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Notes to Accounts of V-Guard Industries Ltd.

Mar 31, 2023

The Company has not capitalised any borrowing cost in the current and previous year.

Right of use asset includes:-

(a) Leasehold land which represents land obtained on long term lease from Government authorities and others.

(b) Leasehold building which represents properties taken on lease for its factories, offices and warehouses, accounted for in accordance with principle of Ind AS 116 âLeases''. Refer Note 42.

During the year ended March 31, 2023, the Company has capitalized expenses amounting to '' 21.38 lakhs (March 31, 2022 - Nil) to the cost of property, plant and equipment / capital work-in-progress. Consequently, expenses disclosed under Note 36, other expenses are net of amounts capitalized by the Company.

Land, buildings, plant and equipments with a carrying amount of '' 27,746.88 lakhs as at March 31, 2023 (March 31, 2022 - Nil) are subject to a hypothecation to secure the term loans availed. The registration of mortgage is under process as on the reporting date.

(i) Others represents unsecured loan given to Mr. Gopal Singh, the landlord, for construction of building to be occupied by the Company, at an interest rate of 9% p.a. The loan is repayable by adjustment of monthly rent payable to the landlord pursuant to lease agreement entered for a period of five years. The landlord''s son has provided personal guarantee for the repayment of loan.

(ii) There are no loans as at March 31, 2023 and March 31, 2022 which have significant increase in credit risk or which are credit impaired.

(iii) Loans are non-derivative financial instruments which generate a fixed or variable interest income for the Company. The carrying value may be affected by the changes in the credit risk of the counter parties.

(i) Trade receivables are generally on terms of 15 to 90 days and are non-interest bearing except in case of overdue payments.

(ii) Trade receivables are hypothecated with the banks against working capital limits and non fund facilities availed from lenders.

(iii) Refer Note 45 for receivables from related parties.

(iv) Offsetting financial assets and financial liabilities: The Company provides certain incentives to selected customers, the amounts payable by the Company as at March 31, 2023 of '' 7,532.30 lakhs (March 31, 2022: '' 6,862.10 lakhs) are offset against receivables from the customers and only the net amounts are settled.

(b) Terms / rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of ''1 per share (March 31, 2022: ''1 per share). Each holder of equity share 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 equity share holders will be entitled to receive remaining assets of the Company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) Aggregate number of bonus shares issued, shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

The Company has issued 6,498,801 shares of face value of '' 1 each (March 31, 2022: 6,887,473 shares) during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan (ESOP) wherein part consideration was received in form of employee services.

(e) Shares reserved for issue under options and contracts

For details of shares reserved for issue under the employee stock option plan (ESOP) of the Company, refer Note 47.

Equity shares are pending to be issued as on March 31, 2023 pursuant to the Scheme of Amalgamation between the Company and Simon Electric Private Limited (Refer Note 48 and Statement of changes in equity).

(ii) Purchase invoice financing from banks is an arrangement where banks remit the amount due to suppliers on due dates and the Company repays the amount to banks at an agreed later date.

(iii) The Company has not made any defaults in the repayment of loans availed from banks during the year.

(iv) Channel financing facility from bank represents financing arrangement with limited recourse to the Company. The Company therefore continues to recognise receivables in their entirety in its balance sheet with corresponding liability presented as borrowings.

(i) Provision for compensated absences

The obligations for compensated absences cover the Company''s liability for paid leaves. The entire amount of the provision is presented as current as the Company does not have an unconditional right to defer settlement for any

of these obligations. However, based on past experience, the Company does not expect all employees to avail the full amount of accrued leave or require payment for such leave within the next 12 months. The current portion of provision per the actuarial valuation report, included in the total obligation for compensated absences, is ''244.69 lakhs (March 31, 2022: ''210.10 lakhs).

(ii) Provision for warranty:

A provision is recognized for expected warranty claims and after sales services on products sold during the year, based on past experience of the level of repairs and defective returns. It is expected that significant portion of these costs will be incurred in the next financial year and all will be incurred within five years after the reporting date. Assumptions used to calculate the provisions for warranties are based on current information available about defective returns based on the warranty period for the respective products sold.

(vii) Performance obligation

The performance obligation for sale of products and scrap are satisfied upon delivery / despatch of goods depending upon terms with customers and payment is generally due within 15 to 90 days from delivery. Some contracts provide customers with a right of return, volume based discounts, rebates and other promotion incentive schemes, which give rise to variable consideration subject to constraint. The contracts do not have a significant financing component. The Company offers standard warranty on selected products. The Company makes provision for same as per the principles laid down under Ind AS 37. The performance obligation for services is satisfied over time and payment is generally due upon completion of service and acceptance of the customer. There are no unsatisfied performance obligations as at March 31, 2023 and March 31, 2022.

(i) 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.

(d) On September 20, 2019, the Taxation Laws (Amendment) Ordinance, 2019 (''ordinance'') was passed introducing section 115BAA of the Income-tax Act, 1961 which allowed domestic Companies to opt for an alternative tax regime from FY 2019-20. As per the new tax regime, Companies are allowed to pay reduced income tax @ 22% (plus surcharge and cess) subject to foregoing of certain exemptions which were allowed earlier. Pursuant to the aforesaid amendment, the Company, during the year ended March 31, 2022 opted for lower rate of tax from financial year ended March 31, 2021 while filing income tax return for the year ended March 31, 2021 and accordingly recomputed income tax provision as per new tax regime for the year ended March 31, 2021 and has reversed current tax provision of '' 808.67 lakhs relating to prior year in the year ended March 31, 2022. Further the Company has restated the deferred tax assets and liabilities as on April 01, 2021 at the rate of 25.168%.

B) Contingent Liabilities

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

('' in lakhs)
Particulars	As at March 31, 2023	As at March 31, 2022
(a) Claims against the Company not acknowledged as debt	275.58	286.93
(b) Direct tax matters under dispute / pending before Income Tax Authorities	4,323.87	4,365.26
(c) Indirect tax matters for demands raised by goods and services tax / sales tax / VAT department pending before various appellate authorities	1,045.72	1,037.65
(d) Others	14.11	6.82
Total	5,659.28	5,696.66

Notes:

(i) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters and claims relating to Company''s products that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.

It is not practicable for the Company to estimate the timing of the cash outflows, if any, in respect of the above, pending resolution of respective proceedings.

(ii) The aforementioned amounts under disputes are as per the demands from various authorities for the respective periods and has not been adjusted to include further interest and penalty leviable, if any, at the time of final outcome of the appeals.

(iii) The Company does not expect any reimbursements in respect of the above contingent liabilities.

(i) The Company had acquired 74% equity stake in Guts Electro-Mech Limited ("Guts") on August 31, 2017 for a total purchase consideration of '' 618.26 lakhs which represents amount paid to promoters of Guts and subscription to fresh issue of equity shares of Guts. Guts is a public limited company engaged in the business of Switch Gear. The Company''s Board of Directors at its meeting held on July 27, 2022 approved acquisition of balance 26% equity shares of Guts by exercising call option in accordance with the Share purchase and subscription agreement dated August 31, 2017. Consequently, Guts has become a wholly-owned subsidiary of the Company.

(ii) Pursuant to the approval of the Board of directors in their meeting held on July 02, 2021, the Company incorporated a wholly owned subsidiary by the name of V-Guard Consumer Products Limited ("VCPL") on July 19, 2021 and invested in 121,089,961 equity shares of '' 10 each as at March 31, 2023 (March 31, 2022 -59,797,507 equity shares of '' 10 each). VCPL is incorporated with an objective of engaging in establishment and carrying on the business of manufacturing, selling and dealing in various consumer electrical, electronics, electromechanical products and home and kitchen appliances of all kinds both electrical and non-electrical and such other allied products.

(iii) Pursuant to the approval of the Board of directors in their meeting held on December 09, 2022, the Company completed the acquisition of 100% shareholding of Sunflame Enterprises Private Limited on January 12, 2023 for an aggregate consideration of '' 68,804.50 lakhs (including deferred consideration of '' 2,500 lakhs (excluding the interest component of '' 40.31 lakhs) and costs related to acquisition '' 771.00 lakhs) computed after the closing adjustments relating to working capital and net debt as described in the Share Purchase Agreement dated December 09, 2022. Accordingly, Sunflame Enterprises Private Limited has become a wholly-owned subsidiary of the Company with effect from January 12, 2023.

(i) The Company''s lease asset primarily consist of leases for vehicles, land and buildings for factories, branch offices and warehouses having the various lease terms. Certain real estate leases have renewal and / or termination options, which are assessed to determine if those options would affect the duration of the lease term. Renewal and termination options in real estate leases create flexibility in the Company''s real estate portfolio, allowing the Company to readily adapt to changing business needs. The Company also has lease for vehicles, which have an average lease term 4 years. The Company also has certain leases with lease terms of 12 months or less. The Company applies the short term lease recognition exemptions for these leases.

(ii) Refer Note 3 for carrying amount and movements of right of use assets during the years ended March 31, 2023 and March 31, 2022.

(iii) Refer Note 22 for carrying amount and movements of lease liabilities during the years ended March 31, 2023 and March 31, 2022.

(vi) The maturity analysis of lease liabilities are disclosed in Note 51A.

(vii) The weighted average incremental borrowing rate applied to lease liabilities is 9%.

(viii) 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.

(ix) The Company had total cash outflows for leases of '' 3,473.17 lakhs during the year ended March 31, 2023 (March 31, 2022: '' 2,802.01 lakhs).

Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate and expected salary increase. The below sensitivity analysis is 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 correlated. 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 and when calculating the defined benefit liability recognised in the balance sheet.

Asset Liability Matching Strategies

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

Funding arrangements and Funding policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

i) Plan assets are fully represented by balance with the Life Insurance Corporation of India.

ii) The long term estimate of the expected rate of return on fund assets has been arrived at based on the prevailing yields on these assets. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching government bonds.

iii) The estimates of future increase in compensation levels, considered in the actuarial valuation, have been taken on account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

iv) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

a. Interest rate risk : The defined benefit obligation calculated uses a discount rate based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations. If bond yields fall, the defined benefit obligation will tend to increase.

b. Salary Inflation risk : The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors. Higher than expected increases in salary will increase the defined benefit obligation

c. Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Note 44: Segment reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, "Operating Segmentâ. Based on the "management approachâ as defined in Ind-AS 108 - Operating Segments, the Chief Operating Decision Maker evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments and segment information is presented accordingly. Accordingly, the management has identified, based on its products, three reportable segments namely, Electronics, Electricals and Consumer Durables as follows:

Electronics Segment includes Stabilizers, Digital UPS and Solar Inverters;

Electricals Segment includes PVC Insulated Cables, Switch Gears, Pumps and Modular Switches; and

Consumer Durables Segment includes Electric Water Heaters, Solar Water Heaters, Fans, Induction Cooktops, Mixer Grinders, Gas Stoves, Rice Cookers, Air Coolers, Breakfast Appliances, Kitchen Hoods and Water Purifiers.

The Management Committee of the Company monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segments have been identified on the basis of the nature of product and have been identified as per the quantitative criteria specified in the Ind AS. The management has complied with the aggregation criteria as specified in Ind-AS 108 and the same has been applied based on the nature of products, considering their end users and as considered relevant and appropriate for the industry the Company operates in.

Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and property, plant and equipment. Assets at corporate level are not allocable to segments on a reasonable basis and thus the same have not been allocated. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liability.

Current taxes, deferred taxes, investment in subsidaries and others, cash and bank balances and certain other financial assets and liabilities are not allocated to segments as they are also managed on Company basis.

Capital expenditure consists of addition of property, plant and equipment, capital work in progress, intangible assets, intangible assets under development and capital advances.

2. Represents additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year.

3. The Company has formed V-Guard Foundation, a Company incorporated under Section 8 of the Companies Act, 2013, as its principal arm for implementing the Company''s CSR programs / projects in compliance with Section 135 of the Companies Act, 2013. Two directors of the Company are the directors of V-Guard Foundation. During the year ended March 31, 2023, the Company has contributed '' 543.29 lakhs (year ended March 31, 2022: '' 492.39 lakhs) towards expenditure for CSR activities. V-Guard Foundation has undertaken various CSR projects like V-Guard Educare and Skill Development, V-Guard Build India, V-Guard Health Care and V-Guard Women Empowerment.

Note 47: Share based payments

The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome . The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date, indicative of future trends, which may not necessarily be the actual outcome.

Note 48: Acquisition of Simon Electric Private Limited through Scheme of Amalgamation

In accordance with the Scheme of Amalgamation (Scheme) between the Company and Simon Electric Private Limited ("Simon") as approved by Hon''ble National Company Law Tribunal, Simon was merged with business of the Company with effect from March 25, 2023 (appointed date), in consideration of 0.76646 equity shares of the Company of ''1 each fully paid up for every 100 equity shares held in Simon of ''10 each fully paid up.

The Scheme will enable the Company to expand its presence in the switches and home automation products market while also helping to enter a premium modular switches segment. It is also expected to result in revenue and cost synergies.

Pursuant to the Scheme, the authorised share capital of the Company was increased to ''19,150.00 lakhs divided into 1,91,50,00,000 equity shares of ''1 each. In discharge of the consideration, the Company is to allot 10,83,008 equity shares to the shareholders of Simon. The fair value of consideration amounts to ''2,683.69 lakhs. The shares pending to be issued as on March 31, 2023 has been disclosed under Other Equity as ''Shares pending issuance.

As per the provisions of the Scheme, transfer of the above business into the Company has been accounted in accordance with Ind AS 103, ''Business Combinations, with effect from the appointed date.

(i) Bargain purchase gain on acquisition of '' 2,045.76 lakhs is mainly on account of deferred tax assets of '' 2,450.30 lakhs recognised on carried forward losses and unabsorbed depreciation of Simon. The same was not recognised as an asset in Simon books considering absence of virtual certainty regarding future taxable income to set off these carried forward losses and unabsorbed depreciation.

(ii) Subsequent to the year end, the Company has alloted 1,083,008 equity shares to the erstwhile shareholders of Simon (0.76646 equity shares of the Company of '' 1 each fully paid up for every 100 equity shares held in Simon of '' 10 each fully paid up).

