability of the investment made by the Company in the JV, the Company and the JV have jointly prepared a business plan and the impairment testing of the investment made by the Company in the JV is done on the basis of financial projections and future cash flows prepared jointly by the management of both the companies. The achievement of the business plan and the financial projections are based on some assumptions about future business scenario like demand for the products, technology changes, raw material availability, prices of inputs etc.

8 Inventories

The impairment of inventories is done on the basis of its aging, discontinuance of products/model, damage conditions of goods, obsolesce, expected salability. The value is written down at its estimated realizable value less cost to sell.

9 Fair value of financial guarantee given

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for loss it incurs because a specified debtor fails to make payment that is due in accordance with the original or modified terms of a debt instrument.

For assessment of the fair value of the financial guarantee given to the lenders of our JV Starlite Lighting Limited, the Company has considered the future projections of the JV basis which the loan repayments by JV are considered. Also the loan rate at which the JV would have got the borrowings facility independently is assessed by the Company on the basis of spreads in bps over FIMMDA-PDAI Gilt Curve for valuation of corporate bonds as announced by CRISIL in its monthly valuation matrix as at 31 March 2015

For the financial guarantees given, the Company may be required to make payments to banks / financial institutions only in the event of a default in accordance with the terms of the instrument that is guaranteed. Accordingly, cash shortfalls are the expected payments to reimburse the bankers I financial institutions for a credit loss that may incur less any amounts that the Company expects to receive from the JV or any other party on behalf of JV. At present, the Company has estimated no default of any loans by JV and hence there is no estimated liability by the Company on behalf of the said guarantee given.

10 Contingent liabilities

In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallising or are very difficult to quantify reliably, the Company treats them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on our financial position or profitability.

11 Non-current assets classified as held for sale

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. Upon relocation of Companyâs employees to new office premises in Mumbai, the leasehold immovable property together with buildings and structure standing thereon was lying vacant. The said transaction involves the transfer of leasehold rights. The Company has made an estimate of the fair value of the leasehold right in the land, the valuation for which is based on the unobservable inputs which involves the estimation of consideration made by the management of the Company.

1C FIRST TIME ADOPTION OF IND AS

These are Bajaj Electricals Limitedâs (âBELâ or âCompanyâ) first financial statements prepared in accordance with Ind AS. The accounting policies set out in this financial statements have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (date of transition). In preparing its opening Ind AS balance sheet, BEL has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (âprevious GAAPâ or âIndian GAAPâ or âIGAAPâ). An explanation of how the transition from previous GAAP to Ind AS has affected BELâs financial position, financial performance and cash flows is set out in the following tables and notes.

Explanation 1 - Exemptions and exceptions availed

Explanation 2 - Total Comprehensive Income Reconciliation for the year ended 31 March 2016

Explanation 3 - Equity Reconciliation as at the date of transition (April 1, 2015) and as at 31 March 2016

Explanation 4 - Impact on cash flows for the year ended 31 March 2016

Explanation 1 - Exemptions and exceptions availed

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

- Deemed Cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets

Accordingly, BEL has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying values.

- Share-based payment transactions

Ind AS 102 deals with the accounting and disclosure requirements related to share-based payment transactions. Under Ind AS 101, a firsttime adopter is encouraged, but not required, to apply Ind AS 102 Share-based payment to equity instruments that vested before date of transition to Ind ASs. However, if a first-time adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of those equity instruments, determined at the measurement date, as defined in Ind AS 102.

Accordingly, BEL has elected this optional exemption and hence Ind AS 102 Share-based payments has not been applied to equity instruments that vested before the date of transition.

- Investments in subsidiaries, joint ventures and associates

When an entity prepares separate financial statements, Ind AS 27 requires it to account for its investments in subsidiaries, joint ventures and associates either at cost; or in accordance with Ind AS 109.

If a first-time adopter measures such an investment at cost in accordance with Ind AS 27, it shall measure that investment at one of the following amounts in its separate opening Ind AS Balance Sheet:

(a) cost determined in accordance with Ind AS 27; or

(b) deemed cost.

The deemed cost of such an investment shall be its:

(i) fair value at the entityâs date of transition to Ind ASs in its separate financial statements; or

(ii) previous GAAP carrying amount at that date.

A first-time adopter may choose either (i) or

(ii) above to measure its investment in each subsidiary, joint venture or associate that it elects to measure using a deemed cost.

Accordingly BEL has an investment in a joint venture Starlite Lighting Limited (âSLLâ) and in an associate Hind Lamps Limited (âHLLâ) which are disclosed at previous GAAP carrying amount at the date of transition

- Non-current assets held for sale and discontinued operations

Ind AS 105 requires non-current assets (or disposal groups) that meet the criteria to be classified as held for sale, non-current assets (or disposal groups) that are held for distribution to owners and operations that meet the criteria to be classified as discontinued and carried at lower of its carrying amount and fair value less cost to sell on the initial date of such identification.

A first time adopter can:

(a) measure such assets or operations at the lower of carrying value and fair value less cost to sell at the date of transition to Ind ASs in accordance with Ind AS 105; and

(b) recognize directly in retained earnings any difference between that amount and the carrying amount of those assets at the date of transition to Ind ASs determined under the entityâs previous GAAP.

BEL has certain non-current assets that qualify to be classified as non-current assets held for sale under Ind AS 105. Accordingly, BEL has measured such assets at the carrying value at the date of transition to Ind AS determined under the entityâs previous GAAP. Also since the carrying value is lesser as compared to the fair value less cost to sell on the initial date of such identification, there is no impact on retained earnings.

Ind AS mandatory exceptions

- De-recoanition of financial assets and liabilities Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

BEL has a factoring and channel financing facility for its trade receivables. Such trade receivables under the respective facilities do not meet derecognition criteria as there is a final recourse on BEL. Since BEL has the necessary information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions, BEL has chosen to apply the same for outstanding transactions as at the transition date.

Hence such factored trade receivables are grossed up and the corresponding amount is shown as short term borrowings under current financial liabilities. In case of channel financing facility, the corresponding amount is shown as current liabilities.

- Estimates

An entityâs estimates in accordance with Ind ASs 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 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.

- Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Accordingly classification and measurement of financial assets have been made based on the facts and circumstances that exist at the date of transition to Ind AS

- Government loans

A company shall classify all government loans received as a financial liability or an equity instrument in accordance with Ind AS 32, Financial Instruments: Presentation. A first time adopter shall apply the requirements in Ind AS 109, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind ASs and shall not recognize the corresponding benefit of the government loan at a below-market rate of interest as a government grant. Consequently, if a first-time adopter did not, under its previous GAAP, recognize and measure a government loan at a below-market rate of interest on a basis consistent with Ind AS requirements, it shall use its previous GAAP carrying amount of the loan at the date of transition to Ind ASs as the carrying amount of the loan in the opening Ind AS Balance Sheet. An entity shall apply Ind AS 109 to the measurement of such loans after the date of transition to Ind AS.

However, an entity may apply the requirements in Ind AS 109 and Ind AS 20 retrospectively to any government loan originated before the date of transition to Ind ASs, provided that the information needed to do so had been obtained at the time of initially accounting for that loan.

The company has sales tax deferral loan at the transition date which is to be paid in installments to the state government authorities. Accordingly it has chosen to apply the requirements of Ind AS 109 and Ind AS 20 prospectively to such kind of loans.

(A) Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31 March 2016 increased by Rs. 331.76 lakh. There is no impact on the total equity as at 31 March 2016.

(B) Equity-settled employee share-based plan

Under the previous GAAP, the cost of equity-settled employee share-based plan was recognized using the intrinsic value method. The options are granted at closing price on the exchange where there is highest trading volume on working day prior to the date of grant, resulting in no intrinsic value. Under Ind AS, the cost of equity settled share-based plan is recognized based on the fair value of the options as at the grant date. Consequently, the amount recognized in share option outstanding account is Rs.967.80 lakh as at 31 March 2016 (1 April 2015 - Rs. 555.56 lakh). The profit for the year ended 31 March 2016 decreased by Rs.467.75 lakh. There is no impact on total equity.

Under the previous GAAP, financial guarantee given was disclosed as a contingent liability. Under Ind AS, financial guarantee contracts are considered as financial liabilities and are measured at initial recognition at fair value. Subsequently, it is measured at an amount initially recognized less the cumulative amount of income recognized under Ind AS. Consequently, at the transition date, a financial guarantee obligation was recognized of the value Rs.622.02 lakh and the corresponding value is added to the cost of investment in Joint Venture âStarlite Lighting Limitedâ. The profit for the year and total equity as at 31 March 2016 has increased to the extent of Rs.136.47 lakh on account of finance income on the financial guarantee obligation. Accordingly, the balance of financial guarantee obligation is Rs.485.55 lakh as at 31 March 2016.

(D) Investment in preference shares of a Starlite Lighting Limited (joint venture) and Hind Lamps Limited (associate)

The Company has investment in preference shares which are either redeemable at premium or carry a cumulative rate of interest. Under the previous GAAP, the said investments were classified as long term investments or current investments based on the intended holding period. These investments were carried at cost less provision for other than temporary decline in the value of such investments. Under Ind AS, the said investments are considered as financial assets and classified as per the business model under which they are held. Thereby these investments are either classified at fair value through profit or loss or at amortized cost. The company measures preference shares of HLL and 0% Non-convertible preference shares of SLL at amortized cost and both issues of 9% non-convertible preference shares of SLL at fair value through profit or loss. These shares have been recognized at their fair value at initial recognition with a corresponding adjustment made to equity in case of SLL and to investment in equity of HLL in case of HLL. Consequently, total equity as at 1 April 2015 has increased by Rs.654.38 lakh. The interest income in respect of preference shares held at amortized cost is Rs.392.87 lakh and the fair value gain recognized is Rs.205 lakh for the year ended 31 March 2016. Accordingly, the profit for the year has increased by Rs.597.87 lakh and total equity as at 31 March 2016 has increased by Rs.1,252.25 lakh.

