Notes to Accounts of Polycab India Ltd.

Mar 31, 2025

22. Provisions

Accounting policy:

Provision is recognised for expected warranty claims and after sales services when
the product is sold or service provided to the customer, based on past experience of
the level of repairs and returns. Initial recognition is based on historical experience.

The initial estimate of warranty-related costs is revised annually. It is expected that
significant portion of these costs will be incurred in the next financial year and the total
warranty-related costs will be incurred within warranty period after the reporting date.
Assumptions used to calculate the provisions for warranties were based on current sales
levels and current information available about returns during the warranty period for all
products sold.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current
best estimate. If it is no longer probable that the outflow of resources would be required
to settle the obligation, the provision is reversed.

24. Revenue from operations

Accounting Policy

(i) Measurement of revenue

Revenue is measured based on the transaction price, which is the consideration,
adjusted for discounts, incentive schemes, if any, as per contracts with customers.
Transaction price is the amount of consideration to which the Company expects
to be entitled in exchange for transferring good or service to a customer. Taxes
collected from customers on behalf of Government are not treated as Revenue.

(ii) Performance obligations:-

(a) Sale of goods

Revenue from contracts with customers involving sale of these products is
recognized at a point in time when control of the product has been transferred
at an amount that reflects the consideration to which the Company expects to
be entitled in exchange for those goods or services, and there are no unfulfilled
obligation that could affect the customer''s acceptance of the products and
the Company retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold.

At contract inception, the Company assess the goods or services promised
in a contract with a customer and identify as a performance obligation each
promise to transfer to the customer. Revenue from contracts with customers
is recognized when control of goods are transferred to customers and the
Company retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold.

The point of time of transfer of control to customers depends on the terms of
the trade - CIF, CFR or DDP, ex-works, etc.

(b) Revenue from construction contracts

Performance obligation in case of revenue from long - term contracts is
satisfied over the period of time, the revenue recognition is done by measuring
the progress towards complete satisfaction of performance obligation. The
progress is measured in terms of a proportion of actual cost incurred to-
date, to the total estimated cost attributable to the performance obligation.
However, the same may not be possible if it lacks reliable information that
would be required to apply an appropriate method of measuring progress. In
some circumstances, if the Company is not able to reasonably measure the
outcome of a performance obligation, but expects to recover the costs incurred

in satisfying the performance obligation, the company shall recognise revenue
only to the extent of the costs incurred until such time that it can reasonably
measure the outcome of the performance obligation.

Contract asset is the entity''s right to consideration in exchange for goods
or services that the entity has transferred to the customer. A contract asset
becomes a receivable when the entity''s right to consideration is unconditional,
which is the case when only the passage of time is required before payment of
the consideration is due.

Contract liability is the obligation to transfer goods or services to a customer
for which the Company has received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration
before the Company transfers goods or services to the customer, a contract
liability is recognised when the payment is made or the payment is due
(whichever is earlier). Contract liabilities are recognised as revenue when the
Company performs under the contract. The timing of the transfer of control
varies depending on individual terms of the sales agreements.

The total costs of contracts are estimated based on technical and other estimates.
Costs to obtain a contract which are incurred regardless of whether the contract
was obtained are charged-off in Statement of Profit & Loss immediately in the
period in which such costs are incurred. Incremental costs of obtaining a contract, if
any, and costs incurred to fulfil a contract are amortised over the period of execution
of the contract.

In the event that a loss is anticipated on a particular contract, provision is made for
the estimated loss. Contract revenue earned in excess of billing is reflected under as
“contract asset” and billing in excess of contract revenue is reflected under “contract
liabilities”.

(iii) Variable consideration

It includes volume discounts, price concessions, liquidity damages, incentives, etc.
The Company estimates the variable consideration with respect to above based on
an analysis of accumulated historical experience. The Company adjusts estimate of
revenue at the earlier of when the most likely amount of consideration the Company
expect to receive changes or when the consideration becomes fixed.

(iv) Schemes

The Company operates several sales incentive programmes wherein the customers
are eligible for several benefits on achievement of underlying conditions as
prescribed in the scheme programme such as credit notes, tours, kind etc. Revenue
from contract with customer is presented deducting cost of all these schemes.

(v) Significant financing components

In respect of advances from its customers, using the practical expedient in Ind AS
115, the Company does not adjust the promised amount of consideration for the
effects of a significant financing component if it expects, at contract inception, that
the period between the transfer of the promised good or service to the customer
and when the customer pays for that good or service will be within normal operating
cycle. Retention money receivable from project customers does not contain any
significant financing element, these are retained for satisfactory performance
of contract. Contract assets arising from such customer contracts are subject to
impairment assessment.

(vi) Warranty

The Company typically provides warranties for general repairs of defects that
existed at the time of sale, as required by law. These assurance-type warranties are
accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent
Assets. Refer to the accounting policy on warranty as per note 22. In certain
contracts, the Company provides warranty for an extended period of time and
includes rectification of defects that existed at the time of sale and are normally
bundled together with the main contract. Such bundled contracts include two
separate performance obligations, because the promises to transfer the goods and
services and the provision of service-type warranty are capable of being distinct.
Using the relative stand-alone selling price method, a portion of the transaction
price is allocated to the service-type warranty and recognised as a contract liability
at the time of recognition of revenue. Revenue allocated towards service-type
warranty is recognised over a period of time on a basis appropriate to the nature of
the contract and services to be rendered.

(vii) Right to return

When a contract provides a customer with a right to return the goods within a
specified period, the Company estimates the expected returns using a probability-
weighted average amount approach similar to the expected value method under
Ind AS 115.

At the point of sale, a refund liability and a corresponding adjustment to revenue
is recognised for those products expected to be returned. At the same time, the
Company has a right to recover the product when customers exercise their right of
return. Consequently, the Company recognises a right to returned goods asset and
a corresponding adjustment to cost of sales. The Company uses its accumulated
historical experience to estimate the number of returns on a portfolio level using the
expected value method. It is considered highly probable that a significant reversal in
the cumulative revenue recognised will not occur given the consistent level of returns
over previous years. The Company updates its estimates of refund liabilities (and the
corresponding change in the transaction price) at the end of each reporting period.
Refer to above accounting policy on variable consideration.

For goods expected to be returned, the Company presented a refund liability
and an asset for the right to recover products from a customer separately in the
balance sheet.

(viii) Onerous Contracts

A provision for onerous contract is recognised when the expected benefits to be
derived by the company from a contract are lower than the unavoidable cost
of meeting its obligation under the contract. The provision is measured at the
present value of the lower of the expected cost of terminating the contract and the
expected net cost of continuing with the contract. Before a provision is established,
the company recognises any impairment loss on assets associated.

(ix) Export incentives

Export incentives under various schemes notified by the Government have been
recognised on the basis of applicable regulations, and when reasonable assurance
to receive such revenue is established. Export incentives income is recognised in the
statement of profit and loss on a systematic basis over the periods in which the
Company recognises as expenses the related costs for which the grants are intended
to compensate.

(x) Cost to obtain a contract

Any costs to obtain a contract or incremental costs to fulfil a contract are recognised
as an asset if certain criteria are met as per Ind AS 115.

The Company applies the optional practical expedient to immediately expense costs
to obtain a contract if the amortisation period of the asset that would have been
recognised is one year or less.

(xi) Government grants

Government grants are recognised where there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. Government
grants are recognised in the statement of profit and loss on a systematic basis
over the periods in which the Company recognises as expenses the related costs for
which the grants are intended to compensate.

When the grant relates to an expense item, it is recognised as income on a
systematic basis over the periods that the related costs, for which it is intended to
compensate, are expensed.

When the grant relates to an asset, it''s recognition as income in the Statement of
Profit & Loss is linked to fulfilment of associated export obligations.

The export incentive and grants received are in the nature of other operating
revenue in the Statement of Profit & Loss.

25. Other income

Accounting Policy:

Other income is comprised primarily of interest income, dividend income, gain on
investments and exchange gain on forward contracts and on translation of other assets
and liabilities.

Interest income on financial asset measured either at amortised cost or FVTPL is
recognised when it is probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to that asset''s net carrying amount on
initial recognition.

Dividend income from investments is recognised when the shareholder''s right to receive
payment has been established.

Foreign Currency

The Company''s Financial Statements are presented in Indian rupee (H) which is also
the Company''s functional currency. Foreign currency transaction are recorded on initial
recognition in the functional currency, using the exchange rate prevailing at the date
of transaction.

Measurement of foreign currency item at the balance sheet date:

(i) Foreign currency monetary assets and liabilities denominated in foreign currency are
translated at the exchange rates prevailing on the reporting date.

(ii) Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rates at the dates of the
initial transactions.

(iii) Exchange differences

Exchange differences arising on settlement or translation of monetary items are
recognised as income or expense in the Statement of Profit & Loss.

30. Employee benefits expense

Accounting policy

(i) Short-term employee benefits

All employee benefits payable wholly within twelve
months of rendering the service are classified as
short-term employee benefits. Benefits such as
salaries, wages, incentives, special awards, medical
benefits etc. are charged to the Statement of
Profit & Loss in the period in which the employee
renders the related service. A liability is recognised
for the amount expected to be paid when there is
a present legal or constructive obligation to pay
this amount as a result of past service provided
by the employee and the obligation can be
estimated reliably.

(ii) Compensated absences

The Company estimates and provides the liability
for such short-term and long term benefits based
on the terms of the policy. The Company treats
accumulated leave expected to be carried forward
beyond twelve months, as long-term employee
benefit for measurement purposes. Such long-term
compensated absences are provided for based on
the actuarial valuation using the projected unit
credit method at the year-end. Remeasurement
gains/losses on defined benefit plans are
immediately taken to the Statement of Profit &
Loss and are not deferred.

(iii) Defined contribution plans

Retirement benefit in the form of provident
fund and National Pension Scheme are defined
contribution schemes. The Company recognises
contribution payable to the provident fund and
National Pension Scheme as an expenditure,
when an employee renders the related service.

The Company has no obligation, other than the
contribution payable to the funds. The Company''s
contributions to defined contribution plans
are charged to the Statement of Profit & Loss
as incurred.

(iv) Defined benefit plan

The Company operates a defined benefit gratuity
plan for its employees. The costs of providing
benefits under this plan is determined on the basis
of actuarial valuation at each year-end using
the projected unit credit method. The discount
rate used for determining the present value of
obligation under defined benefit plans, is based
on the market yields on Government securities
as at the balance sheet date, having maturity
periods approximating to the terms of related
obligations. Re-measurements, comprising of
actuarial gains and losses, the effect of the asset
ceiling, excluding amounts included in net interest
on the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the Balance sheet
with a corresponding debit or credit to retained
earnings through OCI in the period in which they
occur. Re-measurements are not reclassified to
Statement of Profit & Loss in subsequent periods.
Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset.
Past service costs are recognised in profit or loss on
the earlier of:

» The date of the plan amendment or
curtailment, and

» The date that the Company recognises related
restructuring costs

When the benefits of a plan are changed or
when a plan is curtailed, the resulting change
in benefit that relates to past service (‘past
service cost'' or ‘past service gain'') or the gain or
loss on curtailment is recognised immediately
in Statement of profit and Loss. The Company
recognises gains and losses on the settlement of a
defined benefit plan when the settlement occurs.

(v) Share based payment

Equity settled share based payments to employees
and other providing similar services are measured
at fair value of the equity instruments at
grant date.

The fair value determined at the grant date
of the equity-settled share based payment is
expensed on a straight line basis over the vesting
period, based on the Company''s estimate of
equity instruments that will eventually vest, with
a corresponding increase in equity. At the end of
each reporting period, the Company revises its
estimates of the number of equity instruments
expected to vest. The impact of the revision
of the original estimates, if any is, recognised
in Statement of Profit and Loss such that the
cumulative expenses reflects the revised estimate,
with a corresponding adjustment to the ESOP
outstanding account (Refer note 16(g)).

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

The dilutive effect, if any of outstanding options
is reflected as additional share dilution in the
computation of diluted earnings per share (Refer
note 34).

The Code on Social Security, 2020 (‘Code'') relating to employee benefits during
employment and post employment benefits received Presidential assent in September
2020. The Code has been published in the Gazette of India. However, the date on which
the Code will come into effect has not been notified and the final rules/interpretation
have not yet been issued. The Company will assess the impact of the Code when it comes
into effect and will record any related impact in the period the Code becomes effective.
Based on a preliminary assessment, the Company believes the impact of the change will
not be significant.

Gratuity and other post-employment benefit plans

(A) Defined Benefit plan

Gratuity Valuation - As per actuary

In respect of Gratuity, the Company makes annual contribution to the employee
group gratuity scheme of the Life Insurance Corporation of India, funded defined
benefits plan for qualified employees. The scheme provided for lump sum payments
to vested employees at retirement, death while in employment or on termination
of employment of an amount equivalent to 15 days salary for each completed year
of service or part thereof in excess of six months. Vesting occurs upon completion of
five years of service. The Company has provided for gratuity based on the actuarial
valuation done as per Project Unit Credit Method.

Defined benefit plans expose the Company to actuarial risks such as:

(i) Interest rate risk

A fall in the discount rate which is linked to the G.Sec. Rate will increase the
present value of the liability requiring higher provision. A fall in the discount rate
generally increases the mark to market value of the assets depending on the
duration of asset.

(ii) Salary Risk

The present value of the defined benefit plan liability is calculated by reference
to the future salaries of members. As such, an increase in the salary of the
members more than assumed level will increase the plan''s liability.

(iii) Investment Risk

The present value of the defined benefit plan liability is calculated using a
discount rate which is determined by reference to market yields at the end of
the reporting period on government bonds. If the return on plan asset is below
this rate, it will create a plan deficit. Currently, for the plan in India, it has a
relatively balanced mix of investments in government securities, and other
debt instruments.

(iv) Asset Liability Matching Risk

The plan faces the ALM risk as to the matching cash flow. Since the plan is
invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces
ALM risk.

(v) Mortality risk

Since the benefits under the plan is not payable for life time and payable till
retirement age only, plan does not have any longevity risk.

(vi) Concentration Risk

Plan is having a concentration risk as all the assets are invested with the
insurance company and a default will wipe out all the assets. Although
probability of this is very low as insurance companies have to follow regulatory
guidelines which mitigate risk.

(vii) Variability in withdrawal rates

If actual withdrawal rates are higher than assumed withdrawal rate
assumption then the gratuity benefits will be paid earlier than expected.

The impact of this will depend on whether the benefits are vested as at the
resignation date.

(viii) Regulatory Risk

Gratuity Benefit must comply with the requirements of the Payment of
Gratuity Act, 1972 (as amended up-to-date). There is a risk of change in the
regulations requiring higher gratuity payments.

A separate trust fund is created to manage the Gratuity plan and the
contributions towards the trust fund is done as guided by rule 103 of Income
Tax Rules, 1962.

The Company operates a defined benefit plan, viz., gratuity for its employees.
Under the gratuity plan, every employee who has completed at least five years
of service gets a gratuity on departure at 15 days of last drawn salary for each
completed year of service. The scheme is funded with an insurance company in
the form of qualifying insurance policy.

The most recent actuarial valuation of the present value of defined obligation
and plan assets were carried out as at 31 March 2025 by an external
independent fellow of the Institute of Actuaries of India. The present value
of the defined benefit obligation and the related current service cost were
measured using the projected unit credit method.

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

A quantitative sensitivity analysis for significant assumption as at 31 March 2025 is as
shown below:

Sensitivity analysis are based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the
assumptions may be co-related. When calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of
the reporting period) has been applied as when calculating the defined benefit liability
recognised in the balance sheet.

Under PUC method a projected accrued benefit is calculated at the beginning of the year
and again at the end of the year for each benefit that will accrue for all active members
of the plan. The projected accrued benefit is based on the plan''s accrual formula
and upon service as of the beginning or end of the year, but using a member''s final
compensation, projected to the age at which the employee is assumed to leave active
service. The plan liability is the actuarial present value of the projected accrued benefits
for active members.

Projected benefits payable in future years from the date of reporting.

(B) Other defined benefit and contribution plans
Provident Fund

The Company contribute towards Provident Fund to defined contribution retirement
benefit plans for eligible employees. Under the schemes, the Company is required
to contribute a specified percentage of the payroll costs to fund the benefits. The
Company contributes towards Provident Fund managed by Central Government
and has recognised H 165.12 million (31 March 2024: H 150.27 million) for provident
fund contributions in the Statement of Profit and Loss.

(d) The unspent amount on ongoing projects as at 31 March 2025 aggregating to H
167.53 million is deposited in separate CSR unspent accounts before the due date.

34. Earnings Per Share

Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable
to the equity holders of the Company by the weighted average number of equity
shares outstanding during the period. The weighted average number of equity shares
outstanding during the period is adjusted for events such as fresh issue, bonus issue that
have changed the number of equity shares outstanding, without a corresponding change
in resources.