(iii) If the acquisition had occurred on April 1, 2022, consolidated pro-forma revenue and loss contribution from Simon for the year ended March 31, 2023 would have been '' 1,482.47 lakhs and '' 837.07 lakhs respectively. These amounts have been calculated using Simon''s results and adjusting them for the additional depreciation that would have been charged assuming the fair value adjustments to property, plant and equipment and right of use asset had applied from April 1, 2022.

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

Long-term receivables / advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

"The fair value of the derivative instrument - call option has been determined using valuation techniques with market observable inputs. The valuation techniques incorporate various inputs including risk free interest rates and volatility. The fair value of other investments has been determined using precedent transaction analysis method. Refer note 50 Civ).â

The fair value of loans, lease liabilities and borrowings is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate. The fair value of put option liability is determined based on the present value of the amount payable on exercise of the option. There are no unobservable inputs that impact fair value.

(i) There have been no transfers between Level 1, Level 2 and Level 3 during the year. Also refer Note 49.

(ii) Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(iii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

Note 51: Financial risk management objectives and policies

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has the overall responsibility for establishing and governing the Company''s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities.

The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2023 and March 31, 2022. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable investments, such as mutual funds, with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

As at March 31, 2023, the Company had '' 38,200.00 lakhs (March 31, 2022: '' 18,307.71 lakhs) of undrawn committed borrowing / credit facilities including non fund based facilities.

B. 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 of following: interest rate risk, foreign currency risk and commodity price risk. Financial instruments affected by market risk include loans, borrowings, trade payables and deposits.

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 term loans which are at floating interest rates.

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 is exposed to foreign currency risks arising from exposures to US Dollars and Chinese Yuan from the Company''s import of goods. The Company manages this foreign currency risk by using foreign currency forward contracts to hedge its import liabilities. The Company''s exposure to foreign currency changes for all other currencies is not material.

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of domestic cable and other electronic items and therefore require a continuous supply of copper, being the major input used in the manufacturing. Due to the significantly increased volatility of the price of the Copper, the Company has entered into various purchase contracts for this material for which there is an active market. The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company partly mitigated the risk of price volatility by entering into the contract for the purchase of these material based on average price for each month.

C. 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 other financial assets.

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and certain customers are covered under credit insurance. An impairment analysis is performed at each reporting date by grouping a large number of minor receivables into homogenous groups and assess them for impairment collectively. The Company creates allowance based on lifetime expected credit loss based on a provision matrix after considering adjustment under credit insurance. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 14. The Company does not hold any collateral as security except for the deposits and bank guarantees received from the customers in certain instances. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several locations and operate in largely independent markets.

Other financial assets

Credit risk from balances with banks and financial institutions and in respect of loans and deposits are managed by the Company in accordance with the Company''s policy. Investments of surplus funds are made only in highly marketable liquid fund instruments with appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet its liabilities.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Note 52: Capital management

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

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The Company monitors Capital using Gearing ratio, which is net debt divided by total capital plus net debt.

Notes:

Variance in the above ratios in excess of 25% is on account of the below reasons:

(i) Reduction is on account of increase in borrowings.

(ii) Increase is on account of increase in borrowings.

(iii) Reduction is on account of reduction in net income.

(iv) Increase is on account of increase in borrowings.

(v) Reduction is on account of increase in expenses.

(vi) Reduction is on account of reduction in earnings before interest and tax.

(vii) Increase is on account of increase in mutual fund holdings during the year.

Note 54: Other statutory information

(i) Details of Benami property held

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

(ii) Borrowing secured against current assets

The Company has borrowings from banks and financial institution on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company during the year with banks and financial institution are in agreement with the books of accounts.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

(iv) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(v) Compliance with number of layers of companies

The Comapny has complied with the number of layers prescribed under the Companies Act, 2013, read with the Companies (Restriction on number of Layers) Rules, 2017.

(vi) Compliance with approved scheme of arrangements

The effect of such Scheme of Arrangement as mentioned in Note 48 have been accounted for in the books of account of the Company in accordance with the Scheme of Amalgamation between Simon Electric Private Limited, the Company and their respective Shareholders and Creditors under Section 230 to 232 and other applicable provisions of the Companies Act, 2013 and in accordance with accounting standards.

(vii) Utilisation of borrowed funds and share premium

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

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

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

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

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

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

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

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

(x) Valuation of property, plant and equipment, right of use assets, intangible assets and investment property

The Company has not revalued its property, plant and equipment (including right of use assets), intangible assets and investment property during the current or previous year.

(xi) Core Investment Company

The Company is not a Core Investment Company (CIC) as defined in the regulations made by the Reserve Bank of India. It does not have any CICs, which are part of the Company.

(xii) Title deeds of immovable properties

The title deeds of all the immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Notes 3 and 4, are held in the name of the Company.

(xiii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xiv) Utilisation of borrowings availed from banks and financial institution

The borrowings obtained by the Company from banks and financial institution have been applied for the purposes for which such loans were taken.

Note 55: Disclosures pursuant to Securities and Exchange Board Of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013

As at March 31, 2023 and March 31, 2022, the Company has provided guarantee amounting to '' 800.00 lakhs (Maximum amount outstanding: '' 800.00 lakhs) to a bank for the borrowings availed by the subsidiary of the Company - Guts Electro-Mech Limited ("Guts"). The borrowing is availed by Guts for working capital requirements and purchase of machineries. Further, as at March 31, 2023 and March 31, 2022, the Company has provided guarantee amounting to '' 5000.00 lakhs (Maximum amount outstanding: '' 5000.00 lakhs) to a bank for the borrowings availed by the subsidiary of the Company -V-Guard Consumer Products Limited ("VCPL"). The borrowing is availed by VCPL for working capital requirements. Neither Guts nor VCPL has any investment in the shares of the Company. The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or companies / firms in which directors are interested. Also refer Note 8 and Note 16.

Note: The Company has also provided guarantee to subsidiary companies Guts Electro-Mech Limited and V-Guard Consumer Products Limited of '' 800.00 lakhs and '' 5,000.00 lakhs respectively as at March 31, 2023 (March 31, 2022: Guts Electro-Mech Limited - '' 800.00 lakhs and V-Guard Consumer Products Limited of - '' 5,000.00 lakhs).

Note 57: During the current year, the Company was required to transfer 6,292 equity shares to the Investor Education and Protection Fund Authority (âIEPFAâ). However, the Company could not transfer 800 equity shares as the demat account of one shareholder was suspended for trading and inactive. The Company has intimated IEPFA the details of such shares by filing form IEPF-3.

Note 58: Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the standalone financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

Mar 31, 2022

1. Capital work-in-progress (CWIP) as at March 31, 2022 represents property, plant and equipment under construction at various plants, warehouses and office buildings. Adjustments in relation to capital work-in-progress relates to addition in property, plant and equipment during the year.

The Company has not capitalised any borrowing cost in the current and previous year.

Right of Use asset includes:-

(a) Leasehold land which represents land obtained on long term lease from Government authorities and others.

(b) Leasehold building which represents properties taken on lease for its factories, offices and warehouses, accounted for in accordance with principle of Ind AS 116 âLeases''. Refer Note 42.

The Company, during the year ended March 31, 2018 had adopted Ind AS under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. The Company had availed the exemption available under Ind AS 101, wherein the carrying value of property, plant and equipment and capital work-in-progress has been carried forward at the amount as determined under the previous GAAP as at April 1, 2016.

(i) Investment Property represents land at Coimbatore acquired by the Company at fair market value. The carrying amount of the investment property is a reasonable approximation of fair value and hence fair value disclosure has not been made.

(ii) The Company, during the year ended March 31, 2018 had adopted Ind AS under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. The Company had availed the exemption available under Ind AS 101, wherein the carrying value of investment property has been carried forward at the amount as determined under the previous GAAP as at April 1, 2016.

The Company, during the year ended March 31, 2018 had adopted Ind AS under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. The Company had availed the exemption available under Ind AS 101, wherein the carrying value of other intangible assets has been carried forward at the amount as determined under the previous GAAP as at April 1, 2016.

Note: On January 15, 2021, the Company entered into a share subscription and shareholder''s agreement to invest in Gegadyne Energy Labs Private Limited (âGegadyneâ) for a cash consideration of ''3,340 lakhs in return for 18.77% stake on a fully diluted basis, the right to nominate 1 director on the Board as well as various other rights under the share subscription and shareholder''s agreement. Gegadyne is a Mumbai based alternate battery technology start-up developing energy storage (battery) solutions. The management is of the view that they do not have the power to participate in the financial and operating policy decisions of Gegadyne and accordingly have accounted the aforesaid stake as investment at fair value through profit or loss under Ind AS -109 âFinancial Instrumentsâ. Refer Note 48.

(ii) There are no loans as at March 31, 2022 and March 31, 2021 which have significant increase in credit risk or which are credit impaired.

(i) Trade receivables are generally on terms of 15 to 90 days and are non-interest bearing except in case of overdue payments.

(ii) No trade receivables are due from directors or other officers of the Company either severally or jointly with any other person; nor any trade receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

(iii) Trade receivables are hypothecated with the banks against working capital limits and non fund facilities availed from lenders.

(i) A charge of '' 327.01 lakhs (March 31, 2021''347.81 lakhs) has been created towards various guarantees in favour of vendors, statutory authorities and others.

(ii) As at March 31, 2022, the Company had '' 18,307.71 lakhs (March 31, 2021: '' 19,824.02 lakhs) of undrawn committed borrowing / credit facilities including non fund based facilities.

(iii) For the purpose of cashflows, cash and cash equivalents is same as stated above.

(b) Terms / rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of '' 1 per share (March 31, 2021: '' 1 per share). Each holder of equity share 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.

(i) Proposed dividends on equity shares are subject to approval at the Annual General Meeting and are not recognised as a liability as at the balance sheet date.

(ii) With effect from April 1, 2020, the Dividend Distribution Tax (''DDT'') payable by the Company under section 115(0) of Income Tax Act, 1961 was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the recipient.

(i) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company up to '' 1,000 lakhs. The total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities as at March 31, 2022 is '' 1,000 lakhs (March 31, 2021: '' 1,000 lakhs) and is included under Borrowings.

(ii) The Company has not made any defaults in the repayment of working capital loans availed from banks during the year.

(iii) The Company has borrowings from banks on the basis of security of current assets. The Company has complied with the requirement of filing of quarterly returns / statements of current assets with the banks as applicable, and these returns were in agreement with the books of accounts for the year ended March 31, 2022.

(i) Trade payables are non interest bearing and are normally settled in 7 days to 120 days. For explanations on the Company''s risk management process, refer Note 51.

(ii) Trade payables are unsecured and for amounts due to related parties, refer Note 45.

(iii) Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

Provision for warranty:

(i) Government budgetary support represents benefits provided by the Government to the Company in respect of its manufacturing units in the state of Sikkim in accordance with the ''Scheme of budgetary support under Goods and Service Tax Regime'' as notified on October 5, 2017 which were earlier eligible for excise duty exemption.

(vi) Performance obligation

The performance obligation for sale of products and scrap are satisfied upon delivery / despatch of goods depending upon terms with customers and payment is generally due within 15 to 90 days from delivery. Some contracts provide customers with a right of return, volume based discounts, rebates and other promotion incentive schemes, which give rise to variable consideration subject to constraint. The contracts do not have a significant financing component. The Company offers standard warranty on selected products. The Company makes provision for same as per the principles laid down under Ind AS 37. The performance obligation for product repair services is satisfied over-time and payment is generally due upon completion of service and acceptance of the customer. There are no unsatisfied or partially satisfied performance obligations as at March 31, 2022 and March 31, 2021.

During the year ended March 31, 2022, revenue recognised from the amount included in contract liability at the beginning of the year is '' 1,302.65 lakhs (March 31, 2021: '' 1,602.12 lakhs).

(i) The Company had granted stock options under the Employees Stock Option Scheme, 2013 (ESOS 2013) to eligible employees of the Company. According to the scheme, the eligible employees were to be granted stock options subject to satisfaction of prescribed vesting conditions. The Company has been accruing the cost of these options over the vesting period. During the year ended March 31, 2022, management evaluated that the vesting condition for few of its options linked to the achievement of a certain threshold of profit before tax will not be satisfied and accordingly, the Company reversed the cost accrued over the years / periods for such options amounting to '' 44.31 lakhs to the statement of profit and loss. The reversal of such costs to the statement of profit and loss for the year ended March 31, 2021 amounted to '' 259.54 lakhs.

(ii) 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.

(iii) Also refer Note 3 and Note 39.

(d) On September 20, 2019, the Taxation Laws (Amendment) Ordinance, 2019 (''ordinance'') was passed introducing section 115BAA of the Income-tax Act, 1961 which allowed domestic Companies to opt for an alternative tax regime from financial year 2019-20. As per the new tax regime, Companies are allowed to pay reduced income tax @ 22% (plus surcharge and cess) subject to foregoing of certain exemptions which were allowed earlier. Pursuant to the aforesaid amendment, the Company, during the quarter ended March 31, 2022 opted for lower rate of tax from financial year ended March 31, 2021 while filing income tax return for the year ended March 31, 2021 and accordingly recomputed income tax provision as per new tax regime for the year ended March 31, 2021 and has reversed current tax provision of '' 808.67 lakhs relating to prior year in the current year ended March 31, 2022. Further the Company has restated the deferred tax assets and liabilities as on April 01, 2021 at the rate of 25.17%.

B) Contingent Liabilities

('' in lakhs)
Particulars	As at March 31, 2022	As at March 31, 2021
(i) Litigations (see note below)
(a) Claims against the Company not acknowledged as debt	286.93	293.77
(b) Direct tax matters under dispute / pending before Income Tax Authorities	4,365.26	2,590.52
(c) Indirect tax matters for demands raised by sales tax / VAT department pending before various appellate authorities	1,037.65	1,391.51
(d) Others	6.82	6.82
Total	5,696.66	4,282.62
(ii) Others
(a) Bank Guarantees	20,353.00	19,167.10
(b) Letter of credit outstanding	7,291.39	6,509.59
(c) Corporate Guarantee given on behalf of subsidiaries for bank loans (Refer Note 45 & 55)	5,800.00	800.00
Total	33,444.39	26,476.69

Notes:

(i) There are numerous interpretative issues relating to the Supreme Court (âSCâ) judgement on Provident Fund ("PF") dated 28th February, 2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the SC order. The Company will update its provision, on receiving further clarity on the subject.