(E) Financing arrangements

(i) Borrowings:

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at 31 March 2016 have been reduced by Rs.12.75 lakh (1 April 2015 - Rs.28.71 lakh) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the year ended 31 March 2016 reduced by Rs.15.96 lakh as a result of the additional interest expense.

(ii) Fair valuation of forward contracts:

Under previous GAAP, premium on forward contracts was amortized over the life of the contract. Under Ind AS, forward contracts are measured at fair value (MTM). Accordingly, there is an increase in equity of Rs. 51.33 lakh (1 April 2015- Rs.94.65 lakh) as at 31 March 2016. The net profit for the year ended 31 March 2016 has reduced by Rs.43.33 lakh.

The derivatives asset are marked to market at each reporting date. Accordingly, there is a decrease in equity of Rs.52.11 lakh (1 April 2015 - Rs.96.83 lakh) as at 31 March 2016. The net profit for the year ended 31 March 2016 has increased by Rs.44.72 lakh.

(iii) Fair valuation of currency swap:

Under previous GAAP, changes in fair value of currency swap were recognized only to the extent of losses. Under Ind AS, derivative contracts are required to be measured at fair value (i.e. Marked-to-market). Accordingly, currency swaps are marked to market and a fair value gain of Rs.58.34 lakh has been recognized for the year ended 31 March 2016 and total equity has increased by that amount as at 31 March 2016.

(F) Net Impact on Profit or Loss due to discounting of Financial Assets & Financial Liabilities

(i) Warranty provision and expense

Under the previous GAAP, long term provisions were not discounted. Under Ind AS, where the effect of the time value of money is material, the amount of provision shall be the present value of the expenditures expected to be required to settle the obligation. Accordingly, the warranty provision is recorded at its present value using an appropriate discount rate. Ind AS also provides that the discounted liability is to be increased in each period to reflect the unwinding effect of passage of time. The said increase is recognized as finance cost. Consequently, the warranty provision has decreased by Rs.229.86 lakh for the year ended 31 March 2016 (1 April 2015 - Rs.249.63 lakh). The total equity has increased by Rs.249.63 lakh as at 1 April 2015. The profit for the year ended 31 March 2016 has reduced to the extent of Rs.142.53 lakh as a result of the finance cost recognized and has increased to the extent Rs.122.76 lakh on account of discounted value of warranty expense for the year ended 31 March 2016. The net decrease in profit is of Rs.19.77 lakh for the year ended 31 March 2016.

(ii) Interest-free refundable security deposits

Under the previous GAAP, interest free lease security deposits are recorded at their transaction value. Under Ind AS, all financial assets are required at initial recognition at fair value. Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid rent under non-current assets. Consequent to this change, the amount of security deposits decreased by Rs.193.86 lakh as at 31 March 2016 (1 April 2015 - Rs.289.86 lakh). The prepaid rent increased by Rs.173.23 lakh as at 31 March 2016 (1 April 2015 - Rs.271.75 lakh). Total equity decreased by Rs.20.63 lakh (1 April 2015 - Rs.18.11 lakh) for the year ended 31 March 2016. The profit for the year decreased by Rs.2.52 lakh due to amortization of the prepaid rent of Rs.98.52 lakh which is partially off-set by notional interest income of Rs.96 lakh.

(iii) Retention Receivable

Under the previous GAAP, contract revenue was recognized on the basis of consideration received or receivable. Under Ind AS, contract revenue should be recognized on the basis of fair value of consideration received or receivable. Where there is a significant financing component in the revenue, the fair value of the consideration would be the discounted value of revenue. The company has long term retention receivables from construction contracts. Accordingly, contract revenue has been discounted to its present value to the extent of long term retention receivables to reflect its fair value. The carrying amount of retention receivable is increased by the interest amount to reflect the passage of time. This income is recorded as finance income in the profit and loss statement. If a trade receivable is received earlier than its due date, the revenue increases to the extent of the difference between the transaction value and carrying value. Consequently, long term trade receivables have reduced by Rs.1,237.36 lakh as at 31 March 2016 (1 April 2015- Rs.3,239.48 lakh) and equity has increased by an equivalent amount. The revenue for the year ended 31 March 2016 has increased by Rs.363.93 lakh and the interest income has increased by Rs.1,638.19 lakh. Accordingly, the profit and total equity for the year ended 31 March 2016 has increased by Rs.2,002.12 lakh.

(iv) Retention payable

The company has long term retention payables in respect of subcontracting and erection expenses. Under previous GAAP, these amounts were recognized at the transaction value. Under Ind AS, financial liabilities are recognized at fair value at initial recognition and subsequently carried at amortized cost. Accordingly, the company has discounted its retention payable. The carrying value of retention payable will be increased by the interest expense each year to reflect the passage of time. This interest expense is recognized as finance cost. If retention payable is paid earlier than its due date, the difference between the transaction value and carrying amount is recognized as additional erection expense. Consequently, retention payable for the year ended 31 March 2016 has reduced by Rs.150.60 lakh (1 April 2015 - Rs.430.08 lakh) and equity has increased by an equivalent amount. The subcontracting expense for the year has increased by Rs.92.74 lakh and the interest expense recognized for the year is Rs.186.74 lakh. Accordingly, profit for the year has reduced by Rs.279.48 lakh.

(G) Other Adjustments

(i) Revaluation Reserve

Under previous GAAP, the company had revalued some items of its property, plant and equipment (buildings and premises on ownership basis) and had recognized a revaluation reserve. Under Ind AS, the company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value. Accordingly, the revaluation reserve of Rs.808.60 lakh is no longer required and has been transferred to retained earnings at the transition date. The profit has reduced by Rs.21.01 lakh for the year ended 31 March 2016 as there is no revaluation reserve to absorb the increase in depreciation due to revaluation of property, plant and equipment. There is no impact on total equity for the year ended 31 March 2016 or 1 April 2015.

(ii) Non-Current Assets held for sale

The company is intending to sell its Naperol Tower and Reay road property and has located buyers for the same. Under previous GAAP, the concept of assets held for sale does not exist. Ind AS requires noncurrent assets to be identified as held for sale if the carrying amount will recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. Ind AS 105 lays down detailed guidelines and criteria in this regard. Based on the assessment performed by the management, it has been determined that the assets and liabilities of Naperol Tower and Reay Road should be presented as held for sale under Ind AS. Consequently, the assets and liabilities of the above mentioned assets held for sale have been presented separately from the other assets and other liabilities respectively in the balance sheet and depreciation on those non-current assets has been ceased. Accordingly, depreciation of Rs. 7.05 lakh has been reversed for the year ended 31 March 2016 resulting which profit and total equity have increased by an equivalent amount. Based on above, the following assets and liabilities were classified as held for sale as at 31 March 2016:

(H) Deferred Tax

Under previous GAAP, deferred tax was accounted based on the differences between taxable profits and accounting profits for the period. Under Ind AS, entities are required to use a balance sheet approach, which is based on the temporary differences between the carrying amounts of an asset or liability in the balance sheet and its tax base. Deferred tax shall also be created on various transitional adjustments. For transactions and other events recognized in profit or loss, any related tax effects are also recognized in profit or loss. For transactions and other events recognized outside profit or loss (either in other comprehensive income or directly in equity), any related tax effects are also recognized outside profit or loss (either in other comprehensive income or directly in equity, respectively). Consequently, deferred tax assets (net) have increased by Rs.642.41 lakh with an equivalent increase in equity as at 1 April 2015. The company has recognized deferred tax liability (net) of Rs.853.95 lakh for the year ended 31 March 2016 in the profit and loss account and other comprehensive income has increased to the extent of'' 107.12 lakh on account of deferred tax asset created. Accordingly, total equity as the 31 March 2016 has reduced by Rs.104.42 lakh.

(I) Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ consist of remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP. Consequently, the other comprehensive income has decreased by Rs.224.64 lakh (net of deferred tax) on account of remeasurement of defined benefit plans for the year ended 31 March 2016.

(J) Retained Earnings

Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustments.

(K) Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs. 1,819.16 lakh (inclusive of dividend distribution tax of Rs.307.73 lakh) as at 1 April 2015 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity as at 1 April 2015 increased by an equivalent amount. The said dividend has been paid in the financial year 2015-16. There was no proposed dividend as at 31 March 2016.

Ind AS Adjustments having no effect on profit or total equity.

12. Provision for discounts and schemes:

Under previous GAAP, provision for discounts and schemes were classified as provisions. Under Ind AS, these have been netted off from trade receivables since they are considered as crystallized liability. Accordingly, trade receivables has reduced by Rs.3,541.31 lakh as at 31 March 2016 (1 April 2015- Rs.2,204.10 lakh).

Similarly cash discount under previous GAAP was considered as an expense. Under Ind AS, revenue is to be shown net of all discounts, rebates, etc. Accordingly the cash discount has been netted against sales. This has reduced the sales and expenses by Rs.3,185.26 lakh for the year ended 31 March 2016. This however has no impact on profit.

13. Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2016 by Rs.3,640.55 lakh.

14. Commercial Paper

Under previous GAAP, the amount payable on maturity was recognized as borrowings and the difference between amount received from holders of commercial paper and amount payable on maturity was recognized as prepaid expense. Under Ind AS, borrowings are financial liabilities which are measured at amortized cost using effective interest rate. Accordingly, prepaid interest has been net off from borrowings to reflect the amortized cost and borrowings has reduced by Rs.45.43 lakh as at 1 April 2015. There is no commercial paper as at 31 March 2016.