Diluted earnings per share reflects the potential dilution that could occur if securities or
other contracts to issue equity shares were exercised or converted during the year. Diluted
earnings per equity share is computed by dividing the net profit attributable to the equity
holders of the Company by the weighted average number of equity shares considered
for deriving basic earnings per equity share and also the weighted average number of
equity shares that could have been issued upon conversion of all dilutive potential equity
shares. Potential equity shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share from continuing ordinary operations.
Potential dilutive equity shares are deemed to be converted as at the beginning of the
period, unless they have been issued at a later date. Dilutive potential equity shares are
determined independently for each period presented.

Employee Stock Option Plan 2018

Pursuant to the resolutions passed by the Company''s Board on 30 August 2018 and our
Shareholders on 30 August 2018, the Company approved the Employee Stock Option
Plan 2018 for issue of options to eligible employees which may result in issue of Equity
Shares of not more than 35,30,000 Equity Shares. The company reserves the right to
increase, subject to the approval of the shareholders, or reduce such numbers of shares as
it deems fit.

The exercise of the vested option shall be determined in accordance with the notified
scheme under the plan.

35. Contingent liabilities and commitments

Accounting Policy

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

Notes:

(a) In respect of the items above, future cash outflows in respect of contingent
liabilities are determinable only on receipt of judgements/decisions pending
at various forums/authority. The Company doesn''t expect the outcome of
matters stated above to have a material adverse effect on the Company''s
financial conditions, result of operations or cash flows.

(b) There is uncertainty and ambiguity in interpreting and giving effect to the
guidelines of Honourable Supreme Court vide its ruling in February 2019,
in relation to the scope of compensation on which the organisation and its
employees are to contribute towards Provident Fund. The Company will
evaluate its position and act, as clarity emerges.

36. Pursuant to the search action by the Income-tax authorities in December 2023,

assessment / re-assessment orders for AY 2014-15 to AY 2023-24 were passed in the
FY 2024-25. Against the said orders, the Company filed appeals and application for
rectifications with the appropriate authorities. After considering rectification orders,
received post the balance sheet date, the aggregate tax demand is H 544.71 million and
interest thereon is H 174.27 million. The Company, in consultation with its tax experts,
believe that these orders are not tenable in law and its favorable position will likely to
be upheld by the appropriate authorities. Accordingly, no provision has been made
in the financial statements. The assessment proceedings for AY 24-25 are currently
under process.

(I) Terms and conditions of transactions with related parties:

i. The transactions with related parties are made on terms equivalent to those
that prevail in arm''s length transactions. Outstanding balances at the period-
end are unsecured and settlement occurs in cash or credit as per the terms of
the arrangement.

ii. Guarantees are issued by the Company in accordance with Section 186 of the
Companies Act, 2013 read with rules issued thereunder.

iii. For the year ended 31 March 2025, the Company has not recorded any impairment
of receivables relating to amounts owed by related parties (31 March 2024: H Nil).
This assessment is undertaken each financial year through examining the financial
position of the related party.

38. Segment reporting
Accounting Policy
Identification of segments

An operating segment is a component of the Company that engages in business
activities from which it may earn revenues and incur expenses, whose operating results
are regularly reviewed by the Company''s Chief Operating Decision Maker (“CODM”) to
make decisions for which discrete financial information is available. The Company''s chief
operating decision maker is the Chairman & Managing Director.

The Operating Segment is the level at which discrete financial information is available.
Operating segments are identified considering:

a the nature of products and services

b the differing risks and returns

c the internal organisation and management structure, and
d the internal financial reporting systems.

The Board of Directors monitors the operating results of all product segments separately
for the purpose of making decisions about resource allocation and performance
assessment based on an analysis of various performance indicators by business segments
and geographic segments.

Segment revenue and expenses:

1 It has been identified to a segment on the basis of relationship to operating
activities of the segment.

2 The Company generally accounts for intersegment sales and transfers at cost plus
appropriate margins.

3 Intersegment revenue and profit is eliminated at group level consolidation.

4 Finance income earned and finance expense incurred are not allocated to individual
segment and the same has been reflected at the Company level for segment
reporting as the underlying instruments are managed at Company level.

Segment assets and liabilities:

Segment assets and segment liabilities represent assets and liabilities of respective
segments, however the assets and liabilities not identifiable or allocable on reasonable
basis being related to enterprise as a whole have been grouped as unallocable.

The accounting policies of the reportable segments are same as that of Company''s
accounting policies described.

No operating segments have been aggregated to form the above reportable operating
segments. Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.

The Company is organised into business units based on its products and services and
has three reportable segments as follows:

Wires and Cables: Manufacture and sale of wires and cables.

Fast moving electrical goods (FMEG): Fans, LED lighting and luminaires, switches,
switchgears, solar products, water heaters, conduits, pumps and domestic appliances.

EPC: Design, engineering, supply of materials, survey, execution and commissioning of
projects on a turnkey basis.

For the year ended 31 March 2025, the EPC business, which was earlier reported as part
of the “Others” segment, is now presented as the “EPC” segment in accordance with Ind
AS 108, based on meeting the quantitative threshold for separate disclosure.

39. Financial Instruments and Fair

Value Measurement

A) Financial Instruments

Accounting policy

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

Financial assets

(i) Initial recognition and measurement

All financial assets are recognised initially at fair
value plus, in the case of financial assets not
recorded at fair value through Statement of Profit
& Loss, transaction costs that are attributable to
the acquisition of the financial asset. However,
trade receivables that do not contain a significant
financing component are measured at transaction
price. Financial assets are classified at the initial
recognition as financial assets measured at
fair value or as financial assets measured at
amortised cost.

(ii) Subsequent measurement

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

(a) Financial assets at amortised cost

(b) Financial assets at fair value

Where assets are measured at fair value, gains
and losses are either recognised entirely in the
Statement of Profit & Loss (i.e. fair value through
Statement of Profit & Loss), or recognised in other
comprehensive income (i.e. fair value through
other comprehensive income) depending on the
classification at initial recognition.

(a) Financial assets carried at amortised cost

A financial assets that meets the following
two conditions is measured at amortised
cost (net of Impairment) unless the asset is
designated at fair value through Statement
of Profit & Loss under the fair value option.

(i) Business Model test: The objective of
the Company''s business model is to
hold the financial assets to collect the
contractual cash flow (rather than to sell
the instrument prior to its contractual
maturity to realise its fair value
changes).

(ii) Cash flow characteristics test: The

contractual terms of the financial
assets give rise on specified dates to
cash flow that are solely payments of
principal and interest on the principal
amount outstanding.

(b) Financial assets at fair value

(i) Financial assets at fair value through

other comprehensive income

Financial assets is subsequently
measured at fair value through other
comprehensive income if it is held with
in a business model whose objective is
achieved by both collections contractual
cash flows and selling financial assets
and the contractual terms of the
financial assets give rise on specified
dated to cash flows that are solely

payments of principal and interest on
the principal amount outstanding.

For equity instruments, the Company
may make an irrevocable election to
present in other comprehensive income
subsequent changes in the fair value.
The Company makes such election on
an instrument-by-instrument basis.

The classification is made on initial
recognition and is irrevocable.

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

Equity instruments included within the
FVTPL category are measured at fair
value with all changes recognized in the
Statement of Profit & Loss.

(ii) Financial assets at fair value through
profit or loss

A financial asset which is not classified
in any of the above categories is
subsequently fair valued through
Statement of Profit & Loss.

(iii) Derecognition

A financial asset (or, where applicable, a part of
a financial asset or part of a Company of similar
financial assets) is primarily derecognised when:

(a) The rights to receive cash flows from the
asset have expired, or

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

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

The Company discloses analysis of the gain
or loss recognised in the statement of profit
and loss arising from the derecognition of
financial assets measured at amortised cost,
showing separately gains and losses arising
from derecognition of those financial assets.

(iv) Impairment of financial assets

The Company assesses impairment based
on expected credit losses (ECL) model for
the following:

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

(b) The Company follows ‘simplified approach''
for recognition of impairment loss allowance
on trade receivables and contract assets.

The application of simplified approach does
not require the Company to track changes in
credit risk. Rather, it recognises impairment
loss allowance based on lifetime ECL at
each reporting date, right from its initial
recognition. The Company has established a
provision matrix that is based on its historical
credit loss experience, adjusted for forward¬
looking factors specific to the debtors and the
economic environment.

The Company recognises an allowance for
ECL for all debt instruments not held at fair
value through profit or loss. ECL are based
on the difference between the contractual
cash flows due in accordance with the

contract and all the cash flows that the
Company expects to receive, discounted at
an approximation of the original effective
interest rate. The expected cash flows will
include cash flows from the sale of collateral
held or other credit enhancements that are
integral to the contractual terms.

ECL are recognised in two stages. For credit
exposures for which there has not been a
significant increase in credit risk since initial
recognition, ECL are provided for credit
losses that result from default events that
are possible within the next 12-months (a
12-month ECL). For those credit exposures
for which there has been a significant
increase in credit risk since initial recognition,
a loss allowance is required for credit losses
expected over the remaining life of the
exposure, irrespective of the timing of the
default (a lifetime ECL).

Ind AS 109 requires expected credit losses
to be measured through a loss allowance.

The Company recognises lifetime expected
losses for all contract assets and / or all trade
receivables that do not constitute a financing
transaction. In determining the allowances
for doubtful trade receivables, the Company
has used a practical expedient by computing
the expected credit loss allowance for trade
receivables based on a provision matrix. The
provision matrix takes into account historical
credit loss experience and is adjusted for
forward looking information. The expected
credit loss allowance is based on the ageing
of the receivables that are due and allowance

rates used in the provision matrix. For all
other financial assets, expected credit losses
are measured at an amount equal to the
12-months expected credit losses or at an
amount equal to the 12 months expected
credit losses or at an amount equal to the life
time expected credit losses if the credit risk on
the financial asset has increased significantly
since initial recognition.

The Company considers a financial asset in
default when contractual payments are 90
days past due. However, in certain cases, the
Company may also consider a financial asset
to be in default when internal or external
information indicates that the Company
is unlikely to receive the outstanding
contractual amounts in full before taking into
account any credit enhancements held by
the Company. A financial asset is written off
when there is no reasonable expectation of
recovering the contractual cash flows.

For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines that whether there has
been a significant increase in the credit risk
since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used
to provide for impairment loss. However, if
credit risk has increased significantly, lifetime
ECL is used.

If, in a subsequent period, credit quality of
the instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the entity reverts to

recognising impairment loss allowance based
on 12-month ECL.

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

ECL impairment loss allowance (or reversal)
during the period is recognized as other
expense in the Statement of Profit & Loss.

Financial liabilities

(i) Initial recognition and measurement

All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction
costs. The Company''s financial liabilities include
trade and other payables, loans and borrowings
including bank overdrafts, lease liabilities and
derivative financial instruments.

(ii) Subsequent measurement

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

(a) Financial liabilities at fair value through
profit or loss

Financial liabilities at fair value through profit
or loss include financial liabilities held for
trading and financial liabilities designated
upon initial recognition as at fair value
through profit or loss. Financial liabilities
are classified as held for trading if they are
incurred for the purpose of repurchasing in
the near term. This category also includes
derivative financial instruments entered into
by the Company that are not designated as
hedging instruments in hedge relationships
as defined by Ind AS 109.

(b) Gains or losses on liabilities held for trading
are recognised in the profit or loss

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

(c) Loans and borrowings

After initial recognition, interest-bearing loans
and borrowings are subsequently measured
at amortised cost using the Effective Interest
Rate method.

(iii) Embedded Derivatives

A derivative embedded in a hybrid contract, with a
financial liability or non-financial host, is separated
from the host and accounted for as a separate
derivative if: the economic characteristics and
risks are not closely related to the host; a separate
instrument with the same terms as the embedded
derivative would meet the definition of a
derivative; and the hybrid contract is not measured
at fair value through profit or loss.

(iv) Derecognition

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

(b) Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified
debtor fails to make a payment when due

in accordance with the terms of a debt
instrument. Financial guarantee contracts
are recognised initially as a liability at fair
value, adjusted for transaction costs that
are directly attributable to the issuance of
the guarantee. Subsequently, the liability is
measured at the higher of the amount of loss

allowance determined as per impairment
requirements of Ind AS 109 and the amount
recognised less cumulative amortisation.

(B) Fair value measurements

Accounting policy

The Company measures financial instruments,
such as, derivatives, mutual funds etc. at fair value
at each Balance sheet date. Fair value is the price
that would be received to sell an asset or paid
to transfer a liability in an orderly transaction
between market participants at the measurement
date. The fair value measurement is based on the
presumption that the transaction to sell the asset
or transfer the liability takes place either:

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

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

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

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

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

All assets and liabilities for which fair value is measured
or disclosed in the Financial Statements are categorised
within the fair value hierarchy, to provide an indication
about the reliability of inputs used in determining
fair value, the Company has classified its financial
statements into three levels prescribed under the Ind
AS as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

» Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities
» Level 2 — Valuation techniques for which the

lowest level input that is significant to the fair value
measurement is directly or indirectly observable
» Level 3 — Valuation techniques for which the

lowest level input that is significant to the fair value
measurement is unobservable

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

(a) The management assessed that cash and cash equivalents, other bank balance, trade
receivables, acceptances, trade payables, loans to related party, loans to employees,
short term security deposit and other current financial liabilities approximate their
carrying amounts largely due to the short-term maturities of these instruments.

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

(c) Fixed deposit of C 330.57 million (31 Mar 2024: C 7.80 million) is restricted for withdrawal,
considering it is lien against commercial arrangements.

(d) There are no borrowings as at 31 March 2025 (31 March 2024: Nil)

For secured loans, charge created by way of:

(i) First ranking pari passu charge by way of hypothecation over the entire current
assets including but not limited to Stocks and Receivables.

(ii) Pari passu first charge by way of hypothecation on the entire movable fixed assets.

(iii) Charges with respect to above borrowing has been created in favour of security
trustee. No separate charge has been created for each of the borrowing.

(iv) All charges are registered with ROC within statutory period by the Company.

(v) Funds raised on short term basis have not been utilised for long term purposes and
spent for the purpose it were obtained.

(vi) Bank returns / stock statements filed by the Company with its bankers are in
agreement with books of account.

( e) Credit facilities

The Company has fund based and non-fund based revolving credit facilities amounting
to H 60,000.00 million (31 March 2024: H H 56,650.00 million), towards operational
requirements that can be used for the short term loan, issuance of letters of credit and
bank guarantees. The unutilised credit line out of these working capital facilities at the
year end is H 13,698.30 million (31 March 2024: H 22,677.10 million).

Fair value hierarchy ¹

All assets and liabilities for which fair value is measured or disclosed in the Financial
Statements are categorised within the fair value hierarchy, to provide an indication about
the reliability of inputs used in determining fair value, the Company has classified its financial
statements into three levels prescribed under the Ind AS as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:

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

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

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

Notes:

(a) Investment Property Under Construction is measured at cost as at 31 March 2025 of

H 790.08 million (31 March 2024:762.98 million). The fair value measurement is required for
disclosure purpose in the financial statements as per Ind AS 40 (Refer note 4).

---

Mar 31, 2024

4. Investment Property Under Construction

Accounting policy

Investment properties that are not intended to be occupied substantially for use by, or in the operations of the Company have been considered as investment property. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The Company does not charge depreciation to investment property land which is held for future undetermined use. Though the Company measures investment property using cost-based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer applying a valuation model.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition. In determining the amount of consideration from the derecognition of investment property, the Company considers the effects of variable consideration, existence of a significant financing component, non-cash consideration, and consideration payable to the buyer (if any).

Transfers are made to (or from) investment property only when there is a change in use. If owner-occupied property becomes an investment property, the Company accounts for such property in accordance with the policy stated under property, plant and equipment up to the date of change in use.

The Company depreciates its investment properties over the useful life which is similar to that of property, plant and equipment.

(H million)
Â	Land	Total
Gross carrying value (at cost)	Â	Â
As at 01 April 2023	-	-
Additions	762.98	762.98
Transfer	-	-
Disposals/Adjustments	-	-
As at 31 March 2024	762.98	762.98
(H million)
Â	Land	Total
Accumulated depreciation As at 01 April 2023	Â	Â
Depreciation charge for the year	-	-
Disposals/Adjustment	-	-
As at 31 March 2024	-	-
Net carrying value	Â	Â
As at 31 March 2024	762.98	762.98

The Company's investment properties consist of vacant land (including incidental vacant building on it) in Mumbai. Management determined that the investment properties consist of one class based on the nature, characteristics and risks of the property.

On 31 March 2024, the Company transferred H762.98 million from property, plant and equipment (Refer note 3) based on the then intention of the management, to investment property under construction, since the property is held for a currently undetermined future use.

The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements. Fair value hierarchy disclosures for investment properties are in Note 38B.

