Havells India Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2026

2.10 Provisions and Contingent Liabilities

Warranty Provisions

Provision for warranty-related costs are recognised when
the product is sold or service is provided to customer.
Initial recognition is based on historical experience. the
Company periodically reviews the adequacy of product
warranties and adjust warranty percentage and warranty
provisions for actual experience, if necessary. The timing
of outflow is expected to be with in one to seven years.

2.11 Material accounting judgements, estimates
and assumptions

The preparation of these standalone financial statements
requires the management to make judgements, use
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 judgements,
assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of
the asset or liability affected in future periods.

a) Leases

The Company determines the lease term as the
non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.

The Company has several lease contracts that
include extension and termination options. The
Company applies judgement in evaluating whether
it is reasonably certain whether or not to exercise
the option to renew or terminate the lease. That
is, it considers all relevant factors that create an
economic incentive for it to exercise either the
renewal or termination. After the commencement
date, the Company reassesses the lease term if
there is a material event or change in circumstances
that is within its control and affects its ability to
exercise or not to exercise the option to renew
or to terminate (e.g., construction of material
leasehold improvements or material customisation
to the leased asset).

b) Taxes

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 assessments and differing interpretations of tax
regulations by the taxable entity and the responsible
tax authority. (Refer Note 17)

c) Gratuity benefit and Leave obligation

The cost of defined benefit plans (i.e. Gratuity
benefit) and other long term employee obligations
(i.e Leave obligation) is determined using actuarial
valuations. An actuarial valuation involves making
various assumptions which may differ from actual
developments in the future. These include the
determination of the discount rate, future salary
increases, mortality rates and future pension
increases. Due to the complexity of the valuation,
the underlying assumptions and its long-term nature,
a defined benefit obligation and leave obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting
date. In determining the appropriate discount rate,
management considers the interest rates of long
term government bonds with extrapolated maturity
corresponding to the expected duration of the
defined benefit obligation. The mortality rate is based
on publicly available mortality tables for India. Future
salary increases and pension increases are based
on expected future inflation rates for India. Further
details about the assumptions used, including a
sensitivity analysis, are given in Note 33(4).

d) Impairment of non-financial assets

The Company assesses at each reporting date
whether there is an indication that an asset including
intangible assets having indefinite useful life and
goodwill may be impaired. If any indication exists,
or when annual impairment testing for an asset
is required, the Company estimates the asset''s
recoverable amount. An assets recoverable amount
is the higher of an asset''s CGU''S fair value less cost
of disposal and its value in use. Where the carrying
amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is
written down to its recoverable amount.

In assessing value in use, the estimated future
cash flows are estimated based on past trend
and discounted to their present value using a
pre-tax discount rate that reflects current market

assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions
are taken into account. If no such transactions can
be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation
multiples, or other fair value indicators.

e) Provision for warranty

Warranty provisions is determined based on the
historical percentage of warranty expense to sales
for the same types of goods for which the warranty is
currently being determined. The same percentage to
the sales is applied for the current accounting period
to derive the warranty expense to be accrued. It is
adjusted to account for unusual factors related to the
goods that were sold, such as defective inventory
lying at the depots. The warranty claims may not
exactly match the historical warranty percentage,
so such estimates are reviewed annually for any
material changes in assumptions and likelihood of
occurrence. The assumptions are consistent with
prior years. (Refer Note 20)

f) Provision for expected credit losses (ECL) of
trade receivables and contract assets

The Company uses a provision matrix to calculate
ECLs for trade receivables and contract assets.
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 material 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 and contract assets is disclosed
in Note 33(10).

g) Property, Plant and Equipment and intangible
assets

Property, Plant and Equipment represent material
portion of the asset base of the Company. The
charge in respect of periodic depreciation is derived
after determining an estimate of assets expected
useful life and expected value at the end of its useful
life. The useful life and residual value of Company''s
assets are determined by Management at the
time asset is acquired and reviewed periodically
including at the end of each year. The useful life is
based on historical experience with similar assets, in
anticipation of future events, which may have impact
on their life such as change in technology.

h) Fair Value on financial instruments

When the fair value 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 valuation
techniques including the Discounted Cash Flow
model. The inputs to these models are taken from
observable markets where possible, but where this
is not feasible, a degree of judgement is required
in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit
risk and volatility. Changes in assumptions about
these factors could affect the reported fair value of
financial instruments.

2.12 Other accounting policy

This note provides a list of other accounting policies
adopted in the preparation of these standalone financial
statements to the extent they have not already been
disclosed in the other notes above. These polices have
been consistently applied to all the years presented,
unless otherwise stated.

a) Rounding Off

These standalone financial statements are presented
in H and all values are rounded to the nearest crore
(H 0,000,000), except when otherwise indicated.

b) Current versus non-current classification

The Company presents assets and liabilities in
the balance sheet based on current/non- current
classification. An asset is treated as current when it is:

- Expected to be realized or intended to be sold
or consumed in normal operating cycle

- Held primarily for purpose of trading

- Expected to be realized within twelve months
after the reporting period, or

- Does not have the right at the end of the
reporting period to defer settlement of the
liability for at least twelve months after the
reporting period.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal
operating cycle

- It is held primarily for purpose of trading

- It is due to be settled within twelve months after
the reporting period, or

- There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period

All other liabilities are classified as non current.

Deferred tax assets and deferred tax liabilities are
classified as non- current assets and liabilities.

The operating cycle is the time between the acquisition
of assets for processing and their realization in cash
and cash equivalents. the Company has identified
twelve months as its operating cycle.

c) Property Plant and Equipment

The historical cost comprises of purchase price,
taxes, duties, freight and other incidental expenses
directly attributable and related to acquisition and
installation of the concerned assets and are further
adjusted by the amount of input tax credit availed
wherever applicable. Such cost includes the cost
of replacing part of the plant and equipment and
borrowing costs for long-term construction projects
if the recognition criteria are met. When material parts
of plant and equipment are required to be replaced at
intervals, the Company depreciates them separately
based on their specific useful lives. Likewise, when a
major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred. The present
value of the expected cost for the decommissioning
of an asset after its use is included in the cost of
the respective asset if the recognition criteria for a
provision are met.

Subsequent costs are included in asset''s carrying
amount or recognised as separate assets, as
appropriate, only when it is probable that future

economic benefit associated with the item will
flow to the Company and the cost of item can be
measured reliably.

An item of property, plant and equipment and any
material part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in the
income statement when the asset is derecognised.

Capital work- in- progress includes cost of property,
plant and equipment under installation/under
development as at the balance sheet date. Capital
work in progress is stated at cost, net of accumulated
impairment loss, if any.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

d) Intangible assets

Separately acquired intangible assets

Intangible assets acquired separately are measured
on initial recognition at cost. Cost of intangible assets
acquired in business combination is their fair value at
the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses,
if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working
condition for its intended use.

The useful lives of intangible assets are assessed
as either finite or indefinite. Intangible assets with
finite lives are amortized over their useful lives and
assessed for impairment whenever there is an
indication that the intangible asset may be impaired.
The amortization period and the amortization method
for an intangible asset with a finite useful life is
reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset is accounted for by changing
the amortization period or method, as appropriate
and are treated as changes in accounting estimates.
The amortization expense on intangible assets
with finite lives is recognised in the statement of
profit and loss.

Intangible assets with indefinite useful lives are not
amortized, but are tested for impairment annually,

either individually or at the cash generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues
to be supportable. If not, the change in useful life
from indefinite to finite is made on a prospective
basis. The Company has assessed indefinite life
for such brand considering the expected usage,
expected investment on brand, business forecast
and challenges to establish a premium electronic
segment. These are carried at historical cost and
tested for impairment annually.

Research and development cost

Research costs are expensed as incurred.
Development expenditure incurred on an individual
project is recognised as an intangible asset when the
Company can demonstrate all the following:

i) The technical feasibility of completing the
intangible asset so that it will be available
for use or sale;

ii) Its intention to complete the asset;

iii) Its ability to use or sale the asset;

iv) How the asset will generate future
economic benefits;

v) The availability of adequate resources to
complete the development and to use or
sale the asset; and

vi) The ability to measure reliably the expenditure
attributable to the intangible asset
during development.

Following the initial recognition of the development
expenditure as an asset, the cost model is applied
requiring the asset to be carried at cost less any
accumulated amortization and accumulated
impairment losses. Amortization of the asset begins
when development is complete and the asset
is available for use. It is amortized on straight line
basis over the estimated useful life and is recognised
in the statement of profit and loss . During the
period of development, the asset is tested for
impairment annually.

e) Impairment of non- financial assets

For assets excluding goodwill and intangible assets
having indefinite life, an assessment is made at
each reporting date to determine whether there is
an indication that previously recognised impairment
losses no longer exist or have decreased. If such
indication exists, the Company estimates the

asset''s or CGU''s recoverable amount. A previously
recognised impairment loss is reversed only if there
has been a change in the assumptions used to
determine the asset''s recoverable amount since the
last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor
exceed the carrying amount that would have been
determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years.
Such reversal is recognised in the statement of profit
and loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a
revaluation increase.

f) Financial instruments

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

Initial recognition measurement

In order for a financial asset to be classified and
measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are
‘solely payments of principal and interest (SPPI)'' on
the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at
an instrument level. Financial assets with cash flows
that are not SPPI are classified and measured at
fair value through profit or loss, irrespective of the
business model.