15. Factoring and Channel Financing

The company offers its dealers and distributors a channel financing facility using which they customers can discount bills drawn on them by the company using the companyâs line of credit. The interest will be borne by the company. This facility has 100% recourse to the Company. It also offers the facility of factoring. This facility is with full recourse to the company. Under previous GAAP, bills discounted and factoring were disclosed as contingent liability. Under Ind AS, trade receivables should be derecognized only if it meets the derecognition requirements of Ind AS. Accordingly, trade receivables have increased by Rs.7,215.36 lakh (1 April 2015 - Rs.6,440.81 lakh) with a corresponding increase in borrowings of Rs.5,082.40 lakh (1 April 2015 - Rs.4,604.23 lakh) in relation to factoring and an increase of Rs.2,132.96 lakh (1 April 2015 - Rs.1,836.58 lakh) in other financial liabilities in relation to channel financing as at 31 March 2016.

16. Acceptances

The company offers its vendors a facility using which vendors can discount bills drawn on the company using the companyâs line of credit. The interest will be borne by the company. Under previous GAAP, these acceptances from vendors were classified under trade payables. However, they are in the nature of short term borrowings from the bank. Accordingly, acceptances have been reclassified to borrowings from trade payables. Accordingly, acceptances of Rs.50,118.89 lakh (1 April 2015 - Rs.57,329.76 lakh) have been reclassified to borrowings as at 31 March 2016.

17. Loan to an associate (Hind Lamps Limited)

The company has extended a loan of Rs.1,152 lakh to its associate company Hind Lamps Limited. The said loan has also been provided to the extent of Rs. 1,000 lakh and net amount was reflected under the previous GAAP under loans and advances. This loan had no repayment terms and carried a mandated rate of 6% through its term. Under Ind AS, where there are such loans which are given to subsidiary, associate or joint venture, without any repayment terms the same is considered as a capital infusion in such subsidiary, associate or joint venture. Accordingly, the loan of Rs.1,152 lakh has been added as an investment in the associate and the same has been impaired to the extent of Rs.1,000 lakh. This classification does not have any impact on equity.

Explanation 4 - Impact on cash flows for the year ended 31 March 2016

There are no impacts in cash flows due to transition to Ind AS.

(ii) Property, plant and equipment pledged as security

Refer to note 43 for information on property, plant and equipment pledged as security by the group.

(iii) Contractual obligations

Refer to note 41 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(iv) Capital work-in-progress

Capital work-in-progress mainly comprises Property, Pland and Equipments used in R& D Centre.

(v) Refer Note 1B.4 for Accounting Policy NOTE 3 : OTHER INTANGIBLE ASSETS

* The investment is shown net of impairment.

** In respect of Investments made in M. P. Lamps Ltd., calls of Rs. 2.50 per share on 48,000 equity shares and Rs.3.75 per share on 95,997 Equity Shares aggregating to Rs.4.80 lakh have not been paid by the Company. On principles of prudence the entire investment in M.P. Lamps Ltd. is considered as diminished and accordingly carried at Rs.NIL.

***There is proposed scheme of demerger under consideration by both the Bajaj Electricals Limited (âResulting Companyâ) and Hind Lamps Limited (âDemerged Companyâ) to demerge the manufacturing business (âDemerged Undertakingâ) of Hind Lamps Limited and to be transferred to Bajaj Electricals Limited.

As per the modified draft rehabilitation scheme filed with the Honâble BIFR for the revival of the Demerged Company, the net worth of the Demerged Company was expected to turn positive by 31 March 2014. The Demerged Company couldnât achieve the aforesaid objective and accordingly the management of the Demerged Company decided to make an attempt to achieve positive net worth by 31 March 2015. However, as on 31 March 2015, the Demerged Company could not achieve positive net worth and accordingly, it has been proposed to demerge the Manufacturing Business of the Demerged Company with the Resulting Company with effect from the appointed date of 31 March 2014.

The scheme of arrangement (the âSchemeâ) is drawn up pursuant to the provisions of Sections 230-232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the Income Tax Act, 1961 as may be applicable for the transfer by way of demerger of the Demerged Undertaking of the Demerged Company to the Resulting Company in the manner provided for in the Scheme.

The Board of Directors of the Demerged Company and the Resulting Company are of the view that the transfer and vesting of the Manufacturing Business of the Demerged Company to the Resulting Company will enable both the Demerged Company and the Resulting Company to achieve and fulfill their objectives more efficiently and economically and the same is also in the interest of all stakeholders. The Resulting Companyâs existing management expertise and quality systems & controls will enhance the performance of the business of the Demerged Undertaking. The Scheme is expected to contribute in furthering and fulfilling the objects of the Demerged Company and the Resulting Company and to facilitate the revival of the Manufacturing Business of the Demerged Company upon its consolidation with the Resulting Company.

Transferred receivables

The carrying amount of trade receivables, include receivables which are subject to factoring arrangements and channel financing facilities. Under this arrangement the Company has transferred the relevant receivables to the factor in exchange for cash. The said facilities are with recourse to company, the Company therefore continues to recognize the transferred assets in their entirety in its balance sheet. The amount repayable under the factoring agreement is presented as unsecured borrowings/other current liabilities.

Amounts recognized in profit or loss

Write-downs of inventories to net realizable value amounted to Rs.800.69 lakh (31 March 2016 - (Rs. 166.04 lakh)). These were recognized as an expense during the year and included in âchanges in value of inventories of work-in-progress, stock-in-trade and finished goodsâ in statement of profit and loss.

Further, on 29 March 2017, the Board of Directors of the Company approved the sale of Company owned residential premises to unlock the investment therein as the usage thereof was minimum. The sale of these residential premises will be completed within one (1) year.

The asset held for sale are not attached to any reported business segment but part of other unallocable assets.

ii) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of''2 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Secured Non Current Borrowings:

Sr. No. Nature of Security and Terms

Zero Coupon Redeemable Non Convertible Debentures (NCD) are secured by First Charge over the following premises :

i) Delhi Office : No. DSM-514 to DSM-521, DLF Tower, 5th Floor, 15 Shivaji Marg, Nazafgarh Road Industrial Area, Delhi -110015

ii) Office Premises No: 001, 701 & 801, âRustomjeeAspireeâ, Bhanu Shankar Yagnik Marg, Off Eastern Express Highway, Sion (East), Mumbai - 400 022

iii) Factory Units (Unit I and II) at Ranjangaon - Plot No. B-7 & B-29 , Ranjangaon Industrial Area, Village Dhoksangvi, Taluka Shirur, Dist. Pune

iv) Factory unit at Chakan - Village Mahalunge, Chakan Talegoan Road, Khed, Pune - 410501

v) Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.

*NCDâs are issued at Zero Coupon corresponding to YTM of 10.85% p.a. compounded annually. Post downgrading of credit rating by ICRA Ltd. (Credit Rating Agency) from âA â to âAâ on 24 February 2015, the YTM has been increased by 0.25% p.a. with effect from 24 February 2015.

âICRA Limited vide its letter No 2016-17/MUM/0697 dated 18 August 2016, communicated that it has upgraded the rating of the Companyâs NCD programme from âA to âA â. However there is no corresponding change in the interest rate. ** Current (shown as Other Current Financial Liabilities in Note no. 18)

Foreign Currency Term Loan :

Foreign Currency Term loan is availed from Kotak Mahindra Bank Ltd is secured by :

Nature of Security

First Charge on following properties:

a) Kosi Factory Unit at Khasra No.647,648, NH 02, Km 109 Mile Stone, Village Dautana, Chhatta, Kosi Kalian, Mathura - 281 403.

b) Office Premises No: 502, âRustomjee Aspireeâ, Bhanu Shankar Yagnik Marg, Off Eastern Express Highway, Sion (East), Mumbai - 400 022.

c) R&D centre at Plot no. 27/ pt 2 at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai.

d) Wind Farm : Village Vankusawade, Tal. Patan, Dist. Satara, Maharashtra - 415 206.

Unsecured:

Sales Tax Deferral Liability/Loan

Terms of Repayment: Sales Tax deferral liability/loan is repayable free of interest over predefined instalments from the initial date of deferment of liability, as per respective schemes of incentive.

Secured Current Borrowings:

Loans from Consortium Banks are secured by :

a First pari passu charge by way of hypothecation of inventories and book debts, b First pari passu charge on the Companyâs immovable properties at:

i) Wardha premises - Plot no. 36, Block no. 17, Mouza no. 225, Bacharaj road, Gandhi Chowk, Wardha.

ii) Hari Kunj - Flat No. 103 and 104, âBâ wing, Sindhi Society, Chembur East, Mumbai - 400 071. c Second pari passu charge over present and future Fixed Assets ofthe Company, situated at:

i) Ranjangaon Units : Village Dhoksanghvi, Taluka Shirur, Ranjangaon, Dist. Pune - 412 210.

ii) Chakan Unit: Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410 501.

iii) Wind Farm : Village Vankusawade, Tal. Patan, Dist. Satara, Maharashtra - 415 206.

iv) Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai - 400 021.

v) Delhi Office : No. DSM-514 to DSM-521, DLF Tower, 5th Floor, 15 Shivaji Marg, Nazafgarh Road Industrial Area, Delhi-West, Delhi -110 015.

vi) Office Premises No : 001, 502, 701 and 801, âRustomjee Aspireeâ, Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022.

vii) Kosi Factory Unit at Khasra No.647,648, NH 02, Km 109 Mile Stone, Village Dautana, Chhatta, Kosi Kalian, Mathura - 281 403.

viii) R&D centre at Plot no. 27/ pt 21 at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai. These securities also extend to the various credit facilities including Bank Guarantees and Letters of Credit of Rs.156,469.16 lakh (Previous year Rs. 121,964.98 lakh) executed on behalf of the Company in the normal course of business.