(ii) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters and claims relating to Company''s products that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.

(iii) The aforementioned amounts under disputes are as per the demands from various authorities for the respective periods and has not been adjusted to include further interest and penalty leviable, if any, at the time of final outcome of the appeals or similar demand for subsequent assessment years.

(iv) Also refer Note 34(ii).

a) These financial statements are separate financial statements prepared in accordance with Ind AS-27 "Separate Financial Statements".

b) The Company''s investment in Subsidiaries are as follows:

Name of the Subsidiaries	Country of incorporation	Portion of ownership interest as at March 31, 2022	Portion of ownership interest as at March 31, 2021	Method used to account for the investment
Guts Electro-Mech Limited	India	74%	74%	At cost
V-Guard Consumer Products Limited	India	100%	NIL	At cost

With effect from August 31, 2017, the Company acquired 74% equity stake in Guts Electro-Mech Limited (âGutsâ) for a total purchase consideration of '' 618.26 lakhs which represents amount paid to promoters of Guts and subscription to fresh issue of equity shares of Guts. Guts is a public limited company engaged in the business of Switch Gear. The Company has a Call Option to acquire the balance 26% stake in Guts, which option can be exercised by the Company any time. Similarly, the original promoter of Guts, holding 26% stake has a Put Option to sell his stake to the Company, which Put Option can be exercised by him after the end of three years from the aforesaid date. The Call Option / Put Option is exercisable by the parties at the price specified in the purchase agreement linked to the time of exercise. The Put Option liability is initially measured at the present value of the amount payable on exercise of the option, as a financial liability amounting to '' 317.15 lakhs, with corresponding increase in investment cost of subsidiary. The subsequent changes in carrying amount of the Put Option liability is recognised in the standalone statement of profit and loss. The Call Option is initially measured at fair value as a financial asset amounting to '' 50.46 lakhs with corresponding reduction in investment cost of subsidiary and subsequent changes in fair value through profit or loss. There has been no change in the fair value of Call Option during the current and previous year.

Pursuant to the approval of the Board of directors in their meeting held on July 02, 2021, the Company incorporated a wholly owned subsidiary by the name of V-Guard Consumer Products Limited (âVCPLâ) on July 19, 2021 and invested in 59,797,507 equity shares of '' 10 each as at March 31, 2022. VCPL is incorporated with an objective of engaging in establishment and carrying on the business of manufacturing, selling and dealing in various consumer electrical, electronics, electromechanical products and home and kitchen appliances of all kinds both electrical and non-electrical and such other allied products.

Note 42: Leases

(i) The Company''s lease asset primarily consist of leases for vehicles, land and buildings for factories, branch offices and warehouses having the various lease terms. The Company also has certain leases with lease terms of 12 months or less. The Company applies the short term lease recognition exemptions for these leases.

(v) The maturity analysis of lease liabilities are disclosed in Note 51A.

(vi) The weighted average incremental borrowing rate applied to lease liabilities is 9%.

(vii) 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.

(viii) The Company had total cash outflows for leases of '' 2,802.01 lakhs during the year ended March 31, 2022 (March 31, 2021''2,149.45 lakhs).

Note 43: Employee Benefit Plans Defined Benefit Plan - Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (based on last drawn basic) for each completed year of service.

Sensitivity Analysis

Asset Liability Matching Strategies

Funding arrangements and Funding policy

i) Plan assets are fully represented by balance with the Life Insurance Corporation of India.

iv) Plan Characteristics and Associated Risks: The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial results are expected to be:

Note 44: Segment Reporting

Electronics Segment includes Stabilizers, Digital UPS, UPS and Solar Inverters;

Electricals Segment includes PVC Insulated Cables, Switch Gears, Single Phase Pumps, Three Phase Pumps and Modular Switches; and

Consumer Durables Segment includes Electric Water Heaters, Solar Water Heaters, Fans, Induction Cooktops, Mixer Grinders, Glass-top Gas Stoves, Rice Cookers, Air Coolers, Breakfast Appliances, Kitchen Hoods and Water Purifiers.

Current taxes, deferred taxes, investment in subsidaries, other investments, cash and bank balances and certain other financial assets and liabilities are not allocated to segments as they are also managed on Company basis.

Capital expenditure consists of addition of property, plant and equipment, capital work-in-progress, intangible assets, intangible assets under development and capital advances.

Transfer pricing between operating segments if any, are on an arm length basis in a manner similar to transaction with third parties.

1. The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole.

2. Represents additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year.

3. The Company has formed V-Guard Foundation, a company incorporated under Section 8 of the Companies Act, 2013, as its principal arm for implementing the Company''s CSR programs / projects in compliance with Section 135 of the Companies Act, 2013. Two directors of the Company are the directors of V-Guard Foundation. During the year ended March 31, 2022, the Company has contributed '' 492.39 lakhs (year ended March 31, 2021: '' 418.80 lakhs) towards expenditure for CSR activities.

4. The purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free.

The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date, indicative of future trends, which may not necessarily be the actual outcome.

Note 48: Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities in future periods.

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

Revenue from sale of products

Revenue is measured at the fair value of consideration received / receivable from its customers and in determining the transaction price for the sale of products, the Company considers the effects of various factors such as volume based discounts, rebates and other promotion incentives schemes (''trade schemes'') provided to the customers. At year end, amounts for trade schemes that have been incurred and not yet provided to the customers are estimated and accrued. The Company estimates variable considerations to be included in the transaction price for the sale of goods with rights of return also.

In estimating the variable considerations, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled. The Company determined that the expected value method is the appropriate method to use in estimating the variable consideration for the sale of goods with rights of return, given the large number of customer contracts that have similar characteristics. In estimating the variable consideration for the sale of goods with trade schemes, the Company determined that using a combination of the most likely amount method and expected value method is appropriate. The selected method that better predicts the amount of variable consideration was primarily driven by the number of volume thresholds contained in the contract. The most likely amount method is used for those contracts with a single volume threshold, while the expected value method is used for contracts with more than one volume threshold.

Before including any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based on its historical experience, business forecast and the current economic conditions. In addition, the uncertainty on the variable consideration will be resolved within a short time frame.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted Cash Flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

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

Put option liability

The Put Option liability granted on the non controlling interests of subsidiary is accounted for at the present value of the amount payable on exercise of the option, as a financial liability. The subsequent changes in carrying amount at each reporting date is recognised in the statement of profit and loss. The determination of the carrying value is based on discounted cash flows. The key assumption taken into consideration is the discount factor. As part of the accounting for the investment in subsidiary, put option liability with an estimated value of '' 317.15 lakhs was recognised at the acquisition date and remeasured to '' 572.55 lakhs as at the reporting date.

Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These mainly include the determination of the discount rate and future salary increases. 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 where remaining maturity of such bond correspond to expected term of defined benefit obligation. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about the gratuity obligation are given in Note 43.

Share-based payments

Estimating fair value for share-based payment transactions requires evaluation of vesting conditions and determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility, dividend yield, forfeitures and making assumptions about them. The assumptions and model used for estimating fair value for share based payment transactions are disclosed in Note 47.

Warranty provision

Warranty provision is determined based on the historical trend of warranty expense for the same types of goods for which the warranty is currently being determined, after adjusting for unusual factors related to the goods that were sold. It is very unlikely that actual warranty claims will exactly match the historical trend of warranty expenses and hence such estimates are reviewed annually for any material changes in assumptions and likelihood of occurrence.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events. In respect of financial guarantees provided by the Company to third parties, the Company considers that it is more likely than not that such an amount will not be payable under the guarantees provided. Refer Note 40(B) for further disclosures.

Taxes

The Company uses estimates and judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and disallowances which is exercised while determining the provision for income tax. Uncertainties exist with respect to the interpretation of tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Impairment allowance for trade receivables

The Company uses a provision matrix to calculate Expected Credit Losses (''ECL'') for trade receivables. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating, and coverage by letters of credit and other forms of credit insurance). The provision matrix is initially based on the Company''s historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Company''s historical credit loss experience and forecast of economic conditions may also not be representative of customer''s actual default in the future. The information about the ECLs on the Company''s trade receivables is disclosed in Note 2.2(q) and Note 51(C).

Determination of control / significant influence for investments made by the Company

As detailed in Note 7, the Company entered into a share subscription and shareholder''s agreement to acquire 7 equity shares and 2,900 OCCPS of Gegadyne for a cash consideration of '' 3,340.00 lakhs in return for 18.77% stake on a fully diluted basis, right to nominate a director on the Board of Gegadyne as well as various other rights under the aforesaid agreement. The management, based on the terms and conditions as per the said agreement, is of the view that they do not have the power to participate in the financial and operating policy decisions of Gegadyne considering that: a)

The equity shareholding of the Company is less than 1% of the total equity shareholding and OCCPS are convertible at the option of the Company and can be liquidated at a predetermined IRR. b) The Company do not intend to participate in the operations of Gegadyne and do not have any visitation or inspection rights in respect of the research facilities and research activities of Gegadyne which is the primary activity of Gegadyne at this juncture. c) On completion of the research activities, Gegadyne will seek additional investment from external investors whereby the Company''s stake

in Gegadyne will be significantly reduced. d) All the other rights considered under ''reserved matters'' in the aforesaid agreement are protective rights and not participative rights.

Accordingly, the Company has accounted the aforesaid investment as investment at fair value through profit or loss as per Ind AS 109 - Financial Instruments.

The fair value of the derivative instrument - call option has been determined using valuation techniques with market observable inputs. The valuation techniques incorporate various inputs including risk free interest rates and volatility. The fair value of other investments has been determined using precedent transaction analysis method. Refer note 50 Civ).

(i) There have been no transfers between Level 1, Level 2 and Level 3 during the year. Also refer Note 49.

(ii) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities.

The Company''s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2022 and March 31, 2021. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable investments, such as mutual funds, with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

B. Market risk

Interest rate risk

Foreign currency risk

Commodity Price risk

C. Credit risk

Trade receivables

Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and certain customers are covered under credit insurance. An impairment analysis is performed at each reporting date by grouping a large number of minor receivables into homogenous groups and assess them for impairment collectively. The Company creates allowance based on lifetime expected credit loss based on a provision matrix after considering adjustment under credit insurance. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 14. The Company does not hold any collateral as security except for the deposits and bank guarantees received from the customers. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several locations and operate in largely independent markets.

Other financial assets

D. Excessive risk concentration

Note 52: Capital management

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

Note 54: Other statutory information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

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

(iii) The Company has not traded or invested in Cryptocurrency or Virtual Currency during the year ended March 31, 2022.

(iv) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

(v) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

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

(vii) The Company do not have any transactions with companies struck off.

(viii) The Company has not been declared as a Wilful Defaulter by any bank or financial institution or Government or any Government authority.

Note 55: Disclosures pursuant to Securities and Exchange Board Of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013

As at March 31, 2022 and March 31, 2021, the Company has provided guarantee amounting to Rs. 800.00 lakhs (Maximum amount outstanding: Rs. 800.00 lakhs) to a bank for the borrowings availed by the subsidiary of the Company - Guts Electro-Mech Limited ("Guts"). The borrowing is availed by Guts for working capital requirements and purchase of machineries. Further, as at March 31, 2022, the Company has extended guarantee amounting to Rs. 5,000.00 lakhs (Maximum amount outstanding: Rs. 5,000.00 lakhs) to V-Guard Consumer Products Limited ("VCPL") for availing borrowings. The borrowing will be availed by VCPL for working capital requirements. Neither Guts nor VCPL has any investment in the shares of the Company. The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or companies / firms in which directors are interested. Also refer Note 8 (i).

Note 56: The Company was required to transfer 9,102 equity shares (including 3,280 equity shares pending to be transferred to the Investor Education and Protection Fund Authority (âIEPFAâ) in the previous year) to IEPFA. However, the Company could not transfer 800 equity shares as the demat account of one shareholder was suspended for trading and was inactive. The Company has intimated IEPFA the details of such shares by filing form IEPF-3.

Note 57: The Company''s Board of Directors at its meeting held on December 20, 2021 has approved a Scheme of Amalgamation amongst the Company, Simon Electric Private Limited and their respective Shareholders and Creditors. The Company is in the process of obtaining necessary approvals from various authorities concerned.

Note 58: Events after the reporting period

The Board of Directors of the Company have proposed dividend after the balance sheet date which are subject to approval by the shareholders at the Annual General Meeting. Refer Note 20.

Note 59: Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in the standalone financial statements have been rounded off or truncated as deemed appropriate by the management of the Company.

Note 60: Previous year''s figures have been regrouped / reclassified, wherever necessary, to conform to the current year''s classification.

Mar 31, 2019

1. CORPORATE INFORMATION

V-Guard Industries Limited (âV-Guardâ or âthe Companyâ) is a public company domiciled in India with its registered office at Vennala High School Road, Kochi, Kerala. The Company is engaged in the manufacturing, trading and selling of a wide range of products as given below:

The standalone financial statements were authorized by the Board of Directors for issue in accordance with resolution passed on May 29, 2019.

1.1. Leasehold land represents land obtained on long term lease from State Industries Promotion Corporation of Tamilnadu Limited and considered as finance lease.

1.2. The Company has not capitalised any borrowing cost in the current and previous year.

1.3. Capital work in progress as at March 31, 2019 includes Rs. 569.97 lakhs [March 31, 2018: Rs. 435.01 lakhs) which represents assets under constructions at various plants, warehouses and office buildings.

1.4. Land, buildings and plant with a carrying amount of Rs. Nil [March 31, 2018 - Rs. 1,793 lakhs) are subject to a hypothecation to secure the Companyâs bank loans. Also refer note 19.