The Company''s business model for managing
financial assets refers to how it manages its financial
assets in order to generate cash flows. The business
model determines whether cash flows will result from
collecting contractual cash flows, selling the financial
assets, or both.

Financial assets classified and measured at
amortised cost are held within a business model
with the objective to hold financial assets in order
to collect contractual cash flows while financial
assets classified and measured at fair value through
OCI are held within a business model with the
objective of both holding to collect contractual cash
flows and selling.

Financial assets at amortised cost
(debt instruments)

After initial measurement, such financial assets are
subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or

premium on acquisition and fees or costs that are
an integral part of EIR. EIR is the rate that exactly
discounts the estimated future cash receipts over
the expected life of the financial instrument or a
shorter period, where appropriate, to the gross
carrying amount of the financial asset. When
calculating the effective interest rate, the Company
estimates the expected cash flows by considering
all the contractual terms of the financial instrument
but does not consider the expected credit losses.
The EIR amortization is included in other income in
profit or loss. The losses arising from impairment
are recognised in the profit or loss. This category
generally applies to trade and other receivables.

Financial assets at fair value through OCI
(FVTOCI) (debt instruments)

Debt instrument included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognised in the other comprehensive income
(OCI), except for the recognition of interest income,
impairment gains or losses and foreign exchange
gains or losses which are recognised in statement
of profit and loss and computed in the same manner
as for financial assets measured at amortised cost.
The remaining fair value changes are recognised in
OCI. Upon derecognition, the cumulative fair value
changes recognised in OCI is reclassified from the
equity to profit or loss.

Financial assets designated at fair value
through OCI (equity instruments)

Upon initial recognition, the Company can elect
to classify irrevocably its equity investments as
equity instruments designated at fair value through
OCI when they meet the definition of equity under
Ind AS 32 Financial Instruments: Presentation
and are not held for trading. The classification is
determined on an instrument-by-instrument basis.
Equity instruments which are held for trading and
contingent consideration recognised by an acquirer
in a business combination to which Ind AS 103
applies are classified as at FVTPL.

Gains and losses on these financial assets are never
recycled to profit or loss. Dividends are recognised as
other income in the statement of profit and loss when
the right of payment has been established, except
when the Company benefits from such proceeds as
a recovery of part of the cost of the financial asset, in
which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are
not subject to impairment assessment.

Derecognition

A financial asset (or,where applicable, a part of a
financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from
the Company''s statement of financial position) when:

- The rights to receive cash flows from the asset
have expired, or

- The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a “pass
through” arrangement and either;

(a) the Company has transferred substantially all
the risks and rewards of the asset, or

(b) the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

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

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Group could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies
expected credit losses (ECL) model for measurement
and recognition of impairment loss on the following
financial asset and credit risk exposure

Financial assets measured at amortized cost;

Financial assets measured at fair value through other
comprehensive income (FVTOCI);

ECLs are based on the difference between the
contractual cash flows due in accordance with

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

ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
income/ expense in the statement of profit and
loss. This amount is reflected under the head ‘other
expenses'' in the statement of profit and loss. The
balance sheet presentation for various financial
instruments is described below:

(a) Financial assets measured as at amortised
cost: ECL is presented as an allowance, i.e.,
as an integral part of the measurement of those
assets in the balance sheet. The allowance
reduces the net carrying amount. Until the
asset meets write-off criteria, the Group does
not reduce impairment allowance from the
gross carrying amount.

(b) Loan commitments and financial guarantee
contracts: ECL is presented as a provision in
the balance sheet, i.e. as a liability.

(c) Debt instruments measured at FVTOCI: For
debt instruments measured at FVTOCI, the
expected credit losses do not reduce the
carrying amount in the balance sheet, which
remains at fair value. Instead, an amount
equal to the allowance that would arise if the
asset was measured at amortised cost is
recognised in other comprehensive income as
the accumulated impairment amount.

g) Financial liabilities:

Initial recognition and measurement

Financial liabilities are classified at initial recognition
as financial liabilities at fair value through profit or
loss, loans and borrowings and payables, net of
directly attributable transaction costs. All financial
liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of
directly attributable transaction costs. The Company
financial liabilities include loans and borrowings,
trade payables, trade deposits, retention money,
liabilities towards services, sales incentive and
other payables.

Subsequent measurement

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

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

(ii) Financial liabilities at amortised cost (loans
and borrowings)

Financial liabilities at fair value through profit
or loss

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

Gains or losses on liabilities held for trading are
recognised in the statement of profit and loss.

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

Financial liabilities at amortised cost (Loans
and borrowings)

After initial recognition, interest-bearing borrowings
are subsequently measured at amortized cost using
the Effective interest rate method. Gains and losses
are recognised in profit or loss when the liabilities
are derecognised as well as through the Effective
interest rate amortization process. Amortized cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are
an integral part of the Effective interest rate. The
Effective interest rate amortization is included as
finance costs in the statement of profit and loss.

Trade Payables

These amounts represents liabilities for goods and
services provided to the Company prior to the end

of financial year which are unpaid. The amounts
are unsecured and are usually paid per the term of
contract with suppliers. Trade and other payables
are presented as current liabilities unless payment
is not due within 12 months after the reporting
period. They are recognised initially at fair value and
subsequently measured at amortized cost using
Effective interest rate method.

Financial guarantee contracts

Financial guarantee contracts issued by the
Company are those contracts that require a payment
to be made to reimburse the holder for a loss it
incurs because the specified debtor fails to make a
payment when due in accordance with the terms of
a debt instrument. Financial guarantee contracts are
recognised initially as a liability at fair value, adjusted
for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the amount
of loss allowance determined as per impairment
requirements of Ind AS 109 and the amount
recognised less cumulative amortization.

Derecognition

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

Offsetting of financial instruments

Financials assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

Reclassification of financial assets/ financial
liabilities

The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for
financial assets which are equity instruments and
financial liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is
a change in the business model for managing those
assets. Changes to the business model are expected
to be infrequent. The Company''s senior management

determines change in the business model as a result
of external or internal changes which are material
to the Company''s operations. Such changes are
evident to external parties. A change in the business
model occurs when the Company either begins or
ceases to perform an activity that is material to its
operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day
of the immediately next reporting period following
the change in business model. The Company does
not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.

h) Investment in Subsidiaries and Associates

The investment in subsidiary are carried at cost
as per Ind AS 27. The Company regardless of the
nature of its involvement with an entity (the investee),
determines whether it is a parent by assessing
whether it controls the investee. The Company
controls an investee when it is exposed, or has
rights, to variable returns from its involvement with
the investee and has the ability to affect those
returns through its power over the investee. Thus,
the Company controls an investee if and only if it has
all the following:

(a) power over the investee;

(b) exposure, or rights, to variable returns from its
involvement with the investee and

(c) the ability to use its power over the investee to
affect the amount of the returns.

The company accounted its investment in associate
using equity method as prescribed under Ind AS 28
‘Investments in Associates and Joint Ventures'', after
initially being recognised at cost.

Certain investment in associate are classified as a
financial asset measured at amortised cost as:

The asset is held within a business model whose
objective is to hold assets to collect contractual cash
flows and the contractual terms give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.On initial recognition, the investment is
measured at fair value plus transaction costs that are
directly attributable to the acquisition/origination of the
financial asset (where classification is amortised cost).
After initial recognition, the investment is measured
at amortised cost using the effective interest rate
(EIR) method. Interest income is recognised in the

consolidated statement of profit and loss using
the EIR method.

Investments are accounted in accordance
with Ind AS 105 when they are classified as
held for sale. On disposal of investment, the
difference between its carrying amount and net
disposal proceeds is charged or credited to the
statement of profit and loss.

i) Inventory

Basis of valuation:

Inventories other than scrap materials are valued at
lower of cost and net realizable value after providing
cost of obsolescence, if any. However, materials
and other items held for use in the production of
inventories are not written down below cost if the
finished products in which they will be incorporated
are expected to be sold at or above cost. The
comparison of cost and net realizable value is made
on an item-by-item basis.

Inventory of scrap materials have been valued at net
realizable value.

Method of Valuation:

Cost of raw materials has been determined by
using moving weighted average cost method and
comprises all costs of purchase, duties, taxes
(other than those subsequently recoverable from tax
authorities) and all other costs incurred in bringing the
inventories to their present location and condition.

Cost of finished goods and work-in-progress
includes direct labour and an appropriate share
of fixed and variable production overheads. Fixed
production overheads are allocated on the basis
of normal capacity of production facilities. Cost is
determined on moving weighted average basis.