The carrying amounts of financial and non-financial assets pledged as security for current and non-current borrowings are disclosed in note 42.

Description of Risk Exposures

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the employee benefit. The assumptions are as follows:

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the benefit and will thus result in an increase in the value of the liability.

Liquidity Risk: This is the risk that the Company is not able to meet the short-term benefit payouts. This may arise due to non availability of enough cash I cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the planâs liability.

Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity of Rs. 10,00,000).

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Asset Volatility Risk: Gratuity funds are with the Insurance Companies and those are subject to interest rate risk and the Insurance Companyâs fund managers manage interest rate risk with derivatives to minimize risk to an acceptable level. A portion of the funds are invested in equity securities and in alternative investments which have low correlation with equity securities. The company intends to maintain the current investment mix in the continuing years.

For PF Trust Managed Assets, the plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. The plan asset investments are in fixed income securities with high grades. The company has a risk management strategy for PF Fund Investments where the aggregate amount of risk exposure on a portfolio level is maintained at a fixed range. Our PF funds are managed by PF trust and the investment decisions are taken by Trustees as per advice and recommendations of 2 professional consultants. Any deviations from the range are corrected by rebalancing the portfolio.

Asset Liability Matching Strategies

The Company has purchased insurance policy from renowned insurance companies, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

But insurers has ensured that the investment positions are managed within an asset-liability matching (ALM) framework to achieve long-term investments that are in line with the obligations under the employee benefit plans.

As far as the PF Trust Investments are concerned, the same are managed by Trustees as per advice and recommendations of 2 professional consultants. The Employeesâ Provident Fund Organization, Ministry of Labour, Government of India, vide its notification in official gazette notified the pattern of investment for EPF exempted establishments, which depicts the obligatory pattern of investments of PF contributions and interests. The pattern mandates to invest as below :

The Leave Encashment Schemes, superannuation and pension schemes are managed on unfunded basis, hence Asset Liability Matching Strategies are not applicable

Effect of any Amendments, Curtailments and Settlements

In connection with the closure of Kosi factory, a curtailment loss was incurred and a settlement arrangement agreed with the employees which were settled for all retirement benefit plan obligations relating to the employees of that factory. The terminated employees were not eligible for gratuity, nonetheless, they were paid an adhoc ex-gratia towards curtailment and retrenchment of their services. Likewise the terminated employees were paid off for their due Leave Balances. The terminated employees of Kosi Unit were covered under RPFC and thus Bajaj Electricals Limited had no liability towards settlement of their PF Claims

Sensitivity Analysis

The readers of the annual report should note that the sensitivity analysis presented here may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. There is no change in the method of valuation for the prior period.

* The present value of obligation of provident fund represents the aggregate of accumulated fund value of Rs. 1,089,833,403 (As on 31 March 2016 - Rs. 934,407,118, As on 1 April 2015 - Rs.798,772,150) and interest rate guarantee Rs.17,272,606 (As on 31 March 2016 - Rs. 14,162,803, As on 1 April 2015 - Rs. 11,938,286). Of the above, the interest rate guarantee is recognized as provision in the Companyâs books, while the accumulated fund value is recognized by the Bajaj Electricals Limited Employeesâ Provident Fund Trusts. The interest rate guarantee so recognized in the Companyâs books is considered as non-current liability.

# The Fair Value of Non-Qualifying Insurance Policy (being a Reimbursement Right as is with Bajaj Allianz) is spilt in current and non current basis the expected cash flows (on undiscounted basis) over the next 1 year as forming part of maturity profile of Defined Benefit Obligation of Gratuity based on the Actuarial Valuation of Gratuity. The Fair Value of Qualifying Insurance Policy (Plan Assetâs Fair Value) is ignored for this split of Reimbursement Right into current and non-current assuming all the payouts shall be done from Non-Qualifying Insurance Policy during 1 year from the reporting date.

The payment of gratuity is required by the Payment of Gratuity Act, 1972. Responsibility for governance of the plans, including investment decisions and contribution schedules lies with the company. Though the investments for gratuity fund are managed by an insurance company, the company owns the accountability and responsibility of the fund.

For Bajaj Electricals Limited, the gratuity benefit payable to the employees of the Company is greater of the two :

(i) The provisions of the Payment of Gratuity Act, 1972 or (ii) The Companyâs gratuity scheme as described below.

The description of plans ability to affect the amount, timing and uncertainty of the entityâs future cash flows

a) Funding arrangements and Funding Policy

Bajaj Electricals Limited operates in two schemes for the compliance of provident fund statute - (i) Bajaj Electricals Limited Employeesâ Provident Fund Trust (defined benefit plan) and (ii) RPFC Contributions for provident fund (defined contribution plan). An Exempt Provident Fund Scheme is a defined benefit plan, the accounting for which has to be done on an actuarial basis.

The net defined benefit obligation as at the valuation date thus represents the excess of accrued account value plus interest rate guaranteed liability over the fair value of plan assets.

The description of plans ability to affect the amount, timing and uncertainty of the entityâs future cash flows a) Funding arrangements and Funding Policy

The scheme is managed on funded basis. Payment for present liability of future payment of PF is made by the Company towards shortfall of Bajaj Electricals Limited Employeesâ Provident Fund Trust, the investments for the same are managed by Trustees as per advice and recommendations of 2 professional consultants and in compliance of obligatory pattern of investments as per government notification in official gazette for the pattern of investment for EPF exempted establishments. Any deficit in the assets of PF Trust is funded by the Company. The provident fund for certain employees is a defined contribution plans covered under RPFC Contributions.

* Last In First Out (LIFO) basis i.e. future leave availments are first assumed to be from future leave accruals.

Responsibility for governance of the Earned Leave Plan lies with the company. Though the Earned Leave Plan is unfunded scheme, the company owns the accountability and responsibility of meeting the commitment towards settlement of the unfunded obligation that arises from time to time.

* Last In First Out (LIFO) basis i.e. future leave availments are first assumed to be from future leave accruals.

Mar 31, 2016

Nature of Security

1.1 Secured :

Loans from Consortium Banks are secured by :

i. First pari passu charge by way of hypothecation of inventories and book debts, excluding project specific assets exclusively charged to IDBI Bank Ltd.

ii. First pari passu charge on the Company''s immovable properties at Wardha and Mumbai (Reay Road);

iii. Second pari passu charge over present and future Fixed Assets of the Company, situated at;

a) Ranjangaon Units : Village Dhoksanghvi, Taluka Shirur, Ranjangaon, Dist. Pune - 412210;

b) Chakan Unit : Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410501;

c) Wind Farm : Village Vankusawade, Tal. Patan, Dist. Satara, Maharashtra 415206;

d) Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.

e) Residential Flat No.183 & 193 - Naperol Tower, Rafi Ahmed Kidwai Marg, Wadala, Mumbai - 400 031.

These securities also extend to the various credit facilities including Bank Guarantees and Letters of Credit of Rs. 107,274.33 lacs (Previous year Rs. 112,636.47 Lacs) executed on behalf of the Company in the normal course of business. Further Company has availed facilities for Bank Guarantees and Letters of Credit of Rs. 14,690.65 Lacs (Previous Year Rs. 13,112.69 Lacs) from IDBI Bank Ltd. which are secured by exclusive first charge on Company''s movable properties and entire current assets pertaining to specific projects and subservient charge on the Company''s entire movable assets including Stocks and Book Debts etc.

The Consortium banks have issued their NOC for substitution of charge on some of the aforesaid properties (Pending Creation) as follows

A Release of charge on the following Properties :

a) Company''s immovable property at Mumbai (Reay Road).

b) Residential Flat No.183 & 193 - Naperol Tower, Rafi Ahmed Kidwai Marg, Wadala, Mumbai - 400 031.

B Creation of pari passu charge over following Residential, Office and Factory premises of the Company, situated at;

I On First Charge basis :

Hari Kunj Flat No. 103 and 104, ''B'' wing, Sindhi Society, Chembur East, Mumbai - 400 071.

II On Second Charge basis :

Delhi Office : No. DSM-514 to DSM-521, DLF Tower, 5th Floor, 15 Shivaji Marg, Nazafgarh Road Industrial Area, Delhi-West, Delhi -110015.

Office Premises No : 001, 501, 701 and 801, ''Rustomjee Aspiree'', Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022.

Kosi Factory Unit at Khasra No.647,648, NH 02, Km 109 Mile Stone, Village Dautana, Chhatta, Kosi Kallan, Mathura 281403.

R & D centre (proposed) at Plot no. 27/ pt 2 at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai.

Terms of repayment for current year

2: Information about Business Segments:

The Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. ''Lighting'' includes Lamps, Tubes, Luminaries; ''Consumer Durables'' includes Appliances & Fans; Engineering & Projects'' includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and ''Others'' includes Die- casting and Wind Energy.

ii) Provident Fund :

In case of certain employees, the provident fund contribution is made to a trust administered by the Company. In terms of the Guidance Note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined the liability as given below.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are: Remaining term of maturity - 6.0 years Expected guaranteed interest rate - 8.80% Discount rate for the remaining term to maturity of interest portfolio - 7.80%

3 : Consolidated Financial Statement

The consolidated financial statements of the Company alongwith its Associate is attached to the standalone financial statement. The details of the Group regarding the nature of relationship and the basis of consolidation can be referred to in Note 1 to the said consolidated financial statements.

4 : Previous year figures

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.