1.5. During the year, the Company has capitalized the following expenses of revenue nature to the cost of property, plant and equipment/ capital work-in-progress [CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company. No expenses of revenue nature is capitalised during the year ended March 31, 2018.

Note (i): Inter corporate loan represents unsecured loan given to M/s Sakthi Accumulators Private Limited (âthe vendorâ) for enhancing its manufacturing infrastructure. The loan is to be repaid over a period of three years starting from March 30, 2018 and ending on March 30, 2021. One of the promoter director of the vendor has provided personal guarantee for the repayment of loan. Interest rate of the loan is 10% p.a.

Note (ii): Others represents unsecured loan given to Mr. Gopal Singh Cintury , the landlord for construction of building to be occupied by the Company, at an interest rate of 9% p.a.. The loan is repayable by adjustment of monthly rent payable to the landlord pursuant to lease agreement entered for a period of five years. The landlordâs son has provided personal guarantee for the repayment of loan.

Note (iii): There are no loans as at March 31, 2019 and March 31, 2018 which have significant increase in credit risk or which are credit impaired.

(a) Trade receivables are generally on terms of 15 to 90 days and are non-interest bearing except in case of overdue payments.

(b) Trade receivables are net of Rs. 6,764.72 lakhs (March 31, 2018: Rs. 5,240.98 lakhs) which represents discounts and rebates/trade incentives due to customers.

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

(d) Bankers have first charge on trade receivables in respect of the working capital limits availed by the Company. Refer note 23.

(i) Includes deposits of Rs. 82.59 lakhs (March 31, 2018: Rs. 77.75 lakhs) provided as security against bank guarantees.

(ii) At March 31, 2019, the Company had available Rs. 27,484 lakhs (March 31, 2018: Rs. 25,558 lakhs) of undrawn committed borrowing / credit facilities.

(iii) Changes in liabilities arising from financing activities are as follows:

(b) Terms/rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of Rs.1 per share (March 31, 2018: Rs.1 per share). Each holder of equity share 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.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability (including DDT thereon) as at the balance sheet date.

(f) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 45.

(a) Cash credits from banks have been secured by hypothecation by way of pari passu first charge on all current assets of the Company, both present and future, including stock of goods and book debts. The short term fund carries interest varying from 8.35% to 10.15% p.a (March 31, 2018: 9.63% to 11.40% p.a)

(b) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company up to Rs. 1,000 lakhs. There were no recourse on the Company as at March 31, 2018. The total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities as at March 31, 2019 is Rs. 1,000 lakhs (March 31, 2018: Nil) and is included under Borrowings.

(i) Trade payables are non interest bearing and are normally settled in 7 days to 120 days term.

(ii) Trade payables are unsecured and for amounts due to related parties refer note 43.

(iii) Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

(i) Sale of products includes excise duty collected from customers of Rs. Nil (Year ended March 31, 2018: Rs. 953.42 lakhs). Sale of products net of excise duty is Rs. 253,747.37 lakhs (Year ended March 31, 2018: Rs. 228,529.66 lakhs). Sales for periods up to June 30, 2017 includes excise duty. From July 1, 2017 onwards the excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Sales. In view of the aforesaid change in indirect taxes, Sales for the year ended March 31, 2019 is strictly not comparable with Sales for the year ended March 31, 2018.

(ii) The Company is entitled to âScheme of budgetary supportâ under Goods and Service Tax law in respect of eligible manufacturing units located in specified regions.

(iii) Disaggregated revenue information

Set out below is the disaggregation of the Companyâs revenue from contracts with customers:

Trade receivables are non-interest bearing and are generally on terms of 15 to 90 days. In FY 2018-19, Rs. 252.74 Lakhs was recognised as provision for expected credit losses on trade receivables. Conract liabilities represents advance received from customers for sale of products.

(vii) Performance obligation

The performance obligation for sale of products and scrap are satisfied upon delivery/despatch of goods depending upon terms with customers and payment is generally due within 15 to 90 days from delivery. Some contracts provide customers with a right of return, volume based discounts, rebates and other promotion incentive schemes, which give rise to variable consideration subject to constraint. The performance obligation for product repair services is satisfied over-time and payment is generally due upon completion of service and acceptance of the customer. There are no unsatisfied or partially satisfied performance obligations as at March 31, 2019.

NOTE 2: COMMITMENTS AND CONTINGENCIES

A) Operating lease: Company as lessee

The Company has entered into commercial leases on certain vehicles, land and building. These leases have an average life of between one and five years with no cancellation option included in these contracts. There are no restrictions placed upon the Company by entering into these leases.

(i) There are numerous interpretative issues relating to the Supreme Court (âSCâ) judgement on Provident Fund (âPFâ) dated February 28, 2019. As a matter of caution, the Company has made a provision on a prospective basis from the date of the SC order. The Company will update its provision, on receiving further clarity on the subject.

(ii) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters and claims relating to Companyâs products that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Companyâs financial position and results of operations.

NOTE 3: INVESTMENT IN SUBSIDIARY

a) These financial statement are separate financial statements prepared in accordance with Ind AS-27 âSeparate Financial Statementsâ

With effect from August 31, 2017, the Company acquired 74% equity stake in Guts Electro-Mech Limited (âGutsâ) for a total purchase consideration of Rs. 618.26 lakhs which represents amount paid to promoters of Guts and subscription to fresh issue of equity shares of Guts. Guts is a public limited company engaged in the business of Switch Gear. The Company has a Call Option to acquire the balance 26% stake in Guts, which option can be exercised by the Company any time. Similarly, the original promoter of Guts, holding 26% stake has a Put Option to sell his stake to the Company, which Put Option can be exercised by him after the end of three years from the aforesaid date. The Call Option/ Put Option is exercisable by the parties at the price specified in the purchase agreement linked to the time of exercise. The Put Option liability is initially measured at the present value of the amount payable on exercise of the option, as a financial liability amounting to Rs. 317.15 lakhs, with corresponding increase in Investment cost of subsidiary. The subsequent changes in carrying amount of the Put Option liability is recognised in the statement of profit and loss. The Call Option is initially measured at fair value as a financial asset amounting to Rs. 50.46 lakhs with corresponding reduction in Investment cost of subsidiary and subsequent changes in fair value through profit or loss.

NOTE 4: EMPLOYEE BENEFIT PLANS

Defined Contribution plan

The Company mainly makes Provident Fund (PF) and Employeeâs state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 759.20 lakhs (year ended March 31, 2018: Rs. 643.75 lakhs) towards PF contributions (included in note 33(b)) and Rs. 37.71 lakhs (year ended March 31, 2018: Rs. 47.03 lakhs) towards ESI contributions (included in note 33(b)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

Asset Liability Matching Strategies

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

Funding arrangements and Funding Policy

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

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

The plan assets are maintained with Life Insurance Corporation of India (LIC).

NOTE 5: SEGMENT REPORTING

The segment reporting of the Company has been prepared in accordance with Ind AS-108, âOperating Segmentâ. For management purposes, the Company is organised into business units based on its products and has three reportable segments as follows

Electronics Segment includes Stabilizers, Digital UPS, UPS and Solar Inverters;

Electricals Segment includes PVC Insulated Cables, Switch Gears, Single Phase Pumps, Three Phase Pumps and Modular Switches; and

Consumer Durables Segment includes Electric Water Heaters, Solar Water Heaters, Fans, Induction Cooktops, Mixer Grinders, Rice cookers, Glass-top Gas Stoves and Air Coolers.

Segment assets include all operating assets used by a segment and consist principally of debtors, inventories, advances and fixed assets. Assets at corporate level are not allocable to segments on a reasonable basis and thus the same have not been allocated. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liability.

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to segments as they are also managed on Company basis.

Capital expenditure consists of addition of property, plant and equipment and intangible assets.

Transfer pricing between operating segments are on an arm length basis in a manner similar to transaction with third parties.

1. The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole.

2. Represents additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year.

3. The Company has formed V-Guard Foundation, a Company incorporated under Section 8 of the Companies Act, 2013, as its principal arm for implementing the Companyâs CSR programs/projects in compliance with Section 135 of the Companies Act, 2013. Two directors of the Company are the directors of V-Guard Foundation. During the year ended March 31, 2019, the Company has contributed Rs. 304 lakhs (Year ended March 31, 2018: Nil) towards expenditure for CSR activities.

4. The purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free.

NOTE 6: SHARE BASED PAYMENTS

The members of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on 14th May, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions. All options granted under ESOS 2013 can be exercised within 6 years from the date of vesting. The number of shares allocated for allotment under the ESOS 2013 is 19,538,118 equity shares of Rs. 1/- each. The schemes are monitored and supervised by the Nomination and Remuneration Committee of the Board of Directors in compliance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and amendments thereof from time to time.

Note: The numbers in parenthesis pertains to the previous year ended March 31, 2018.

Weighted average fair value of the options granted during the year was Rs. 209.33 (2017-18: Rs. 214.47).

Weighted average equity share price at the date of exercise of options during the year was Rs. 205.90 (2017-18: Rs. 235.83). The value of the underlying shares has been determined by an independent valuer. The following assumptions were used for calculation of fair value of grants in accordance with Binomial model:

The risk free interest rates are determined based on the zero-coupon sovereign bond yields with maturity equal to the expected term of the option. Volatility calculation is based on historical stock prices using standard deviation of daily change in stock price. The historical period is taken into account to match the expected life of the option. Dividend yield has been calculated taking into account expected rate of dividend on equity share price as on grant date.

NOTE 7: SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities in future periods.

Revenue from sale of products

Revenue is measured at the fair value of consideration received/receivable from its customers and in determining the transaction price for the sale of products, the Company considers the effects of various factors such as volume based discounts, rebates and other promotion incentives schemes (âtrade schemesâ) provided to the customers. At year end, amounts for trade schemes that have been incurred and not yet provided to the customers are estimated and accrued.

The Company estimates variable considerations to be included in the transaction price for the sale of goods with rights of return. The Company updates its assessment of expected returns quarterly and the refund liabilities are adjusted accordingly. Estimates of expected returns are sensitive to changes in circumstances and the Companyâs past experience regarding returns and may not be representative of customersâ actual returns in the future.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a Discounted Cash Flow (DCF) model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

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

The Put Option liability granted on the non controlling interests of subsidiary is accounted for at the present value of the amount payable on exercise of the option, as a financial liability. The subsequent changes in carrying amount at each reporting date is recognised in the statement of profit and loss. The determination of the carrying value is based on discounted cash flows. The key assumption taken into consideration is the discount factor. As part of the accounting for the investment in subsidiary, put option liability with an estimated value of Rs. 317.15 lakhs was recognised at the acquisition date and remeasured to Rs. 363.85 lakhs as at the reporting date.

Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about the gratuity obligation are given in Note 41.

Share-based payments

Estimating fair value for share-based payment requires evaluation of vesting conditions and determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility, dividend yield, forfeitures and making assumptions about them. The assumptions and model used for estimating fair value for share based payment transactions are disclosed in Note 45.

Warranty provision

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of investments in mutual funds units is based on the net asset value (âNAVâ) as stated by the issuers of these mutual fund units in the published statements as at balance sheet date. NAV represents the price at which the issuer will issue further units of mutual funds and the price at which issuers will redeem such units from the investors.

The fair value of loans and borrowings is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The same would be sensitive to a reasonably possible change in the forecast cash flows or the discount rate. The fair value of Put Option Liability is determined based on the present value of the amount payable on exercise of the option. There are no unobservable inputs that impact fair value.

NOTE 8: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Companyâs business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Companyâs senior management has the overall responsibility for establishing and governing the Companyâs risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Companyâs risk management policies. The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Audit Committee of the Company.

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities.

The Companyâs approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2019 and March 31, 2018. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an ongoing basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable investments, such as mutual funds, with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

For long term borrowings, the Company also focuses on maintaining / improving its credit ratings to ensure that appropriate refinancing options are available on the respective due dates.

B. 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, foreign currency risk and commodity price risk. Financial instruments affected by market risk include loans, borrowings and deposits.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant. of changes in market interest rates. This risk exist mainly on account of borrowings of the Company.

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 is exposed to foreign currency risks arising from exposures to US Dollars from the Companyâs import of goods. The Company manages this foreign currency risk by using foreign currency forward contracts to hedge its import liabilities. The Company has hedged 79% of foreign currency exposure as on March 31, 2019. The Companyâs exposure to foreign currency changes for all other currencies is not material.

Commodity Price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of industrial and domestic cable and other electronic items and therefore require a continuous supply of copper, being the major input used in the manufacturing. Due to the significantly increased volatility of the price of the Copper, the Company has entered into various purchase contracts for this material for which there is an active market. The Companyâs Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company partly mitigated the risk of price volatility by entering into the contract for the purchase of these material based on average price for each month.

C. Credit risk

Trade receivables

Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and all major customers are covered under credit insurance. An impairment analysis is performed at each reporting date by grouping a large number of minor receivables into homogenous groups and assess them for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 13. The Company does not hold any collateral as security except for the deposits and bank guarantees received from the customers. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several locations and operate in largely independent markets.

Other financial assets

Credit risk from balances with banks and financial institutions and in respect of loans is managed by the Company in accordance with the Companyâs policy. Investments of surplus funds are made only in highly marketable liquid fund instruments with appropriate maturities to optimise the cash return on instruments while ensuring sufficient liquidity to meet its liabilities.

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Companyâs policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

NOTE 9: CAPITAL MANAGEMENT

For the purpose of the Company capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on managementâs judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The Company monitors Capital using Gearing ratio, which is net debt divided by total capital plus net debt.

NOTE 10 : LOANS AND ADVANCES IN THE NATURE OF LOANS GIVEN TO SUBSIDIARIES AND ASSOCIATES AND FIRMS/ COMPANIES IN WHICH DIRECTORS ARE INTERESTED

As at March 31, 2019, the Company has provided guarantee amounting to Rs. 800 lakhs to a bank for the borrowings availed by the subsidiary of the Company - Guts Electro-Mech Limited (âGutsâ) . The borrowing is availed by Guts for working capital requirements and purchase of machineries. The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or companies / firms in which directors are interested.