Cost of traded goods has been determined by
using moving weighted average cost method and
comprises all costs of purchase, duties, taxes
(other than those subsequently recoverable from tax
authorities) and all other costs incurred in bringing the
inventories to their present location and condition.

j) Non-current assets held for sale

The Company classifies non-current assets as held
for sale if their carrying amounts will be recovered
principally through a sale rather than through
continuing use and the sale is considered highly
probable. Such non-current assets classified as
held for sale are measured at the lower of their

carrying amount and fair value less costs to sell .
Any expected loss is recognised immediately in the
statement of profit and loss.

The criteria for held for sale classification is regarded
as met only when the assets is available for
immediate sale in its present condition, subject only
to terms that are usual and customary for sales of
such assets, its sale is highly probable; and it will
genuinely be sold. The Company treats sale of the
asset to be highly probable when:

i) The appropriate level of management is
committed to a plan to sell the asset

ii) An active programme to locate a buyer
and complete the plan has been initiated
(if applicable)

iii) The asset is being actively marketed for sale
at a price that is reasonable in relation to its
current fair value

iv) The sale is expected to qualify for recognition
as a completed sale within one year from the
date of classification and

v) Actions required to complete the plan indicate
that it is unlikely that material changes to the plan
will be made or that the plan will be withdrawn.

The criteria for held for sale classification is regarded
as met only when the sale is highly probable and the
asset is available for immediate sale in its present
condition and the assets must have actively marketed
for sale at a price that is reasonable in relation to its
current fair value. Actions required to complete the
sale should indicate that it is unlikely that material
changes to the plan to sale these assets will be
made. Management must be committed to the sale,
which should be expected to qualify for recognition
as a completed sale within one year from the date of
classification.

Property, plant and equipment and intangible assets
once classified as held for sale are not depreciated
or amortized. Assets and liabilities classified as held
for sale are presented separately as current items in
the balance sheet.

k) Income Tax

The income tax expense or credit for the period
is the tax payable on the current period''s taxable
income based on the applicable income tax rate
adjusted by changes in deferred tax assets and

liabilities attributable to temporary differences and to
unused tax losses. Income Tax expense for the year
comprises of current tax and deferred tax.

Current income tax

Current income tax, assets and liabilities are measured
at the amount expected to be paid to or recovered
from the taxation authorities in accordance with the
Income Tax Act, 1961 and the Income Computation
and Disclosure Standards (ICDS) enacted in India by
using tax rates and the tax laws that are enacted at
the reporting date.

The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the end of the reporting period in the countries
where the company operate and generate taxable
income. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation
and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The
company measures its tax balances either based
on the most likely amount or the expected value,
depending on which method provides a better
prediction of the resolution of the uncertainty.

Current income tax relating to item recognised
outside the statement of profit and loss is recognised
outside profit or loss (either in other comprehensive
income or equity).Current tax items are recognised
in correlation to the underlying transactions either in
OCI or directly in equity.

Deferred Tax

Deferred tax is provided in full using the balance
sheet method on temporary differences arising
between the tax bases of assets and liabilities and
their carrying amounts in the financial statements.
However, deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

i) When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor
taxable profit or loss

ii) In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when

the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future

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

When the deferred tax asset relating to the
deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit or loss.

In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, deferred
tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be
available against which the temporary differences
can be utilised.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that
it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the
statement of profit and loss is recognised outside
the statement of profit and loss (either in other
comprehensive income or in equity). Deferred tax
items are recognised in correlation to the underlying
transaction either in OCI or direct in equity.

Tax benefits acquired as part of a business
combination, but not satisfying the criteria for
separate recognition at that date, are recognised

subsequently if new information about facts and
circumstances change. Acquired deferred tax
benefits recognised within the measurement period
reduce goodwill related to that acquisition if they
result from new information obtained about facts and
circumstances existing at the acquisition date. If the
carrying amount of goodwill is zero, any remaining
deferred tax benefits are recognised in OCI/ capital
reserve depending on the principle explained for
bargain purchase gains. All other acquired tax
benefits realized are recognised in profit or loss.

l) Other Operating Revenues

(a) Export benefit

Revenue from export benefits arising from
duty drawback scheme, Remission of duties
and taxes on exported product scheme are
recognised on export of goods in accordance
with their respective underlying scheme at fair
value of consideration received or receivable.

(b) Government Grants

Government Grants are recognised at their fair
value when there is reasonable assurance that
the grant will be received and all the attached
conditions will be complied with.

When the grant relates to an expense item,
it is recognised as income on a systematic
basis over the periods that the related costs,
for which it is intended to compensate, are
expensed. Government grant related to the
non-monetary asset are recognised at nominal
value and presented by deducting the same
from carrying amount of related asset and the
grant is then recognised in profit or loss over
the useful life of the depreciable asset by way
of a reduced depreciation charge.

m) Retirement and other employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including
non monetary benefits that are expected to
be settled wholly within twelve months after
the end of the period in which the employees
render the related service are recognised in
respect of employee service upto the end
of the reporting period and are measured at
the amount expected to be paid when the
liabilities are settled. The liabilities are presented
as current employee benefit obligations in
the balance sheet.

(ii) Post employment

a) Gratuity

The Employee''s Gratuity Fund Scheme,
which is defined benefit plan, is managed
by Trust with its investments maintained
with Bajaj Life Insurance Limited. The
liabilities with respect to Gratuity Plan
are determined by actuarial valuation
on projected unit credit method on
the balance sheet date, based upon
which the Company contributes to the
Gratuity Scheme. The difference, if any,
between the actuarial valuation of the
gratuity of employees at the year end
and the balance of funds is provided
for as assets/ (liability) in the books. Net
interest is calculated by applying the
discount rate to the net defined benefit
liability or asset. The Company recognises
the following changes in the net defined
benefit obligation under Employee benefit
expense in statement of profit or loss:

a) Service costs comprising current
service costs, past-service costs,
gains and losses on curtailments and
non-routine settlements

b) Net interest expense or income

Remeasurements, comprising of actuarial
gains and losses, the effect of the asset
ceiling, excluding amounts included in net
interest on the net defined benefit liability
and the return on plan assets (excluding
amounts included in net interest on the
net defined benefit liability), are recognised
immediately in the Balance Sheet with a
corresponding debit or credit to retained
earnings through other comprehensive
income in the period in which they occur.
Remeasurements are not reclassified to
profit or loss in subsequent periods.

b) Provident fund

Retirement benefit in the form of provident
fund is a defined contribution scheme.
The Company has no obligation, other
than the contribution payable to the
provident fund. The Company recognises
contribution payable through provident
fund scheme as an expense, when an
employee renders the related services.
If the contribution payable to scheme
for service received before the balance

sheet date exceeds the contribution
already paid, the deficit payable to the
scheme is recognised as liability after
deducting the contribution already paid.
If the contribution already paid exceeds
the contribution due for services received
before the balance sheet date, then
excesses recognised as an asset to the
extent that the prepayment will lead to, for
example, a reduction in future payment
or a cash refund.

(iii) Other employee benefits

Employees (including senior executives) of the
Company receive remuneration in the form of
share based payment transactions, whereby
employees render services as consideration
for equity instruments. In accordance with the
Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations, 2014
and the Ind AS 102 ‘Share based Payments'', the
fair value of options granted under the Havells
Long Term cumulative expense recognised for
equity-settled transactions at each reporting
date until the vesting date reflects the extent
to which the vesting period has expired and
the Company''s best estimate of the number of
equity instruments that will ultimately vest. The
expense or credit recognised in the Statement
of Profit and Loss for a period represents the
movement in cumulative expense recognised as
at the beginning and end of that period and is
recognised in employee benefits expense.

Where the terms of an equity-settled transaction
award are modified, the minimum expense
recognised is the expense as if the terms had not
been modified, if the original terms of the award
are met. An additional expense is recognised for
any modification that increases the total intrinsic
value of the share-based payment transaction,
or is otherwise beneficial to the employee as
measured at the date of modification. The
Employee stock option scheme is administered
through Havells Employee Welfare Trust.

The Company provides long term incentive plan
to employees via equity settled share based
payments as enumerated below:

(a) Havells Employee Stock Purchase Plan: The
fair value of options granted under this option
plan is recognised as an employee benefit
expense with corresponding increase in
equity in accordance with recognition and
measurement principles as prescribed

in Ind AS 102 ‘Share based Payments''
when grant is made. The total expense is
recognised over the vesting period, which
is the period over which all of the specified
vesting conditions are to be satisfied. At end
of the reporting period, the entity revises
its estimates of the number of options that
are expected to vest based on the non¬
market vesting and service conditions. It
recognises the impact of the revision to
original estimates, if any, in profit or loss, with
corresponding adjustment to equity.

(b) Havells Employees Long term Incentive
plan : These are in nature of employee
benefit wherein employees (including
senior executives) of the Company
purchase shares of the Company at fair
value on the grant cum allotment date and
receives remuneration in the form of ex-
gratia equivalent to predefined percentage
of purchase price paid by designated
employee subject to serving of relevant
period of service after the grant cum
allotment date. These are recognised at
fair value of shares granted and allotted as
employee benefit expense over the period
of employee serving relevant period.

c) Leave Obligation

Leave obligations: The Company has
liabilities for earned leave that are not
expected to be settled wholly within 12
months after the end of the period in which
the employees render the related service.
These obligations are therefore measured
as the present value of expected future
payments to be made in respect of services
provided by employees up to the end of the
reporting period using the projected unit
credit method. The benefits are discounted
using the appropriate market yields at the
end of the reporting period that have terms
approximating to the terms of the related
obligation. Remeasurements as a result
of experience adjustments and changes
in actuarial assumptions are recognised in
profit or loss.