In accordance with Ind AS 113, the fair value of investment property is determined by the Company at H847.00 million following the risk-adjusted discounted cash flow method and based on Level 3 inputs from an independent accredited valuation expert, as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, with relevant valuation experience for similar properties. The fair valuation is mainly based on location and locality, current real estate prices in the active market for similar properties. The main inputs used are area, location, construction cost, demand, weighted-average cost of capital and trend of real estate market at the location. As at 31 March 2024, the fair value of the properties are based on valuations performed by Bharat Shah & Associates, an accredited independent registered valuer.

5. Right of use assets

Accounting policy

i.    The Company as a lessee

The Company's lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases), variable lease and leases with low value assets. For these shortterm, variable lease and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

The estimated useful life of the right-of-use assets are determined on the same basis as those of property, plant and equipment.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows. The Company has used a single discount rate to a portfolio of leases with similar characteristics.

ii.    The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. For operating leases, rental income is recognised on a straight line basis over the term of the relevant lease.

iii.    Finance lease

The Company has entered into land lease arrangement at various locations. Terms of such lease ranges from 30-90 years. In case of lease of land for 90 years and above, it is likely that such leases meet the criteria that at the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset.

iv.    Others

The following is the summary of practical expedients elected on initial application:

(a)    Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

(b)    Applied the exemption not to recognise right-of-use assets and liabilities for short term leases, variable lease and leases of low value assets.

(c)    Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

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

 

Lease contracts entered by the Company majorly pertains for warehouse taken on lease to conduct its business in the ordinary course. The Company does not have any lease restrictions and commitment towards variable rent as per the contract.

The Company had total cash outflows for leases of H209.52 million in 31 March 2024 (H157.37 million in 31 March 2023).

6. Other intangible assets

Accounting policy

i. Other intangible assets acquired separately

Other intangible assets acquired are reported at cost less accumulated amortisation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Amortisation on other intangible assets is calculated on pro rata basis on straight-line method using the useful lives of the assets and in the manner prescribed in Schedule II of the Companies Act, 2013. The useful life is as follows:

Assets	Useful life
Computer software	3 year
Technical Know-how	5 year

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

Based on the results of the Goodwill impairment test, the estimated value in use in all CGUs were higher than their respective carrying amount, hence impairment provision recorded during the current year is H Nil (31 March 2023 - H Nil). Management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the Goodwill.

The residual values, useful lives and methods of amortisation of Other intangible assets are reviewed at each financial year end and adjusted prospectively.

ii.    Intellectual Property

Brands/trademarks acquired separately are measured on initial recognition at the fair value of consideration paid. Following initial recognition, brands/trademarks are carried at cost less any accumulated amortisation and impairment losses, if any. The useful lives of brands/trademarks are assessed to be either finite or indefinite. The assessment includes whether the brand/trademark name will continue to trade and the expected lifetime of the brand/trademark. Amortisation is charged on assets with finite lives on a straightline basis over a period appropriate to the asset's useful life.

The Company owns 282 number as on 31 March 2024 (166 number as on 31 March 2023) registered trademarks pertaining to Brand, Sub-brands and Designs in India. The Company has also entered into royalty agreements with few companies for use of Polycab brand on specific products and charges fees for the same. These intellectual property and royalty income are solely owned and earned by the company and is not shared with any stakeholder. Intellectual Property has not been capitalised in the books as it does not meet the recognition criteria in Ind AS 38.

iii.    Research and development expenditure

Expenditure on research and development activities is recognised in the Statement of Profit and Loss as incurred. Development expenditure is capitalised as part of cost of the resulting other intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in Statement of profit or loss as incurred. Subsequent to initial recognition, the asset is measured at cost less accumulated amortisation and any accumulated impairment losses, if any. During the year, the Company has incurred Capital R&D expenditure amounting to H27.83 million (31 March 2023 H150.95 million) which have been included in property, plant and equipment. Further, Revenue R&D expenditure incurred amounting to H232.45 million (31 March 2023 H191.86 million) which have been charged to the respective revenue accounts.

iv.    De-recognition of other intangible assets

Other intangible asset is derecognised on disposal or when no future economic benefits are expected from use. Gains or losses arising from derecognition of an intangible asset is calculated as the difference between the net disposal proceeds and the carrying amount of the asset. Such gains or losses is recognised in the statement of profit and loss under ‘Other expenses' or ‘Other income'.

v.    Goodwill

Goodwill is measured at cost less any accumulated impairment losses. Goodwill acquired in a business combination is, from the acquisition date, allocated to cash-generating units that are expected to benefit from the combination.

7. Investment

Accounting policy

Investment in subsidiaries and joint ventures

The Company considers an investee company as a subsidiary company when it controls the investee company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:

•    Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)

•    Exposure, or rights, to variable returns from its involvement with the investee

•    The ability to use its power over the investee to affect its returns

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The considerations made in determining whether joint control is similar to those necessary to determine control over the subsidiaries.

Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is recognised in the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss under ‘Other Income' or ‘Other Expenses'.

(c) On 29 June 2023, the Company acquired additional 25,000 shares at face value of H10 each of Steel Matrix Private Limited for a purchase consideration of H0.25 million making it a wholly owned subsidiary of the Company.

(a)    Refer note 36A for information on financial information, principal place of business, activities and the Company's ownership interest in the above subsidiaries and joint venture.

(b)    Refer note 45 for scheme of amalgamation between the Company and Silvan Innovation Labs Private Limited.

(a)    Trade receivables are usually non-interest bearing and are generally on credit terms up to 90 days except EPC business. The Company's term includes charging of interest for delayed payment beyond agreed credit days. Company charges interest for delayed payments in certain cases depending on factors, such as, market conditions and past realisation trend.

(b)    For EPC business, trade receivables are non-interest bearing and credit terms are specific to contracts.

(c)    For explanations on the Company's credit risk management processes, refer note 39(B).

(d)    For trade receivables, the Company applies a simplified approach in calculating Expected credit loss (ECL). Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

(e)    Trade receivables have been pledged as security against bank borrowings, the terms relating to which have been described in note 38B.

(f)    Refer note 38 for accounting policies on financial instruments.

(g)    No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person. Further, no trade or other receivables are due from firms or private companies respectively in which any director is a partner, a director or a member. Refer note 36 for the terms and conditions pertaining to related party disclosures.

(h)    Non-current trade receivables are not due.

(i)    Trade receivables ageing schedule - Current

(C)    Details of investments made are given in Note 7A and 36E.

(D)    Details of guarantee issued and outstanding are given in Note 36F. Guarantees are issued by the Company in accordance with Section 186 of the Companies Act, 2013 read with rules issued thereunder.

(E)    The Company has complied with the provision section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(F)    The Company has not entered with any Scheme(s) of arrangement in terms of sections 230 to 237 of the Companies Act, 2013.

(G)    No funds 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 person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

13. Income taxes

Accounting policy

Income tax expenses comprise current tax and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Income tax received / receivable pertains to prior period recognised when it is probable that refund acknowledged by the Income-tax department will arise. Company periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

 

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences only to the extent that it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

The tax jurisdiction of the Company is India. The Company's tax return for past years are generally subject to examination by the tax authorities. The Company has made provisions for taxes basis its best judgement, considering past resolutions to disputed matters by adjudicating authorities, prior year assessments and advice from external experts, if required. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax laws and prior experience.

H Details of transaction not recorded in the books of accounts that has been surrendered/ disclosed as income during the year in the tax assessments (e.g. search) H Nil (31 March 2023 H Nil).

I The Company does not have any unrecorded income and assets related to previous years which are required to be recorded during the year.

J Refer note 46 for Income tax search activity.

(b) For contract assets, the Company applies a simplified approach in calculating Expected credit loss (ECL). Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

15. Inventories

Accounting policy

Raw materials, stock in trade, work in progress, finished goods, packing materials, project material for long term contracts, scrap materials and stores and spares are valued at lower of cost or net realisable value (“NRV”) after providing for obsolescence and other losses, where considered necessary on an item-by-item basis. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost of raw materials, packing materials, and stores and spares is determined on a First In-First Out (FIFO) basis and includes all applicable costs, including inward freight, incurred in bringing goods to their present location and condition.

Cost of work-in-progress and finished goods includes direct materials as aforesaid, direct labour cost and a proportion of manufacturing overheads based on total manufacturing overheads to raw materials consumed.

Cost of stock-in-trade includes cost of purchase and includes all applicable costs, including inward freight, incurred in bringing the inventories at their location and condition. Cost is determined on a weighted average basis.

The stocks of scrap materials have been taken at net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Copper and aluminium is purchased on provisional price with option to fix the purchase price based on current or future pricing model based on LME. Such feature is kept to hedge against exposure in the value of inventory of copper and aluminium due to volatility in copper and aluminium prices. Since, the value of the copper and aluminium changes with response to change in commodity pricing index, embedded derivatives (ED) is identified and separated from the host contract. The ED so separated, is treated like commodity derivative and qualifies for hedge accounting. These derivatives are put into a Fair Value hedge relationship with respect to unpriced inventory. The Company designates only the spot-to-spot movement of the copper and aluminium inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. Hedge accounting is discontinued when the hedging instrument is settled, or when it no longer qualifies for hedge accounting or when the hedged item is sold (Refer note 40).

(b)    The above includes inventories held by third parties amounting to '4,629.37 million (31 March 2023 -'5,212.98 million)

(c) During the year ended 31 March 2024, '5.52 million (31 March 2023 - '4.32 million) was recognised as an expense for inventories carried at net realisable value.

(d)    Inventories are hypothecated with the bankers against working capital limits (Refer note 38B).

 

(b)    Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of H10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the 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.

(c)    The details of Shareholding of Promoters are as under as at 31 March 2024 and 31 March 2023 are as follows:

 

(e)    Aggregate number of bonus share issued and share issued for consideration other than cash during the period of 5 years immediately preceding the reporting date :

There were no buy back of shares or issue of shares pursuant to contract without payment being received in cash during the previous 5 years.

(f)    Dividend Accounting policy

Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company's Board of Directors.

The Company declares and pays dividend in Indian rupees in accordance with its dividend distribution policy. Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

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

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

Employee stock option plan

The Company had instituted an ESOP Plan 2018, ESOP Performance Scheme, and ESOP Privilege Scheme as approved by the Board of Directors and Shareholders dated 30 August 2018 for issuance of stock option to eligible employees of the Company.

Under Employee Stock Options Performance Scheme 2018 the options will be vested in the specified ratio subject to fulfilment of the employee performance criteria laid down in the scheme. This shall be monitored annually as per the performance evaluation cycle of the company and options shall vest based on the achieved rating to the employee.

Under Employee Stock Options Privilege Scheme 2018 the options are vested over a period of one year subject to fulfilment of service condition.

Expected volatility is based on historical stock volatility of comparable Companies operating within the same industry. The historical stock prices of comparable Companies has been observed for a period commensurate to the Life of option.

Pursuant to the said scheme, Stock options convertible into 33,87,750 equity shares vide ESOP Performance Scheme and 1,42,250 equity shares vide ESOP Privilege Scheme of H10 each were granted to eligible employee including group companies at an exercise price of H405/-.

Proposed dividend on equity share

The Board of Directors in their meeting on 10 May 2024 recommended a final dividend of H30/- per equity share for the financial year ended 31 March 2024. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company and if approved would result in a net cash outflow of approximately H4,500 million. It is not recognised as a liability as at 31 March 2024.

(g) Employee stock Option Plan (ESOP)

Accounting policy

Equity settled share based payments to employees and other providing similar services are measured at fair value of the equity instruments at grant date.

The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The increase in equity recognised in connection with share based payment transaction is presented as a separate component in equity under “ESOP Outstanding”. The amount recognised as an expense is adjusted to reflect the actual number of stock options that vest. For the option awards, grant date fair value is determined under the option-pricing model (Black-Scholes). Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures materially differ from those estimates. Corresponding balance of a ESOP Outstanding is transferred to general reserve upon expiry of grants.

(a)    Capital Reserve:

The Company has created the reserve pursuant to amalgamation in an earlier years.

(b)    Securities premium:

Amount received in excess of face value of the equity shares is recognised in Securities Premium. In case of equity-settled share based payment transactions difference between fair value on grant date and nominal value of share is accounted as Securities Premium. It will be used as per the provision of Companies Act, 2013.

(c) General reserve

The Company had transferred a portion of the net profit of the Company before declaring dividend to General Reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to General Reserve is not required under the Companies Act, 2013. General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit or loss.

(e) ESOP outstanding

Fair value of equity-settled share based payment transactions with employees is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding . The Company has two stock option schemes under which options to subscribe for the Company's shares have been granted to certain employees. The ESOP Outstanding is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

(e) Retained earnings

Retained earnings are the profits that the Company has earned till date less any transfers to General Reserve, dividends or other distributions to shareholders. Retained earnings includes re-measurement loss/ (gain) on defined benefit plans, net of taxes that will not be reclassified to statement of profit and loss. Retained earnings is a free reserve available to the Company.

 

19. Acceptances

Accounting policy

The Company enters into arrangements for purchase under usance letter of credit issued by banks under non-fund based working capital limits of the Company. Considering these arrangements are majorly for raw materials with a maturity of up to twelve months, the economic substance of the transaction is determined to be operating in nature and these are recognised as Acceptances and is disclosed on the face of the Balance Sheet. Interest borne by the Company on such arrangements is accounted as finance cost.

 

Notes:

(a) Acceptances is availed in foreign currency from offshore branches of Indian banks or foreign banks at an interest rate ranging from 4.98 % to 5.79 % per annum and in rupee from domestic banks at interest rate ranging from 5.93 % to 9.30 % per annum. Acceptances represent amounts payable to banks on due date as per usance period of Letter of Credit (LCs) issued to raw material vendors under non-fund based working capital facility approved by Banks for the Company. The arrangements are interest-bearing. Non-fund limits are secured by first pari-passu charge over the present and future current assets of the Company. The Company from the current year has decided to present liabilities with respect to Acceptances on the face of Balance Sheet, which were previously included in trade payables as Acceptances to enhance understanding of the financial statements. The value of such liabilities as at 01 April 2022 and 01 April 2023 was H6,364.55 million and ?12,257.56 million. This revision in presentation has no material impact on the standalone financial statements.

(a)    Others include amount payable to vendors, employees liability and accrual of expenses that are expected to be settled in the Company's normal operating cycle or due to be settled within twelve months from the reporting date.

(b)    For the terms and conditions with related parties, refer note 36.

(c)    For explanations on the Company's liquidity risk management processes refer note 39(C).

(d)    I nformation as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended 31 March 2024 and year ended 31 March 2023 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

(b)    There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of Companies Act, 2013 as at the year end.

(c)    Company had provided a guarantee for credit facility availed by Tirupati Reels Private Limited, amounting to H899.70 million (31 March 2023: H520.00 million) and by Uniglobus Electricals and Electronics Private Limited amounting to H400 million (31 March 2023: H Nil).

22. Provisions

Accounting policy:

Provision is recognised for expected warranty claims and after sales services when the product is sold or service provided to the customer, based on past experience of the level of repairs and returns. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually. It is expected that significant portion of these costs will be incurred in the next financial year and the total warranty-related costs will be incurred within warranty period after the reporting date. Assumptions used to calculate the provisions for warranties were based on current sales levels and current information available about returns during the warranty period for all products sold.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

24. Revenue from operations

Accounting Policy

(i)    Measurement of revenue

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, incentive schemes, if any, as per contracts with customers. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring good or service to a customer. Taxes collected from customers on behalf of Government are not treated as Revenue.

(ii)    Performance obligations:-

(a)    Sale of goods

Revenue from contracts with customers involving sale of these products is recognised at a point in time when control of the product has been transferred at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, and there are no unfulfilled obligation that could affect the customer's acceptance of the products and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. At contract inception, the Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue from contracts with customers is recognised when control of goods are transferred to customers and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The point of time of transfer of control to customers depends on the terms of the trade - CIF, CFR or DDP, ex-works, etc.

(b)    Revenue from construction contracts

Performance obligation in case of revenue from long-term contracts is satisfied over the period of time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. However, the same may not be possible if it lacks reliable information that would be required to apply an appropriate method of measuring progress. In some circumstances, if the Company is not able to reasonably measure the outcome of a performance obligation, but expects to recover the costs incurred in satisfying the performance obligation, the company shall recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Contract asset is the entity's right to consideration in exchange for goods or services that the entity has transferred to the customer. A contract asset becomes a receivable when the entity's right to consideration is unconditional, which is the case when only the passage of time is required before payment of the consideration is due.

Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. The timing of the transfer of control varies depending on individual terms of the sales agreements.

The total costs of contracts are estimated based on technical and other estimates. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in Statement of Profit & Loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract.

In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss. Contract revenue earned in excess of billing is reflected under as “contract asset” and billing in excess of contract revenue is reflected under “contract liabilities”.