Mar 31, 2014

Basis of preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"]. Pursuant to circular 15/2013 dated 13.09.2013 read with circular 08/2014 dated 04.04.2014, till the standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

1: Contingent liabilities

Particulars 2013-14 2012-13

(i) Contingent Liabilities not provided for :

Claims against the Company not acknowledged as debts 1,386.39 1,391.15

Net of tax 915.16 918.30

Guarantees / Letter of Comfort given on behalf of Companies Rs.13,560.53 Lacs (Previous Year Rs.10,560.53 Lacs) 9,711.62 9,757.06

Liability towards Banks in respect of Bill Discounting / Channel Finance Facility 2,387.37 1,559.77

Excise and Customs demand - matters under dispute and Claims for refund of Excise Duty, if any, against Excise Duty Refund received in the earlier year 25.48 32.74

Net of tax 16.82 21.61

Service Tax matters under dispute and Claims 134.68 -

Net of tax 88.90 -

Income Tax matters - Appeal by company 479.76 480.30

Sales Tax matters under dispute 2,797.95 747.21

Net of tax 1,846.93 493.23

Penalty/damages/interest, if any, due to non-fulfillment of any of the terms of Liability Liability works contracts unascert -ained unascer -tained

(ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

The Company has arranged channel finance facility for its dealers and distributors from Axis Bank Limited. The outstanding in respect of this facility as at Balance Sheet date is Rs. 5,593.87 Lacs (Previous Year Rs. 4,987.54 Lacs). Accordingly, Trade Receivables at the end of the year stands reduced by the said amount. However, the Company has provided a recourse of 33% of the outstanding that may be overdue and irrecoverable from the dealers, which works out to Rs. 7.44 Lacs (Previous Year Rs. 15.64 lacs)

The Company has been sanctioned Sales Bills / Receivables Factoring facility by few banks for discounting the bills raised on its customers. The said facilities are with full recourse to the Company. The outstanding in respect of this facility as at Balance Sheet date is Rs. 2,379.93 Lacs (Previous Year Rs. 1,544.13 Lacs). Accordingly, Trade Receivables at the end of the year stands reduced by the said amount.

Disclosure in Respect of Material Related Party Transactions during the year :

1 Purchases include Hind Lamps Limited Rs. 4,943.44 Lacs (Previous Year Rs. 5,678.92 Lacs), Starlite Lighting Limited Rs. 7,281.30 Lacs (Previous Year Rs. 11,094.67 Lacs)

2 Purchase of DEPB Licenses include Bajaj Auto Ltd. Rs. Nil (Previous Year Rs. 343.63 Lacs)

3 Sales include Mukand Ltd. Rs. Nil (Previous Year Rs. 91.76 Lacs), Hindustan Housing Co. Ltd. Rs. Nil (Previous Year Rs. 4.31 Lacs) , Bajaj Finance Ltd. Rs. 64.28 Lacs (Previous year Rs. Nil)

4 Commission include commission paid to Shri Madhur Bajaj Rs. 2.50 Lacs (Previous Year Rs. 2.50 Lacs)

5 Directors'' sitting fees include fees paid to Shri Madhur Bajaj Rs. 1.00 Lacs (Previous Year Rs. 1.00 Lacs)

6 Insurance premium paid include premium paid to Bajaj Allianz General Insurance Co. Ltd. Rs. 689.31 Lacs (Previous Year Rs. 463.44 Lacs)

7 Reimbursement of expenses include expense reimbursed to Hind Musafir Agency Ltd. Rs.1,295.53 Lacs (Previous Year Rs. 1,036.40 Lacs)

8 Other expenses include expenses paid to Mukand Ltd Rs. 5.02 Lacs (Previous Year Rs. Nil)

9 Amount paid for transfer of deposit in the Company''s name include deposit reimbursed to Hind Lamps Ltd. Rs.13.63 Lacs (Previous Year Rs. Nil)

10 Services received include services received from Hind Musafir Agency Ltd. Rs. 19.63 Lacs (Previous Year Rs. 13.86 Lacs), Hindustan Housing Co. Ltd.Rs. 23.48 Lacs (Previous Year Rs. 20.16 Lacs), Hind Lamps Ltd. Rs. 164.01 Lacs (Previous Year Rs. Nil )

11 Remuneration paid to Directors include remuneration paid to Shri Shekhar Bajaj Rs. 211.64 Lacs (Previous Year Rs. 253.10 Lacs), Shri Anant Bajaj Rs. 143.39 Lacs (Previous Year Rs.158.92 Lacs).

12 Rent paid include rent paid to Jamnalal Sons Pvt. Ltd. Rs. 34.65 Lacs (Previous Year Rs. 31.33 Lacs), Smt. Kiran Bajaj Rs. 9.00 Lacs (Previous Year Rs. 9.00 Lacs).

13 Claims received include claims received from Bajaj Allianz General Insurance Co. Ltd.Rs. 132.54 Lacs (Previous Year Rs. 95.00 Lacs)

14 Incentives & other income include incentive received from Hind Musafir Agency Ltd. Rs. 3.90 Lacs (Previous Year Rs. 2.70 Lacs)

15 Interest received include interest received from Hind Lamps Ltd. Rs. 71.34 Lacs (Previous Year Rs. 114.45 Lacs), Starlite Lighting Ltd. Rs. 389.37 Lacs (Previous Year Rs. 238.22 Lacs)

16 Lease rent received include rent received from Starlite Lighting Ltd. Rs. 103.28 Lacs (Previous Year Rs. 103.28 Lacs)

17 Dividend received include dividend received from Bajaj Ventures Ltd. Rs. Nil (Previous Year Rs. 142.41 Lacs)

18 Contribution to Gratuity Fund include contribution paid to Bajaj Allianz Life Insurance Co Ltd. Rs. 224.63 Lacs (Previous Year Rs. 400.00 Lacs)

19 Contribution to equity include Hind Lamps Ltd. Rs. 756.00 Lacs (Previous Year Rs. Nil)

20 Loan given include loan given to Starlite Lighting Ltd. Rs. Nil (Previous Year Rs. 1,000.00 Lacs)

21 Trade advance given include advances given to Starlite Lighting Ltd. Rs. 6,470.00 Lacs (Previous Year Rs. 3,200.00 Lacs)

22 Security Deposit advanced include Hindustan Housing Co. Ltd. Rs. Nil deposit refund received (Previous Year Rs. 0.90 Lacs)

23 Capital asset purchase include purchase of Hind Lamps Ltd.''s Kosi Unit Rs. Nil (Previous Year Rs. 2,263.14 Lacs)

24 Fixed asset purchase include purchase from Hind Lamps Ltd. Rs.. 5.01 Lacs (Previous Year Rs. Nil)

25 Advance for capital asset include advance given to Bajaj Auto Ltd. Rs. 40.88 Lacs (Previous Year Rs. Nil)

26 Redemption of 2% Non-Convertible Cumulative Redeemable Preference Shares include redemption of investment in preference shares of Bajaj Ventures Ltd. Rs. Nil (Previous Year Rs. 1,000.00 Lacs)

27 Non Convertible Redeemable Preference Shares include investment in preference shares of Hind Lamps Ltd. Rs. Nil (Previous Year Rs. 700.00 Lacs) Starlite Lighting Ltd. Rs. 3,000.00 Lacs (Previous Year Rs. Nil)

ii) Provident Fund :

In case of certain employees, the provident fund contribution is made to a trust administered by the company. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined that there is no shortfall as at 31 March 2014.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 6.78 years

Expected guaranteed interest rate - 8.75%

Discount rate for the remaining term to maturity of interest portfolio - 9.28%

The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange and Bombay Stock Exchange Limited over a period prior to the date of grant corresponding with the expected life of the options.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 01 April 2005.

Stock Options exercised after the Balance Sheet date rank pari passu with the equity shares as on the Balance Sheet date and hence are entitled to dividend, if exercised before the dividend is declared. Accordingly proposed dividend includes dividend on such equity shares issued and allotted up to the date these financial statements are drawn up. Dividend on subsequently allotted equity shares is accounted under "Appropriations" as ''Dividend paid on exercise of Stock Options''.

2 : Exceptional item of Rs. Nil (Previous Year Rs. 2,472.32 Lacs) represents profit realised on divestment of Company''s entire shareholding in Bajaj Venture Ltd.

3 : Advertisement and Publicity expenses includes Rs. 1,353.11 Lacs, incurred for 75th year Platinum Jubilee celebration (Previous Year Rs. Nil).

4 : Previous year figures

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.

Mar 31, 2013

Basis of preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"] in compliance with the provisions of the Companies Act, 1956 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 prescribed by the Central Government. Further, the guidance notes/ announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations viz. SEBI guidelines override the same requiring a different treatment. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

1: Information about Business Segments :

The Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. ''Lighting'' includes Lamps, Tubes, Luminaries; ''Consumer Durables'' includes Appliances & Fans; Engineering & Projects'' includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and ''Others'' includes Die-casting and Wind Energy.

2: Related Party Transactions

1. Relationships

(A) Other related parties where control exists :

Hind Lamps Limited

Bajaj Ventures Limited*

Starlite Lighting Limited

(B) Associates, Joint ventures, Investing Party :

Jamnalal Sons Pvt. Ltd.

(C) Individuals Controlling Voting power/ Excercising Significant influence & their relatives :

Mr. Madhur Bajaj

(D) Key Management Personnel :

Mr. Shekhar Bajaj - Chairman & Managing Director

Mr. Anant Bajaj - Joint Managing Director

Mr. R. Ramakrishnan - Executive Director ( Upto 29th Feb,2012) #

(E) Relatives of Key Management Personnel and their enterprises where transactions have taken place:

Mrs. Kiran Bajaj

Mrs. Swarnalatha Ramakrishnan #

Hind Musafir Agency Limited

Bajaj Auto Limited Mukand Ltd.