NOTE 11: STANDARDS ISSUED BUT NOT YET EFFECTIVE

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Companyâs financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standards:

Ind As 116 Leases

Ind AS 116 Leases was notified by MCA on March 30, 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of âlow-valueâ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset. Lessor accounting under Ind AS 116 is substantially unchanged from todayâs accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases. The Company intends to adopt these standards from April 1, 2019 and is in the process of implementing the new standard and expects that it will have no material effects on the results of the operations of the Company.

Appendix C to Ind AS 12 Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of Ind AS 12 and does not apply to taxes or levies outside the scope of Ind AS 12, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

a. Whether an entity considers uncertain tax treatments separately

b. The assumptions an entity makes about the examination of tax treatments by taxation authorities

c. How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

d. How an entity considers changes in facts and circumstances

An entity has to determine whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. In determining the approach that better predicts the resolution of the uncertainty, an entity might consider, for example, (a) how it prepares its income tax filings and supports tax treatments; or (b) how the entity expects the taxation authority to make its examination and resolve issues that might arise from that examination. The interpretation is effective for annual reporting periods beginning on or after April 1, 2019, but certain transition reliefs are available. The Company will apply the interpretation from its effective date. As the taxation of the Company is not complex, the adoption of this standard is not likely to have a material impact on the financial statements.

Ind As 23 Borrowing Costs

The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete. An entity applies those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments, i.e. April 1, 2019. Since the Companyâs current practice is in line with these amendments, the Company does not expect any effect on its financial statements.

Mar 31, 2018

1. CORPORATE INFORMATION

The Companyâs manufacturing facilities are located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh; at SIPCOT Industrial growth center, Perundurai, Tamil Nadu and at Majitar, Rangpo and Mamring in Sikkim. The research and development facilities located at Head office, Kochi (Kerala) have been approved by Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India, New Delhi. The Companyâs shares are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The financial statements were authorized by the Board of Directors for issue in accordance with resolution passed on May 30, 2018.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IND AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).

For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2018 are the first financial statements, which have been prepared in accordance with IND AS notified under the Companies (Indian Accounting Standard) Rules, 2015. Refer Note No. 51 for information on how the Company adopted Ind-AS.

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

(i) Derivative financial instruments

(ii) Certain financial assets and liabilities that are measured at fair value

The financial statements are presented in Indian Rupees (Rs.) and all values are rounded to nearest lakhs (Rs.00,000), except when otherwise indicated.

Investment Property represents land at Coimbatore acquired by the Company at fair market value. The carrying amount of the Investment property is a reasonable approximation of fair value and hence fair value disclosure has not been made.

(b) During the year ended March 31, 2018, Rs.211 lakhs (March 31, 2017: Nil) was recognised as an expense for inventories carried at net realisable value.

Note (i) - Increase in Authorised Share capital

The Company increased its Authorised Share Capital from Rs.3,500 lakhs to Rs.4,000 lakhs vide shareholdersâ approval at the Annual General Meeting held on July 26, 2016. In the Extra Ordinary General Meeting (EGM) held on March 6, 2017 vide shareholdersâ approval, the Company further increased the Authorised Share Capital from Rs.4,000 lakhs to Rs.5,000 lakhs.

Note (ii) - Sub division of equity shares

Pursuant to shareholdersâ approval at the Annual General Meeting held on July 26, 2016, the Company sub-divided the face value of equity shares of Rs.10 each into ten equity shares of Rs.1 each on the record date of August 31, 2016.

Note (iii) - Issue of Bonus shares

The Company has allotted 121,329,846 fully paid up equity shares of Rs.1 each on March 17, 2017 pursuant to 2:5 bonus share issue approved by the shareholders in the Extra Ordinary General Meeting (EGM) held on March 6, 2017, by capitalising the Surplus in the statement of profit and loss amounting to Rs.1,213.30 lakhs.

(b) Terms/rights attached to equity shares:

The Company has issued only one class of equity shares having a face value of Rs.1 per share (March 31, 2017:Rs.1 per share, April 1, 2016: Rs.10 per share). Each holder of equity share 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.

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.

In addition, the Company has issued 3,398,410 shares of face value of Rs.1 each (March 31, 2017: 237,724 shares of face value of Rs.10 each, March 31, 2016: 125,621 shares of face value of Rs.10 each) during the period of five years immediately preceding the reporting date on exercise of options granted under the employee stock option plan (ESOP) wherein part consideration was received in form of employee services.

(f) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 45

(ii) The secured loan from DBS contains certain debt covenants relating to limitation on indebtedness and debt service coverage ratio. The Company has satisfied the debt covenants prescribed in the terms of bank loan. The other loans do not carry any debt covenant. The Company has not defaulted on any loans payable.

(a) Cash credits from banks have been secured by hypothecation by way of pari passu first charge on all current assets of the Company, both present and future, including stock of goods and book debts. The short term fund carries interest varying from 9.63% to 11.40% p.a. (March 31, 2017: 9.63% to 11.40% p.a., April 1, 2016: varying from 9.65% to 11.40% p.a.)

(b) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company which varies from 0% to 25% of the respective sanctioned limit. As at March 31, 2018 and March 31, 2017, based on the revised terms of the facilities, there is no recourse on the Company. The total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities as at March 31, 2018 is Nil (March 31, 2017: Nil, March 31, 2016: Rs.1,057.50 lakhs) and is included under Borrowings.

(i) Sale of products includes excise duty collected from customers of Rs.953.42 lakhs [Year ended March 31, 2017: Rs.2,856.45 lakhs). Sale of products net of excise duty is Rs.228,529.66 lakhs (Year ended March 31, 2017: Rs.207,455.60 lakhs). Sales for periods up to 30th June, 2017 includes excise duty. From July 1, 2017 onwards the excise duty and most indirect taxes in India have been replaced by Goods and Service Tax (GST). The Company collects GST on behalf of the Government. Hence, GST is not included in Sales. In view of the aforesaid change in indirect taxes, Sales for the year ended March 31, 2018 is strictly not comparable with Sales for the year ended March 31, 2017.

(ii) The Company is entitled to âScheme of budgetary supportâ under Goods and Service Tax Regime in respect of eligible manufacturing units located in specified regions.

note 3: commitments And CoNTINGENCIES

a) operating lease: Company as lessee

note 4: INVESTMENT IN SuBSIDIARY

a) These financial statement are separate financial statements prepared in accordance with Ind AS-27 âSeparate Financial Statementsâ

b) The Companyâs investment in subsidiary is as follows:

With effect from August 31, 2017, the Company acquired 74% equity stake in Guts Electro-Mech Limited (âGutsâ) for a total purchase consideration of Rs.618.26 lakhs which represents amount paid to promoters of Guts and subscription to fresh issue of equity shares of Guts. Guts is a public limited company engaged in the business of Switch Gear. The Company has a Call Option to acquire the balance 26% stake in Guts, which option can be exercised by the Company any time. Similarly, the original promoter of Guts, holding 26% stake has a Put Option to sell his stake to the Company, which Put Option can be exercised by him after the end of three years from the aforesaid date. The Call Option/ Put Option is exercisable by the parties at the price specified in the purchase agreement linked to the time of exercise. The Put Option liability is initially measured at the present value of the amount payable on exercise of the option, as a financial liability amounting to Rs.317.15 lakhs, with corresponding increase in Investment cost of subsidiary. The subsequent changes in carrying amount of the Put Option liability is recognised in the statement of profit and loss. The Call Option is initially measured at fair value as a financial asset amounting to Rs.50.46 lakhs with corresponding reduction in Investment cost of subsidiary and subsequent changes in fair value through profit or loss.

note 5: employee BENEFIT pLANS

Defined Contribution Plan

The Company mainly makes Provident Fund (PF) and Employeeâs state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs.643.75 lakhs (year ended March 31, 2017: Rs.537.83 lakhs) towards PF contributions (included in note 33(b)) and Rs.47.03 lakhs (year ended March 31, 2017: Rs.27.79 lakhs) towards ESI contributions (included in note 33(b)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

Defined Benefit Plan - Gratuity

The following table sets out the funded status of the gratuity scheme and the amount recognised in the financial statements:

Sensitivity analysis

Asset Liability Matching Strategies

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

Funding arrangements and Funding policy

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

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

The plan assets are maintained with Life Insurance Corporation of India (LIC).

note 6: segment REpoRTING

Electronics Segment includes Stabilizers, Digital UPS, UPS and Solar Inverters;

Electricals Segment includes PVC Insulated Cables, LT Cables, Switch Gears, Single Phase Pumps, Three Phase Pumps and Modular Switches; and

Consumer Durables Segment includes Electric Water Heaters, Solar Water Heaters, Fans, Induction Cooktops, Mixer Grinders, Rice cookers, Glass-top Gas Stoves and Air Coolers

Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to segments as they are also managed on Company basis.

Capital expenditure consists of addition of property, plant and equipment and intangible assets.

Transfer pricing between operating segments are on an arm length basis in a manner similar to transaction with third parties.

1. The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole.

2. Represents additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year.

3. The purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions. Outstanding balances at the year-end are unsecured and interest free.

note 7: share Based pAYMENTS

The members of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on May 14, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions. All options granted under ESOS 2013 can be exercised within 6 years from the date of vesting. The options granted under ESOS 2013 and their exercise prices disclosed below are adjusted for the sub-division and bonus issue of shares made in the previous year. The number of shares allocated for allotment under the ESOS 2013 is 18,090,234 equity shares of Rs.1/- each. The schemes are monitored and supervised by the Nomination and Remuneration Committee of the Board of Directors in compliance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and amendments thereof from time to time.

note 8: significant accounting judgements, estimates and assumptions

a) Judgements

I n the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

Operating lease commitments

The Company has taken various commercial properties on leases. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it does not retain all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

b) Estimates and assumptions

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit (CGU) exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at armâs length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the assetâs performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

Fair value measurement of financial instruments

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

The Put Option liability granted on the non controlling interests of subsidiary is accounted for at the present value of the amount payable on exercise of the option, as a financial liability. The subsequent changes in carrying amount at each reporting date is recognised in the statement of profit and loss. The determination of the carrying value is based on discounted cash flows. The key assumption taken into consideration is the discount factor. As part of the accounting for the investment in subsidiary, put option liability with an estimated value of Rs.317.15 lakhs was recognised at the acquisition date and remeasured to Rs.333.81 lakhs as at the reporting date.

Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment leave benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about the gratuity obligation are given in Note 41.

Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and model used for estimating fair value for share based payment transactions are disclosed in Note 45.

Warranty provision

note 9: FAIR VALuES

Set out below, is a comparison by class of the carrying amounts and fair value of the Companyâs financial instruments:

Long-term receivables/advances given are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

note 10: FAIR VALuE HIERARcHY

The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities, measured at fair value on the balance sheet date:

note 11: financial RISK management oBJEcTIVES AND PoLIcIES

A. Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities.

The Companyâs approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2018 and March 31, 2017. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an ongoing basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable investments, such as mutual funds, with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

For long term borrowings, the Company also focuses on maintaining / improving its credit ratings to ensure that appropriate refinancing options are available on the respective due dates.

B. Market risk

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because these borrowings are at fixed interest rate and hence the exposure to change in interest rate is insignificant of changes in market interest rates. This risk exist mainly on account of borrowings of the Company.

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 is exposed to foreign currency risks arising from exposures to US Dollars from the Companyâs import of goods. The Company manages this foreign currency risk by using foreign currency forward contracts to hedge its import liabilities. The Company has hedged 65% of foreign currency exposure as on March 31, 2018. The Companyâs exposure to foreign currency changes for all other currencies is not material.

The following table demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities net of amounts hedged is as follows:

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing manufacture of industrial and domestic cable and other electronic items and therefore require a continuous supply of copper, being the major input used in the manufacturing. Due to the significantly increased volatility of the price of Copper, the Company has entered into various purchase contracts for this material for which there is an active market. The Companyâs Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company partly mitigated the risk of price volatility by entering into the contract for the purchase of these material based on average price for each month.

C. Credit risk

Trade receivables

Other financial assets

D. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry.

note 12: capital MANAGEMENT

For the purpose of the Companyâs capital management, capital includes issued equity capital and other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholder value.

The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to shareholders. The capital structure of the Company is based on managementâs judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence. The Company monitors Capital using Gearing ratio, which is net debt divided by total capital plus net debt.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

NOTE 13: FIRST-TIME ADOPTION OF IND AS

These financial statements, for the year ended March 31, 2018, are the first financial statements the Company prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 1, 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

Exemptions applied

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

(a) The Company has elected to continue with the carrying value for all of its property, plant and equipment including intangibles as recognised in its Previous GAAP financials as deemed cost at the transition date.

(b) Ind AS 102 Share based payment has not been applied to equity instruments in share based payment transactions that vested before April 1, 2016.

(c) Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements for embedded leases based on conditions in place as at the date of transition. There were no embedded leases.

Estimates

The estimates as at April 1, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with Previous GAAP, apart from Impairment of financial assets based on Expected Credit Loss model, where application of Previous GAAP did not require such estimation.

2 provision for cash Discounts and Sales Returns

Under Previous GAAP, cash discount was recognised as expense as and when it was actually incurred. Ind AS 18 requires that the revenue should be measured at the fair value of the consideration received or receivable. Accordingly, the Company has created a provision for the expected cash discounts based on prior trend by reducing retained earnings as on the transition date by Rs.116.29 lakhs with a corresponding reduction in trade receivables. Under Ind AS, if an entity retains only an insignificant risk of ownership, revenue is recognised at the time of sale provided that the seller can reliably estimate future returns and recognises a liability for returns based on previous experience and other relevant factors. Accordingly, the Company has created a provision of Rs.109.55 lakhs relating to expected sales returns in the retained earnings as on the date of transition, with a corresponding increase in Inventories of Rs.296.19 lakhs and reduction in Trade Receivables of Rs.405.74 lakhs. There was no material impact on the statement of profit & loss for the year ended March 31, 2017.