(iii)    Variable consideration

It includes volume discounts, price concessions, liquidity damages, incentives, etc. The Company estimates the variable consideration with respect to above based on an analysis of accumulated historical experience. The Company adjusts estimate of revenue at the earlier of when the most likely amount of consideration the Company expect to receive changes or when the consideration becomes fixed.

(iv)    Schemes

The Company operates several sales incentive programmes wherein the customers are eligible for several benefits on achievement of underlying conditions as prescribed in the scheme programme such as credit notes, tours, kind etc. Revenue from contract with customer is presented deducting cost of all these schemes.

(v)    Significant financing components

In respect of advances from its customers, using the practical expedient in Ind AS 115, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be within normal operating cycle. Retention money receivable from project customers does not contain any significant financing element, these are retained for satisfactory performance of contract. Contract assets arising from such customer contracts are subject to impairment assessment.

(vi)    Warranty

The Company typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. Refer to the accounting policy on warranty as per note 22. In certain contracts, the Company provides warranty for an extended period of time and includes rectification of defects that existed at the time of sale and are normally bundled together with the main contract. Such bundled contracts include two separate performance obligations, because the promises to transfer the goods and services and the provision of service-type warranty are capable of being distinct. Using the relative stand-alone selling price method, a portion of the transaction price is allocated to the service-type warranty and recognised as a contract liability at the time of recognition of revenue. Revenue allocated towards service-type warranty is recognised over a period of time on a basis appropriate to the nature of the contract and services to be rendered.

(vii)    Right to return

When a contract provides a customer with a right to return the goods within a specified period, the Company estimates the expected returns using a probability-weighted average amount approach similar to the expected value method under Ind AS 115.

At the point of sale, a refund liability and a corresponding adjustment to revenue is recognised for those products expected to be returned. At the same time, the Company has a right to recover the product when customers exercise their right of return. Consequently, the Company recognises a right to returned goods asset and a corresponding adjustment to cost of sales. The Company uses its accumulated historical experience to estimate the number of returns on a portfolio level using the expected value method. It is considered highly probable that a significant reversal in the cumulative revenue recognised will not occur given the consistent level of returns over previous years. The Company updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. Refer to above accounting policy on variable consideration.

For goods expected to be returned, the Company presented a refund liability and an asset for the right to recover products from a customer separately in the balance sheet.

(viii)    Onerous Contracts

A provision for onerous contract is recognised when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligation under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the company recognises any impairment loss on assets associated.

(ix)    Export incentives

Export incentives under various schemes notified by the Government have been recognised on the basis of applicable regulations, and when reasonable assurance to receive such revenue is established. Export incentives income is recognised in the statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

(x)    Cost to obtain a contract

Any costs to obtain a contract or incremental costs to fulfil a contract are recognised as an asset if certain criteria are met as per Ind AS 115.

The Company applies the optional practical expedient to immediately expense costs to obtain a contract if the amortisation period of the asset that would have been recognised is one year or less.

(xi)    Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Government grants are recognised in the statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

When the grant relates to an asset, it's recognition as income in the Statement of Profit & Loss is linked to fulfilment of associated export obligations.

The export incentive and grants received are in the nature of other operating revenue in the Statement of Profit & Loss.

(e)    Trade receivables are usually non-interest bearing and are generally on credit terms up to 90 days except EPC business. Provision for expected credit losses on trade receivables recognised/ (derecognises) during the year of H305.26 million (31 March 2023: H (25.57) million). The Company has channel finance arrangement for providing credit to its dealers. Evaluation is made as per the terms of the contract i.e. if the Company does not retain any risk and rewards or control over the financial assets, then the entity derecognises such assets upon transfer of financial assets under such arrangement with the banks.

(f)    No single customer contributed 10% or more to the Company's revenue for the year ended 31 March 2024 and 31 March 2023.

25. Other income

Accounting Policy:

Other income is comprised primarily of interest income, dividend income, gain on investments and exchange gain on forward contracts and on translation of other assets and liabilities.

Interest income on financial asset measured either at amortised cost or FVTPL is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Dividend income from investments is recognised when the shareholder's right to receive payment has been established.

Foreign Currency

The Company's Financial Statements are presented in Indian rupee (?) which is also the Company's functional currency. Foreign currency transaction are recorded on initial recognition in the functional currency, using the exchange rate prevailing at the date of transaction.

Measurement of foreign currency item at the balance sheet date:

(i)    Foreign currency monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing on the reporting date.

(ii)    Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

(iii)    Exchange differences :

Exchange differences arising on settlement or translation of monetary items are recognised as income or expense in the Statement of Profit & Loss.

(i)    Includes interest on Income Tax refund of Nil (31 March 2023: H1.03 million).

(ii)    Gain on fair valuation of financial instruments at fair value through profit or loss relates to foreign exchange fluctuation on forward contracts that are designated as at fair value through profit and loss account and on embedded derivatives, which have been separated. No ineffectiveness has been recognised on foreign exchange and interest rate hedges.

30. Employee benefits expense

Accounting policy

(i)    Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as shortterm employee benefits. Benefits such as salaries, wages, incentives, special awards, medical benefits etc. are charged to the Statement of Profit & Loss in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii)    Compensated absences

The Company estimates and provides the liability for such short-term and long term benefits based on the terms of the policy. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Remeasurement gains/losses on defined benefit plans are immediately taken to the Statement of Profit & Loss and are not deferred.

(iii)    Defined contribution plans

Retirement benefit in the form of provident fund and National Pension Scheme are defined contribution schemes. The Company recognises contribution payable to the provident fund and National Pension Scheme as an expenditure, when an employee renders the related service. The Company has no obligation, other than the contribution payable to the funds. The Company's contributions to defined contribution plans are charged to the Statement of Profit & Loss as incurred.

(iv)    Defined benefit plan

The Company operates a defined benefit gratuity plan for its employees. The c

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Mar 31, 2023

(f) CWIP completion schedule, whose completion is overdue or has exceeded its cost compared to its original plan: None (31 March 2022 : None)

(g) Assets pledged and hypothecated against borrowings: Refer note 17(a)(ii).

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

(i) For capital expenditures contracted but not incurred -Refer note 34(B).

4. Right of use assetsAccounting policy

i. The Company as a lessee

The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (shortterm leases), variable lease and leases with low value assets. For these short-term, variable lease and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.

The estimated useful life of the right-of-use assets are determined on the same basis as those of property, plant and equipment. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not

generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying value may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows. The Company has used a single discount rate to a portfolio of leases with similar characteristics.

ii. The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. For operating leases, rental income is recognised on a straight line basis over the term of the relevant lease.

iii. Finance lease

The Company has entered into land lease arrangement at various locations. Terms of such lease ranges from 30-90 years. In case of lease of land for 90 years and above, it is likely that such leases meet the criteria that at the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset. Accordingly, the Company has classified leasehold land as finance leases applying Ind AS 17. For such leases, the carrying amount of the right-of-use asset at the date of initial application of Ind AS 116 is the carrying amount of the lease asset on the transition date as measured applying Ind AS 17. Accordingly, an amount of ''41.78 million has been reclassified from property, plant and equipment to right-of-use assets in financial year 2019-20.

iv. Others

The following is the summary of practical expedients elected on initial application:

(a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

(b) Applied the exemption not to recognise right-of-use assets and liabilities for short term leases, variable lease and leases of low value assets.

(c) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

(d) The effective interest rate for lease liabilities is 9.0% p.a., with maturity between financial year 2022-2030.

Lease contracts entered by the Company majorly pertains for warehouse taken on lease to conduct its business in the ordinary course. The Company does not have any lease restrictions and commitment towards variable rent as per the contract.

The Company had total cash outflows for leases of ''157.37 million in 31 March 2023 (''169.44 million in 31 March 2022).

5. Other intangible assets Accounting policy

i. Other intangible assets acquired separately

Other intangible assets acquired are reported at cost less accumulated amortisation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Amortisation on other intangible assets is calculated on pro rata basis on straight-line method using the useful lives of the assets and in the manner prescribed in Schedule II of the Companies Act, 2013. The useful life is as follows:

Assets Useful life

Computer software 3 year

The residual values, useful lives and methods of amortisation of Other intangible assets are reviewed at each financial year end and adjusted prospectively.

Other intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets.

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

ii. Intellectual Property

Brands/trademarks acquired separately are measured on initial recognition at the fair value of consideration paid. Following initial recognition, brands/trademarks are carried at cost less any accumulated amortisation and impairment losses, if any. A brand/trademark acquired as part of a business combination is recognised outside goodwill, at fair value at the date of acquisition, if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably. The useful lives of brands/trademarks are assessed to be either finite or indefinite. The assessment includes whether the brand/trademark name will continue to trade and the expected lifetime of the brand/trademark. Amortisation is charged on assets with finite lives on a straightline basis over a period appropriate to the asset''s useful life. The carrying values of brands/ trademarks with finite and indefinite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company does not have any brands/ trademarks with indefinite useful lives.

The Company owns 166 number as on 31 March 2023 (144 number as on 31 March 2022) registered trademarks pertaining to Brand, Sub-brands and Designs in India. The Company has also entered into royalty agreements with few companies for use

of Polycab brand on specific products and charges fees for the same. These intellectual property and royalty income are solely owned and earned by the company and is not shared with any stakeholder. Intellectual Property has not been capitalised in the books as it does not meet the recognition criteria in Ind AS 38.

iii. Research and development expenditure

Expenditure on research and development activities is recognised in the Statement of Profit and Loss as incurred. Development expenditure is capitalized as part of cost of the resulting other intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in Statement of profit or loss as incurred. Subsequent to initial recognition, the asset is measured at cost less accumulated amortisation and any accumulated impairment losses, if any. During the year, the Company has incurred Capital R&D expenditure amounting to ''150.95 million (31 March 2022 ''60.31 million) which have been included in property, plant and equipment. Further, Revenue R&D expenditure incurred amounting to ''191.86 million (31 March 2022 ''162.47 million) which have been charged to the respective revenue accounts.

iv. De-recognition of other intangible assets

Other intangible asset is derecognised on disposal or when no future economic benefits are expected from use. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in the statement of profit and loss when the asset is derecognised.

6. InvestmentAccounting policy

i. Investment in subsidiaries and joint ventures

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The considerations made in determining whether significant influence or joint control are similar to those necessary to determine control over the subsidiaries.

Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.

(b) During the previous year ended 31 March 2022, the Company has divested its 100% stake in Ryker Base Private Limited, a wholly-owned subsidiary for a consideration of ''1,778.92 million and recognised a gain of ''1,243.25 million which has been disclosed as an exceptional item.

(c) On 18 June 2021, the Company acquired 100% stake in Silvan Innovation Labs Private Limited making it a wholly-owned subsidiary at a consideration of ''101.54 million. The acquisition will augment the Company''s Internet of Things (IOT) results based automation offerings and expand the potential addressable market in FMEG space.

(d) During the previous year, the Company has increased its stake in a subsidiary viz Dowells Cable Accessories Private Limited from 51% to 60% for a purchase consideration of ''21.77 million.

(e) Refer note 35A for information on financial information, principal place of business, activities and the Company''s ownership interest in the above subsidiaries and joint venture.

(f) Refer note 44 for scheme of amalgamation between the Company and Silvan Innovation Laboratories Private Limited.

(a) Trade receivables are usually non-interest bearing and are generally on credit terms up to 90 days except EPC business. The Company''s term includes charging of interest for delayed payment beyond agreed credit days. Company charges interest for delayed payments in certain cases depending on factors, such as, market conditions and past realisation trend.

(b) For EPC business trade receivables are non-interest bearing and credit terms are specific to contracts.

(c) For explanations on the Company''s credit risk management processes, refer note 38(B).

(d) The Company follows life time expected credit loss model. Accordingly, deterioration in credit risk is not required to be evaluated annually.

(e) Trade receivables have been pledged as security against bank borrowings, the terms relating to which have been described in note 17.

(f) Refer note 37 for accounting policies on financial instruments.

(g) No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person, except the dues referred in note 35(F)(iii). Further, no trade or other receivables are due from firms or private companies respectively in which any director is a partner, a director or a member. Refer note 35 for the terms and conditions pertaining to related party disclosures.

(C) Details of investments made are given in Note 6A and 35D.

(D) Details of guarantee issued and outstanding are given in Note 35E. Guarantees are issued by the Company in accordance with Section 186 of the Companies Act, 2013 read with rules issued thereunder.

(E) The Company has complied with the provision section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.

(F) The Company has not entered with any Scheme(s) of arrangement in terms of sections 230 to 237 of the Companies Act, 2013.

(G) No funds 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 person(s) or entity(ies), including foreign entities (“Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(H) Loan has been given to related parties are repayable on demand.

12. Income taxes Accounting policy

Income tax expenses comprise current tax and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current and deferred taxes are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Income tax received / receivable pertains to prior period recognised when reasonable certainty arise for refund acknowledged by the Income-tax department. Company periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

Deferred tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount for financial reporting purposes at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted at the reporting date. The effect of changes in tax rates on deferred tax assets and liabilities is recognised as income or expense in the period that includes the enactment or the substantive enactment date.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax asset to the extent that it has become reasonably certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying unit intends to settle the asset and liability on a net basis.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

The tax jurisdiction of the Company is India. The Company''s tax return for past years are generally subject to examination by the tax authorities. The Company has made provisions for taxes basis its best judgement, considering past resolutions to disputed matters by adjudicating authorities, prior year assessments and advice from external experts, if required.

The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax laws and prior experience.

Further, the Company periodically receives notices and inquiries from Indian income tax authorities related to the Company''s operations. The Company has evaluated these notices and inquiries and has concluded that any consequent income tax claims or demands, if any, by the income tax authorities will not succeed on ultimate resolution.

14. InventoriesAccounting policy

Raw materials, stock in trade, Work-in-Progress, finished goods, packing materials, project material for long term contracts, scrap materials and stores and spares are valued at lower of cost or net realizable value (“"NRV"") after providing for obsolescence and other losses, where considered necessary on an item-by-item basis. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.

Cost of raw materials, packing materials, and stores and spares is determined on a First In-First Out (FIFO) basis and includes all applicable costs, including inward freight, incurred in bringing goods to their present location and condition.

Cost of work-in-progress and finished goods includes direct materials as aforesaid, direct labour cost and a proportion of manufacturing overheads based on total manufacturing overheads to raw materials consumed.

Cost of stock-in-trade includes cost of purchase and includes all applicable costs, including inward freight, incurred in bringing the inventories at their location and condition. Cost is determined on a weighted average basis.

The stocks of scrap materials have been taken at net realisable value.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Copper and aluminium is purchased on provisional price with option to fix the purchase price based on current or future pricing model based on LME. Such feature is kept to hedge against exposure in the value of inventory of copper and aluminium due to volatility in copper and aluminium prices. Since, the value of the copper and aluminium changes with response to change in commodity pricing index, embedded derivatives (ED) is identified and separated from the host contract. The ED so separated, is treated like commodity derivative and qualifies for hedge accounting. These derivatives are put into a Fair Value hedge relationship with respect to unpriced inventory. The Company designates only the spot-to-spot movement of the copper and aluminium inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. Hedge accounting is discontinued when the hedging instrument is settled, or when it no longer qualifies for hedge accounting or when the hedged item is sold (Refer note 39).

(b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having 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 final dividend proposed by the Board of Directors is subject to the approval of the 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.

(e) Aggregate number of bonus share issued and share issued for consideration other than cash during the period of 5 years immediately preceding the reporting date :

There were no buy back of shares or issue of shares pursuant to contract without payment being received in cash during the previous 5 years.

(f) Dividend Accounting policy

Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.

The Company declares and pays dividend in Indian rupees in accordance with its dividend distribution policy. Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

Proposed dividend on equity share

The Board of Directors in their meeting on 12 May 2023 recommended a final dividend of ''20 /- per equity share for the financial year ended 31 March 2023. This payment is subject to the approval of shareholders in the Annual General Meeting of the Company and if approved would result in a net cash outflow of approximately ''2,995 million. It is not recognised as a liability as at 31 March 2023.

(g) Employee stock Option Plan (ESOP)

Accounting policy

Equity settled share based payments to employees and other providing similar services are measured at fair value of the equity instruments at grant date.

The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The increase in equity recognised in connection with share based payment transaction is presented as a separate component in equity under “ESOP Outstanding". The amount recognised as an expense is adjusted to reflect the actual number of stock options that vest. For the option awards, grant date fair value is determined under the option-pricing model (Black-Scholes). Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures materially differ from those estimates. Corresponding balance of a ESOP Outstanding is transferred to general reserve upon expiry of grants or upon exercise of stock options by an employee.

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

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

Employee stock option plan

The Company had instituted an ESOP Plan 2018, ESOP Performance Scheme, and ESOP Privilege Scheme as approved by the Board of Directors and Shareholders dated 30 August 2018 for issuance of stock option to eligible employees of the Company.

U nder Employee Stock Options Performance Scheme 2018 the options will be vested in the specified ratio subject to fulfilment of the employee performance criteria laid down in the scheme. This shall be monitored annually as per the performance evaluation cycle of the company and options shall vest based on the achieved rating to the employee.