The Company does not have an
unconditional right to defer settlement
for at least twelve months after the
reporting period, however, based on past
experience, the Company does not expect
all employees to avail the full amount of

accrued leave or require payment of such
leave within the next 12 months.

n) Leases

The Company assesses at contract inception
whether a contract is, or contains, a lease. That is, if
the contract conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration.

Right-of-use assets (ROU)

The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the
date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at
or before the commencement date less any lease
incentives received.

If ownership of the leased asset transfers to the
Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation
is calculated using the estimated useful life of the
asset. The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section ‘Impairment of non-financial assets''.

Lease Liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured at the
present value of lease payments to be made over
the lease term. The lease payments include fixed
payments (including in substance fixed payments)
less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and
amounts expected to be paid under residual value
guarantees. The lease payments also include the
exercise price of a purchase option reasonably
certain to be exercised by the Company and
payments of penalties for terminating the lease, if
the lease term reflects the Company exercising the
option to terminate. Variable lease payments that
do not depend on an index or a rate are recognised
as expenses (unless they are incurred to produce
inventories) in the period in which the event or
condition that triggers the payment occurs.

After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities

is remeasured if there is a modification, a change
in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a
change in an index or rate used to determine such
lease payments) or a change in the assessment of an
option to purchase the underlying asset.

Lease payments are allocated between principal and
finance cost. The finance

---

Mar 31, 2025

e) Terms/rights attached to equity shares

The Company has only one class of issued share capital i.e. equity shares having a par value of '' 1/- per share (March 31,2024 : '' 1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend 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 n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

g) Shares reserved for issue under Employee stock purchase plan

I nformation relating to Employee stock purchase plan, including details of options issued, exercised and lapsed during the financial year and options outstanding as at the end of the reporting period are set out in note 33 (7).

(C) Nature and Purpose of Reserves

(a) Capital reserve

During amalgamation/ merger approved by honourable court, the excess of net assets taken over the consideration paid, if any, is treated as capital reserve. This capital reserve has arisen as a result of scheme of amalgamation in the past periods.

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations adjusted by utilisation of reserve in accordance with scheme of Amalgamation in earlier years. The requirement to mandatorily transfer a specified percentage of the net profit to general reserve before declaration of dividend has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

(d) Share options outstanding account

The share option outstanding account is used to recognise the grant date fair value of options issued to employees under Employee stock purchase plan.

(e) Retained earnings

Retained Earnings are profits that the Company has earned till date less transfer to General Reserve, dividend or other distribution or transaction with shareholders.

Notes:

(i) The Company has unabsorbed capital loss of '' 177.31crores as on March 31, 2025 (March 31, 2024: '' 171.09 crores) out of which capital loss of '' 122.30 crores will expire in financial year 2025-26, capital loss of '' 27.51 crores will expire in financial year 2029-30, capital loss of '' 21.28 crores will expire in financial year 2030-31 and capital loss of '' 6.20 crores will expire in financial year 2032-33, on which no deferred tax asset has been created by the management due to lack of probability of future capital gain against which such deferred tax assets can be realised. If the Company were able to recognise all unrecognised deferred tax assets, the profit after tax would have increased by '' 40.57 crores (March 31, 2024: '' 39.15 Crore).

(ii) Effective tax rate has been calculated on profit before tax.

a) Provision for product warranties

(i) Warranties

A provision is recognized for expected warranty claims and after sales services on products sold during the last one to seven years, 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 seven years after the reporting date. Assumptions used to calculate the provisions for warranties are based on current sales levels and current information available about defective returns based on one to seven years warranty period for all products sold and are consistent with those in the prior years. The assumptions made in relation to the current year are consistent with those in the prior year.

(v) Performance obligation

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery/ dispatch of the goods as applicable and payment is generally due as per the terms of contract with customers.

Sales of services: The performance obligation in respect of maintenance services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of maintenance period based on time elapsed and acceptance of the customer. In certain non-standard contracts, where the Company provides warranties in service of consumer durable goods, the same is accounted for as a separate performance obligation and a portion of the transaction price is allocated based on its relative standalone prices. The performance obligation for the warranty service is satisfied over a period of time based on time elapsed.

The transaction price allocated to remaining performance obligation (unsatisfied performance obligation) pertaining to sales of goods and services as at March 31,2025 and expected time to recognise the same as revenue is as follows:-

Note: The remaining performance obligation expected to be recognised in more than one year relates to amounts received from customers against which performance obligation is to be satisfied over a period of one to four years. All other remaining performance obligations are expected to be recognised within one year. During the year ended March 31, 2025, revenue recognised from amount included in contract liability at the beginning of year is '' 98.73 crores (March 31, 2024: '' 82.53 crores).

(vi) Disclosure pursuant to Appendix C of Ind AS 115

The Company was awarded a contract for replacement of existing conventional street/ park lights with LED street/ park lights by a Municipal Corporation in April 2017. As per the agreement, the Company shall also be responsible for the operation and maintenance of LED street/ park lights for a period of 7 years after installation which will be completed in FY 2026-27. The consideration received by the Company under the contract is based on the energy savings resulting from the LED street/ park lights. The revenue recognised during the year and the contract assets balance as at year-end from such contract amounts to '' 46.34 Crores (March 31,2024: '' 43.34 crores) and '' 12.34 Crores (March 31,2024: '' 30.32 crores) respectively.

32. Commitments and Contingencies		('' in crores)
	As At March 31,2025	As At March 31,2024
A Contingent liabilities (to the extent not provided for)
a Claims / Suits filed against the Company not acknowledged as debts (Refer point (i))	10.56	6.67
b Disputed tax liabilities in respect of pending litigations before appellate authorities {Amount deposited under protest '' 4.16 crores (March 31, 2024: '' 10.20 crores), included in “Deposit with Statutory and Government authorities” in note no. 8) {refer point (ii)}	57.36	110.25

Notes:

i) Claims / suits filed against the Company not acknowledged as debts which represents various legal cases filed against the company. The Company has disclaimed the liability and defending the action. The Company has been advised by its legal counsel that its position is likely to be upheld in the litigation process and accordingly no provision for any liability has been made in the financial statement.

C Undrawn committed borrowing facility

During the Year, the company has availed fund and non fund based unsecured working capital limit amounting to '' 942.50 crores (March 31,2024: 1142.50 crores) under multiple banking arrangements from IDBI Bank Limited, Yes Bank Limited, Standard Chartered Bank Limited, HSBC Bank, ICICI Bank Limited, IndusInd Bank Limited, HDFC Bank Limited, DBS Bank Limited and CITI Bank N.A. An amount of '' 573.27 crores (March 31,2024: 836.75 crores) remain undrawn as at March 31, 2025. Drawn amount is related to non fund based bank guarantee and letter of credit.

D Other Litigations

The company has taken provisions amounting '' 9.21 Crores (March 31,2024 : '' 9.10 Crores) against the income tax and other sales tax related litigations. These provisions represent estimates made where liability has been assessed as probable. The probability and the timing of the outflow with regard to these matters depend on the final outcome of the litigations/ disputes. Hence, the Company is not able to reasonably ascertain the timing of the outflow.

E The Company has outstanding obligation amounting to '' 0.12 crores (March 31,2024: '' 0.72 crores) in respect of bonds given to central tax department against import of goods at concessional rate of basic custom duty. The Company expects to fulfil the obligation in due course of time.

F The Company has export obligation of '' 224.55 crores (March 31, 2024: '' 236.44 crores) on account of import duty exemption of '' 11.85 crores (March 31,2024: ''12.56 crore) on capital goods under the Export Promotion Capital Goods (EPCG) and '' 0.05 crores (March 31,2024: '' 0.79 crores) Advance Authorisation scheme laid down by the Government of India. The Company expects to fulfil the obligation in due course of time.

3. Leases

i The Company''s lease asset primarily consist of leases for land and buildings for branch offices and warehouses having the various lease terms . The Company also has certain leases of with lease terms of 12 months or less. The Company applies the ‘short-term lease'' recognition exemption for these leases. Payment made towards leases of low value assets other than building and warehouse are recognized in the statement of Profit and Loss as rental expenses over the tenure of such leases.

x Extension and termination options are included in a number of property and equipment leases across the company. These are used to maximise operational flexibility in terms of managing the assets used in the company''s operations. The majority of extension and termination options held are exercisable only by the company and not by the respective lessor.

xi As at March 31,2025, potential future cash outflows of '' 382.91 (March 31,2024: '' 255.38) (undiscounted) have not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated).