3 channel Financing

The Company has arranged a channel financing facility from banks under which certain dealers and distributors can pay the Company for the sales made to them using such bank loans. This facility had a 25% recourse to the Company. Under Previous GAAP, the same was disclosed as contingent liability. Under Ind AS, trade receivables should be derecognised only if it meets the derecognition requirements of Ind AS. Accordingly, trade receivables have increased by Rs.1,057.50 lakhs with a corresponding increase in current borrowings as at April 1, 2016. There are no such arrangements as at March 31, 2017.

4 Trade Receivables

Under Previous GAAP, the Company provided for doubtful receivables on assessment of aged balances. Under Ind AS the Company opted to apply the simplified approach of impairing its trade receivables by considering the past trend of behaviour of similar customers under ECL. Due to ECL, the Company has recorded an impairment of Rs.193.29 lakhs as of April 1, 2016. There was no impact on the statement of profit & loss for the year ended March 31, 2017 under the ECL model.

5 Deferred tax

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The various transitional adjustments lead to different temporary differences on which deferred tax adjustments amounting to Rs.145.04 lakhs have been recognised in correlation to the underlying transaction in retained earnings.

6 proposed dividend

Under Previous GAAP, proposed dividends including dividend distribution tax were recognised as a liability in the period to which they relate, irrespective of when they are declared and approved. Under Ind AS, dividend is recognised as a liability in the period in which it is declared by the Board of Directors in case of interim dividends or approved by the shareholders of the Company in case of final dividends. Therefore, the liability of Rs.905.25 lakhs as at March 31, 2016 recorded for dividend (including dividend distribution tax) proposed by the Board of Directors after the end of the year was reduced from Provisions with a corresponding impact in the retained earnings.

7 Revenue from operations

Under Previous GAAP, revenue from operations was presented net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus, sale of goods under Ind AS has increased by Rs.2,856.45 lakhs with a corresponding increase in excise duty expense for the year ended March 31, 2017.

Further, under Previous GAAP, certain sale promotion expenses linked to the volume of sales achieved were recognised as Advertisement and business promotion expenses under Other Expenses. Under Ind AS, revenue is measured at the fair value of the consideration received or receivable taking into account the amount of any volume rebates allowed by the Company. Thus, Other Expenses have been reduced by Rs.6,498.40 lakhs with a corresponding reduction in sale of goods for the year ended March 31, 2017.

8 Share-based payments

Under Previous GAAP, the Company recognised the intrinsic value of the employee stock option plans as an expense. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognised over the vesting period. Accordingly, an additional expense of Rs.663.47 lakhs has been recognised by reducing the retained earnings as on the date of transition and Rs.903.35 lakhs has been has been recognised in Statement of profit and loss for the year ended March 31, 2017. The corresponding credit has been adjusted in a separate component of equity.

9 Defined benefit obligation

Both under Previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gains and losses, are charged to statement of profit & loss. Under Ind AS, remeasurements comprising of actuarial gains and losses on the net defined benefit liability and the return on plan assets are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income. Thus, the employee benefits expense is reduced by Rs.259.66 lakhs and is recognised in other comprehensive income (net of tax of Rs.74.78 lakhs) for the year ended March 31, 2017.

10 other comprehensive income

Under Previous GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Previous GAAP profit to profit as per Ind AS. Further, Previous GAAP profit is reconciled to total comprehensive income as per Ind AS.

11 Statement of cash flows

The transition from Previous GAAP to Ind AS has not had a material impact on the statement of cash flows.

Previous GAAP figures have been reclassified / regrouped wherever necessary to confirm with financial statements prepared under Ind AS.

note 14. loans and advances in the nature of loans given to subsidiaries and associates and firms/ companies in which directors are interested

During the year ended March 31, 2018, the Company has provided guarantee amounting to Rs.800 lakhs to a bank for the borrowings availed by the subsidiary of the Company - Guts Electro-Mech Limited (âGutsâ). The borrowing is availed by Guts for working capital requirements and purchase of machineries. The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or companies / firms in which directors are interested.

note 15. standards issued but not yet effective

Ind AS 115 Revenue from contracts with customers

Ind AS 115 was issued in March, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after April 1, 2018. The Company plans to adopt the new standard on the required effective date using modified retrospective method. The Company assessed the impact of Ind AS 115 and expects that it will have no material effects on the results of the operations of the Company.

Appendix B to Ind AS 21 Foreign currency Transactions and Advance consideration

The Appendix clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. The Appendix is effective for annual periods beginning on or after April 1, 2018. The Company has assessed the impact of the Appendix and expects that it will have no material effects on the results of the operations of the Company.

Mar 31, 2017

Note 1: Inter corporate loan represents unsecured loan given to M/s Sakthi Accumulators Private Limited (''the vendor'') for enhancing its manufacturing infrastructure. The loan has to be repaid over a period of three years starting from 30th March, 2018 and ending on 30th March, 2021. One of the promoter director of the vendor has provided personal guarantee for the repayment of loan. Interest rate of the loan is 10% p.a. with effect from 31st October 2016 (31st March 2016: 18% p.a.).

Note 2: Others represents unsecured loan given during the year to Mr. Gopal Singh Cintury , the landlord for construction of building to be occupied by the Company, at an interest rate of 9% p.a.. The loan will be repaid by adjustment of monthly rent payable to the landlord pursuant to lease agreement entered for a period of five years. The landlord''s son has provided personal guarantee for the repayment of loan.

(1) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters and claims relating to company''s products that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.

(2) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company which varies from 0% to 25% of the respective sanctioned limit. As at March 31, 2017, based on the revised terms of the facilities, there is no recourse on the Company . The total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities as at 31st March, 2017 is Nil (31st March 2016: RS,1,057.50 lakhs) and is included under Guarantees above. The total trade receivables who have availed the facilities as at 31st March 2017 were RS,4,612.91 lakhs (31st March, 2016: RS,4,318.66 lakhs).

Note 3 Employee Benefit Plans Defined Contribution Plan

The Company mainly makes Provident Fund (PF) and Employee''s state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognized RS,537.83 lakhs (year ended 31st March, 2016: RS,464.99 lakhs) towards PF contributions (included in note 24(b)) and RS,27.79 lakhs (year ended 31st March, 2016: RS,26.18 lakhs) towards ESI contributions (included in note 24(b)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

Defined Benefit Plan - Gratuity

The following table sets out the funded status of the gratuity scheme and the amount recognized in the financial statements:

Note 4 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronics, (b) Electrical / Electro Mechanical and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallowable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallowable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

Note: Figures in brackets relates to the previous year

Note 5 Related Party Transactions a. Details of Related Parties:

Description of Relationship Names of Related Parties

Key Management Personnel (KMP) Mr. Kochouseph Chittilappilly - Chairman

Mr. Mithun K. Chittilappilly - Managing Director and Son of Mr. Kochouseph Chittilappilly Mr. Ramachandran Venkataraman - Director and Chief Operating Officer w.e.f 1st June, 2016 (Director - Marketing and Strategy up to 31st May, 2016)

Mr. Jacob Kuruvilla - Chief Financial Officer (Refer note 2 below)

Ms. Jayasree K - Company Secretary (Refer note 2 below)

Relatives of KMP with whom Ms. Sheela Kochouseph - Wife of Mr. Kochouseph Chittilappilly

transactions have taken place Mr. Arun K. Chittilappilly - Son of Mr. Kochouseph Chittilappilly

^{during the year} Ms. Joshna Johnson Thomas - Wife of Mr. Mithun K. Chittilappilly and Non-Executive

Director

Company in which KMP / Relatives M/s. Wonderla Holidays Limited of KMP can exercise significant M/s. V-Star Creations Private Limited

^influence M/s. Veegaland Developers Private Limited

M/s. K Chittilapilly Foundation M/s. Thomas Chittilapilly Trust

Note: The basic and diluted earnings per share and number of shares used for computation of the EPS have been adjusted retroactively to give effect to the sub division of shares from H10 face value to H1 face value and issue of bonus shares. Refer Note 3(ii) and (iii) for further details.

Note 6 Employee Stock Compensation

The shareholders of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on 14th May, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. The Compensation Committee of the Company administers the Scheme. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions. The options granted under ESOS 2013 disclosed below are adjusted for the sub-division of shares. Adjustment for issue of bonus shares has been disclosed separately for grants issued during FY 2013-14 and FY 2015-16. Refer Note 3(ii) and 3(iii) for further details.

Grant I

(a) 2,161,380 restricted stock units (RSU) (face value of H1 each) to be exercised at a price of H1 per share.

(b) 7,011,840 share options (face value of H1 each) to be exercised at a price of H48.50 per share.

These options will vest over a period of three years from June 2014 to June 2016. Of the total entitlements of 9,173,220 stock options (the total entitlements), as discussed above, two third of total entitlements are Time Based Grants whereby the eligible employee is vested with the options considering his continuing employment with the Company on the day of vesting. Remaining one third of the total entitlements are performance based whereby the employee will be vested with options considering the performance of the Company and the Individual employee.

Stock options under ESOS 2013 were granted on June 11, 2013. Market price of the Company''s equity shares at the date of the grant was H485.35 (face value of H10 each) per share.

Grant II

(a) 221,810 restricted stock units (RSU) (face value of H1 each) to be exercised at a price of H1 per share.

(b) 684,470 share options (face value of H1 each) to be exercised at a price of H99.90 per share.

These options will vest over a period of three years from May 2016 to May 2018. Of the total entitlements of 906,280 stock options (the total entitlements), as discussed above, two third of total entitlements are Time Based Grants whereby the eligible employee is vested with the options considering his continuing employment with the Company on the day of vesting. Remaining one third of the total entitlements are performance based whereby the employee will be vested with options considering the performance of the Company and the Individual employee.

Stock options under ESOS 2013 were granted on May 04, 2015. Market price of the Company''s equity shares at the date of the grant was H999 (face value of H10 each) per share.

Grant III to VII

(a) 2,468,466 (adjusted for issue of bonus shares) restricted stock units (RSU) (face value of H1 each) to be exercised at a price of H1 per share.

(b) 3,780,000 (adjusted for issue of bonus shares) share options (face value of H1 each) to be exercised at a price of H68.75 per share.

(c) 1,120,000 (adjusted for issue of bonus shares) share options (face value of H1 each) to be exercised at a price of H121.79 per share.

The options granted will vest over a period of four years from May 2017 to January 2021. These options will vest on time basis and on the basis of performance of the Company.

Weighted average market price of the Company''s equity shares during the grant dates was H90.93 per share (face of H1 each).

Note 7 Operating lease: Company as lessee

The Company has entered into commercial leases on certain vehicles, land and building. These leases are for periods ranging between one and five years with no reversal option included in these contracts. There are no restrictions placed upon the Company by entering into these leases.

Note 8 Capitalization of Expenditure

During the year, the Company has capitalized the following expenses of revenue nature to the cost of property, plant and equipment/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

Note 9: Previous year figures

Previous year figures have been regrouped / reclassified, wherever nec

Mar 31, 2015

1. Corporate information

V-Guard Industries Ltd ('V-Guard' or 'the Company') is a public company domiciled in India and is engaged in the manufacturing, trading and selling of a wide range of products including Voltage Stabilizers, PVC Cables, Pumps and Motors, Electric Water Heaters, Digital UPS, Fans, L.T.Cable, UPS, Solar Water Heaters, Switchgears, Induction Cooktops, etc.

V-Guard has its manufacturing facilities located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh and at SIPCOT Industrial growth center, Perundurai, Tamil Nadu.

The Company's shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

a) Basis of preparation

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

b) Share capital

Terms/rights attached to equity shares:

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

During the year ended 31st March, 2015, the amount of per share dividend recommended for distribution to equity shareholders is Rs. 4.50 (31st March, 2014: Rs. 4.50).

In the event of liquidation of the Company, the equity share holders will be entitled to receive remaining assets of the Company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.Intangible assets under development

Intangible assets under development as at March 31, 2014 relates to computer software being developed for the Company.

3.Litigations, contingent liabilities and commitments (to the extent not provided for)

As at As at 31st March,2015 31st March,2014 (Rs. in lakhs) (Rs. in lakhs)

(i) Litigations (see note 1 below)

(a) Claims against the Company not 302.86 262.82 acknowledged as debt

(b) Direct tax matters under dispute / 340.74 158.39 pending before Income Tax Authorities

(c) Indirect tax matters for demands raised 645.98 144.10 by sales tax / vat department pending before various appellate authorities

(d) Others 6.82 6.82

Total 1,296.40 572.13

(ii) Contingent liabilities

(a) Guarantees (see note 2 below) 3,041.67 3,501.14

(b) Letters of credit opened with banks 2,012.49 1,915.34

Total 5,054.16 5,416.48

(iii) Commitments

(a) Estimated amount of contracts remaining 298.88 417.36 to be executed on capital account and not provided for.

Total 298.88 417.36

(1) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters and claims relating to company's products that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company's financial position and results of operations.

(2) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company which varies from 25% to 100% of the respective sanctioned limit as on the balance sheet date. Total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities amounted to Rs. 2,717.26 lakhs as at 31st March 2015 (31st March, 2014: Rs. 3,227.49 lakhs) and is included under Guarantees above. The total trade receivables who have availed the facilities as at 31st March 2015 were Rs. 3,851.89 lakhs (31st March, 2014: Rs. 4,500.33 lakhs).

3.1 Disclosure as per clause 32 of the listing agreements with the stock exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or companies / firms in which directors are interested, and there are no investments in the shares of the Company by such parties.