U nder Employee Stock Options Privilege Scheme 2018 the options are vested over a period of one year subject to fulfilment of service condition.

Expected volatility is based on historical stock volatility of comparable Companies operating within the same industry. The historical stock prices of comparable Companies has been observed for a period commensurate to the Life of option.

Pursuant to the said scheme, Stock options convertible into 3,387,750 equity shares vide ESOP Performance Scheme and 142,250 equity shares vide ESOP Privilege Scheme of ''10 each were granted to eligible employee including group companies at an exercise price of ''405/-.

(a) For secured loans, charge created by way of:

(i) First ranking pari passu charge by way of hypothecation over the entire current assets including but not limited to Stocks and Receivables.

(ii) Pari passu first charge by way of hypothecation on the entire movable fixed assets.

(iii) Charges with respect to above borrowing has been created in favour of security trustee. No separate charge has been created for each of the borrowing.

(iv) All charges are registered with ROC within statutory period by the Company.

(v) Funds raised on short term basis have not been utilised for long term purposes and spent for the purpose it were obtained.

(vi) Bank returns / stock statements filed by the Company with its bankers are in agreement with books of account.

19. Trade payables Accounting policy

These amounts represent liabilities for goods and services provided to the Company during the year and are unpaid at the year end. The amounts are unsecured and are usually paid within 30 to 90 days of recognition other than usance letter of credit. Trade payables are presented as current financial liabilities.

The Company enters into arrangements for purchase under usance letter of credit issued by banks under non-fund based working capital limits of the Company. Considering these arrangements are majorly for raw materials with a maturity of up to twelve months, the economic substance of the transaction is determined to be operating in nature and these are recognised as acceptances under trade payables.

(a) Acceptances represent amounts payable to banks on due date as per usance period of Letter of Credit (LCs) issued to raw material vendors under non-fund based working capital facility approved by Banks for the Company. The arrangements are interest-bearing. Non-fund limits are secured by first pari-passu charge over the present and future current assets of the Company.

(b) Others include amount payable to vendors, employees liability and accrual of expenses that are expected to be settled in the Company''s normal operating cycle or due to be settled within twelve months from the reporting date.

(c) For the terms and conditions with related parties, refer note 35.

(d) For explanations on the Company''s liquidity risk management processes refer note 38(C).

(e) Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended 31 March 2023 and year ended 31 March 2022 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

21. ProvisionsAccounting policy:

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the Statement of Profit & Loss. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provision is recognised for expected warranty claims and after sales services when the product is sold or service provided to the customer, based on past experience of the level of repairs and returns. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually. It is expected that significant portion of these costs will be incurred in the next financial year and the total warranty-related costs will be incurred within warranty period after the reporting date. Assumptions used to calculate the provisions for warranties were based on current sales levels and current information available about returns during the warranty period for all products sold.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that the outflow of resources would be required to settle the obligation, the provision is reversed.

is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. However, the same may not be possible if it lacks reliable information that would be required to apply an appropriate method of measuring progress. In some circumstances, if the Company is not able to reasonably measure the outcome of a performance obligation, but expects to recover the costs incurred in satisfying the performance obligation, the company shall recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Contract asset is the entity''s right to consideration in exchange for goods or services that the entity has transferred to the customer. A contract asset becomes a receivable when the entity''s right to consideration is unconditional, which is the case when only the passage of time is required before payment of the consideration is due.

Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. The timing of the transfer of control varies depending on individual terms of the sales agreements.

The total costs of contracts are estimated based on technical and other estimates. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in Statement of Profit & Loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract.

In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss. Contract revenue earned in excess of billing is reflected under as “contract asset" and billing in excess of contract revenue is reflected under “contract liabilities".

23. Revenue from operations Accounting Policy

IND AS 115 was made effective from 1 April 2018 and establishes a five-step model to account for revenue arising from contracts with customers. The new revenue standard replaced IND AS 18 & IND AS 11 and interpretations on revenue recognition related to sale of goods and services. The Company has applied the modified retrospective approach and accordingly has included the impact of Ind AS 115.

(i) Measurement of revenue

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, incentive schemes, if any, as per contracts with customers. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring good or service to a customer. Taxes collected from customers on behalf of Government are not treated as Revenue.

(ii) Performance obligations

(a) Sale of goods

Revenue from contracts with customers involving sale of these products is recognised at a point in time when control of the product has been transferred at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, and there are no unfulfilled obligation that could affect the customer''s acceptance of the products and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. At contract inception, the Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue from contracts with customers is recognised when control of goods are transferred to customers and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The point of time of transfer of control to customers depends on the terms of the trade - CIF, CFR or DDP, ex-works, etc.

(b) Revenue from construction contracts

Performance obligation in case of revenue from long - term contracts is satisfied over the period of time, the revenue recognition

(iii) Variable consideration

It includes volume discounts, price concessions, liquidity damages, incentives, etc. The Company estimates the variable consideration with respect to above based on an analysis of accumulated historical experience. The Company adjust estimate of revenue at the earlier of when the most likely amount of consideration the Company expect to receive changes or when the consideration becomes fixed.

(iv) Schemes

The Company operates several sales incentive programmes wherein the customers are eligible for several benefits on achievement of underlying conditions as prescribed in the scheme programme such as credit notes, tours, kind etc. Revenue from contract with customer is presented deducting cost of all these schemes.

(v) Significant financing components

In respect of advances from its customers, using the practical expedient in Ind AS 115, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be within normal operating cycle. Retention money receivable from project customers does not contain any significant financing element, these are retained for satisfactory performance of contract.

(vi) Warranty

The Company typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. Refer to the accounting policy on warranty as per note 21. In certain contracts, the Company provides warranty for an extended period of time and includes rectification of defects that existed at the time of sale and are normally bundled together with the main contract. Such bundled contracts include two separate performance obligations, because the promises to transfer the goods and services and the provision of service-type warranty are capable of being distinct. Using the relative stand-alone selling price method,

a portion of the transaction price is allocated to the service-type warranty and recognised as a contract liability at the time of recognition of revenue. Revenue allocated towards service-type warranty is recognised over a period of time on a basis appropriate to the nature of the contract and services to be rendered.

(vii) Right to return

When a contract provides a customer with a right to return the goods within a specified period, the Company estimates the expected returns using a probability-weighted average amount approach similar to the expected value method under Ind AS 115.

At the point of sale, a refund liability and a corresponding adjustment to revenue is recognised for those products expected to be returned. At the same time, the Company has a right to recover the product when customers exercise their right of return. Consequently, the Company recognises a right to returned goods asset and a corresponding adjustment to cost of sales. The Company uses its accumulated historical experience to estimate the number of returns on a portfolio level using the expected value method. It is considered highly probable that a significant reversal in the cumulative revenue recognised will not occur given the consistent level of returns over previous years. The Company updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. Refer to above accounting policy on variable consideration.

For goods expected to be returned, the Company presented a refund liability and an asset for the right to recover products from a customer separately in the balance sheet.

(viii) Onerous contracts

A provision for onerous contract is recognised when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligation under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the company recognises any impairment loss on assets associated.

(ix) Export incentives

Export incentives under various schemes notified by the Government have been recognised on the basis of applicable regulations, and when reasonable assurance to receive such revenue is established. Export incentives income is recognised in the statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

(x) Cost to obtain a contract

Any costs to obtain a contract or incremental costs to fulfil a contract are recognised as an asset if certain criteria are met as per Ind AS 115.

The Company applies the optional practical expedient to immediately expense costs to obtain a contract if the amortisation period of the asset that would have been recognised is one year or less.

(xi) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Government grants are recognised in the statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

When the grant relates to an asset, it''s recognition as income in the Statement of Profit & Loss is linked to fulfillment of associated export obligations.

The export incentive and grants received are in the nature of other operating revenue in the Statement of Profit & Loss.

(e) Trade receivables are usually non-interest bearing and are generally on credit terms up to 90 days except EPC business. Provision for expected credit losses on trade receivables recognised/ (derecognises) during the year of ''(31.74) million (31 March 2022: ''(150.98) million). The Company has channel finance arrangement for providing credit to its dealers. Evaluation is made as per the terms of the contract i.e. if the Company does not retain any risk and rewards or control over the financial assets, then the entity derecognises such assets upon transfer of financial assets under such arrangement with the banks.

(f) No single customer contributed 10% or more to the Company''s revenue for the year ended 31 March 2023 and 31 March 2022.

(g) Contract assets are initially recognised for revenue earned from installation services as receipt of consideration is conditional on successful completion of installation. Upon completion of installation and acceptance / certifications by the customer, the amounts recognised as contract assets are reclassified to trade receivables. The increase in contract assets as on 31 March 2023 is on account of unbilled revenue booked for which the billing will be done subsequently. During the year ''6.17 million (31 March 2022: '' Nil) was reduced from the provision for expected credit losses on contract assets.

(h) Contract liabilities include advances received towards EPC projects as well as transaction price allocated to unexpired service contracts. The outstanding balances of these accounts decreased in FY 2022-23 due to the revenue recognition against the advance from customers received in the previous years for the projects which got closed in the current year.

24. Other income Accounting Policy:

Other income is comprised primarily of interest income, dividend income, gain on investments and exchange gain on forward contracts and on translation of other assets and liabilities.

Interest income on financial asset measured either at amortised cost or FVTPL is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

Dividend income from investments is recognised when the shareholder''s right to receive payment has been established.

Foreign Currency

The Company''s Financial Statements are presented in Indian rupee ('') which is also the Company''s functional currency. Foreign currency transaction are recorded on initial recognition in the functional currency, using the exchange rate prevailing at the date of transaction.

Measurement of foreign currency item at the balance sheet date:

(i) Foreign currency monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing on the reporting date.

(ii) Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

29. Employee benefits expenseAccounting policy

(i) Short-term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages, incentives, special awards, medical benefits etc. and the expected cost of ex-gratia are charged to the Statement of Profit & Loss in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(ii) Compensated absences

The Company estimates and provides the liability for such short-term and long term benefits based on the terms of the policy. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Remeasurement gains/losses on defined benefit plans are immediately taken to the Statement of Profit & Loss and are not deferred.

(iii) Defined contribution plans

Retirement benefit in the form of provident fund and ‘Employer-Employee Scheme'' are defined contribution schemes. The Company recognises contribution payable to the provident fund and ‘Employer Employee'' scheme as an expenditure, when an employee renders the related service. The Company has no obligation, other than the contribution payable to the funds. The Company''s contributions to defined contribution plans are charged to the Statement of Profit & Loss as incurred.

(iv) Defined benefit plan

The Company operates a defined benefit gratuity plan for its employees. The costs of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end using the projected unit credit method. The discount rate used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related

obligations. Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the Balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to Statement of Profit & Loss in subsequent periods. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Past service costs are recognised in profit or loss on the earlier of:

• The date of the plan amendment or curtailment, and

• The date that the Company recognises related restructuring costs

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost'' or ‘past service gain'') or the gain or loss on curtailment is recognised immediately in Statement of profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(v) Share based payment

Equity settled share based payments to employees and other providing similar services are measured at fair value of the equity instruments at grant date.

The fair value determined at the grant date of the equity-settled share based payment is expensed on a straight line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimates of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any is, recognised in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the ESOP outstanding account (Refer note 15(g)).

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

The dilutive effect, if any of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (Refer note 33).

The Code on Social Security, 2020 (‘Code'') relating to employee benefits during employment and post employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective. Based on a preliminary assessment, the Company believes the impact of the change will not be significant.

Gratuity and other post-employment benefit plans

(A) Defined Benefit plan

Gratuity Valuation - As per actuary

In respect of Gratuity, the Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. The scheme provided for lump sum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The Company has provided for gratuity based on the actuarial valuation done as per Project Unit Credit Method.

Defined benefit plans expose the Company to actuarial risks such as:

(i) Interest rate risk

A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

(ii) Salary Risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

(iii) Investment Risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

(iv) Asset Liability Matching Risk

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

(v) Mortality risk

Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

(vi) Concentration Risk

Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very low as insurance companies have to follow regulatory guidelines which mitigate risk.

(vii) Variability in withdrawalrates

If actual withdrawal rates are higher than assumed withdrawal rate assumption then the gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

(viii) Regulatory Risk

Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). There is a risk of change in the regulations requiring higher gratuity payments.

A separate trust fund is created to manage the Gratuity plan and the contributions towards the trust fund is done as guided by rule 103 of Income Tax Rules, 1962.

The Company operates a defined benefit plan, viz., gratuity for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15

Statement of profit and loss

days of last drawn salary for each completed year of service.

---

Mar 31, 2021

5. Intangible assets Accounting policy

i. Intangible assets acquired separately

Intangible assets acquired are reported at cost less accumulated amortisation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Amortisation on intangible assets is calculated on pro rata basis on straight-line method using the useful lives of the assets and in the manner prescribed in Schedule II of the Companies Act, 2013. The useful life is as follows:

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

ii. Intellectual Property

Brands/trademarks acquired separately are measured on initial recognition at the fair value of consideration paid. Following initial recognition, brands/trademarks are carried at cost less any accumulated amortisation and impairment losses, if any. A brand/trademark acquired as part of a business combination is recognised outside goodwill, at fair value at the date of acquisition, if the asset is separable or arises from contractual or other legal rights and its fair value can be measured reliably. The useful lives of brands/trademarks are assessed to be either finite or indefinite. The assessment includes whether the brand/trademark name will continue to trade and the expected lifetime of the brand/trademark. Amortisation is charged on assets with finite lives on a straight-line basis over a period appropriate to the asset''s useful life. The carrying values of brands/ trademarks with finite and indefinite lives are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The Company does not have any brands/trademarks with indefinite useful lives.

The Company owns 115 number as on March 31, 2021 (92 number as on March 31, 2020) registered trademarks pertaining to Brand, Sub-brands and Designs in India. The Company has also entered into royalty agreements with few companies for use of Polycab brand on specific products and charges fees for the same. These intellectual property and royalty income are solely owned and earned by the Company and is not shared with any stakeholder. Intellectual Property has not been capitalised in the books as it does not meet the recognition criteria in Ind AS 38.

iii. Research and development expenditure

During the year, the Company has incurred Capital R&D expenditure amounting to ''31.94 million (March 31, 2020 ''3.27 million) which have been included in property, plant and equipment. Further, Revenue R&D expenditure incurred amounting to ''175.60 million (March 31, 2020 ''72.33 million ) which have been charged to the respective revenue accounts. Expenditure on research and development activities is recognised in the Statement of Profit and Loss as incurred. Development expenditure is capitalised as part of cost of the resulting intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition, the asset is measured at cost less accumulated amortisation and any accumulated impairment losses, if any.

iv. De-recognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in the statement of profit and loss when the asset is derecognised.

Assets	Useful life
Computer software	3 year

The residual values, useful lives and methods of amortisation of Intangible assets are reviewed at each financial year end and adjusted prospectively.

The Intangible Assets include license and software of Gross carrying amount of ''70.28 million (March 31, 2020 ''70.47 million) which has been fully amortised over the past periods and are being use by the Company.

Intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets.

i. Interests in joint ventures

A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The considerations made in determining whether significant influence or joint control are similar to those necessary to determine control over the subsidiaries.

Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.

Upon first-time adoption of Ind AS, the Company had elected to measure its investments in subsidiaries, associates and joint ventures at the Previous GAAP carrying amount and use it as its deemed cost on the transition date.

ii. Business Combinations

(b) On May 6, 2020, the Company acquired the balance 50% equity shares in Ryker Base Private Limited making it a wholly-owned subsidiary at consideration of ''303.80 million , Put Option liability of ''49.75 million derecognised against such consideration paid for. This acquisition would strengthen the Company''s operations and help the Company deliver better quality products to consumers.

(c) During the current year, the Company has received in principle approval from Reserve Bank of India to wind up Polycab Wires Italy SRL (PWISRL). Accordingly, PWISRL was liquidated and closure certificate was issued on March 5, 2021 by the Italian authorities. The related closing formalities with RBI are in progress. The impact of closure of PWISRL on the financial statements is not material.

(d) Refer note 6 to the Consolidated Financial Statements for information on financial information, principal place of business and the Company''s ownership interest in the above subsidiaries and joint venture.

The Company uses the acquisition method of accounting to account for business combinations. The Company measures goodwill as of the acquisition date at the difference of the fair value consideration transferred (including fair value of previously held interest and contingent consideration) less the net fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed. When such difference results into deficit, the excess is recognised in equity as capital reserve.

Business combination involving entities or businesses under common control is accounted for using the pooling of interest method. Under pooling of interest method, the assets and liabilities of combining entities are reflected at their carrying amount and no adjustments are made to reflect fair values.

Transaction costs that the Company incurs in connection with a business combination are charged to Statement of Profit and Loss account.

