Notes to Accounts of Lumax Industries Ltd.

Mar 31, 2022

14 B Rights, preferences and restrictions attached to equity shares

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

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

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

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

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

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

C. Capital Management

The Company’s objectives when managing capital are to:

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

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

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

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

(a) Provision for warranties

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

31.2 Corporate Social Responsibility (CSR)

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

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

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

B. Leases as lessor

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

35 Segment

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

A. Information about the Defined contribution plans

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

B. Information about the Defined benefit plan and Funding arrangements

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

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

Reconciliation of the net defined benefit (asset) liability

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

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

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

(ii) Transfers between level 1 and level 2

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

(iii) Level 3 fair values

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

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

- Credit risk

- Liquidity risk

- Market risk

- Interest rate risk

(i) Risk management framework

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

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

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

Trade receivables

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

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

Loans and other financial assets

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

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

Cash and cash equivalents

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

Derivatives

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

(iii) Liquidity risk

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

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

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

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

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

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

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

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

Currency risk

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

Sensitivity analysis

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

(v) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company tries to manage the risk partly by entering into fixed-rate instruments and partly by borrowing at a floating rate:

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

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

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

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

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

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

44 Disclosure required by Ind AS 115

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

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

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

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

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

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

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

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

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

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

47 Additional information pursuant to changes in Schedule III

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

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

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

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

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

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

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

(vii) There are no funds which have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall:

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

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

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

---

Mar 31, 2018

1. Reporting entity

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

2. Basis of preparation

A. Statement of compliance

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

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

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

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

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

B. Functional and presentation currency

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

C. Basis of measurement

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

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

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

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

D. Use of estimates and judgements

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

Assumptions and estimation uncertainties and judgements

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

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

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

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

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

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

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

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

E. Measurement of fair values

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

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

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

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

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

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

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

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

Notes:

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

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

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

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

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

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

3. Assets held for sale

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

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

a. Rights, preferences and restrictions attached to equity shares

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

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

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

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

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

B. dividends

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

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

C. Capital Management

The Company’s objectives when managing capital are to:

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

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

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

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

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

(a) Provision for warranties

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

4.1 Corporate social responsibility (CSR)

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

5. Operating leases

A. Leases as lessee

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

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

B. Leases as lessor

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

6. Segment

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

7. Assets and liabilities relating to employee benefits

A. Information about the defined contribution plans

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

B. Information about the defined benefit plan and Funding arrangements

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

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

Reconciliation of the net defined benefit (asset) liability

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

D. Sensitivity analysis

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

8. explanation of transition to Ind AS

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

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

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

I. Optional exemptions availed and mandatory exceptions

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

A. exemptions availed

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

As per Ind AS 101 an entity may elect to:

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

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

- fair value;

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

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

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

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

B. Mandatory exceptions

1. estimates

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

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

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

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

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

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

2. Classification and measurement of financial assets

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

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

II. Reconciliations between previous GAAP and Ind AS

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

Notes to the reconciliation a) Revaluation reserve

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

b) Deferred income

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

c) Sales incentive and Excise duty

Sales incentive

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

Excise duty

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

d) Fair valuation of investments

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

e) Remeasurement of defined benefit liability(asset)

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

f) Property, Plant and equipment and Depreciation

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

g) Lease arrangement

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

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

h) Others

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

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

Assets and liabilities which are measured at amortised cost

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

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

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

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

b) Measurement of fair values

(i) Valuation techniques and significant unobservable inputs

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

(ii) Transfers between level 1 and level 2

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

(iii) Level 3 fair values

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

c) Financial risk management

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

- Credit risk

- Liquidity risk

- Market risk

(i) Risk management framework

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

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

(ii) Credit risk

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

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

Trade receivables

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

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

Loans and other financial assets

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

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

Cash and cash equivalents

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

Derivatives

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

(iii) Liquidity risk

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

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

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

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

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

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

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

(iv) Market risk

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

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

Currency risk

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

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

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

Sensitivity analysis

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

(v) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company tries to manage the risk partly by entering into fixed-rate instruments and partly by borrowing at a floating rate:

exposure to Interest rate risk

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

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

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

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

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

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

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

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

11. Government grant

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

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

B. Export incentives

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

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

13. Recent accounting pronouncement

A. Amendment to Ind AS 21:

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

B. Amendment to Ind AS 115:

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

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

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

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

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

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

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

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

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

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

---

Mar 31, 2017

b. terms/rights attached to equity shares

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

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

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

Notes:

1 Indian Rupee Loan from Bank includes:

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

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

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

2 Foreign Currency Loan from Bank includes:

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

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

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

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

(a) Provision for warranties

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

The table below gives information about movement in warranty provisions.