4.Disclosures under accounting standards

4.1 Employee Benefit Plans

Defined Contribution Plan

The Company mainly makes Provident Fund (PF) and Employee's state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 380.04 lakhs (year ended 31st March, 2014: Rs. 335.29 lakhs) towards PF contributions (included in note 22(b)) and Rs. 47.81 lakhs (year ended 31st March, 2014: Rs. 73.70 lakhs) towards ESI contributions (included in note 22(b)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

4.2 Related Party Transactions (a) Details of Related Parties:

Description of Names of Related Parties Relationship

Mr.Kochouseph Chittilappilly - Chairman Mr. Mithun K. Chittilappilly - Managing Director and Son of Mr.Kochouseph Chittilappilly Mr. Ramachandran Venkataraman - Director Marketing and Strategy (w.e.f 1st June 2013) Key Management Personnel (KMP) Dr. George Sleeba - Joint Managing Director (upto 31st May 2013) Mr. Jacob Kuruvilla - Chief Financial Officer (Refer note 2 below) Ms. Jayasree K - Company Secretary (Refer note 2 below)

Relatives of KMP with whom Ms. Sheela Kochouseph - Wife of Mr. transactions have taken Kochouseph Chittilapilly place during the year Mr. Arun K. Chittilappilly - Son of Mr. Kochouseph Chittilappilly Mr. C. T. John - Brother of Mr. Kochouseph Chittilappilly

M/s. Wonderla Holidays Limited M/s. V-Star Creations Private Limited Company in which KMP / M/s. Veegaland Developers Private Limited Relatives of KMP can M/s. K Chittilapilly Foundation exercise significant M/s. Thomas Chittilapilly Trust influence

4.3 Employee Stock Compensation

The shareholders of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on 14th May, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. The Compensation committee of the Company administers the scheme. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions:

(a) 2,16,138 restricted stock units (RSU) (face value of Rs. 10 each) to be exercised at a grant price of Rs. 10 per share.

(b) 7,01,184 share options (face value of Rs. 10 each) to be exercised at a grant price of Rs. 485 per share.

These options will vest over a period of three years from June 2014 to May 2016. Of the total entitlements of 917,322 stock options (the total entitlements), as discussed above, two third of total entitlements are Time Based Grants whereby the eligible employee is vested with the options considering his continuing employment with the Company on the day of vesting. Remaining one third of the total entitlements are performance based whereby the employee will be vested with options considering the performance of the Company and the Individual employee.

Stock options under ESOS 2013 were granted on June 11,2013. Market price of the Company's equity shares at the date of the grant was Rs. 485.35 per share.

5. Previous year figures

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

Mar 31, 2014

1. Corporate information

V-Guard Industries Ltd (''V-Guard'' or ''the Company'') is a public company domiciled in India and is engaged in the manufacturing, trading and selling of a wide range of products including Voltage Stabilizers, PVC Cables, Pumps and Motors, Electric Water Heaters, Digital UPS, Fans, L.T. Cable, UPS, Solar Water Heaters, Switchgears, Induction Cooktops, etc.

V-Guard has its manufacturing facilities located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh and at SIPCOT Industrial growth center, Perundurai, Tamil Nadu.

The Company''s shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

Note 3 (A) : Intangible assets under development

Intangible assets under development as at March 31, 2014 and as at March 31, 2013 relates to a computer software being developed for the Company.

(Rs. in lakhs)

As at As at

Particulars 31st March, 2014 31st March, 2013

4.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not 262.82 8.82 acknowledged as debt

(b) Guarantees (see Note 2 below) 3,501.14 1,050.00

(c) Direct tax matters under dispute / pending 158.39 149.99 before Commissioner of Income Tax

(d) Indirect tax matters for demands raised by 144.10 160.08 sales tax / VAT department pending before various appellate authorities

(e) Letters of credit opened with banks 1,915.34 2,126.56

(f) Others 6.82 6.82

Total 5,988.61 3502.27

(ii) Commitments

(a) Estimated amount of contracts remaining to be 417.36 1,288.57

executed on capital account and not provided for:

Total 417.36 1,288.57

(1) The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including commercial matters that arise from time to time in the ordinary course of business. Management is of the view that such claims are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.

(2) The Company has arranged Channel Finance Facilities for its customers from various banks. As per the terms of these facilities, should the customers default in making payment, after exhausting other modes of recovery the bankers have recourse on the Company which varies from 25% to 100% of the respective sanctioned limit as on the balance sheet date. Total amount guaranteed by the Company towards such recourses under the Channel Financing Facilities amounted to Rs. 3,227.49 lakhs as at 31st March 2014 (31st March, 2013 - Rs. 1,050 lakhs) and is included under Guarantees above. The total trade receivables who have availed the facilities as at 31st March 2014 were Rs. 4,500.33 lakhs (31st March, 2013 - Rs. 2,022 lakhs).

4.2 Disclosure as per clause 32 of the listing agreements with the stock exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or others, and there are no investments in the shares of the Company by such parties.

4.3 Foreign exchange forward contracts and unhedged foreign currency exposures Details on hedged foreign currency exposures

5.1 Employee Benefit Plans

Defined Contribution Plan

The Company mainly makes Provident Fund (PF) and Employee''s state insurance (ESI) contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 335.29 lakhs (year ended 31 March, 2013: Rs. 237.11 lakhs) towards PF contributions (included in note 22(b)) and Rs. 73.70 lakhs (year ended 31st March, 2013: Rs. 75.17 lakhs) towards ESI contributions (included in note 22(e)) in the statement of profit and loss. The contributions payable to this plan by the Company is at the rate specified in the rules of the scheme.

Defined Benefit Plan - Gratuity

The following table sets out the funded status of the gratuity scheme and the amount recognised in the financial statements:

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

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

The plan assets are maintained with Life Insurance Corporation of India (LIC).

5.2 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronic Products, (b) Electrical / Electro Mechanical Products and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

5.3 Employee Stock Compensation

The shareholders of the Company by way of a special resolution under Section 81(1)(A) of the Companies Act, 1956, passed on 14th May, 2013 through postal ballot procedure, approved Employees Stock Option Scheme, 2013 (ESOS 2013) for grant of stock options to eligible employees of the Company. The Compensation committee of the Company administers the scheme. According to the Scheme, the eligible employees will be entitled to options as given below subject to satisfaction of prescribed vesting conditions;

(a) 2,16,138 restricted stock units (RSU) (face value of Rs. 10 each) to be exercised at a grant price of Rs. 10 per share.

(b) 7,01,184 share options (face value of Rs. 10 each) to be exercised at a grant price of Rs. 485 per share.

These options will vest over a period of three years from June 2014 to May 2016. Of the total entitlements of 917,322 stock options (the total entitlements), as discussed above, two third of total entitlements are Time Based Grants whereby the eligible employee is vested with the options considering his continuing employment with the Company on the day of vesting. Remaining one third of the total entitlements are performance based whereby the employee will be vested with options considering the performance of the Company and the Individual employee.

Stock options under ESOS 2013 were granted on June 11, 2013. Market price of the Company''s equity shares at the date of the grant was Rs. 485.35 per share.

6 Previous year figures

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

Mar 31, 2013

1. Corporate information

V-Guard Industries Ltd (''V-Guard'' or ''the Company'') is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the manufacturing, trading and selling of a wide range of products including voltage stabilizers, PVC Cables, Pumps and Motors, Electric Water Heaters, Digital UPS, Fans, L.T.Cable, UPS, Solar Water Heaters, Switchgears and Induction Cooktops.

V-Guard has its manufacturing facilities located at K.G. Chavady, Coimbatore, Tamil Nadu; at Kashipur, Utharakhand; at Kala Amb, Himachal Pradesh and at SIPCOT Industrial growth center, Perundurai, Tamil Nadu.

The Company''s shares are listed in Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3.1 Disclosures required under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

As at March 31, 2013, Trade payables include Rs. 1,658.91 lakhs (March 31, 2012 - Rs. 1001.75 lakhs), towards principal amount payable to suppliers as defined under Micro, Small, Medium Enterprises Development Act, 2006 (MSMED Act). Interest due on the above as at March 31, 2013 is Rs. 0.17 lakhs.

The amount of interest paid by the Company in terms of section 16 of the MSMED Act 2006 along with the amounts of the payment made to the supplier beyond the appointed day was Rs. Nil for the year ended March 31, 2013. The amount of interest due and payable for the period of delay for payments made to suppliers during the year ended March 31, 2013 amounts to Rs. 10.36 lakhs. The amount of interest accrued and remaining unpaid as at March 31, 2013 amounts to Rs. Nil. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006 is Rs. Nil for year ended March 31, 2013.

Note: Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the management.

3.2 Disclosure as per clause 32 of the listing agreements with the stock exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or others, and there are no investments in the shares of the Company by such parties.

4.1 Employee Benefit Plans

Defined Contribution Plan - Provident Fund

The Company makes Provident Fund contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognised Rs. 237.11 lakhs (Year ended 31 March, 2012: Rs. 193.44 lakhs) towards Provident Fund contributions in the statement of profit and loss. The contribution payable to this plan by the Company is at the rate specified in the rules of the scheme.

4.2 Details of capitalisation of expenditure

During the year, the Company has capitalised the following expenses of revenue nature to capital work-in- progress. Consequently, expenses disclosed under the respective notes are net of amounts capitalised by the Company.

4.3 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronic Products, (b) Electrical / Electro Mechanical Products and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments.

5 Previous year figures

Prior year financial statements were audited by a firm other than S.R. Batliboi & Associates LLP. Prior year figures have been regrouped / reclassified, wherever necessary, to confirm to current year''s classification.

Mar 31, 2012

1 Corporate information

V-Guard Industries Ltd ('V-Guard' or 'the Company') is a leading corporation in the Indian electric and electronic goods panorama. V-Guard which started in 1977 as a Stabilizer manufacturer, now has a wide range of products including PVC Cables, Pumps & Motors, Electric Water Heaters, Digital UPS, Fans, L.T.Cable, UPS, Solar Water Heaters, Switchgears and Induction Cook tops.

V-Guard has state of the art manufacturing facilities at K.G.Chavady, Coimbatore, Tamil Nadu (manufacturing PVC cables, LT cables & Solar water heaters) at Kashipur, Utharakhand (manufacturing PVC cables) at Kala Amb, Himachal Pradesh (manufacturing Fans & Electric Water Heaters) and at Coimbatore, Tamil Nadu (manufacturing Pumps & Motors).A new factory for manufacturing Solar Water Heaters with improved technology is also coming up at SIPCOT Industrial growth centre, Perundurai, near Erode, Tamil Nadu. Apart from self manufactured goods which forms about 40 % of total turnover, V-Guard also trade in imported goods and goods procured from various production units in India.

V-Guard now has pan India presence with 28 branches, an extensive network of about 200 distributors / service centre's, 2700 channel partners and over 10000 dealers. V-Guard's untiring commitment for performance, cutting edge technology, innovative design and dependable service standards have ensured unrivalled product quality leading to its trusted brand image. The Company's shares are listed in the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

(i) Rights attached to equity shares:

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

During the year ended 31st March 2012, the amount of per share dividend recommended for distribution to equity shareholders is Rs 3.50 (31st March 2011: Rs 3.50).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after settling the dues of preferential and other creditors as per priority. The distribution will be in proportion to the number of equity shares held by the shareholders.

For the For the year ended year ended Note Particulars 31st March, 31st March, 2012 2011

2.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt 9.05 7.05

(b) Guarantees 153.75 -

(c) Other money for which the Company is contingently liable 681.38 759.48

844.18 766.53

(ii) Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for:

Tangible assets 182.62 1,572.12

182.62 1,572.12

2.2 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

The Company has not given any loans and advances in the nature of loans to subsidiaries, associates or others, and there are no investments in the shares of the Company by such parties.

2.3 The Company has deposited the dividends payable to non-resident shareholders into their Rupee account with various banks in India and hence the disclosure of amounts remitted in foreign currency during the year to non-resident shareholders on account of dividend is not applicable.

3.1 Employee Benefit Plans

Defined Contribution Plan - Provident Fund

The Company makes Provident Fund contributions to a defined contribution plan for qualifying employees. Under the Scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company has recognized Rs 193.44 lakhs (Year ended 31st March, 2011: Rs 153.38 lakhs) towards Provident Fund contributions in the Statement of Profit and Loss. The contribution payable to this plan by the Company is at the rate specified in the rules of the scheme.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

3.2 Segment Information

The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily (a) Electronic Products, (b) Electrical / Electro Mechanical Products and (c) Others. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallowable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallowable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments. Company's operations are situated predominantly in one geographical area, viz., India, and hence secondary Geographical segment information is not applicable.

4 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

Mar 31, 2011

1. Particulars of Security provided for loans are as under: - Term Loans from Banks:

a) Term loan of Rs.370 lakhs from Dhanlaxmi Bank Ltd. is secured by hypothecation by way of (1) first charge on the plant and machinery, tools and accessories in respect of specific assets financed by the bank, namely (a) 2 x 230 KW Wind Mills situated at Dharapuram Taluk, Erode, Tamil Nadu, (b) Machinery and equipment in respect of Solar Water Heater Unit at K.G Chavadi, Coimbatore; and (c) Office cum godown building at Mansoorabad Village, Renga Reddy District, Andhra Pradesh; and (2) equitable mortgage of 4 acres of land relating to the Wind Mills, at Erode, Tamil Nadu and 2091.5 sq. meters of land at Mansoorabad Village in Andhra Pradesh.

b) Term loan of Rs.100 lakhs from Dhanlaxmi Bank Ltd. is secured by way of equitable mortgage of 106.424 cents of land at Edappally South Village, Kanayannur Taluk, Vennala Desom, together with godown with an area of 1578.40 sq meters.

c) Term loan of Rs.1,000 lakhs from State Bank of India is secured by way of (a) charge over the registered Trade Mark "V-GUARD"; and (b) exclusive charge over (i) Plant and Machinery in the trading division having establishments at Ernakulam, Bangalore, Coimbatore and Hyderabad; (ii) Factory building and plant and machinery at Solar Water Heater Division; (iii) 113.293 cents of land at High School Road, Vennala; (iv) 1306 cents of land at K.G Chavadi, Coimbatore; and (v) 12.52 cents of land at Mettupalayam Road, Coimbatore. Balance outstanding in this facility as on 31.03.2011 is Rs. Nil (Previous Year: Rs.120 lakhs).

d) Term loan of Rs.800 lakhs from State Bank of India is secured by way of (a) charge over the assets acquired / constructed out of bank finance, viz., corporate office building at Vennala; (b) extension of equitable mortgage over 113.293 cents of land at High School Road, Vennala, 1306 cents of land at K.G Chavadi, Coimbatore, 12.52 cents of land at Mettupalayam Road, Coimbatore, and (c) extension of charge over Plant and Machinery in Trading Division and Solar Water Heater Division and factory building of Solar Water Heater Division. The loan is further secured by personal guarantees of Sri. Kochouseph Chittilappilly, Managing Director and Smt. Sheela Kochouseph, wife of Sri. Kochouseph Chittilappilly.

e) Term loan of Rs.200 Lakhs from Punjab National Bank is secured by way of mortgage of 622.50 Cents of land at Survey No.37/2, 37/3 and 37/4 together with godown building at Thenkurissi Village near NH-47 Junction, Palakkad. Balance outstanding in this facility as on 31.03.2011 is Rs. Nil (Previous Year: Rs. Nil).