(a) Trade receivables are usually non-interest bearing and are generally on credit terms up to 90 days except EPC business. The Company''s term includes charging of interest for delayed payment beyond agreed credit days. Company entities charge interest for delayed payments in certain cases depending on factors, such as, market conditions and past realisation trend.

(b) For EPC business trade receivables are non-interest bearing and credit terms are specific to contracts.

(c) For explanations on the Company''s credit risk management processes, Refer note 38(B).

(d) The Company follows life time expected credit loss model. Accordingly, deterioration in credit risk is not required to be evaluated annually.

(e) Trade receivables have been pledged as security against bank borrowings, the terms relating to which have been described in Note 18(B)

(f) Refer note 37 for accounting policies on financial instruments.

(g) No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person, except the dues referred in note 35(F)(iii). Further, no trade or other receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

Income tax expenses comprise current tax and deferred income tax and includes any adjustments related to past periods in current and/or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current and deferred taxes are recognised in statement ofprofit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Income tax received/receivable pertains to prior period recognised when reasonable certainty arise for refund acknowledged by the Income-tax department. Company periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount for financial reporting purposes at the reporting date. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted at the reporting date. The effect of changes in tax rates on deferred income tax assets and liabilities is recognised as income or expense in the period that includes the enactment or the substantive enactment date.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for deductible temporary differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax asset to the extent that it has become reasonably certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying unit intends to settle the asset and liability on a net basis.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

The major tax jurisdiction of the Company is India. The Company''s tax return for past years are generally subject to examination by the tax authorities. The Company has ongoing disputes with income tax authorities in India. The disputes relate to tax treatment of certain expenses claimed as deductions or manner of computation of certain income, expenses. However, there are no pending tax demands from Income-tax authorities as on March 31, 2021. The Company is contesting some of the claims made by it before tax authorities in tax returns, assessments. The management of the Company is of the opinion that such claims will, most likely result in refund of taxes from Income-tax department aggregating to '' 46.15 million. The Company has made provisions for taxes basis its best judgement, considering past resolutions to disputed matters by adjudicating authorities, prior year assessments and advice from external experts, if required. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax laws and prior experience.

Further, the Company periodically receives notices and inquiries from Indian income tax authorities related to the Company''s operations. The Company has evaluated these notices and inquiries and has concluded that any consequent income tax claims or demands, if any, by the income tax authorities will not succeed on ultimate resolution.

The tax rate used for the March 31, 2021 and March 31, 2020 reconciliations above is the corporate tax rate of 25.17%, payable by corporate entities in India on taxable profits under Indian Income Tax Laws.

During the previous year, the Company elected to exercise the option of reduced Corporate income-tax rate from 34.94% to 25.17% as permitted under Section 115BAA of the Income-tax Act, 1961 as per the amendment notified in the official Gazette dated December 12, 2019. Accordingly, the Company has recognised Provision for Income Tax for the year ended March 31, 2020 and re-measured its Deferred Tax Assets or Liabilities basis the reduced tax rate prescribed in the said section. The impact of the said change recognised in the statement of Profit & Loss of ''71.06 million pertaining to earlier years is recognised during the previous year.

14. Inventories

Accounting policy

Raw materials, traded goods, Work-in-progress, finished goods, packing materials, project material for long-term contracts, scrap materials and stores and spares are valued at lower of cost or net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, packing materials, and stores and spares is determined on a First In-First Out (FIFO) basis and includes all applicable costs, including inward freight, incurred in bringing goods to their present location and condition.

Work-in-progress and finished goods are valued at lower of cost or net realisable value. Cost includes direct materials as aforesaid, direct labour cost and a proportion of manufacturing overheads based on total manufacturing overheads to raw materials consumed.

Stock-in-trade are valued at lower of cost and or realisable value. Cost includes cost of purchase and includes all applicable costs, including inward freight, incurred in bringing the inventories at their location and condition. Cost is determined on a weighted average basis.

The stocks of scrap materials have been taken at net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Copper and aluminium is purchased on provisional price with option to fix the purchase price based on current or future pricing model based on LME. Such feature is kept to hedge against exposure in the value of inventory of copper and aluminium due to volatility in copper and aluminium prices. Since, the value of the copper and aluminium changes with response to change in commodity pricing index, embedded derivatives (ED) is identified and segregated in the contract. The ED so segregated, is treated like commodity derivative and qualify for hedge accounting. These derivatives are put into a Fair Value hedge relationship with respect to inventory. The Company designates only the spot-to-spot movement of the copper and aluminium inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. Hedge accounting is discontinued when the hedging instrument is settled, or when it no longer qualifies for hedge accounting or when the hedged item is sold (Refer note 39).

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having 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 final dividend proposed by the Board of Directors is subject to the approval of the 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.

(d) Aggregate number of bonus share issued and share issued for consideration other than cash during the period of 5 years immediately preceding the reporting date:

There were no buy back of shares or issue of shares pursuant to contract without payment being received in cash during the previous 5 years.

(e) Dividend Accounting policy

Final dividend on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.

The Company declares and pays dividend in Indian rupees in accordance with its dividend distribution policy . The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.

Accounting policy

Equity settled share based payments to employees and other providing similar services are measured at fair value of the equity instruments at grant date.

The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The increase in equity recognised in connection with share based payment transaction is presented as a separate component in equity under "ESOP Outstanding". The amount recognised as an expense is adjusted to reflect the actual number of stock options that vest. For the option awards, grant date fair value is determined under the option-pricing model (Black-Scholes). Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures materially differ from those estimates. Corresponding balance of a ESOP Outstanding is transferred to general reserve upon expiry of grants or upon exercise of stock options by an employee.

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

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

Employee stock option plan

The Company had instituted an ESOP Plan 2018, ESOP Performance Scheme, and ESOP Privilege Scheme as approved by the Board of Directors and Shareholders dated August 30, 2018 for issuance of stock option to eligible employees of the Company.

Under Employee Stock Options Performance Scheme 2018 the options will be vested in the specified ratio subject to fulfilment of the employee performance criteria laid down in the scheme. This shall be monitored annually as per the performance evaluation cycle of the Company and options shall vest based on the achieved rating to the employee.

Under Employee Stock Options Privilege Scheme 2018 the options are vested over a period of one year subject to fulfilment of service condition.

Expected volatility is based on historical stock volatility of comparable Companies operating within the same industry. The historical stock prices of comparable Companies has been observed for a period commensurate to the Life of option.

Pursuant to the said scheme, Stock options convertible into 22,12,500 equity shares vide ESOP Performance Scheme and 142,250 equity shares vide ESOP Privilege Scheme of ''10 each were granted to eligible employee including group companies at an exercise price of ''405/-.

(a) Capital Reserve:

The Company has created the reserve pursuant to amalgamation in an earlier year.

(b) Securities premium:

Amount received in excess of face value of the equity shares is recognised in Securities Premium . The Company''s share of IPO expenses has been adjusted with securities premium account considering the successful completion of IPO process on April 16, 2019. In case of equity-settled share based payment transactions difference between fair value on grant date and nominal value of share is accounted as Securities Premium. It will be used as per the provision of Companies Act, 2013

(c) General reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to General Reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to General Reserve is not required under the Companies Act, 2013. General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit or loss.

(c) ESOP Outstanding

Fair value of equity-settled share based payment transactions with employees is recognised in Statement of Profit and Loss with corresponding credit to Employee Stock Options Outstanding . The Company has two stock option schemes under which options to subscribe for the Company''s shares have been granted to certain employees. The ESOP Outstanding is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

(a) The above loans are secured by way of

(i) First pari passu charge by way of registered mortgage on specific immovable fixed assets at Halol and hypothecation of all movable fixed assets acquired on or after April 1, 2015.

(ii) Second pari passu charge by way of hypothecation of all movable fixed assets appearing in balance sheet as on March 31, 2015 and on all current assets of the Company.

(iii) Charges with respect to above borrowing has been created in favour of security trustee. No separate charge created for each of the borrowing.

(a) The above loans are secured by way of

(i) Secured borrowings from banks are secured against pari passu first charge by way of hypothecation of inventories and receivables .

(ii) Pari passu first charge on specific properties, plant and equipments of the Company such as Daman staff quarters, Daman godown premises, factory land and building at Halol and Daman and office building at Mumbai.

(iii) Pari passu first charge by way of hypothecation of all movable fixed assets appearing in balance sheet as on March 31, 2015.

(iv) Pari passu second charge by way of registered mortgage on all movable assets acquired on or after April 1, 2015.

(v) Charges with respect to above borrowing has been created in favour of security trustee. No separate charge has been created for each of the borrowing.

19. Trade payables Accounting policy

These amounts represents liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 to 90 days of recognition other than usance letter of credit. Trade payables are presented as current financial liabilities.

The Company enters into arrangements for purchase under usance letter of credit issued by banks under non-fund based working capital limits of the Company. Considering these arrangements are majorly for raw materials with a maturity of up to twelve months, the economic substance of the transaction is determined to be operating in nature and these are recognised as acceptances under trade payables.

(a) Acceptances represent amounts payable to banks on due date as per usance period of Letter of Credit (LCs) issued to raw material vendors under non-fund based working capital facility approved by Banks for the Company. The arrangements are interestbearing. Non-fund limits are secured by first pari passu charge over the present and future current assets of the Company.

(b) Others includes amount payable to vendors, employees liability and accrual of expenses that are expected to be settled in the Company''s normal operating cycle or due to be settled within twelve months from the reporting date.

(c) For explanations on the Company''s liquidity risk management processes Refer note 38 (C).

(b) There are no amounts due for payment to the Investor Education and Protection Fund under Section 125 of Companies Act, 2013 as at the year end.

(c) Company has provided a guarantee for credit facility availed by the Ryker Base Private Limited and Tirupati Reels Private Limited, amounting to ''4,184.62 million [$ 25 million and 2,347 million] (March 31, 2020: ''1,243.87 million [$ 12.5 million]) and ''520.00 million (March 31, 2020: ''520.00 million ) respectively. The fair value of corporate guarantee ''15.31 million (March 31, 2020: ''11.21 million ) has been included in carrying cost of investment.

(d) Information as required to be furnished as per Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended March 31, 2021 and year ended March 31, 2020 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

millinnl

Provisions

Accounting policy:

A provision is recognised when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the Statement of Profit & Loss. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provision is recognised for expected warranty claims and after sales services when the product is sold or service provided to the customer, based on past experience of the level of repairs and returns. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually. It is expected that significant portion of these costs will be incurred in the next financial year and all will have been incurred within warranty period after the reporting date. Assumptions used to calculate the provisions for warranties were based on current sales levels and current information available about returns during the warranty period for all products sold.

. Revenue from operations Accounting Policy

IND AS 115 was made effective from April 1, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. The new revenue standard replaced IND AS 18 & IND AS 11 and interpretations on revenue recognition related to sale of goods and services. The Company has applied the modified retrospective approach and accordingly has included the impact of Ind AS 115.

(i) Measurement of Revenue

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, incentive schemes, if any, as per contracts with customers. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring good or service to a customer. Taxes collected from customers on behalf of Government are not treated as Revenue.

(ii) Sale of goods

Revenue from contracts with customers involving sale of these products is recognised at a point in time when control of the product has been transferred at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, and there are no unfulfilled obligation that could affect the customer''s acceptance of the products and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. At contract inception, the Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue from contracts with customers is recognised when control of goods or services are transferred to customers and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The point of time of transfer of control to customers depends on the terms of the trade-CIF, CFR or DDP, ex-works, etc.

(iii) Revenue from Construction contracts

Performance obligation in case of revenue from long-term contracts is satisfied over the period of time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. However, the same may not be possible if it lacks reliable information that would be required to apply an appropriate method of measuring progress. In some circumstances, if the Company is not able to reasonably measure the outcome of a performance obligation, but expects to recover the costs incurred in satisfying the performance obligation, the Company shall recognise revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.

Contract asset is the entity''s right to consideration in exchange for goods or services that the entity has transferred to the customer. A contract asset becomes a receivable when the entity''s right to consideration is unconditional, which is the case when only the passage of time is required before payment of the consideration is due.

Contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. The timing of the transfer of Control varies depending on individual terms of the sales agreements.

The total costs of contracts are estimated based on technical and other estimates. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in Profit & Loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract.

In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss. Contract revenue earned in excess of billing is reflected under as "contract asset" and billing in excess of contract revenue is reflected under "contract liabilities".

(iv) Variable consideration

It includes volume discounts, price concessions, liquidity damages, incentives, etc. The Company estimates the variable consideration with respect to above based on an analysis of accumulated historical experience. The Company adjust estimate of revenue at the earlier of when the most likely amount of consideration the Company expect to receive changes or when the consideration becomes fixed.

(v) Schemes

The Company operates several sales incentive programmes wherein the customers are eligible for several benefits on achievement of underlying conditions as prescribed in the scheme programme such as credit notes, tours, kind etc. Revenue from contract with customer is presented deducting cost of all these schemes.

(vi) Significant Financing Components

In respect of advances from its customers, using the practical expedient in Ind AS 115, the Company does not adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be within normal operating cycle. Retention money receivable from project customers does not contain any significant financing element, these are retained for satisfactory performance of contract.

(vii) Warranty

The Company typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. Refer to the accounting policy on warranty as per note 22. In certain contracts, the Company provides warranty for an extended period of time and includes rectification of defects that existed at the time of sale and are normally bundled together with the main contract. Such bundled contracts include two performance obligations because the promises to transfer the goods and services and the provision of service-type warranty are capable of being distinct. Using the relative stand-alone selling price method, a portion of the transaction price is allocated to the service-type warranty and recognised as a liability. Revenue is recognised over the period in which the service-type warranty is provided on a basis appropriate to the nature of the contract and services to be rendered.

(viii) Right to return

When a contract provides a customer with a right to return the goods within a specified period, the Company estimates the expected returns using a probability-weighted average amount approach similar to the expected value method under Ind AS 115.

At the point of sale, a refund liability and a corresponding adjustment to revenue is recognised for those products expected to be returned. At the same time, the Company has a right to recover the product when customers exercise their right of return. Consequently, the Company recognises a right to returned goods asset and a corresponding adjustment to cost of sales. The Company uses its accumulated historical experience to estimate the number of returns on a portfolio level using the expected value method. It is considered highly probable that a significant reversal in the cumulative revenue recognised will not occur given the consistent level of returns over previous years. The Company updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each reporting period. Refer to above accounting policy on variable consideration.

For goods expected to be returned, the Company presented a refund liability and an asset for the right to recover products from a customer separately in the balance sheet.

(ix) Onerous Contracts

A provision for onerous contract is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligation under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on assets associated.

(x) Export incentives

Export incentives under various schemes notified by the Government have been recognised on the basis of applicable regulations, and when reasonable assurance to receive such revenue is established. Export incentives income is recognised in the statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

(xi) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Government grants are recognised in the statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

Trade receivables are usually non-interest bearing and are generally on credit terms up to 90 days except EPC business. Provision for expected credit losses on trade receivables recognised/(reversed) during the year of ''(51.30) million (March 31, 2020: ''256.06 million ). The Company has channel finance arrangement for providing credit to its dealers. Evaluation is made as per the terms of the contract i.e. if the Company does not retain any risk and rewards or control over the financial assets, then the entity derecognises such assets upon transfer of financial assets under such arrangement with the banks.

No single customer contributed 10% or more to the Company''s revenue for the year ended March 31, 2021 and March 31, 2020.

Contract assets are initially recognised for revenue earned from installation services as receipt of consideration is conditional on successful completion of installation. Upon completion of installation and acceptance/certifications by the customer, the amounts recognised as contract assets are reclassified to trade receivables. The decrease in contract assets as on March 31, 2021 is on account of acceptance/Certification of installation services for which work were done by the Company in earlier period. During the year ''Nil (March 31, 2020: ''4.24 million ) was recognised as provision for expected credit losses on contract assets.

Contract liabilities include advances received towards EPC projects as well as transaction price allocated to unexpired service contracts. The outstanding balances of these accounts increased in 2020-21 due to the continuous increase in the Company''s customer base and contracts where billing is in excess of revenue.

Other income Accounting Policy:

Other income is comprised primarily of interest income, dividend income, gain on investments and exchange gain on forward contracts and on translation of other assets and liabilities.

Interest income on financial asset measured either at amortised cost or FVTPL is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

Dividend income from investments is recognised when the shareholder''s right to receive payment has been established.

Employee benefits expense

Accounting Policy

(i) Short-term employee benefits

AU employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages, incentives, special awards, medical benefits etc. and the expected cost of ex-gratia are charged to the Statement of Profit & Loss account in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Compensated absences

The Company has revised its leave policy applicable to all employees except for certain categories of employees in Daman factory location effective April 1, 2019. The Company estimates and provides the liability for such short-term and long-term benefits based on the terms of the policy. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Remeasurement gains/losses on defined benefit plans are immediately taken to the Statement of Profit & Loss and are not deferred.