Notes:

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

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

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

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

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

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

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

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

* Refer note 32 for related party transactions

# Customer deposits are repayable on demand.

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

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

Notes :

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

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

iii) Building given on operating lease

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

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

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

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

iv) Adjustment of revaluation reserve

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

3. GRATUITY BENEFIT PLAN

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

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

Statement of profit and loss

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

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

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

4. capitalization of expenditure

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

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

5. SEGMENT INFORMATION

Business Segments:

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

Geographical Segments

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

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

6. DISCLOSURE IN RESPECT OF CASH TRANSACTIONS

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

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

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

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

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

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

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

---

Mar 31, 2016

b Terms/rights attached to equity shares

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

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

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

Notes:

1 Indian Rupee Loan from Bank includes:

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

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

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

2 Foreign Currency Loan from Bank includes:

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

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

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

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

(a) Provision for warranties

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

Notes:

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

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

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

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

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

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

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

* Refer note 33 for related party transactions

# Customer deposits are repayable on demand.

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

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

Notes :

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

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

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

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

3. Gratuity benefit plan

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

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

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

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

4. Leases

Operating lease: Company as lessee

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

5. Segment information

Business Segments:

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

Geographical Segments

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

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

6. Related party disclosures

Names of related parties and related party relationship

Related parties with whom transactions have taken place during the year

S. Particulars Name of Related Parties

No.

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

2. Associate SL Lumax Limited

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

Mr. Deepak Jain (Managing Director)

Mr. Anmol Jain (Joint Managing Director)

Mr. E. Hirooka (Sr. Executive Director)

Mr. N. Sato (Executive Director)

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

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

Mrs. Usha Jain (Spouse of Chairman)

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

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

D.K. Jain & Sons (HUF)

Lumax Automotive Systems Limited Bharat Enterprises

Lumax Cornaglia Auto Technologies Private Limited

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

7. Corporate Social Responsibility (CSR)

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

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

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

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

---

Mar 31, 2015

1. Corporate Information

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

2. Basis of preparation

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

3. Terms/rights attached to equity shares

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

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

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

4 Indian Rupee Loan from Bank includes:

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

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

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

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

5 Foreign Currency Loan from Bank includes:

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

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

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

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

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

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

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

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

(a) Provision for warranties

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

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

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

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

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

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

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

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

8. Gratuity benefit plan

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

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

9. Depreciation

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

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

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

10. Segment information

Business Segments:

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

Geographical Segments

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

11. Related party disclosures

Names of related parties and related party relationship

Related parties with whom transactions have taken place during the year

S. Particulars Name of Related Parties No.

1. Enterprise having significant influence

Stanley Electric Co. Ltd., Japan

2. Associate SL Lumax Limited

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

Mr. Deepak Jain (Managing Director)

Mr. Anmol Jain (Joint Managing Director)

Mr. E. Hirooka (Sr. Executive Director)

Mr. N. Sato (Executive Director)

4. Relatives of Key Management Personnel

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

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

Mrs. Usha Jain (Spouse of Chairman)

5. Enterprise owned or significantly influenced

Lumax Auto Technologies Limited

by Key Management Personnel or their Relatives

Lumax DK Auto Industries Limited

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

Lumax Automotive Systems Limited Bharat Enterprises

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

12. Contingent liabilities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

13. Corporate Social Responsibility ( CSR)

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

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

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

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

---

Mar 31, 2014

1. Gratuity benefit plan

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

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

Statement of profit and loss

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

2. Segment information

Business Segments

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

Geographical Segments

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

3. Contingent liabilities

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

(Rs.) (Rs.)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

* The amount reflects disallowances made by the assessing officer.

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

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

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

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

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

---

Mar 31, 2013

1. Corporate Information

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

2. Basis of preparation

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

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

3. Gratuity benefit plan

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

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

4. Leases

Operating lease: Company as lessee

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

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

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

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

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

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

---

Mar 31, 2012

1. Corporate Information

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

2. Basis of preparation

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

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

a Terms/rights attached to equity shares

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

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

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

Notes :

1 Indian Rupee Loan from Bank includes:

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

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

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

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

2 Foreign Currency Loan from Bank includes :

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

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

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

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

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

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

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

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

Provision for warranties

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

The table below gives information about movement in warranty provisions.

Notes:

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

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

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

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

Notes:

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

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

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

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

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

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

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

Margin money deposits given as security

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

3. Gratuity benefit plan

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

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

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

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

4. Leases

Operating lease: Company as lessee

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

Finance lease commitments - Company as lessor

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

5. Segment information

Business Segments:

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

6. Contingent liabilities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

7. Transfer pricing

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

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

Further, due to inadequacy of profits during the year, directors have waived off their rights to receive commission and therefore, the same has not been provided for in the books of account.