Compensated absences

The provision for compensated absences covers the liability for earned leave as per actuarial valuation, the amount of provision recognised is '' 15.94 crores (March 31,2024''12.82 Crores), net of amount funded with Bajaj Allianz Life Insurance Co. Ltd of ''12.82 crores (March 31,2024 '' NIL)

Defined Benefit Plan

The employees'' Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust which maintains its investments with Bajaj Allianz Life Insurance Co. Ltd. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn basic salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following tables summaries the components of net benefit expense recognised in the statement of profit or loss, the funded status and amounts recognised in the balance sheet for the respective plans:

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 21.88 years for employees (March 31,2024: 21.80 years).

k) The Company expects to contribute '' 55.05 crores (March 31,2024 : '' 28.14 crores) to the plan during the next financial year.

l) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

m) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

n) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in an assumptions occurring at the end of the reporting period while holding all other assumption constant. In practice it is unlikely to occur and change in some of the assumption 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 when calculating the defined benefit liability recognised in the balance sheet.

o) The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

5. Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, “Operating Segment” (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act). For management purposes, the Company is organized into business units based on its products and services and has six reportable segments as follows:

a) Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (LED, Fixtures) and luminaries.

Electrical Consumer Durables : Fans, Water Heaters, Coolers, and Domestic Appliances Lloyd Consumer : Air Conditioner, Television, Refrigerator and Washing Machine

Others : Motors, Pump, Water purifier, Solar, Personal Grooming

b) Identification of Segments:

Operating segments have been identified on the basis of the nature of product / services and have been identified as per the quantitative criteria specified in the Ind AS. The Board of Directors 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.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “unallocable”.

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as “unallocable”.

e) There are no customers having revenue exceeding 10% of total revenues

f) No operating segments have been aggregated to form the above reportable operating segments.

a) The transactions with 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 settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31,2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2024: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) As at March 31,2025, the Company has not granted any loans to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person (March 31,2024: Nil),

c) Transactions with related parties are reported gross of Goods and Service Tax.

7. Share based payments

The Company has in place following employee stock purchase plan approved by shareholders of the Company in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) regulations, 2021 :

(a) Havells Employee Stock Purchase Plan 2014 : In accordance with this scheme, 54,274 (March 31,2024 : 51,376) share options of '' 1 each were granted, out of which 53,883 (March 31,2024: 50,945) share options of '' 1 each were vested and allotted on May 31,2024 (March 31,2024 : June 08, 2023) to eligible employees at '' 1,644.45 (March 31,2024:

'' 1,230.20) per share as contributed by these employees. As per the scheme, 50% of the shares are under lock in period of 13 months and balance 50% for 2 years. Also as per the scheme, the Company is obliged to pay 50% of the contribution made by eligible employees as retention bonus over a period of two years in equal instalments. Accordingly, a sum of '' 3.75 crores (March 31,2024 : '' 2.53 crores) has been recognised as employee stock purchase plan expense (refer note 28).

(b) Havells Employee Stock Purchase Plan 2015 : In accordance with this scheme, 1,50,000 (March 31, 2024: 1,35,000) share options of '' 1 each were granted, vested and allotted on May 31, 2024 (March 31, 2024: June 08, 2023) at '' 1,644.45 (March 31,2024: '' 1,230.20) per share to eligible employees. As per the scheme, 78% of the shares are under lock in period of 13 months and remaining 22% are under lock in period for 2 years. Accordingly, a sum of '' 24.67 crores (March 2024 :'' 16.61 crores) has been recognised as employee stock purchase plan expenses (refer note 28).

(c) Havells Employee Stock Purchase Plan 2016 : In accordance with the said scheme, 41,529 (March 31,2024: 34,303) share options of '' 1 each were granted to eligible employees with graded vesting in three years starting from 2024. During the year, 32,157 equity shares of '' 1 each (March 31,2024 : 20,627equity shares) were allotted at '' 1,644.45 (March 31,2024 : ''1,230.20) per share on May 31,2024 (March 31,2024 : June 08, 2023). Accordingly, a sum of '' 6.78 crores (March 31,2024: 3.88 crores) has been recognised as employee stock purchase plan expense (refer note 28) and balance outstanding of '' 4.30 crores (March 31,2024 : 2.81 crores) (refer note 14).

(d) Havells Employee Stock Purchase Plan 2022 : In accordance with the said scheme, 1,11,231 (March 31,2024: 65,628) share options of '' 1 each were granted to eligible employees with graded vesting in five years starting from 2024. During the year, 22,662 equity shares of '' 1 each (March 31,2024 : 8,680 equity shares) were allotted at '' 1,644.45 (March 31,2024 : 1,230.20) per share on October 07, 2024 (March 31,2024 : November 01,2023). Accordingly, a sum of '' 12.68 crores (March 31,2024: 3.98 crores) has been recognised as employee stock purchase plan expense (refer note 28) and balance outstanding of '' 12.71 crores (March 31,2024 : 3.75 crores) (refer note 14).

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

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

1) The fair value of unquoted instruments, other non-current financial assets and non-current financial liabilities is estimated by discounting future cash flows (DCF model) using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

2) The fair values of the Company''s interest-bearing borrowings are determined by using DCF method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31,2025 was assessed to be insignificant.

3) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

4) Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets is based on quoted (unadjusted) market prices at the end of the reporting period for identical assets or liabilities

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers among levels 1,2 and 3 during the year.

10. Financial risk management objectives and policies

The Company''s principal financial liabilities comprise liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk

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

, and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31,2025 and March 31,2024

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD,EUR,CNY and other currencies including JPY, KES, NPR, CHF, LKR, AED and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(ii) Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligation at floating interest rates. The Company does not have any outstanding borrowings as at March 31,2025 and March 31,2024.

(iii) 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 and aluminium being the major input used in the manufacturing. To mitigate the risk of supply and price fluctuations, Domestic and overseas sources are bench-marked to Optimize the allocation of business share among various sources. The Company’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company mitigated the risk of price volatility by entering Long Term & Short term contracts for the Purchase of these commodities basis estimated annual requirements.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) Trade Receivables and Contract Assets

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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

The group assigns the following internal credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of the financial assets. The group provides for expected credit loss based on the following:

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31,2025 is the carrying amounts. The Company’s maximum exposure relating to financial instrument is noted in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, short term loans, short term commercial papers and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

Maturity profile of financial liabilities

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

11. Capital Management

For the purpose of Company’s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31,2025 and March 31,2024.

15. Fire Incident in Neemrana Plant

During the current year, the insurance company has fully settled the claim towards loss of property, plant and equipment incurred during the fire incident in Neemrana location in July, 2022. As at March 31, 2024, the claim recoverable was '' 15.79 crores against which the Company has received '' 32 .84 crores, being reinstatement value of property, plant and equipment, from the insurance company. Accordingly, '' 17.05 crores has been recognised as Other Income (refer note 24).

16. The Company has not been declared as a Wilful Defaulter by any bank or financial institution or government or any government authority.

19. Additional regulatory information required by Schedule III of Companies Act, 2013

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

(ii) Utilisation of borrowed funds and share premium:

The Company, other than mentioned below, 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

The relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and The Companies Act 2013 have been complied with for such transactions and the transactions are not violative of the Prevention of MoneyLaundering Act, 2002 (15 of 2003).

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

(iii) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the Companies Act, 2013 read with Companies (Restriction on number of layers) Rules, 2017.

(iv) Compliance with approved scheme(s) of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact in current or previous financial year.

(v) 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.

(vi) 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.

(vii) The company has not granted any loans or advances in the nature of loans, repayable on demand.

20. The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than '' 50,000/-

21. The Company has used accounting software for maintaining its books of account which have a feature of recording audit trail(edit log) facility that have operated throughout the financial year for all relevant transactions except: (a) that the audit trail for modification, if any, made by users having debug access was enabled from June 17, 2024; and (b) that the audit trail at database level did not operate during the period December 31,2024 to February 28, 2025. This happened because of an inadvertent step at service provider''s end to avoid a system outage. However as confirmed by the service provider, there was no changes made at database level during this period. Audit trail at database level, where available, contains modified values. There was no instance of audit trail feature being tampered with for the period the audit trail was enabled. The audit trail, where enabled, has been preserved as per the statutory requirements.

22. Event after Balance sheet date

The company has signed a binding term sheet to invest '' 600 crore in Goldi Solar Private Limited (Goldi) to accelerate growth in renewable sector. Goldi is engaged mainly in the business of manufacturing and supply of solar modules and invertors. The company already has presence in solar ecosystem through sale of modules, invertors, solar cables and DC switchgears. This is a strategic minority investment to ensure consistent supply of critical solar components like solar modules and cells. The company is expected to have a stake ranging between 8.90%- 9.24% post investment. Transaction is expected to close by June 30, 2025, subject to fulfilment of certain Conditions Precedent. This transaction has no impact on these financials.