Defined contribution plans

Retirement benefit in the form of provident fund and ''Employer-Employee Scheme'' are defined contribution schemes. The Company recognises contribution payable to the provident fund and ''Employer Employee'' scheme as an expenditure, when an employee renders the related service. The Company has no obligation, other than the contribution payable to the funds. The Company''s contributions to defined contribution plans are charged to the Statement of Profit & Loss as incurred.

Defined benefit plan

The Company operates a defined benefit gratuity plan for its employees. The costs of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end using the projected unit credit method. The discount rate used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations. Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the Balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to Statement of Profit & Loss in subsequent periods. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Past service costs are recognised in profit or loss on the earlier of:

• The date of the plan amendment or curtailment, and

• The date that the Company recognises related restructuring costs.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in Statement of profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Share based payment

Equity settled share based payments to employees and other providing similar services are measured at fair value of the equity instruments at grant date.

The fair value determined at the grant date of the equity-settled share based payment is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimates of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any is, recognised in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the shared option outstanding account (Refer note 17(g)).

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

) Defined Benefit plan

Gratuity Valuation As per actuary

In respect of Gratuity, the Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, funded defined benefits plan for qualified employees. The scheme provided for lump sum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The Company has provided for gratuity based on the actuarial valuation done as per Project Unit Credit Method.

Defined benefit plans expose the Company to actuarial risks such as

(i) Interest rate risk

A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of asset.

(ii) Salary Risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

(iii) Investment Risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

(iv) Asset Liability Matching Risk

The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

(v) Mortality risk

Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk. If actual mortality rates are higher than assumed mortality rate assumption than the gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

(vi) Concentration Risk

Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

(vii) Variability in withdrawal rates

If actual withdrawal rates are higher than assumed withdrawal rate assumption then the gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

(viii) Regulatory Risk

Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). There is a risk of change in the regulations requiring higher gratuity payments.

A separate trust fund is created to manage the Gratuity plan and the contributions towards the trust fund is done as guided by rule 103 of Income Tax Rules, 1962.

The Company operates a defined benefit plan, viz., gratuity for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The most recent actuarial valuation of the plan assets and the present value of defined obligation were carried out as at March 31, 2021 an external independent fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method.

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

The estimates of future salary increases, considered in actuarial valuation, takes 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 plan assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

A quantitative sensitivity analysis for significant assumption as at March 31, 2021 is as shown below:

Sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be co-related. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

Methodology for Defined Benefit Obligation:

The Projected Unit Credit (PUC) actuarial method has been used to assess the plan''s liabilities, including those related to death-in-service and incapacity benefits.

Under PUC method a projected accrued benefit is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active members of the plan. The projected accrued benefit is based on the plan''s accrual formula and upon service as of the beginning or end of the year, but using a member''s final compensation, projected to the age at which the employee is assumed to leave active service. The plan liability is the actuarial present value of the projected accrued benefits for active members.

Projected benefits payable in future years from the date of reporting.

Borrowing costs that are directly attributable to the acquisition, construction or erection of qualifying assets are capitalised as part of cost of such asset until such time that the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale.

Capitalisation of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended uses are complete. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs include exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

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) Other Defined Benefit and contribution Plans

Provident Fund

The Company contribute towards Provident Fund to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company contributes towards Provident Fund managed by Central Government and has recognised ''77.45 million (31st March, 2020-''82.86 million ) for provident fund contributions in the Statement of Profit and Loss.

Pension Fund

Contribution to National Pension Scheme, a defined contribution scheme, is made at predetermined rates to the asset management companies under National Pension Scheme and is charged to the statement of profit and loss. The Company contributes has recognised ''9.25 million (March 31, 2020 ''7.56 million ) for contribution to National Pension Scheme in the Statement of Profit and Loss.

Compensated absences (unfunded)

In respect of Compensated absences, accrual is made on the basis of a year-end actuarial valuation except for Halol worker in pursuance of the Company''s leave rules. The Company has provided for compensated absences based on the actuarial valuation done as per Project Unit Credit Method except for Halol worker. The Company had provided for compensated absences for Halol worker based on the Company''s leaves rules. The leave obligation cover the Company''s liability for earned leave. The amount of the provision of ''82.38 million (year ended March 31, 2020 ''93.16 million ) is presented as non-current and ''25.69 million (year ended March 31, 2020 ''27.91 million ) is presented as current. The Company contributes has recognised ''0.82 million (March 31, 2020 ''43.00 million ) for Compensated absences in the Statement of Profit and Loss.

Earnings per share Accounting Policy

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as fresh issue, bonus issue that have changed the number of equity shares outstanding, without a corresponding change in resources.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue equity shares were exercised or converted during the year. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares

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Mar 31, 2019

1 Corporate information

Polycab India Limited (‘The Company’) is a public Limited company (CIN- U31300DL1996PLC266483) domiciled in India and incorporated under the provisions of the Companies Act, 1956. The status of the Company Polycab Wires Private Limited has been changed from Private Limited to Public Limited as per the approval received from Registrar of Companies, delhi on August 29, 2018 and consequently the name of the Company has been changed to Polycab Wires Limited. The name of the Company has been further changed to Polycab India Limited with Certificate of Incorporation pursuant to change of name dated October 13,2018. The Registered office of the company is situated at E-554, Greater kailash-ll, New delhi-110048. The Company is one of the Largest manufacturers of various types of cables and wires. The Company is also in the business of Engineering, Procurement and Construction (EPC) projects, Manufacturing and trading of Electrical Wiring Accessories, Electrical appliances and Agro Pipe and pumps. The Company’s manufacturing facilities are Located at Daman in Daman and Diu, halol in Gujarat, Nashik in Maharashtra and Roorkee in Uttarakhand.The Company caters to both domestic and International markets.

The Company has entered into the Listing agreement with the Securities and Exchange Board of India (‘SEBI’) on 15 April 2019, pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as a result of which its shares have started trading on the national Stock Exchange (NSE) and Bombay Stock Exchange (BSE) on 16 April 2019.

2.1 Significant accounting judgements, estimates and assumptions

In the course of applying the policies outlined in all notes, the Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

(a) Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the Standalone Financial Statements:

Leasehold land arrangement

The Company has entered into land lease arrangement at various locations. Terms of such lease ranges from 30-90 years. In case of lease of land for 90 years and above, it is likely that such leases meet the criteria that at the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the Leased asset.accordingly,such Lease is classified as finance Lease.Other Land Lease are classified as operating leases.

(b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next Financial year, are described below. The Company based its assumptions and estimates on parameters available when the Standalone Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Cost to complete

The Company’s management estimate the cost to complete for each project for the purpose of revenue recognition and recognition of anticipated losses of the projects, if any. In the process of calculating the cost to complete, Management conducts regular and systematic reviews of actual results and future projections with comparison against budget. The process requires monitoring controls including Financial and operational controls and identifying major risks facing the Company and developing and implementing initiative to manage those risks. The Company’s Management is confident that the costs to complete the project are fairly estimated.

(ii) Impairment of investments in subsidiaries and joint-ventures

Determining whether the investments in subsidiaries, joint ventures and associates are impaired requires an estimate in the value in use of investments. In considering the value in use,the Directors have anticipated the future market conditions and other parameters that affect the operations of these entities.

(iii) Provisions and liabilities

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires application of judgement to existing facts and circumstances which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(iv) Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognized.

(v) Fair value measurements

When the fair values of Financial assets or Financial liabilities recorded or disclosed in the Standalone Financial Statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including multiples and the Discounted Cash flow (DCF model). The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.

(vi) Taxes

Deferred tax assets are recognised for unused tax Losses to the extent that it is probable that taxable profit will be available against which the Losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

(vii) Impairment of non-Financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If an indication exists, or when the annual impairment testing of the asset is required, the Company estimates

The asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value Less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from the other assets or group of assets. When the carrying amount of an asset or CGU exceeds it recoverable amount, the asset is considered as impaired and it’s written down to its recoverable amount.

(viii) Defined benefit plans

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its Long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. ALL assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

The Company recognize the following changes in the net defined benefit obligation under employee benefit expenses in statement of Standalone Statement of Profit & Loss:

A) Service cost comprising current service costs, past service costs, gains and Losses on curtailments and non-routine settlements.

B) Net interest expense or lncome.

Remeasurements, comprising of actuarial gains and Losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the Standalone balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or Loss in subsequent periods.

2.2 Standards Issued but not Effective:

The Company has applied the Companies (Indian Accounting Standards), Amendment Rules 2018 which is effective from 01 April 2018,while preparing the restated Ind as financial statements.

Accordingly, the Company has applied the standards and interpretations issued which are not effective to the reporting period presented. Thus, all the Ind AS applicable till date have been applied, and there are no standards which are issued but not yet effective, (refer note 47)

(ii) The above includes inventories held by third parties amouting to Rs. 1787.77 million (31 March 2018 - Rs. 29.80 million)

(iii) During the year ended 31 March 2019, Rs. 39.04 million (31 March 2018 - Rs. 13.00 million ) was recognised as an expense for inventories carried at net realisable value.

(iv) Inventories are hypothecated with the bankers against working capital Limits. (Refer note - 18(A))

(v) The Company enters into purchase contract of copper and aluminium, in which the amount payable is not fixed on the date of purchase and the same is affected by changes in LME prices in future. Such transactions are entered into to protect the Company against the risk of price movement in the purchased copper and aluminium. This is designated as a fair value hedge as it is taken to hedge the exposure to changes in fair value due to commodity price risks. The open hedge exposures are valued at the fair value and the impact is adjusted to the value of the inventory to the extent the hedged is considered effective. (Refer Note 42 (A)(iii))

Notes

- Trade receivables are non-interest bearing and are Generally on credit terms up to 90 days except EPC business.

- For EPC business trade receivables are non-interest bearing and credit terms are specific to contracts.

- For explanations on the Company’s credit risk management processes, refer note 42(B)

- The Company follows life time expected credit loss model. Accordingly, deterioration in credit risk is not required to be evaluated annually.

On 31 March 2019,the Company classified certain property, plant and equipmentrs. 0.22 million (31 March 2018 Rs. 2.58 million) and other asset Nil (31 March 2018 Rs. 0.12 million) retired from active use and held for sale recognised and measured in accordance with Ind-AS 105“Non Current Assets Held For Sale and Discontinued Operations “at lower of its carrying amount and fair value less costto sell. The Company expects to complete the sale in Financial year 2019-20.

(C) TERMS/RIGHTS ATTACHED TO EOUITY SHARES

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.The Company declares and pays 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.

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.

Subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company, the Board of Directors has recommended a final dividend of Rs. 3/- per equity share of Rs. 10/- each (30%) for the Financial year 2018-19. During the year ended 31 March 2018, the amount of per share interim dividend recognized and paid to equity shareholders Rs. 1 per share.

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, including shares held in the name of individual’s trust.

* During the year ended 31 March 2019, 2,18,17,870 equity shares were transferred to an escrow account by the shareholders in a

Pre-Initial Public Offer (IPO) sale in the proportion mentioned below. These shareholders continue to be the beneficial owners of the shares until the completion of the IPO process.

The equity shares of the Company were Listed on national Stock Exchange of India Limited (NSE) via ID POLYCAB and BSE Limited (BSE) via ID 542652 on 16 April 2019.

The Company has estimated Rs. 554.10 million as IPO related expenses and allocated such expenses between the Company Rs. 165.33 million and selling shareholders Rs. 388.77 million in proportion to the equity shares allotted to the public as fresh issue by the Company and under offer for sale by selling shareholders respectively. As at 31 March 2019, the total amount attributable to the Company amounting to Rs. 148.28 million has been adjusted to securities premium and balance amountRs. 17.05 million charged off to Profit and Loss account.

(E) Aggregate number of bonus share issued and share issued for consideration other than cash during the period of 5 years immediately preceding the reporting date :

70,602,919 equity shares of Rs. 10 each fully paid up issued as Bonus shares in the ratio of 1:1 by capitalization of Securities premium during the year ended 31 March 2015.

* Securities premium represents the surplus of proceeds received over the face value of share at the time of issue of shares. The Company’s share of IPO expenses has been adjusted with securities premium account considering the successful completion of IPO process on 16 April 2019.

** General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit or Loss.

# The Company has two stock option schemes under which options to subscribe for the Company’s shares have been granted to certain employees. The ESOP Outstanding is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 36(C) for further Details of these plans.

The above loans are secured by way of:

I) First pari passu charge byway of registered mortgage on specific immovable fixed assets at Halol and hypothecation of all movable fixed assets acquired on or after 1 April 2015.

Ii) Second pari passu charge byway of hypothecation of all movable fixed assets appearing in balance sheet as on 31 March 2015 and on all current assets of the Company.

Iii) Charges with respect to above borrowing has been created in favor of lead banker in the consortium. No separate charge created for each of the borrowing.

Notes

(i) The Company offsets tax assets and liabilities if and only if it has a Legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relating to income taxes Levied by the same tax authority.

(ii) The Company has received CIT(A) order dated 09 March 2018 for AY 2012-13,2013-14,2014-15 and 2015-16 allowing Company’s major claims relating to sales tax subsidy as capital receipt, Additional depreciation, disallowance u/s 14A read with rule 8D and consequently carry forward losses and payment of tax under MAT. Company’s claim was partly allowed, Income Tax Dept has filed appeals in the tribunal against the Company and Company has also filed appeal against disallowance in these orders, Since subject matter is pending in the higher courts and therefore Company has not accounted for refund received/receivable on these orders which is Rs.1,003.42 million including interest Rs. 163.89 million u/s 234B and 234C of the Income Tax Act, 1961.

Note

(i) Secured borrowings from banks are secured against pari passu first charge byway of hypothecation of inventories and receivables .

(ii) Pari passu first charge on specific properties , plant and equipment’s of the Company such as Daman staff quarters, Daman godown premises, factory land and building at Halol and Daman and office building at Mumbai.

(iii) Pari passu first charge byway of hypothecation of all movable fixed assets appearing in balance sheet as on 31 March 2015.

(iv) Pari passu second charge byway of registered mortgage on all movable assets acquired on or after 1 April 2015.

(v) Charges with respect to above borrowing has been created in favour of lead banker in the consortium. No separate charge has been created for each of the borrowing.

3 Current Financial liabilities

(i) Acceptances represent amounts payable to banks on due date as per usance period of Letter of Credit (lcs) issued to raw material vendors under non-fund based working capital facility approved by Banks for the Company. These letter of credit are discounted by the vendors with their banks and the payments are made on due date to Banks by the Company along with interest payable as perterms of lcs. Non-fund limits are secured by first pari-passu charge over the present and future current assets of the Company.

(ii) For explanations on the Group’s liquidity risk management processes. (Refer note - 42 (C))

(iii) Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended 31 March 2019 and year ended 31 March 2018 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

iv) Revenue from contracts with customers includes excise duty collected of ‘ Nil (31 March 2018: Rs. 1,437.51 Million). Revenue from contracts with customers net of applicable taxes is Rs. 79,053.21 Million (31 March 2018: Rs. 67,518.55 million). Revenue from operations for previous periods up to 30 June 2017 includes excise duty. From 1 july 2017 onwards the excise duty and most indirect taxes in India have been replaced Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations for the year ended 31 March 2019 is not comparable with 31 March 2018.

V) Trade receivables are non-interest bearing and are Generally on terms of 30 to 90 days. In 31 March 2019, Rs. 540.92 Million (31 March 2018: Rs. 421.00 Million) was recognised as provision for expected credit Losses on trade receivables. The Company has channel finance arrangement for providing credit to its dealers. Evaluation is made as per the terms of the contract i.e. If the Company does not retain any risk and rewards or control over the Financial assets, then the entity derecognises such assets upon transfer of Financial assets under such arrangement with the banks.

Vi) Contract assets are initially recognised for revenue earned from installation services as receipt of consideration is conditional on successful completion of installation. Upon completion of installation and acceptance/certifications by the customer, the amounts recognised as contract assets are reclassified to trade receivables. The increase in contract assets in March 2019 is the result of the increase in ongoing installation services at the end of the year. In March 2019, Rs.7.58 Million (March 2018: Nil) was recognised as provision for expected credit Losses on contract assets.

Vii) Contract liabilities include advances received towards EPC projects as well as transaction price allocated to unexpired service contracts. The outstanding balances of these accounts increased in 2018-19 due to the continuous increase in the Company’s customer base and contracts where billing is in excess of revenue.

X) Performance obligation

Aggregate amount of the transaction price (net of tax) allocated to Long-term construction contracts that are partially or fully unsatisfied as at 31 March 2019 Rs.14,431.36 Million (31 March 2018 Rs.8,518.78 Million).The unsatisfied performance obligation is expected to be recognised within 24 months. Based on the General trend of period of contract and its period of execution approximately 54% of the unsatisfied performance obligation amount is expected to be satisfied within one year. The remaining amount is expected to be realised within the next 12-24 months. In certain contract, where the company has extended warranty/ maintenance services obligation,a separate performance obligation is identified and the transaction price is allocated accordingly.