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

10. The assets of Rs. 93,500,000 (Previous year Rs. 66,500,000) recognized by the Company as "MAT Credit Entitlement' under Loans and Advances' represents that portion of MAT liability, which can be recovered and set off in subsequent years based on provisions of Section 115JAA of the Income Tax Act, 1961. The management, based on present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets.

---

Mar 31, 2011

1. Nature of operations

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

2. Segment Information

Business Segments:

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

Geographical Segments*

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

3. Related Party Disclosure

Key Management Personnel

Mr. D. K. Jain (Chairman & Managing Director)

Mr. Deepak Jain (Sr. Executive Director)

Mr. Anmol Jain (Sr. Executive Director)

Mr I. Abe (Sr. Executive Director)

Mr A. Ishii (Executive Director)

Relatives of Key Management Personnel

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

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

Mrs. Usha Jain (Spouse of Chairman)

Mr. Rajan Jain (Nephew of Chairman)

Enterprise significantly influenced by

Key Management Personnel or their Relatives

Lumax Auto Technologies Ltd.

Lumax DK Auto Industries Ltd.

Lumax Tour & Travels Ltd.

Lumax Investment and Finance (P) Ltd. (Merged with Sheela

Finance Pvt. Ltd.)

Lumax Finance Private Limited (Formerly Sheela Finance Pvt. Ltd)

Deepak Auto Ltd.

Mahavir Udyog

D.K. Jain & Sons (HUF)

Lumax Automotive Systems Ltd.

Lumax International (P) Ltd.

Lumax Auto (P) Ltd.

Bharat Enterprises

Lumax Cornaglia Auto Technologies Pvt. Ltd.

Associate Stanley Electric Co. Ltd., Japan

Joint Venture SL Lumax Ltd.

In case of assets given on Lease

a) Finance Lease

The Company has leased out plant and machinery and furniture on finance lease. The lease term is for three years after which the legal title is passed to the lessee. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

4. Contingent Liabilities not provided for

S.No. Particulars 2010-11 2009-10 (Rs.) (Rs.)

(i) Bills of exchange discounted from a bank. 155,278,747 136,109,465

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

(iiii) Demand raised by Sales Tax authorities against purchase tax on inter unit stock transfers, being disputed by the Company. 906,111 1,736,251

(iv) Various other claims made against the Company not acknowledged as debts, being disputed by the Company. 1,402,682 391,081

(v) Income Tax demand in respect of Assessment Year 2004-05 for which the Department has filed an appeal with ITAT. 93,072 934,369

(vi) In respect of additions made by the Assessing officer for Transfer Pricing for Assessment Year 2004-05 for which the 1,441,121 1,441,121 department has filed an appeal with ITAT.

(vii) Income Tax demand in respect of Assessment Year 2005-06 for which the Department has filed an appeal with ITAT. 27,884,526 27,884,526

(viii) Income Tax demand in respect of Assessment Year 2006-07 for which the Company has filed an appeal before ITAT. 5,699,097 -

(ix) Income Tax demand in respect of Assessment Year 2007-08 for which the Company has filed an appeal before Dispute Resolution Panel 31,275,736 - against the Draft order

(x) Demand raised by BSES Rajdhani Power Ltd for which the Company has filed a writ petition in High Court of Delhi. - 2,260,541

(xi) Export Obligation to be undertaken by the Company under EPCG licenses. 22,665,071 17,677,486

(xii) Claims against the Company not acknowledged as debts. - 6,870,264

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

5. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for gratuity.

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

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

7. Pursuant to completion of negotiations with its customer in relation with the Companys investment in a plant at Singur, West Bengal and after giving consideration to its alternative plans, management has assessed the carrying value of its assets and made adequate provisions as considered necessary in the last year.

8. At the instance of a customer who has initiated International Financial Reporting Standards (IFRS) implementattion, the Company has negotitated and has, at the year end, sold certian moulds which were financed by the said customer. For the settlement of transaction, moulds of the net book value of Rs. 2,616.81 lacs have been sold for Rs. 1,797.28 lacs resulting in loss on sale of fixed assets amounting to Rs. 819.53 lacs.

9. Excise duty on sales amounting to Rs. 883,819,416 (Previous year Rs.570,947,081) has been reduced from Sales in Profit & Loss Account and Excise Duty on Decrease/ (Increase) in Stock amounting to Rs.(605,466) (Previous year Rs. 5,547,489) has been considered as (income)/ expense in Schedule 18 of the financial statements.

10. Previous Year Comparatives

Previous years figures have been regrouped where necessary to conform to this years classification.