Bajaj International Pvt. Ltd.

Hindustan Housing Co.Ltd.

Bajaj Allianz General Insurance Co. Ltd.

Bajaj Allianz Life Insurance Co Ltd.

Bajaj Finance Ltd.

Bajaj Finserv Ltd.

Bajaj Financial Solutions Ltd.

Hercules Hoists Ltd.

Disclosure in Respect of Material Related Party Transactions during the year :

1 Purchases include Hind Lamps Limited Rs.5,678.92 Lacs (Previous Year Rs.5,522.56 Lacs), Starlite Lighting Limited Rs.11,094.67 Lacs (Previous Year Rs.7,901.12 Lacs)

2 Purchase of DEPB Licenses include Bajaj Auto Ltd. Rs.343.63 Lacs (Previous Year Rs. Nil)

3 Sales include Mukand Ltd. Rs.91.76 Lacs (Previous Year Rs.43.49 Lacs), Hindustan Housing Co. Ltd. Rs.4.31 Lacs (Previous Year Rs.93.25 Lacs)

4 Commission include commission paid to Mr. Madhur Bajaj Rs.2.50 Lacs (Previous Year Rs.2.00 Lacs)

5 Commission paid on Imports include commission paid to Bajaj International Pvt. Ltd. Rs. Nil (Previous Year Rs.192.06 Lacs)

6 Directors'' Sitting Fees include fees paid to Mr. Madhur Bajaj Rs.1 Lac (Previous Year Rs.1 Lac)

7 Insurance Premium paid include premium paid to Bajaj Allianz General Insurance Co. Ltd. Rs.463.44 Lacs (Previous Year Rs.337.97 Lacs)

8 Reimbursement of Expenses include expenses reimbursed to Hind Musafir Agency Ltd. Rs.1,036.40 Lacs (Previous Year Rs.1,109.85 Lacs)

9 Services Received include services from Hind Musafir Agency Ltd. Rs.13.86 Lacs (Previous Year Rs.13.90 Lacs), Hindustan Housing Co. Ltd. Rs. 20.16 Lacs (Previous Year Rs.15.65 Lacs)

10 Remuneration paid to Directors include remunerations paid to Mr. Shekhar Bajaj Rs.253.10 Lacs (Previous Year Rs.485.17 Lacs), Mr. Anant Bajaj Rs.158.92 Lacs (Previous Year Rs.244.23 Lacs), Mr. R. Ramakrishnan # Rs. Nil (Previous Year Rs.217.08 Lacs)

11 Rent Paid include rent paid to Jamnalal Sons Pvt. Ltd Rs.31.33 Lacs (Previous Year Rs.30.90 Lacs), Mrs. Kiran Bajaj Rs.9.00 Lacs (Previous Year Rs.9.00 Lacs), Mrs. Swarnalatha Ramakrishnan# Rs. Nil (Previous Year Rs.5.50 Lacs)

12 Claims Received include claims received from Bajaj Allianz General Insurance Co. Ltd. Rs.95.00 Lacs (Previous Year Rs.52.97 Lacs)

13 Incentives & Other income include incentives received from Hind Musafir Agency Ltd. Rs.2.70 Lacs (Previous Year Rs.0.81 Lacs)

14 Interest Received include interest received from Hind Lamps Ltd. Rs.114.45 Lacs (Previous Year Rs.146.49 Lacs), Starlite Lighting Ltd Rs.238.22 Lacs (Previous Year Rs.323.17 Lacs)

15 Lease Rent Received include rent received from Starlite Lighting Ltd. Rs.103.28 Lacs (Previous Year Rs.103.28 Lacs)

16 Royalty received include royaty received from Bajaj International Pvt. Ltd. Rs. Nil (Previous Year Rs.28.93 Lacs)

17 Rent Received include rent received from Bajaj Auto Ltd. Rs. Nil (Previous Year Rs.0.44 Lacs)

18 Dividend Received include dividend received from Bajaj Ventures Ltd. Rs.142.41 Lacs (Previous Year Rs. Nil)

19 Contribution to Gratuity Fund include contribution paid to Bajaj Allianz Life Insurance Co Ltd. Rs.400.00 Lacs (Previous Year Rs.1,000.00 Lacs)

20 Contribution to Equity include Bajaj Ventures Ltd. Rs. Nil (Previous Year Rs.750.00 Lacs)

21 Loan Given include loans given to Starlite Lighting Ltd. Rs.1,000.00 Lacs (Previous Year Rs. Nil)

22 Trade Advance Given include advances given to Starlite Lighting Ltd. Rs.3,200.00 Lacs (Previous Year Rs.1,500.00 Lacs)

23 Advance for Insurance Premium include payment made to Bajaj Allianz General Insurance Co. Ltd. Rs. Nil (Previous Year Rs.239.41 Lacs)

24 Security Deposit Advanced include Hindustan Housing Co. Ltd. Rs.0.90 Lacs deposit refund received (Previous Year Rs.6.03 Lacs)

25 Capital Asset Purchase include purchase of Hind Lamps Ltd.''s Kosi Unit - Rs.2,263.14 Lacs (Previous Year Rs. Nil)

26 Redemption of 2% Non-Convertible Cummulative Redeemable Preference Shares include redemption of investment in Preference Shares of Bajaj Ventures Ltd Rs.1,000.00 Lacs (Previous Year Rs. Nil)

27 Non Convertible Redeemable Preferance Shares include investment in Preference Shares of Hind Lamps Ltd. Rs.700.00 Lacs (Previous Year Rs. Nil)

# Mr. R. Ramakrishnan - Executive Director up to 29th February, 2012, considered for previous year figures.

3: Employee benefits

Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard 15 (Revised) the details of which are as hereunder.

Provident Fund :

In case of certain employees, the provident fund contribution is made to a trust administered by the Company. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined that there is no shortfall as at 31 March 2013.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 6 years Expected guaranteed interest rate - 7.98%

Discount rate for the remaining term to maturity of interest portfolio - 8.09%

4: Exceptional Item of Rs. 2,472.32 Lacs represents profit realized on divestment of Company''s entire shareholding in Bajaj Ventures Ltd.

5: Previous year figures

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.

Mar 31, 2012

Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

1.1 The Company has reserved issuance of 3,616,121 (Previous year 2,171,632) Equity Shares of Rs. 2/- each for offering to eligible employees of the Company under Employees Stock Options Scheme. During the year, the Company has granted 2,595,000 (Previous Year 695,000) options to the eligible employees which includes 2,455,000 options at a price of Rs. 164.85 per option and 140,000 option at a price of Rs. 182.20 per option (Previous year 695,000 options at a price of Rs. 313.95 per option) plus all applicable taxes, as may be levied in this regard on the Company. The options would vest over a maximum period of 4 years or such other period as may be decided by the Remuneration & Compensation Committee from the date of Grant based on specified criteria.

1.2 Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors and approved by the shareholders in the Annual General Meeting is paid in Indian rupees. 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.

1.3 For the Period of Five years immediately preceding the date as at which the Balance sheet is prepared

During the Financial year 2007-08 Company issued 8,642,880/- Equity Shares of Rs. 10/- each as Bonus shares in the ratio of 1:1 (43,214,400 equity shares of Rs. 2/- each) by capitalising reserves.

*On 500 Equity Shares of Rs. 2/- each (Previous Year 46,000 Equity Shares of Rs. 2/- each) issued at a premium of Rs. 28/- per Equity Share under Loyalty Plan and 767,022 Equity Shares of Rs. 2/- each (Previous year 1,254,312 Equity Shares of Rs. 2/- each) issued at a premium of Rs. 41.11 each and 28,000 Equity Shares of Rs. 2/- each issued at a premium of Rs. 171.35 each under Growth Plan to eligible employees under Employees Stock Options Scheme.

*The Company had advanced loans aggregating to Rs.2,372 lacs to Hind Lamps Ltd. (HLL) in which Company holds 50% of Equity Share Capital as a promoter and HLL is a major dedicated vendor of lamps and tubes to the Company. The loans are a result of continued financial support to HLL in view of substantial losses incurred by HLL in past many years. The Company based on its own assessment of the financial condition of HLL has in the past, as a matter of prudence, made a provision for doubtful advance to the extent of Rs.1,000 lacs.

The Draft Rehabilitation Scheme (DRS) submitted by HLL to the Board for Industrial and Financial Reconstruction (BIFR) envisaging its revival was approved in January 2012 and according to which HLL has repaid to the Company loans of Rs. 520 lacs during the year and the loan amount of Rs. 700 lacs would be converted into Non Convertible Cumulative Redeemable Preference Shares in FY 2012-13.

In terms of the Scheme approved by BIFR, HLL has sold its Kosi Unit and the proceeds received from the sale are being utilized to reduce part of its high cost debt obligations and to meet working capital requirements. Further, HLL has approached various authorities for grant of other reliefs as per the scheme approved by BIFR. With these reliefs the management of HLL is confident in executing the revival plan successfully to turn around its operations.

Note 2. Contingent liabilities

(i) Contingent Liabilities not provided for : (Rs. In Lacs) 2011-12 2010-11

Claims against the Company not acknowledged as debts 1,360.55 1,155.00

Net of tax 919.12 771.34

Guarantees / Letter of Comfort given on behalf of Companies 10,950.00 5,200.00

Excise and Customs demand - matters under dispute and Claims for refund of Excise Duty, if any, against Excise Duty Refund received in the earlier year 32.74 32.74

Net of tax 22.12 21.86

Income Tax matters - Appeal by company 443.19 478.42

Sales Tax matters under dispute 791.54 725.93

Net of tax 534.72 484.79

Penalty/damages/interest, if any, due to non-fulfilment of any of the terms of Liability Liability works contracts unascertained un ascertained

Letter of support given to Associate Company Liability Liability unascertained un ascertained

(ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

Note 3. Information about Business Segments :

Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. 'Lighting' includes Lamps, Tubes, Luminaries; 'Consumer Durables' includes Appliances & Fans; Engineering & Projects' includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and 'Others' includes Die-casting and Wind Energy.