Xi) Impact of lnd AS115

Ind AS 115 “ Revenue from Contracts with Customers” is mandatory for reporting periods beginning on or after 1 April 2018 and has replaced existing Ind AS related thereto.The Company has adopted the modified retrospective approach under the standard. Under this approach, no adjustments were required to be made to the retained earning as at 1 April 2018. Also the application of Ind AS 115 did not have any significant impact on recognition and measurement of revenue and related Items In the Financial results for the year 31 March 2019.

Xii) Disclosure in terms of Ind AS 111 on the accounting of joint operation

The Company has 50% interest in a joint operation with GTPL hathway Limited for an EPC project ofrs. 10,738.40 million, which has been awarded by Gujarat Fibre Grid Network Limited (GFGNL) during the FY 2018-19. The principle place ofjoint operation is in India.

The arrangements require unanimous consent from all parties for all relevant activities and hence it is classified as joint operation. The partners to the agreement have direct right to the assets and are jointly and severally Liable for the liabilities incurred by the un- incorporated joint operation. In accordance with Ind AS 111 on “Joint Arrangements’’ the Financial statements of the Company includes the Company’s share in the assets, liabilities, incomes and expenses relating to joint operations based on the Financial statements received from the respective operators. The income, expenditure, assets and liabilities of the joint operations are merged on line by line basis according to the participating interest with the similar items in the Financial Statements of the Company.

The table below provides summarized Financial information of the company’s share of assets, liabilities, income and expenses in the joint operations.

4 Earnings per share (EPS)

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

For the purpose of calculating diluted earnings per share, the net profit or losses for the year attributable to the equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares unless the effect of the potential dilutive equity shares is anti-dilutive.

Employee Stock Option Plan 2018

Pursuant to the resolutions passed by our Board on August 30, 2018 and our Shareholders on August 30, 2018, the Company approved the Employee Stock Option plan 2018 for issue of options to eligible employees which may result in issue of Equity Shares of not more than 35,30,000 Equity Shares. The company reserves the right to increase, subject to the approval of the shareholders, or reduce such numbers of shares as it deems fit.

The exercise of the vested option shall be determined in accordance with the notified scheme under the plan.

Employee Stock Option Performance Scheme 2018 and Employee Stock Option Privilege Scheme 2018

The Company also approved Employee Stock Option Performance Scheme 2018 and Employee Stock Option Privilege Scheme 2018 under which the maximum number of options granted to any grantee under “Performance Scheme” together with options granted in any other scheme shall not exceed 1 percent of the total share capital at the time of grant.

5 Commitments and contingencies

(A) LEASES

Operating lease: Company as lessee

The Company has taken industrial premises, residential building, Land (space for godowns) under various Lease agreements. There are no restrictions placed upon the Company by entering into these Leases. There are no clauses on contingent rent.

There are numerous interpretative issues relating to the Supreme Court (SC) judgement on PF dated 28th February, 2019. The company will update its provision, on receiving further clarity on the subject.

In respect of the items above, future cash outflows in respect of contingent Liabilities are determinable only on receipt of judgements/decisions pending at various forums/authority. The Company doesn’t expect the outcome of matters stated above to have a material adverse effect on the Company’s Financial conditions, result of operations or cash flows.

6 Gratuity and other post-employment benefit plans

(A) DEFINED BENEFIT PLAN-AS PER ACTUARIAL VALUATION

The Company operates a defined benefit plan, viz., 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 salary for each completed year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

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

The average expected future service as at 31 March 2019 is 8 years(31 March 2018 - 8 years).

The estimates of future salary increases, considered in actuarial valuation, takes 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 plan assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Sensitivity analysis is an analysis which will give the movement in liability if the assumptions were not proved to be true on different count. This only signifies the change in the liability if the difference between assumed and the actual is not following the parameters of the sensitivity analysis.

Maturity analysis of projected benefit obligation from the fund.

(C) SHARE-BASED PAYMENTS

employee stock option plan

During the year ended 31 March 2019, the Company had instituted an ESOP plan 2018, ESOP Performance Scheme, and ESOP privilege Scheme as approved by the Board of Directors and Shareholders dated 30 August 2018 for issuance of stock option to eligible employees of the Company.

Under employee Stock Options Performance Scheme 2018 the options will be vested in the specified ratio subject to fulfilment of the employee performance criteria Laid down in the scheme. This shall be monitored annually as per the performance evaluation cycle of the company and options shall vest based on the achieved rating to the employee.

Under employee Stock Options privilege Scheme 2018 the options are vested over a period of one year subject to fulfilment of service condition.

Expected volatility is based on historical stock volatility of comparable Companies operating within the same industry. The historical stock prices of comparable Companies has been observed for a period commensurate to the Life of option.

Pursuant to the said scheme, Stock options convertible into 2,147,500 equity shares vide ESOP Performance Scheme (Previous year: NIL) and 142,250 equity shares vide ESOP privilege Scheme (Previous year: NIL) of Rs. 10 each were granted to eligible employee at an exercise price of Rs. 405/-.

7 related party Disclosures

KEY MANAGEMENT PERSONNEL

Mr. Inder T. Jaisinghani Chairman and Managing Director

Mr. R. Ramakrishnan Chief Executive *

Mr. Ramesh T. Jaisinghani Whole time Director

Mr. Ajay T. Jaisinghani Whole time Director

Mr. Shyam lal Bajaj Chief Financial officer (w.e.f. 25 September 2018) and Whole time

Director- Finance (w.e.f. 15 December 2016)

Mr. Radhey Shyam Sharma Independent Director (w.e.f. 20 September 2018)

Mr. Tilokchand Punamchand ostwal Independent Director (w.e.f. 20 September 2018)

Mr. Pradeep Poddar Independent Director (w.e.f. 20 September 2018)

Mrs. Hiroo Mirchandani Independent Director (w.e.f. 20 September 2018)

Mr. Subramaniam Sai Narayana Company Secretary and compliance officer

*Mr. R. Ramakrishnan was Key Management personnel and Joint Managing Director of the Company till 23 May 2018.

Relatives of Key management personnel

Mr. Bharat A. Jaisinghani Son of Mr. Ajay T. Jaisinghani

Mr. Girdhari T. Jaisinghani Brother of Mr. Inder T. Jaisinghani

Mr. Kunal I. Jaisinghani Son of Mr. Inder T. Jaisinghani

Mr. Nikhil R. Jaisinghani Son of Mr. Ramesh T. Jaisinghani

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the period-end are unsecured and interest free and settlement occurs in cash. For the year 31 March 2019, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2018:’ Nil).This assessment is undertaken each Financial year through examining the Financial position of the related party and the market in which the related party operates.

8 Fair value measurements

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

Interest rate swaps, foreign exchange forward contracts and embedded commodity derivative are valued using valuation techniques, which employ the use of market observable inputs( closing rates of foreign currency and commodities).

Embedded foreign currency and commodity derivatives are measured similarly to the foreign currency forward contracts and commodity derivatives. The embedded derivatives are commodity and foreign currency forward contracts which are separated from purchase contracts . The management assessed that cash and cash equivalents, trade receivables, trade payables, short-term borrowings, loans to related party, loans to employees, short term security deposit and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the Financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values.

Fixed-rate and variable-rate loans are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair values of the Company’s interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The non- performance risk as at 31 March 2019 was assessed to be insignificant.

The fair values of the mutual funds are based on NAV at the reporting date.

The fair value of interest rate swaps are based on MTM bank rates as on reporting date.

The fair value of put option is determined using Monte Carlo Simulation which assumes a Geometric Brownian Motion for the modelling equity value. The key assumptions used for fair valuation of Put option are:

A) costofequity-17.0%-17.5%

B) WACC-12.5%-12.75%

C) Terminal growth rate - 6.0%

The Company enters into derivative Financial instruments with various counterparties, principally Financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves. All derivative contracts are fully cash collateralised, thereby eliminating both counterparty and the Company’s own non-performance risk. Mark-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognised at fair value.

9 Financial risk management objectives and policies

The Company’s principal Financial liabilities, other than derivatives, comprise loans and borrowings and trade and other payables. The main purpose of these Financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal Financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTPL investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management’ focus is to foresee the unpredictability and minimize potential adverse effects on the Company’s Financial performance. The Company’s overall risk management procedures to minimise the potential adverse effects of Financial market on the Company’s performance are as follows:

(A) MARKET RISK

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

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a Financial instrument will fluctuate because of changes in market interest rates. The Company’s 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 manages its interest rate risk by having a fixed and variable rate loans and borrowings. The Company’s approach is to keep its majority of borrowings at fixed rates of interest for long term funding. The Company also enters into interest rate swaps for long term foreign currency borrowings, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. At 31 March 2019, after taking into account the effect of interest rate swaps, approximately 72 % of the Company’s borrowings are at a fixed rate of interest (31 March 2018: 96%).

INTEREST RATE SENSITIVITY

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of Loans and borrowings affected, after the impact of hedge accounting. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

(ii) Foreign currency risk

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

10 Financial risk management objectives and policies

FOREIGN CURRENCY SENSITIVITY

The following tables demonstrate the sensitivity to a reasonably possible change in USD, Euro, GBP and CHF exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The Company’s exposure to foreign currency changes for all other currencies is not material. Sensitivity due to unhedged Foreign Exchange Exposures is as follows:

(iii) Commodity price risk

The Company’s exposure to price risk of copper and aluminium also arises from trade payables of the Company where the prices are linked to LME. Payment is therefore sensitive to changes in copper and aluminium prices. The trade payables are classified in the balance sheet as fair value through profit or loss. The option to fix prices are at future unfixed LME prices to hedge against potential Losses in value of inventory of copper and aluminium held by the Company. With effect from 1 April 2016, the Company applies fair value hedge for the copper and aluminium purchased whose price is to be fixed in future. Therefore, there is no impact of the fluctuation in the price of the copper and aluminium on the Company’s profit for the year ended 31 March 2019 to the extent of inventory on hand.

(B) CREDIT RISK

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

(i) Trade receivables

Credit risk has always been managed through credit approvals, establishing credit Limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business.On account of adoption of ind as 109,the Company uses expected credit loss model to assess the impairment loss or gain. The Company has applied Expected credit loss (ECL) model for measurement and recognition of impairment losses on trade receivables. ECL has been computed as a percentage of revenue on the basis of Company’s historical data of delay in collection of amounts due from customers and default by the customers along with management’s estimates.

The Company has channel finance arrangement for providing credit to its dealers. Evaluation is made as perthe terms of the contract i.e. If the Company does not retain any risk and rewards or control over the Financial assets, then the entity derecognises such assets upon transfer of Financial assets under such arrangement with the banks._

(C) LIQUIDITY RISK

The Company’s principle sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source of funding.

11 Hedging activity and derivatives

Fair value hedge of copper and aluminium price risk in inventory

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management’ focus is to foresee the unpredictability and minimize potential adverse effects on the Company’s Financial performance. The Company’s overall risk management procedures to minimise the potential adverse effects of Financial market on the Company’s performance are as follows:

The Company enters into contracts to purchase copper and aluminium wherein the Company has the option to fix the purchase price based on LME price of copper and aluminium during a stipulated time period. Accordingly, these contracts are considered to have an embedded derivative that is required to be separated. Such feature is kept to hedge against exposure in the value of inventory of copper and aluminium due to volatility in copper and aluminium prices. The Company designates the embedded derivative in the payable for such purchases as the hedging instrument in fair value hedging of inventory. The Company designates only the spot-to-spot movement of the copper and aluminium inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. Hedge accounting is discontinued when the hedging instrument is settled, or when it no longer qualifies for hedge accounting or when the hedged item is sold.

To test the hedge effectiveness between embedded derivatives and LME prices of Copper and Aluminium, the Company uses the said prices during a stipulated time period and compares the fair value of embedded derivative against the changes in fair value of LME price of copper and aluminium attributable to the hedged risk.

The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying embedded derivative is identical to the LME price of Copper and Aluminium. The hedge ineffectiveness can arise from the difference in timing of embedded derivative and LME strike price of Copper and Aluminium.

Disclosure of effects of fair value hedge accounting on Financial position:

Hedged item - Changes in fair value of inventory attributable to change in copper and aluminium prices.

Hedging instrument- Changes in fair value of the embedded derivative of copper and aluminium trade payables, as described above.

12 Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in Light of changes in economic conditions and the requirements of the Financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company’s policy is to keep the gearing ratio between 40% and 60%.The Company includes within net debt, interest bearing Loans and borrowings, trade and other payables, Less cash and cash equivalents.

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

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2019 and year ended 31 March 2018.

13 Provision for investment and loan to subsidiary

“As at 31 March 2019, the Company has investment of Euro 150,000 (Rs. 10.89 million) and Loan of Euro 388,276.11 C 30.17 million) in Polycab italy SRL (PWISRL), a wholly owned subsidiary company situated in italy.

PWISRL in its Financial statement had appropriated an amount of Euro 40,000 C 2.80 million) from Share Capital and Euro 438,276.11 C 34.06 million) from Loan given by the Company, to accumulated Losses of previous years and Capital Reduction Reserve to comply with the applicable italian accounting requirements in an earlier year.

The company had filed a compounding application with Reserve Bank of India (RBI) in response to which RBI directed our company to comply with alternatives. Currently, the company is in the process of evaluating the alternatives directed by RBI and will be responding in due course. Considering the status, no adjustment is made in the Financial statements for the year ended 31 March 2019.”

14 Subsequent events

The Company has completed initial public offering (IPO) including fresh issue of Rs. 4,000 million comprising of 73,88,058 equity shares of Rs. 10/- each at an issue price Rs. 538/- per share and 52,009 equity shares of Rs. 10/- each at an issue price Rs. 485/- per share for employee quota. The equity shares of the Company were Listed on national Stock Exchange of India Limited (NSE) and BSE Limited (BSE) w.e.f. 16 April 2019.

15 Standards issued but not effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company’s Financial statement are disclosed below. The Company intends to adopt these standards if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Second Amendment Rules, 2019 applicable from 1 April 2019 amending the following standard:

(i) Impact of Ind AS 116 - Leases

“On 30 March 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing Leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the recognition, measurement, presentation and Disclosure of Leases for both parties to a contract i.e., the Lessee and the Lessor. Ind AS 116 introduces a single Lessee accounting model and requires a Lessee to recognize assets and liabilities for all Leases with a term of more than twelve months, unless the underlying asset is of Low value. Currently, operating Lease expenses are charged to the statement of Profit & Loss. The Standard also contains enhanced Disclosure requirements for Lessees. Ind AS 116 substantially carries forward the Lessor accounting requirements in Ind AS 17

The effective date for adoption of Ind AS 116 is annual periods beginning on or after April 1, 2019. The standard permits two possible methods of transition:

- full retrospective - retrospectively to each prior period presented applying Ind AS 8 Accounting policies, Changes in Accounting Estimates and Errors

- Modified retrospective - retrospectively, with the cumulative effect of initially applying the Standard recognized at the date of initial application. Under modified retrospective approach, the Lessee records the Lease liability as the present value of the remaining Lease payments, discounted at the incremental borrowing rate and the right of use asset either as:

- Its carrying amount as if the standard had been applied since the commencement date, but discounted at Lessee’s incremental borrowing rate at the date of initial application or

- An amount equal to the Lease liability, adjusted by the amount of any prepaid or accrued Lease payments related to that Lease recognized under Ind AS 17 immediately before the date of initial application. Certain practical expedients are available under both the methods.

On completion of evaluation of the effect of adoption of lndas116, the Company is proposing to use the ‘Modified Retrospective Approach’ for transitioning to Ind AS 116,and take the cumulative adjustment to retained earnings, on the date of initial application (April1,2019). Accordingly, comparatives for the year ended 31 March 2019 will not be retrospectively adjusted.”

16 Standards issued but not effective

(ii) Amendment to existing issued Ind AS

“The MCA has also carried out amendments of the following accounting standards:

(a) Appendix C to Ind AS 12: Uncertainty over Income Tax Treatment

(b) Amendments to Ind AS 109: Prepayment Features with Negative Compensation

(c) Amendments to Ind AS 19: plan Amendment, curtailment or Settlement

(d) Amendments to Ind AS 28: Long-term interests in associates and joint ventures

(e) Annual improvement to Ind AS (2018)

Amendments to Ind AS 103: Party to a Joint Arrangements obtains control of a business that is a Joint Operation Amendments to Ind AS lll:Joint Arrangements Amendments to Ind AS 12: Income Taxes Amendments to Ind AS 23: Borrowing Costs application ofabove standards are not expected to have any significant impact on the Company’s Financial Statements.” Polycab India Limited (formerly known as ‘Polycab Wires Limited’)

17 Others

Figures relating to previous years has been regrouped wherever necessary to make them comparable with the current period figures. Figures representing Rs. 0.00 million is below Rs. 5,000.