Medium Term Loans from Banks:

Medium term loans from Dhanlaxmi Bank Ltd. and HDFC Bank Ltd. are secured by way of hypothecation of vehicles financed by the lender.

Medium Term Loans from Others:

Medium term loan from Cisco Systems Capital India Pvt. Ltd. is secured by way of hypothecation of fixed assets financed by the lender.

Working Capital Loans from Banks:

Working capital loans from State Bank of India, Dhanlaxmi Bank Ltd., Citibank N.A., HDFC Bank Limited and Standard Chartered Bank are secured by hypothecation by way of pari passu first charge on all current assets of the Company, both present and future, including stock of goods, book debts and all other movable assets including document of title to goods and third pari-passu charge on all fixed assets of the Company including immovable properties.

2. Company has availed supplier bill-discounting facilities from Small Industries Development Bank of India (SIDBI), State Bank of India, Standard Chartered Bank and Dhanlaxmi Bank Ltd. The security details of these facilities are as follows:

a) The limit with SIDBI is secured by a second charge by way of hypothecation of all the movable assets including movable plant, machinery, spares, tools, accessories, equipments, computers etc., both present and future, of the Company and personal guarantee of Shri Kochouseph Chittilappilly, Managing Director of the Company.

b) The limits with State Bank of India, Standard Chartered Bank and Dhanlaxmi Bank Ltd. are secured by way of extension of security provided for working capital loans.

3. Contingent Liabilities:

(Rs. in lakhs)

Particulars 2010-11 2009-10

(a) Disputed sales tax matters, pending in appeal 127.62 125.35

(b) Claims against the Company not acknowledged as debts 7.05 -

(c) Disputed income tax matters, pending in appeal 4.53 -

(d) Open letters of credit for import / inland purchases 627.33 343.72

4. Estimated amount of contracts remaining to be executed on capital amount and not provided for (net of advances): Rs.1,572.12 lakhs. (Previous Year: Rs.343.96 lakhs).

Note: The Ministry of Corporate Affairs, Government of India, vide Notification No. S.O. 301(E) dated 8th February 2011, has exempted manufacturing / multi-product companies from disclosing particulars of goods which form less than 10% of the total value of turnover under clauses 3(i)(a) and 3(ii)(a) of Part II of Schedule VI of the Companies Act, 1956. The Company has accordingly disclosed quantitative particulars of goods which constitute 10% or more of the turnover for the current year and / or previous year.

(b) Particulars in respect of Opening Stock, Purchases and Closing Stock of Traded Goods

Note: The Ministry of Corporate Affairs, Government of India, vide Notification No. S.O. 301(E) dated 8th February 2011, has exempted trading / multi-product companies from disclosing particulars of goods which form less than 10% of the total purchase under clauses 3(i)(a) and 3(ii)(b) of Part II of Schedule VI of the Companies Act, 1956. The Company has accordingly disclosed quantitative particulars of goods which constitute 10% or more of the total purchases for the current year and / or previous year.

Note: The Ministry of Corporate Affairs, Government of India, vide Notification No. S.O. 301(E) dated 8th February 2011, has exempted manufacturing / multi-product companies from disclosing particulars of goods which form less than 10% of the value of raw material consumption under clause 3(ii)(a) of Part II of Schedule VI of the Companies Act, 1956. The Company has accordingly disclosed quantitative particulars of goods which constitute 10% or more of the value of raw materials consumed during the current year and / or previous year.

- Perquisites have been valued in accordance with the Income Tax Rules, 1962.

- The above remuneration is within the limits specified u/s 198 of the Companies Act, 1956.

- Provisions for / contributions to employee retirement benefits, which are based on actuarial valuations done for the Company as a whole, are excluded from the above.

5. Notes on Cash Flow Statement:

a) The Cash Flow Statement has been prepared under the 'indirect method' specified in Accounting Standard Ã 3 "Cash Flow Statements" notified under Companies (Accounting Standards) Rules, 2006.

b) Cash and Cash Equivalents includes (a) fixed deposits of Rs.207.05 lakhs (Previous Year: Rs. 85.25 lakhs), given as security for guarantee and letter of credit facility extended by State Bank of India and Dhanlaxmi Bank Ltd.; and (b) unclaimed dividends amounting to Rs.13.33 lakhs (Previous Year: Rs. 8.50 lakhs) lying in current accounts, not available for use by the Company.

6. Employee Benefits:

The Company has provided the following benefits to its employees during the year:

I. Defined Contribution Plan Ã Provident Fund:

During the year, the Company has recognised the employer's contribution to Employees Provident Fund Organisation amounting to Rs.42.95 lakhs (Previous Year: Rs. 27.34 lakhs) as part of Employee Costs in Schedule 17 of the financial statements.

II. State Plans:

a) Employer's contribution to Employees' State Insurance Scheme.

b) Employer's contribution to Employees' Pension Scheme, 1995.

7. Segment Disclosures:

a) Business segments have been identified as per Accounting Standard 17 Ã 'Segment Reporting' taking into account the product portfolio, internal reports, organisation structure, etc.

b) The Company has considered business segment as the primary segment for the purpose of disclosure.

c) Types of products in each Business Segment:

d) The Segment Revenues, Results, Assets and Liabilities include amounts identifiable to specific segments and amounts allocated to all segments on a reasonable basis.

8. The amount of unclaimed dividends lying in separate bank accounts as at the Balance Sheet date is Rs.13.33 lakhs (Previous Year: Rs. 8.50 lakhs). There is no amount due and outstanding as at the Balance Sheet date to be credited to the Investor Education and Protection Fund.

9. Previous year's figures have been re-grouped/re-classified wherever necessary to conform to classification for the current year.

Mar 31, 2010

1. Particulars of Security provided for the loans are as under: - Term loans from Banks:

a) Term loan of Rs.370 lakhs from Dhanlaxmi Bank Ltd. is secured by hypothecation by way of (1) first charge on the plant and machinery, tools and accessories in respect of specific assets financed by the bank, namely (a) 2 x 230 KW Wind Mills situated at Dharapuram Taluk, Erode, Tamil Nadu; (b) Machinery and equipment in respect of Solar Water Heater Unit at K.G Chavadi, Coimbatore; and (c) Office cum godown building at Mansoorabad Village, Renga Reddy District, Andhra Pradesh and (2) equitable mortgage of 4 acres of land relating to the Wind Mills, at Erode, Tamil Nadu and 2,091.5 sq. meters of land at Mansoorabad Village in Andhra Pradesh.

b) Term loan of Rs.100 lakhs from Dhanlaxmi Bank Ltd. is secured by way of equitable mortgage of 106.424 cents of land at Edappally South Village, Kanayannur Taluk, Vennala Desom, together with godown with an area of 1,578.40 sq. meters.

c) Term loan of Rs.1,000 lakhs from State Bank of India is secured by way of (a) charge over the registered Trade Mark ÃV-GUARDÃ; and (b) exclusive charge over (i) Plant and Machinery in the trading division having establishments at Ernakulam, Bangalore, Coimbatore and Hyderabad; (ii) Factory building and plant and machinery at Solar Water Heater Division; (iii) 47.737 cents of land at Sastha Temple Road, Kaloor; (iv) 113.293 cents of land at High School Road, Vennala; (v) 1,306 cents of land at K.G Chavadi, Coimbatore; and (vi) 12.52 cents of land at Mettupalayam Road, Coimbatore.

d) Term loan of Rs.800 lakhs from State Bank of India is secured by way of (a) charge over the assets acquired / constructed out of bank finance, viz., corporate office building at Vennala; (b) extension of equitable mortgage over 47.737 cents of land at Sastha Temple Road, Kaloor, 113.293 cents of land at High School Road, Vennala, 1,306 cents of land at K.G Chavadi, Coimbatore, 12.52 cents of land at Mettupalayam Road, Coimbatore, and (c) extension of charge over Plant and Machinery in Trading Division and Solar Water Heater Division and factory building of Solar Water Heater Division.

e) Term loan of Rs.200 Lakhs from Punjab National Bank is secured by way of hypothecation of 622.50 Cents of land at Survey No.37/2, 37/3 and 37/4 together with godown building at Thenkurissi Village near NH-47 Junction, Palakkad.

Medium term loan from Banks:

Medium term loans from Dhanlaxmi Bank Ltd. and HDFC Bank Ltd. are secured by hypothecation of vehicles financed by the lender.

Medium term loan from Others:

Medium term loan from Cisco Systems Capital India Pvt. Ltd. is secured by hypothecation of fixed assets financed by the lender.

Working capital loan from Banks:

a) Working capital loan from State Bank of India, Dhanlaxmi Bank Ltd, Citibank N.A., HDFC Bank and Standard Chartered Bank are secured by hypothecation by way of pari-passu first charge on all current assets of the Company, both present and future, including stock of goods, book debts and all other movable assets including document of title to goods on pari-passu basis and third pari-passu charge on all fixed assets of the Company including immovable properties.

b) Working capital loan from Punjab National Bank is secured by way of first pari-passu charge on all current assets of the Company, wherever located, or in transit or delivery to the Company including stock of goods, book debts and all other movable assets along with other banks. Balance outstanding in this facility as on 31.03.2010 is Rs. Nil.

2. Company has availed supplier bill-discounting facilities of Rs.500 lakhs from Small Industries Development Bank of India (SIDBI), Rs.1,000 lakhs from State Bank of India, Rs.1,050 lakhs from Standard Chartered Bank and Rs.1,000 lakhs from Dhanlaxmi Bank Ltd. The security details of these facilities are as follows:

a) The limit with SIDBI is secured by a second charge by way of hypothecation of all the movable assets including movable plant, machinery, spares, tools, accessories, equipments, computers etc., both present and future, of the Company and personal guarantee of Shri Kochouseph Chittilappilly, Managing Director of the Company.

b) The limit with State bank of India, Standard Chartered Bank and Dhanlaxmi Bank Ltd. are secured by way of extension of security provided for working capital loans.

3. Contingent liabilities:

(Rs. in lakhs)

Particulars 2009-10 2008-09

a) Sales tax matters under dispute 125.35 97.49

b) Open letters of credit for import purchase 343.72 65.22

4. Estimated amount of contracts remaining to be executed on capital amount and not provided for (net of advances): Rs.343.96 lakhs. (Previous Year: Rs.576.10 lakhs).

5. Notes on Cash Flow Statement:

a) The Cash Flow Statement has been prepared using the Ãindirect methodÃ specified in Accounting Standard Ã 3 ÃCash Flow StatementsÃ notified in Companies (Accounting Standards) Rules, 2006.

b) Cash and Cash Equivalents includes (a) fixed deposits of Rs.85.25 lakhs (Previous Year: Rs.59.45 lakhs), given as security for guarantee and letter of credit facility extended by State Bank of India and Dhanlaxmi Bank Ltd.; and (b) unclaimed dividend amounting to Rs.8.50 lakhs (Previous Year: Rs.5.36 lakhs), not available for use by the Company.

6. Interest capitalized during the year on funds borrowed for construction of Corporate Office building: Rs. Nil (Previous Year: Rs.36.97 lakhs).

7. Employee Benefits:

The Company has provided the following benefits to its employees during the year:

I. Defined Contribution Plan Ã Provident Fund:

During the year, the Company has recognised the employerÃs contribution to Employees Provident Fund Organisation amounting to Rs.27.34 lakhs (Previous Year: Rs.21.71 lakhs) as part of Employee Costs in Schedule 17 of the financial statements.

II. State Plans:

a) EmployerÃs contribution to EmployeesÃ State Insurance Scheme.

b) EmployerÃs contribution to EmployeesÃ Pension Scheme, 1995.

During the year, the Company has recognised the following amounts in the Profit and Loss Account, included as part of Employee Costs in Schedule 17 of the financial statements:

8. Segment Disclosures:

a) Business segments have been identified as per Accounting Standard 17 - Segment Reporting taking into account the product portfolio, internal reports, organisation structure, etc.

b) The Company has considered business segment as the primary segment for the purpose of disclosure.

d) The Segment revenues, results, assets and liabilities include amounts identifiable to specific segment and amounts allocated to that segment on a reasonable basis.

9. Related Party Disclosures:

I. Related party disclosures under Accounting Standard 18: a) Nature of Relationship and Name of Related Parties:

Sl. No. Nature of Relationship Name of Related Party

(i) Key Management Personnel

Mr. Kochouseph Chittilappilly (Managing Director),

Mr. Mithun K. Chittilappilly, (Executive Director),

Mr. N. Sreekumar (Joint Managing Director - From

June 2009 to January 2010)

(ii) Relatives of Key

Ms. Sheela Kochouseph, Mr. Arun K. Chittilappilly,

Management Personnel

Mr. C. T. John - Wife, Son and Brother respectively of Mr. Kochouseph Chittilappilly

(iii) Enterprises in which the Key M/s. Wonderla Holidays Private Limited,

Management Personnel and M/s. V-Star Creations Private Limited his relatives have substantial and M/s. Vintes Solutions Private Limited interest

10. The amount of unclaimed dividends lying in separate bank accounts as at the Balance Sheet date is Rs.8.50 lakhs (Previous Year: Rs.5.36 lakhs). There is no amount due and outstanding as at the Balance Sheet date to be credited to the Investor Education and Protection Fund.

11. Previous yearÃs figures have been re-grouped / re-classified wherever necessary to conform to classification for the year.

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