1. Providend Fund Liability

In case of certain employees, the Providend Fund contribution is made to a trust administered by the Company. In terms of the Guidance note issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Providend Fund liability based on the assumptions listed below and determined net liability of Rs. 28.67 Lacs as at 31st March 2012, the same has been provided for in the books of accounts of the Company.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are :- Remaining term of maturity - 6.89 years Expected Guaranteed interest rate - 8.25%

Discount rate for the remaining term to maturity of interest portfolio - 8.60%

The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange and Bombay Stock Exchange Limited over a period prior to the date of grant corresponding with the expected life of the options.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 1st April 2005.

Stock Options exercised after the Balance Sheet date rank pari passu with the equity shares as on the Balance Sheet date and hence are entitled to dividend, if exercised before the dividend is declared. Accordingly proposed dividend includes dividend on such equity shares issued and allotted up to the date these financial statements are drawn up. Dividend on subsequently allotted equity shares is accounted under "Appropriations" as 'Dividend paid on exercise of Stock Options'.

Note 4. Previous year figures

The financial statements for the year ended 31 March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to confirm to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

Mar 31, 2011

1. 2010-11 2009-10

(i) Contingent Liabilities not provided for:

(a) Disputed Income-tax Matters 478.42 300.30

(b) Disputed Excise Matters Ã Gross 32.74 68.02

Ã Net of tax 21.86 44.90

(c) Disputed Sales Tax Matters Ã Gross 725.93 645.63

Ã Net of tax 484.79 426.18

(d) Claims against the Company not acknowledged as debts Ã Gross 1,760.37 1,558.43

Ã Net of tax 1,175.62 1,028.72

(e) Guarantees/Letter of Comfort given on behalf of Companies 5,200.00 5,055.46

(f) Penalty/damages/interest, if any, due to non-fulfillment of any of the terms of works contracts Amounts not ascertainable

(g) Letter of Support given to Associate Company Amounts not ascertainable

(ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

2. As required by Accounting Standard 29 Ã "Provisions, Contingent Liabilities and Contingent Assets", the Company recognised a liability aggregating to Rs.1,620.50 (Previous Year Rs.1,508.84) for expected warranty claims that are estimated to be incurred in future periods arising out of sales made up to the closure of the year.

3. Ownership premises include the sum of Rs.0.13 (Previous Year Rs.0.01) being the Face Value of Shares in co-operative societies required to be held under their respective bye-laws.

4. The buildings (including leasehold land appurtenant thereto) and ownership premises had been revalued as on 1st January, 1985 then resulting in the net increase in the book value by Rs.321.01 which had been transferred to Revaluation Reserve. All the freehold land, leasehold land, buildings (including leasehold land appurtenant thereto) and premises on ownership basis had been revalued as on 30th September, 1994 resulting in a further net increase in the book value of the said assets as on 1st October, 1994 by Rs.2,305.87 which also had been transferred to the Revaluation Reserve. As a result of the above, the total net increase in the book value of the said assets aggregates to Rs.2,626.88 (Rs.62.51 on freehold land, Rs.13.69 on leasehold land, Rs.816.49 on building and Rs.1,734.19 on ownership premises).

The depreciation on the increased value has resulted in an additional charge for the year of Rs.26.26 (Previous Year Rs. 26.26). An amount equivalent to the additional charge has been transferred from Revaluation Reserve to Profit & Loss Account. Such transfer, according to an authoritative professional view, is an acceptable practice for the purpose of true and fair presentation of the Companys financial statements. The balance depreciation charged on original cost of assets is in accordance with the SLM rates specified in Schedule XIV to the Companies Act, 1956.

5. In respect of Investments made in M. P. Lamps Ltd., calls of Rs.2.50 per share on 48,000 equity shares and Rs.3.75 per share on 95,997 equity shares aggregating to Rs.4.80 have not been paid by the Company. On principles of prudence the entire investment in M. P. Lamps Ltd. is considered as diminished and accordingly carried at Rs. NIL.

6. Estimated amount of contracts remaining to be executed on capital account Rs.3,207.49 (Previous Year Rs.406.52) net of advances.

7. Acceptances include Rs.1,910.24 (Previous Year Rs.1,762.07) for bills accepted by the Company and discounted by the suppliers with Small Industries Development Bank of India under a line of credit extended to the Company, which are secured by a second charge on raw materials, goods in process, semi-finished goods, finished goods and book debts and also on the collateral security created by way of equitable mortgage on the Companys properties at Mumbai and Wardha.

8. Provision for taxation includes Rs.3.10 (Previous Year Rs.4.00), provided in respect of wealth tax liability for the year.

9. Information about Business Segments:

Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. Lighting includes Lamps, Tubes, Luminaries; Consumer Durables includes Appliances & Fans; Engineering & Projects includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and Others includes Die-casting and Wind Energy.

The Company caters mainly to the needs of the Indian Markets and the export turnover being 0.12% (Previous Year 0.19%) of the total turnover of the Company. There are no reportable geographical segments. All assets are located in India.

10. Related Party Transactions :

Details of transactions with Related Parties during the year as required by Accounting Standard - 18 on Related Party Transactions have been disclosed on the basis of parties identified by the Key Management Personnel to be within the definition of Related Parties as per the Standard and noted by the Board of Directors. Accordingly, the information is disclosed hereunder :

1. Relationships

(a) Other related parties where control exists :

Hind Lamps Limited Bajaj Ventures Limited Starlite Lighting Limited

(b) Key Management Personnel :

Mr. Shekhar Bajaj Ã Chairman & Managing Director Mr. Anant Bajaj Ã Executive Director Mr. R. Ramakrishnan Ã Executive Director

(c) Relatives of Key Management Personnel and their enterprises where transactions have taken place:

Mr. Madhur Bajaj Mrs. Kiran Bajaj Mrs. Pooja Bajaj Mrs. Swarnalatha Ramakrishnan Bajaj Allianz General Insurance Co. Ltd. Bajaj Auto Ltd. Bajaj Consumer Care Ltd. Bajaj Hindusthan Ltd. Bajaj International Pvt. Ltd. Hercules Hoist Ltd. Hind Musafir Agency Ltd. Hindustan Construction Co. Ltd. Hindustan Housing Co. Ltd. Jamnalal Bajaj Seva Trust Jamnalal Sons Pvt. Ltd. Maharashtra Scooters Ltd. Mukand Engineers Ltd. Mukand Ltd.

Note : Related party relationship is as identified by the Company and relied upon by the Auditors.

21. Miscellaneous Income includes Rs.257.60 (Previous Year Rs.44.83) being the liabilities no longer payable.

22. Employee Benefits and Employee Stock Options.

A) Disclosures pursuant to Accounting Standard - 15 ( Revised ) " Employee Benefits" :

a. Defined Contribution Plans:

Amount of Rs.655.37 (Previous Year Rs.602.06) (Provident Fund, Pension Fund, Superannuation Fund) is recognized as expense and included in "Employee Emoluments" - Schedule 11 in the Profit and Loss Account.

b. Defined Benefit Plans:

i) General descriptions of significant Defined plans:

a. Gratuity Plan

b. Leave Plan

B) Employee Stock Options Scheme:

During the year, the Company granted 6,95,000 Options under Growth Plan to the eligible employees, at a price of Rs. 313.95 per option, being the closing equity price of the Company on the National Stock Exchange of India Ltd, as per their eligibility under ESOP 2007 of the Company.

The Compensation cost of stock Options granted to employees is accounted by the Company using the intrinsic value method.

The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange and Bombay Stock Exchange Limited over a period prior to the date of grant corresponding with the expected life of the options.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 1st April 2005

Stock Options exercised after the Balance Sheet date rank pari passu with the equity shares as on the Balance Sheet date and hence are entitled to dividend, if exercised before the dividend is declared. Accordingly proposed dividend includes dividend on such equity shares issued and allotted up to the date these financial statements are drawn up. Dividend on subsequently allotted equity shares is accounted under "Appropriations" as Dividend paid on exercise of Stock Options.

11. The Company had advanced loans aggregating to Rs.2,372 as on 31st March 2011 (Previous Year Rs.2,372) to Hind Lamps Ltd.(HLL) in which Company holds 50% of Equity Share Capital as a promoter and HLL is a major dedicated vendor of lamps and tubes to the Company. The loans are a result of continued financial support to HLL in view of substantial losses incurred in past many years. HLL had submitted Draft Rehabilitation Scheme to the Board for Industrial and Financial Reconstruction (BIFR) envisaging its revival and as a part thereof HLL has been permitted to sale the assets of its Kosi Unit for settling its debt obligation and raising its net worth and profitability. Keeping the revival plan in mind, the Company had estimated a part repayment of the above loan once the scheme is approved by BIFR and implemented by HLL and thereby determining the potential disability to recover an amount of Rs. 500 for substantial period of time. Accordingly the Company had as a matter of prudence made a provision for this irrecoverability in the previous year.

In view of the revised draft rehabilitation scheme submitted by HLL to BIFR on 25th April, 2011, subsequent to the permission of sale of assets of Kosi unit was granted, the net worth of HLL has been reinstated. The management of HLL has a strategy in place and is confident in turning around its operations. However, the Company based on its own assessment of the financial status of HLL has assumed potential disability to recover further amount of Rs. 500 for a substantial period of time and therefore has, as a matter of prudence, made a provision for this irrecoverability during the year.