23. Note No.1 to 33 form integral part of the Standalone Balance Sheet and Standalone Statement of Profit and Loss.

---

Mar 31, 2024

Impairment testing of goodwill and intangible assets with indefinite lives

Lloyd Consumer business is a single Cash Generating Unit (“CGU") engaged in the business of manufacturing, trading and distribution of consumer electronics products under the ‘Lloyd’ brand. Goodwill and Trademarks having indefinite useful lives, pertains to the acquisition of Lloyd Consumer business, and have accordingly been allocated to the said business. As the Lloyd Consumer business has incurred losses, considering the requirements of Indian Accounting Standard (Ind AS) - 36 ''Impairment of Assets, the Company has performed an impairment test to ascertain the recoverable amount of goodwill, intangible assets as well as other non-financial assets, viz., property, plant and equipment, capital work-in-progress etc. of Lloyd Consumer business. The recoverable amount is determined based on value in use calculation. This calculation uses management assumptions and pre-tax cash flow projections, based on financial budgets approved by management, covering a 5 year period. Cash flow projections beyond 5 years’ time period are extrapolated using the estimated growth rate which is consistent with the forecasts included in industry reports specific to the industry in which the CGU operates.

The management has determined budgeted gross margin based on past performance and its expectations of the future market scenario. The revenue and profit growth rates used are consistent with the forecasts included in industry reports. Management has performed a sensitivity analysis on the above mentioned key assumptions, based on which the management believes that the recoverable amount of the above-mentioned assets of the CGU is more than the carrying amount and a reasonably possible change in the assumptions would not cause the carrying amount to exceed its recoverable amount.

(a) Trade Receivables represent the amount of consideration in exchange for goods or services transferred to the customers that is unconditional.

(b) During the earlier years, the Company had entered into agreements with customers wherein the Company had identified multiple performance obligations as per Ind AS 115 “Revenue from contracts with customers”. The Company’s right to receive consideration is conditional upon satisfaction of all performance obligations. Accordingly, the Company has recognised contract assets in respect of performance obligations satisfied during the year. The contract asset arises when the Company satisfies a performance obligation but does not have an unconditional right to consideration. Contract assets have decreased in the current year due to change in the time frame for a right to consideration to become unconditional (i e. for a contract asset to be reclassified to trade receivable).

(c) The Company has entered into the agreements with customer for sale of goods and services. The Company has identified these performance obligations and recognised the contract liabilities in respect of contracts, where the Company has obligation to deliver the goods and perform specified services to a customer for which the Company has received consideration. There has been no significant change in the contract liabilities.

(a) The deposits maintained by the Company with banks comprise of the time deposits, which may be withdrawn by the Company at any point of time without prior notice and are made for varying periods between one day to twelve months depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates.

(b) Fixed deposit with original maturity of more than twelve months but remaining maturity of less than twelve months have been disclosed under other bank balances.

(c) The Company can utilise the balance towards settlement of unclaimed dividend.

(d) Includes Fixed Deposit amounting '' Nil (March 31, 2023''4.34 crores) related to Unspent CSR amount kept in separate bank account as per provision in section 135(6) of Companies Act, 2013.

(e) Includes Fixed Deposit amounting '' 12.31 crores (March 31, 2023''5.93 crores) related to Havells Employees Welfare Trust.

(f) Includes Fixed Deposit amounting '' 0.69 crores (March 31, 2023''0.52 crores) related to Havells Employees Welfare Trust.

e) Terms/rights attached to equity shares

The Company has only one class of issued share capital i.e. equity shares having a par value of ''1/- per share (March 31,2023 : ''1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend 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 n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

g) Shares reserved for issue under Employee stock purchase plan

I nformation relating to Employee stock purchase plan, including details of options issued, exercised and lapsed during the financial year and options outstanding as at the end of the reporting period are set out in note 33 (7).

(C) Nature and Purpose of Reserves

(a) Capital reserve

During amalgamation/ merger approved by honourable court, the excess of net assets taken over the consideration paid, if any, is treated as capital reserve. This capital reserve has arisen as a result of scheme of amalgamation in the past periods.

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations adjusted by utilisation of reserve in accordance with scheme of Amalgamation in earlier years. The requirement to mandatorily transfer a specified percentage of the net profit to general reserve before declaration of dividend has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

(d) Share options outstanding account

The share option outstanding account is used to recognise the grant date fair value of options issued to employees under Employee stock purchase plan.

Nil number of share (March 31,2023: 41,960 shares) is held by employee welfare trust included in the financial statements

(e) Retained earnings

Retained Earnings are profits that the Company has earned till date less transfer to General Reserve, dividend or other distribution or transaction with shareholders.

(i) The Company has unabsorbed capital loss of '' 171.09 crores as on March 31, 2024 (March 31, 2023: '' 390.84 crores) out of which capital loss of '' 122.30 crores will expire in financial year 2025-26, capital loss of '' 27.51 crores will expire in financial year 2029-30 and capital loss of '' 21.28 crores will expire in financial year 2030-31, on which no deferred tax asset has been created by the management due to lack of probability of future capital gain against which such deferred tax assets can be realised. If the Company were able to recognise all unrecognised deferred tax assets, the profit after tax would have increased by '' 39.15 crores (March 31, 2023: '' 89.28 Crore). The capital losses of ''211 crores has been expired during the year.

(i) Trade Payables include due to related parties '' 24.87 crores (March 31, 2023 : ''16.00 crores) {refer note 33(6)(D)}

(ii) The amounts are unsecured and non interest-bearing and are usually on varying trade term.

(iii) For terms and conditions with related parties. {refer to note 33(6)}

(iv) The amounts falling in the category of more than 1 year are related to pending obligations on the part of the supplier as per agreed terms and conditions mentioned in respective contracts.

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

(a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The Company has transferred '' 0.24 crores (March 31,2023 : ''0.26 crores) out of unclaimed dividend to Investor Education and Protection Fund of Central Government in accordance with the provisions of section 124 of the Companies Act, 2013.

a) Provision for warranties

(i) Warranties

A provision is recognized for expected warranty claims and after sales services on products sold during the last one to seven years, 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 seven years after the reporting date. Assumptions used to calculate the provisions for warranties are based on current sales levels and current information available about defective returns based on one to seven years warranty period for all products sold and are consistent with those in the prior years. The assumptions made in relation to the current year are consistent with those in the prior year.

b) Provision for litigations

Provision for litigation amounting to '' 9.10 Crores (March 31,2023: ''6.70 Crores) is created against demands raised in various ongoing litigations in ordinary course of business. Based on the facts of the case and legal precedents, the management believes there would be a probable outflow of resources and accordingly, has created a provision in books of account.

(v) Performance obligation

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery/ despatch of the goods as applicable and payment is generally due as per the terms of contract with customers.

Sales of services: The performance obligation in respect of maintenance services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of maintenance period based on time elapsed and acceptance of the customer. In certain non-standard contracts, where the Company provides warranties in service of consumer durable goods, the same is accounted for as a separate performance obligation and a portion of the transaction price is allocated based on its relative standalone prices. The performance obligation for the warranty service is satisfied over a period of time based on time elapsed.

Note: The remaining performance obligation expected to be recognised in more than one year relates to amounts received from customers against which performance obligation is to be satisfied over a period of one to four years. All other remaining performance obligations are expected to be recognised within one year. During the year ended March 31, 2024, revenue recognised from amount included in contract liability at the beginning of year is '' 82.53 crores (March 31, 2023: '' 54.30 crores).

(vi) Disclosure pursuant to Appendix C of Ind AS 115

The Company was awarded a contract for replacement of existing conventional street/ park lights with LED street/ park lights by a Municipal Corporation in April 2017. As per the agreement, the Company shall also be responsible for the operation and maintenance of LED street/ park lights for a period of 7 years after installation. The consideration received by the Company under the contract is based on the energy savings resulting from the LED street/ park lights. The revenue recognised during the year and the contract assets balance as at year-end from such contract amounts to '' 46.02 Crores (March 31,2023: '' 45.89 crores) and '' 30.32 Crores (March 31,2023: '' 43.57 crores) respectively.

32. Commitments and Contingencies	As At March 31,2024	('' in crores) As At March 31,2023
A Contingent liabilities (to the extent not provided for)
a Claims / Suits filed against the Company not acknowledged as debts (Refer point (i))	6.67	6.83
b Disputed tax liabilities in respect of pending litigations before appellate authorities {Amount deposited under protest '' 10.20 crores (March 31, 2023: '' 13.04 crores), included in “Deposit with Statutory and Government authorities” in note no. 8) {refer point (ii)}	110.25	54.74

Notes:

i) Claims / suits filed against the Company not acknowledged as debts which represents various legal cases filed against the company. The Company has disclaimed the liability and defending the action. The Company has been advised by its legal counsel that its position is likely to be upheld in the litigation process and accordingly no provision for any liability has been made in the financial statement.

ii) The various disputed tax litigations are as under: Sl. Description {refer note below} Period to which relates	Disputed amount As At March 31,2024	('' in crores) Period to which Disputed amount relates As At March 31,2023
a) Excise / Customs / Service Tax
Demands raised by Excise and 1994-97, 2007-08 to Custom department. 2009-10, 2015-16 to 2020-21	24.13	2007-08 to 2009-10, 16.32 2015-16 to 2017-18 and 2019-20
b) Income Tax*
Disallowances / additions made by 2008-09 the income tax department. to 2014-15 and 2016-17	27.52	2005-06, 2008-09 35.17 to 2014-15, 2016-17 to 2017-18 and 2019-20
c) Goods and Service Tax
Demands raised by GST 2017-18, Department 2019-20 and 2022-23	56.58	2017-18 1.23 and 2019-20
d) Sales Tax / VAT
Demands raised by Sales tax / VAT 2003-04, 2005-06 department to 2011-12 and 2016-17	1.87	2003-04, 2005-06 to 1.87 2011-12 and 2016-17
e) Others
Demand of local area development 2001-02 tax by the concerned authorities	0.12	2001-02 0.12
Demand of octroi along with 2010-11 penalty in the state of Maharashtra by the concerned authorities	0.03	2010-11 0.03
	110.25	54.74

Notes:

The above figures are net of provisions made by the Company. The Company is contesting these demands and the management believe that its position is likely to be upheld in the appellate process. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

* Based on favourable decisions in similar cases, the Company does not expect any liability against these matters in accordance with principles of Ind AS -12 ‘Income taxes’ read with Ind AS -37; Provisions, Contingent Liabilities and Contingent Assets’ and hence no provision has been considered in the books of accounts except for provision created in respect of few years {refer note 20(ii)}.