---

Mar 31, 2010

1. Nature of operations

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

2. Segment Information

Business Segments:

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

Geographical Segments *

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

3. Related Party Disclosure

S.No. Particulars Names of Related Parties

1. Key Management Personnel Mr. D. K. Jain (Chairman & Managing Director)

Mr. Deepak Jain (Sr. Executive Director) Mr. Anmol Jain (Sr. Executive Director) Mr I. Abe (Sr. Executive Director) Mr A. Ishii (Executive Director)

2. Relatives of Key Management Personnel Mr. S.C. Jain (Father of Chairman)

Mr. U. K. Jain (Brother of Chairman) Mr. M. K. Jain (Brother of Chairman) Mrs. Usha Jain (Spouse of Chairman) Mr. Rajan Jain (Nephew of Chairman)

3. Enterprise significantly influenced by Lumax Auto Technologies Ltd.

Key Management Personnel or their Relatives ( Formerly Dhanesh Auto Electricals Ltd.)

Lumax DK Auto Industries Ltd. Lumax Tour & Travels Ltd.

Lumax Investment and Finance Pvt. Ltd. Sheela Finance Pvt. Ltd. Deepak Auto Ltd. Mahavir Udyog D.K. Jain & Sons (HUF) Lumax Automotive Systems Ltd. Lumax International Pvt Ltd. Lumax Auto Pvt Ltd. Bharat Enterprises

4. Associate Stanley Electric Co. Ltd., Japan

5. Joint Venture SL Lumax Ltd.

5. Leases

In case of assets taken on lease

a) Finance Lease

The Company has acquired plant and machinery, moulds and vehicles under finance leases, the cost of which is included in the gross block of Plant and Machinery and Vehicles respectively under Fixed Assets. The lease term is for 5 years in case of moulds and 3 years in case of vehicles, after which the legal title will pass on to the Company. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. There are no sub leases:

b) Operating Leases

Lease payments of Rs 24,378,217 (previous year - Rs 12,020,108) have been recognised as an expense in the profit and loss account for the year ended March 31, 2010.

a) Finance Lease

The Company has leased out plant and machinery and furniture on finance lease. The lease term is for three years after which the legal title is passed to the lessee. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.

5. Contingent Liabilities not provided for

S.No. Particulars 2009-10 2008-09 (Rs.) (Rs.)

(i) Bills of exchange discounted from a bank. 136,109,465 130,523,592

(ii) Demand raised by Central Excise department against the rejected goods sent on 57(f) (4) challans, being disputed by the Company. 7,755,448 7,755,448

(iii) Other Excise Duty Demands, being disputed by the Company. 2,026,701 2,422,335

(iv> Demand raised by Service Tax department for the service tax on Royalty and Technical know how, being disputed by the Company. 3,451,809 3,451,809

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

(vi) Demand raised by Sales Tax Authorities against purchase tax on inter-unit stock transfers, being disputed by the Company. 1,736,251 1,736,251

(vii) Various other claims made against the Company not acknowledged as debts, being disputed by the Company. 391,081 391,081

(viii) Income Tax demand in respect of Assessment Year 2004-05 for which the Company has filed an appeal with CIT (Appeals). 2,375,490 2,375,490

(ix) Income Tax demand in respect of Assessment Year 2005-06 for which the Company has filed an appeal with CIT (Appeals). 27,884,526 27,884,526

(x) Income Tax demand in respect of Assessment Year 2006-07 for which the Company has filed an appeal before Dispute Resolution Panel against the draft order. 12,831,256 -

(xi) Demand raised by BSES Rajdhani Power Ltd for which the Company has filed a writ petition in High Court of Delhi. 2,260,541 -

(xii) Export Obligation to be undertaken by the Company under EPCG licenses. 17,677,486 -

(xiii) Claims against the Company not acknowledged as debts. 6,870,264 -

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

6. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for gratuity.

7. Derivative Instruments and Unhedged Foreign Currency Exposure a. Forward contract outstanding as at Balance Sheet date

No Forward Contract is outstanding as at 31st March2010 (Previous year JPY 63,925,554).

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

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

9. During the year, an amount of Rs Nil (Previous Year Rs. 303,152,581) has been utilized by the Company for modernisation / expansion of its existing plants out of the Preferential Issue proceeds, in line with the objects of the Preferential Issue and the unutilized money is Rs. Nil (Previous Year Rs Nil).

10. Pursuant to completion of negotiations with its customer in relation with the Companys investment in a plant at Singur, West Bengal and after giving consideration to its alternative plans, management has assessed the carrying value of its assets and made adequate provisions as considered necessary.

11. Excise duty on sales amounting to Rs. 570,947,081 (Previous year Rs. 675,618,715) has been reduced from Sales in Profit & Loss Account and Excise Duty on Decrease/ (Increase) in Stock amounting to Rs. 5,547,489 (Previous year Rs. (10,567,029)) has been considered as (income)/ expense in Schedule 19 of the financial statements.

12. Previous Year Comparatives

Previous years figures have been regrouped where necessary to conform to this years classification.