12. In respect of Debtors relating to Engineering & Projects Business Unit balance confirmations have not been called for by the Company.

13. Statement of Abstract of Financial Statements and Companys General Business Profile, as compiled by the Company, is attached hereto.

14. Additional information on assets given on operating lease:

The Company has given on lease certain plant & machinery for a lease period ranging between 1 to 5 years. The arrangement is in the nature of cancelable lease and are generally renewable by mutual consent or mutual agreeable terms.

15. Previous years figures have been regrouped wherever necessary to make them comparable with those of the current year.

Mar 31, 2010

1. 2009-10 2008-09 (i) Contingent Liabilities not provided for: (a) Disputed Income-tax Matters 300.30 119.40 (b) Disputed Excise Matters - Gross 68.02 68.02 - Net of tax 44.90 44.90 (c) Disputed Sales Tax Matters - Gross 645.63 752.02 - Net of tax 426.18 496.41 (d) Claims against the Company not acknowledged as debts - Gross 1558.43 1534.18 - Net of tax 1028.72 1012.71 (e) Guarantees/Letter of Comfort given on behalf of Companies 5055.46 2,750.00 (f) Penalty/damages/interest, if any due to non- fulfillment of any of the terms of works contracts Amounts not ascertainable (g) Letter of Support given to Associate Company Amounts not ascertainable (ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

2. Ownership premises include the sum of Rs. 0.01 (Previous Year Rs. 0.01) being the Face Value of Shares in co-operative societies required to be held under their respective bye-laws.

3. The buildings (including leasehold land appurtenant thereto) and ownership premises had been revalued as on 1 st January, 1985 then resulting in the net increase in the book value by Rs. 321.01 which had been transferred to Revaluation Reserve. All the freehold land, leasehold land, buildings (including leasehold land appurtenant thereto) and premises on ownership basis had been revalued as on 30th September, 1994 resulting in a further net increase in the book value of the said assets as on 1st October, 1994 by Rs. 2,305.87 which also had been transferred to the Revaluation Reserve. As a result of the above, the total net increase in the book value of the said assets aggregates to Rs. 2,626.88 (Rs. 62.51 on freehold land and Rs. 13.69 on leasehold land, Rs. 816.49 on building and Rs. 1,734.19 on ownership premises).

The depreciation on the increased value has resulted in an additional charge for the year of Rs.26.26 (Previous Year Rs. 26.26). An amount equivalent to the additional charge has been transferred from Revaluation Reserve to Profit & Loss Account. Such transfer, according to an authoritative professional view, is an acceptable practice for the purpose of true and fair presentation of the Companys financial statements. The balance depreciation charged on original cost of assets is in accordance with the SLM rates specified in Schedule XIV to the Companies Act, 1956.

4. In respect of Investments made in M. P. Lamps Ltd., a call of Rs. 2.50 per share on 48,000 equity shares and Rs. 3.75 per share on 95,997 equity shares aggregating to Rs. 4.80 Lacs has not been paid by the Company. On principles of prudence the entire investment in M. P. Lamps is considered as diminished and accordingly valued at Rs. NIL.

5. Estimated amount of contracts remaining to be executed on capital account Rs. 406.52 (Previous Year Rs. 475.12) net of advances.

6. Acceptances include Rs. 1,762.07 (Previous Year Rs. 2,205.50 ) for bills accepted by the Company and discounted by the suppliers with Small Industries Development Bank of India under a line of credit extended to the Company, which are secured by a second charge on raw materials, goods in process, semi-finished goods, finished goods and book debts and also on the collateral security created by way of equitable mortgage on the Companys properties at Mumbai and Wardha.

7. a. Provision for taxation includes Rs. 4.00 (Previous Year Rs. 2.50), provided in respect of wealth tax liability for the year.

b. The Company had paid taxes with regards to certain disallowances in respect of Assessment Years 2007-08, 2008-09 and 2009-10 against which the Company is in the process of making representations to appropriate authorities to reclaim the same. As a matter of prudence a provision has been made during the year in the books of account without prejudice to the Companys right to contest and reclaim the same.

8. Information about Business Segments:

Company has identified its Primary Reportable Business Segments comprising of i) Lighting, ii) Consumer Durables, iii) Engineering & Projects and iv) Others. Lighting includes Lamps, Tubes, Luminaries; Consumer Durables includes Appliances & Fans; Engineering & Projects includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and Others includes Die-casting and Wind Energy.

9. Related Party Transactions :

Details of Transactions with Related Parties during the year as required by Accounting Standard -18 on Related Party Transactions have been disclosed on the basis of parties identified by the key management personnel to be within the definition of Related Parties as per the Standard and noted by the Board of Directors. Accordingly, the information is disclosed hereunder:

1. Relationships

(a) Other related parties where control exists : Hind Lamps Limited Bajaj Ventures Limited Starlite Lighting Limited

(b) Key Management Personnel:

Mr. Shekhar Bajaj - Chairman & Managing Director Mr. Anant Bajaj - Executive Director Mr. R. Ramakrishnan - Executive Director

(c) Relatives of key management personnel and their enterprises where transactions have taken place: Mr. Madhur Bajaj

Mrs. Kiran Bajaj Mrs. Pooja Bajaj Mrs. Swarnalatha Ramakrishnan Hind Musafir Agency Ltd. Bajaj Auto Ltd. Bajaj Hindusthan Ltd. Jamnalal Bajaj Seva Trust Maharashtra Scooters Ltd. Mukand Engineers Ltd. Mukand Ltd. Bajaj International Pvt. Ltd. Hindustan Housing Co. Ltd. Hindustan Construction Co. Ltd. Jamnalal Sons Pvt. Ltd. Hercules Hoist Ltd. Bajaj Allianz General Insurance Co. Ltd. Bajaj Consumer Care Ltd.

Note : Related party relationship is as identified by the Company and relied upon by the Auditors.

10. Miscellaneous Income includes Rs. 44.83 (Previous Year Rs. 269.03) being the liabilities no longer payable.

11. Employee Benefits and Employee Stock Options.

A) Disclosures pursuant to Accounting Standard -15 ( Revised )" Employee Benefits":

a. Defined Contribution Plans:

Amount of Rs. 602.06 (Previous Year Rs. 479.25) (Provident Fund, Pension Fund, Superannuation Fund) is recognised as expense and included in "Employee Emoluments" - Schedule 11 in the Profit and Loss Account.

b. Defined Benefit Plans:

i) General Descriptions of significant Defined plans:

a. Gratuity Plan

b. Leave Plan

B) Employee Stock Options Scheme:

On 30th April, 2009, 5,55,000 outstanding options out of the Growth Options that were granted on 25th October, 2007, 24th July, 2008 and 6,h August, 2008 were cancelled and the Remuneration & Compensation Committee of the Company in its meeting held on 30th April, 2009 re-granted 4,66,385 Stock Options under Growth Plan to the Eligible Employees, at an exercise price of Rs. 215.55 per option, in consideration of the unusal meltdown of the stock market, which had resulted in a steep fall in the market price of the Companys shares compared to the price prevalent when the Stock Options were granted, and to achieve the basic objectives of the ESOP Scheme viz. to motivate the employees to contribute to the growth and profitability of the Company as also to attract and retain talent in the organization.

The Remuneration & Compensation Committee has also, in its meeting held on 28* January, 2010, granted 1,44,000 incremental Stock Options under Growth Plan to the eligible employees consisting of promotees and new joinees, at a price of Rs. 866.75 per option, being the closing equity price of the Company on the National Stock Exchange of India Ltd, as per their eligibility under ESOP 2007 of the Company.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share- based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 1st April 2005.

12. Company has advanced loan aggregating to Rs.2,372 as on 31st March 2010 (Previous Year Rs.1,947) to Hind Lamps Ltd. (HLL) in which Company holds 50% of Equity Shares Capital as a promoter and HLL being major dedicated vendor of lamps and tubes to the Company. The loans are a result of continued financial support to HLL in view of substantial losses incurred in past many years. HLL has referred a scheme of revival before the Board for Industrial and Financial Reconstruction (BIFR) envisaging its revival by disposal of some of the assets thereby settling its debt obligation and raising its net worth and profitability. Keeping the revival plan in mind, the Company has estimated a part repayment of the above loan once the scheme is approved by BIFR and implemented by HLL and thereby determining the potential disability to recover the amount of Rs. 500 for substantial period of time. Accordingly the company has as a matter of prudence made a provision for this irrecoverability during the year.

13. In respect of Debtors relating to Engineering & Projects Business Unit balance confirmations have not been called for by the Company.

14. Statement of Abstract of Financial Statements and Companys General Business Profile, as compiled by the Company, is attached hereto.

15. (i) During the year, the Company has come up with a Qualified Institutional Placement (QIP) offer for issue of additional 20,48,339 equity shares @ Rs.785 per share (including premium of Rs.775 per share). Entire proceeds of Rs.16,079 net of share issue expenses, have been utilized in repayment debts in accordance with the terms of issue.

Share issue expenses amounting to Rs.348.30 have been adjusted against the Share Premium Account as per Section 78 of the Companies Act, 1956.

(ii) The Company, pursuant to the approval of the shareholders granted by postal ballot on November 18, 2009, sub-divided equity shares to 5 shares of a face value of Rs.2 for every share of a face value of Rs.10 as on January 29, 2010, the record date fixed for the purpose. Accordingly, EPS for the financial year 2008-09 has been recomputed on the basis of face value at Rs.2 per share.

16. Previous years figures have been regrouped wherever necessary to make them comparable with those of the current year.

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