The above amounts contain interest and penalty where included in the order issued by the department to the Company.

B. Commitments		('' in crores)
	As at	As at
	March 31,2024	March 31,2023
Estimated amount of capital contracts remaining to be executed and not provided for (Net of Advances amounting to '' 131.98 crores (March 31,2023: '' 52.52 crores))	268.86	476.73
	268.86	476.73

C Undrawn committed borrowing facility

During the Year, the company has availed fund and non fund based unsecured working capital limit amounting to '' 1,142.50 Crores (March 31, 2023: 1,382.50 Crores) under multiple banking arrangements from IDBI Bank Limited, Yes Bank Limited, Standard Chartered Bank Limited, HSBC Bank, ICICI Bank Limited, IndusInd Bank Limited, HDFC Bank Limited, DBS Bank Limited and CITI Bank N.A. An amount of '' 836.75 crores (March 31, 2023: 1,102.86 Crores) remain undrawn as at March 31,2024. Drawn amount is related to non fund based bank guarantee and letter of credit.

D Other Litigations

The company has taken provisions amounting '' 9.10 Cr (March 31, 2023 : '' 6.70 Cr) against the income tax and other sales tax related litigations. These provisions represent estimates made where liability has been assessed as probable. The probability and the timing of the outflow with regard to these matters depend on the final outcome of the litigations/disputes. Hence, the Company is not able to reasonably ascertain the timing of the outflow.

E The Company has outstanding obligation amounting to '' 0.72 crores (March 31,2023: '' 0.51 crores) in respect of bonds given to central tax department against import of goods at concessional rate of basic custom duty. The Company expects to fulfil the obligation in due course of time.

F The Company has export obligation of '' 236.44 crores (March 31, 2023: '' 158.68 crores) on account of import duty exemption of '' 12.56 crores (March 31, 2023: ''8.72 crore) on capital goods under the Export Promotion Capital Goods (EPCG) and '' 0.79 crores ('' 0.15 crores March 31,2023) Advance Authorisation scheme laid down by the Government of India. The Company expects to fulfil the obligation in due course of time.

3 Leases

i The Company''s lease asset primarily consist of leases for land and buildings for branch offices and warehouses having the various lease terms. The Company also has certain leases of with lease terms of 12 months or less. The Company applies the ‘short-term lease'' recognition exemption for these leases. Payment made towards leases of low value assets (lease of assets worth less than '' 2 Lakhs) other than building and warehouse are recognized in the statement of Profit and Loss as rental expenses over the tenure of such leases.

4 Gratuity and other post-employment benefit plans

Disclosures pursuant to Ind AS - 19 “Employee Benefits” (notified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act) are given below :

Defined Benefit Plan

The employees'' Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust which maintains its investments with Bajaj Allianz Life Insurance Co. Ltd. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn basic salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 21.80 years for on-roll employees (March 31,2023: 21.87 years).

k) The Company expects to contribute '' 28.14 crores (March 31,2023 : '' 29.08 crores) to the plan during the next financial year.

l) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

m) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

n) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in an assumptions occurring at the end of the reporting period while holding all other assumption constraint. In practice it is unlikely to occur and change in some of the assumption 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 when calculating the defined benefit liability recognised in the balance sheet.

o) The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

5 Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, “Operating Segment” (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act). For management purposes, the Company is organized into business units based on its products and services and has six reportable segments as follows:

a) Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (LED, Fixtures) and luminaries.

Electrical Consumer Durables : Fans, Water Heaters, Coolers, and Domestic Appliances Lloyd Consumer : Air Conditioner, Television, Refrigerator and Washing Machine

Others : Industrial motors, Pump, Water purifier, Solar, Personal Grooming

b) Identification of Segments:

Operating segments have been identified on the basis of the nature of product / services and have been identified as per the quantitative criteria specified in the Ind AS. The Board of Directors 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.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “unallocable”.

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as “unallocable”.

e) There is no transfer of products between operating segments.

f) There are no customers having revenue exceeding 10% of total revenues

g) No operating segments have been aggregated to form the above reportable operating segments.

a) The transactions with 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 settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31,2024, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2023: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) As at March 31,2024, the Company has not granted any loans to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person (March 31,2023: Nil).

c) Transactions with related parties are reported gross of Goods and Service Tax.

7 Share based payments

The Company has in place following employee stock purchase plan approved by shareholders of the Company in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) regulations, 2021 :

(a) Havells Employee Long Term Incentive Plan 2014 : In accordance with this scheme, 51,376 (March 31,2023 : 41,817) share options of '' 1 each were granted, out of which 50,945 (March 31,2023: 41,415) share options of '' 1 each were vested and allotted on June 08, 2023 (March 31,2023 : June 03, 2022) to eligible employees at '' 1,230.20 (March 31, 2022: '' 1,289.85) per share as contributed by these employees. As per the scheme, 50% of the shares are under lock in period of 13 months and balance 50% for 2 years. Also as per the scheme, the Company is obliged to pay 50% of the

contribution made by eligible employees as retention bonus over a period of two years in equal instalments. Accordingly, a sum of '' 2.53 crores (March 31,2023 : '' 2.23 crores) has been recognised as employee stock purchase plan expense (refer note 28).

(b) Havells Employee Stock Purchase Plan 2015 : In accordance with this scheme, 93,040, which will be transferred to eligible employees together with the 41,960 Shares lying in the Trust, against the Exercise of 1,35,000 share options (March 31,2023: 150,000) of '' 1 each were granted, vested and allotted on June 08,2023 (March 31,2023: June 03, 2022) at '' 1,230.20 (March 31,2023: '' 1289.85) per share to eligible employees as contributed by the Company. As per the scheme, 78% of the shares are under lock in period of 13 months and remaining 22% are under lock in period for 2 years. Accordingly, a sum of '' 16.61 crores (March 2023 :'' 19.35 crores) has been recognised as employee stock purchase plan expenses (refer note 28).

(c) Havells Employee Stock Purchase Plan 2016 : In accordance with the said scheme, 34,303 (March 31,2023: 24,942) share options of '' 1 each were granted to eligible employees with graded vesting in three years starting from 2022. During the year, 20,627 equity shares of '' 1 each (March 31,2023 : 13534 equity shares) were allotted at '' 1,230.20 (March 31,2023 : ''1,289.85) per share on June 08, 2023 (March 31,2023 : June 03, 2022). Accordingly, a sum of ''3.88 crores (March 31,2023: 2.69 crores) has been recognised as employee stock purchase plan expense refer note 28 and balance outstanding of '' 2.81 crores (March 31,2023 : 1.48 crores) (refer note 14).

(d) Havells Employee Stock Purchase Plan 2022 : In accordance with the said scheme, 65,628 (March 31,2023: 17,733) share options of '' 1 each were granted to eligible employees with graded vesting in five years starting from 2022. During the year, 8680 equity shares of '' 1 each (March 31,2023 : 1722 equity shares) were allotted at '' 1,230.20 (March 31, 2023 : 1348.55) per share on November 01,2023 (March 31,2023 : November 03, 2022). Accordingly, a sum of ''3.98 crores (March 31,2023: 1.06 crores) has been recognised as employee stock purchase plan expense refer note 28 and balance outstanding of '' 3.75 crores (March 31,2023 : 0.82) (refer note 14).

The fair value at grant date of options granted during the year ended March 31, 2024 was within range of '' 1,211.83 to '' 1,222.64 per share (March 31,2023 was within range of '' 1,271.53 to '' 1,348.16 per share). The fair value at the grant date is determined using Black Scholes valuation model which takes into account the exercise price, the terms of the options, the share price at grant date and expected price volatility of the underlying shares, the expected dividend yield and the risk free interest rate for the term of the option.

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

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

1) The fair value of unquoted instruments, other non-current financial assets and non-current financial liabilities is estimated by discounting future cash flows (DCF model) using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

2) The fair values of the Company''s interest-bearing borrowings are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31,2024 was assessed to be insignificant.

3) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

4) Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets is based on quoted (unadjusted) market prices at the end of the reporting period for identical assets or liabilities

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers among levels 1,2 and 3 during the year.

This section explains the judgement and estimates made in determining the fair value of financial assets that are:

a) Recognised and measured at Fair value

b) Measured at amortised cost and for which fair value is disclosed in financial statements

10 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments, and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31,2024 and March 31,2023

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD,EUR,CNY and other currencies including JPY,KES,NPR, CHF, LKR, MWK,AED,SLL and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(ii) Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligation at floating interest rates. The Company''s borrowings outstanding as at March 31, 2024 and March 31,2023 comprise of long term loans.

(iii) 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 and aluminium being the major input used in the manufacturing. To mitigate the risk of supply and price fluctuations, Domestic and overseas sources are bench-marked to Optimize the allocation of business share among various sources. The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company mitigated the risk of price volatility by entering Long Term & Short term contracts for the Purchase of these commodities basis estimated annual requirements.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) Trade Receivables and Contract Assets

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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31,2024 is the carrying amounts. The Company’s maximum exposure relating to financial instrument is noted in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, short term loans, short term commercial papers and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

Maturity profile of financial liabilities

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

11 Capital Management

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company''s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31,2024 and March 31,2023.

15 Fire Incident in Neemrana Plant

During the financial year ended March 31,2023, an amount aggregating to ''112.52 crore has been accounted for in the books and disclosed as “Exceptional items” against the fire incident at Neemrana location in July, 2022. As of year ending March 31,2024, balance claim amounting '' 15.79 crore is receivable towards Property Plant and Equipment from insurance company, which will be received in due course.

16 The Company has not been declared as a Wilful Defaulter by any bank or financial institution or government or any government authority.

19 Additional regulatory information required by Schedule III of Companies Act, 2013

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

(ii) Utilisation of borrowed funds and share premium:

The Company, other than mentioned below, 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

The relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act has been complied with for such transactions and the transactions are not violative of the Prevention of Money-Laundering Act, 2002 (15 of 2003).

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

(iii) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(iv) Compliance with approved scheme(s) of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) 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.

(vi) 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.

(vii) Valuation of PP&E and intangible asset: The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(viii) The company has not granted any loans or advances in the nature of loans either repayable on demand.

20 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than '' 50,000/-.

21 The Company has used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility that have operated throughout the financial year for all relevant transactions, except: (a) for modification, if any, made by certain users having debug access for troubleshooting; and (b) that the audit trail, which was enabled at database level in the last month of the financial year, contains only the modified values. The audit trail feature was not tampered with for the aforesaid period. There was no instance of audit trail feature being tampered with for the period the audit trail was enabled.

22 Note No.1 to 33 form integral part of the Standalone Balance Sheet and Standalone Statement of Profit and Loss.

---

Mar 31, 2023

(C) Nature and Purpose of Reserves

(a) Capital reserve

During amalgamation/ merger approved by honourable court, the excess of net assets taken over the consideration paid, if any, is treated as capital reserve. This capital reserve has arisen as a result of scheme of amalgamation in the past periods.

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations adjusted by utilisation of reserve in accordance with scheme of Amalgamation in earlier years. The requirement to mandatorily transfer a specified percentage of the net profit to general reserve before declaration of dividend has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.

(d) Share options outstanding account

The share option outstanding account is used to recognise the grant date fair value of options issued to employees under Employee stock purchase plan.

Net of shares 41,960 (March 31,2022: 41,960) held by employee welfare trust included in the financial statements

(e) Retained earnings

Retained Earnings are profits that the Company has earned till date less transfer to General Reserve, dividend or other distribution or transaction with shareholders.

(a) The Company has availed secured loan of '' Nil (March 31, 2022: '' 250 crores), carrying interest rate of (3 months TBill rate plus (288 - 488 base points)) against the sanctioned term loan amount of '' Nil (March 31, 2022: '' 250 crores) from CITI Bank N.A. The Company has repaid its loan during the year. The current outstanding amount against the loan is '' Nil (March 31, 2022: '' 203.13 crores).The loan was obtained for the purpose of fresh capital expenditure and reimbursement of prior capital expenditure incurred by the company during the previous year.The term loan was repayable in 16 equated quarterly instalments commencing from 15^th month from first drawdown date of April 21, 2020. This term loan was secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets both present and future situated at (i) SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India (ii) Unit-1 Village Dharampur,Sai Road,Baddi,Dist Solan,Himachal Pradesh,(iii) Unit-II Village Gulerwala,Dist Solan, Baddi,Himachal Pradesh,(iv) Unit-I,Sector -10,Plot No 2A,BHEL Complex,Haridwar (v) Unit-II, Plot No 2A and 2D/1 Sector-10,Sidcul Industrial Area,Haridwar, Uttarakhand

(b) The Company has availed secured loan of '' Nil (March 31, 2022: '' 250 Crores) carrying interest rate of 4 - 6 % against the sanctioned amount of '' Nil (March 31, 2022: '' 350 crores) from HDFC Bank Limited. The Company has repaid its loan during the year. The current outstanding amount against the loan is '' Nil (March 31, 2022: '' 190.52 crores).The loan was obtained for the purpose of fresh capital expenditure and reimbursement of prior capital expenditure incurred by the company during 12 months of first drawdown date of May 29, 2020. The term loan was repayable in quarterly instalments over the period of 5 years as per terms of agreement starting from [1^st Loan of '' 120 Crores (June 2020- May 2025) and 2^nd Loan of '' 130 Crores (April 2021- May-2025)]. This loan was secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets, plant and machinery and all movable properties both present and future situated at (i) A-461/462,SP-215 and 204 & 204A, Matsya Industrial Area, Alwar, Rajasthan and (ii) SP-1-133,General Zone, RIICO Industrial Area, Ghiloth.

(c) The Company was required to maintain the Debt Covenants i.e., Fixed assets coverage ratio, Debt service coverage ratio, gearing ratio, leverage ratio and interest coverage ratio and Company had complied with all such covenants in the previous year i.e. March 31, 2022.

(d) During the previous year, The Company had borrowings from banks and financial institutions on the basis of security of current assets. The Company had complied with the requirement of filing of monthly/ quarterly returns/statements of current assets with the banks or financial institutions, as applicable, and these returns were in agreement with the books of accounts for the year ended March 31, 2022. During the year, the Company has not been sanctioned working capital limits in excess of '' 5 crores, in aggregate from banks and financial institutions on the basis of security of current assets and accordingly, the quarterly returns or statements are not required to be filed with banks or financial institutions.

(e) As on the balance sheet date there is no default in repayment of loans and interest.

(f) The borrowings obtained by the company from banks and financial institutions had been applied for the purposes for which such loans were taken. In respect of the term loans which were taken in the previous years, those were applied in the respective years for the purpose for which the loans were obtained.

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

(i) The Company has unabsorbed capital loss of '' 390.84 crores as on March 31, 2023 (March 31, 2022: '' 369.61 crores) out of which capital loss of '' 219.75 crores will expire in financial year 2023-24, capital loss of '' 122.30 crores will expire in financial year 2025-26, capital loss of '' 27.51 crores will expire in financial year 2029-30 and capital loss of '' 21.27 crores will expire in financial year 2030-31, on which no deferred tax asset has been created by the management due to lack of probability of future capital gain against which such deferred tax assets can be realised. If the Company were able to recognise all unrecognised deferred tax assets, the profit after tax would have increased by '' 89.28 crores (March 31, 2022: '' 84.56 Crore).

(ii) Effective tax rate has been calculated on profit before tax.

a) Provision for warranties

(i) Warranties

A provision is recognized for expected warranty claims and after sales services on products sold during the last one to seven years, 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 seven years after the reporting date. Assumptions used to calculate the provisions for warranties are based on current sales levels and current information available about defective returns based on one to seven years warranty period for all products sold and are consistent with those in the prior years. The assumptions made in relation to the current year are consistent with those in the prior year.

b) Provision for litigations

Provision for litigation amounting to '' 6.70 Crores (March 31,2022: ''7.28 Crores) is created against demands raised in various ongoing litigations in ordinary course of business. Based on the facts of the case and legal precedents, the management believes there would be a probable outflow of resources and accordingly, has created a provision in books of account.

(v) Performance obligation

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery of the goods and payment is generally due as per the terms of contract with customers.

Sales of services: The performance obligation in respect of maintenance services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of maintenance period based on time elapsed and acceptance of the customer. In certain non-standard contracts, where the Company provides warranties in service of consumer durable goods, the same is accounted for as a separate performance obligation and a portion of the transaction price is allocated based on its relative standalone prices. The performance obligation for the warranty service is satisfied over a period of time based on time elapsed.

Note: The remaining performance obligation expected to be recognised in more than one year relates to amounts received from customer against which performance obligation is to be satisfied over the period of one to seven years. All other remaining performance obligation are expected to be recognised within one year. During the year ended March 31, 2023, revenue recognised from amount included in contract liability at the beginning of year is '' 54.30 crores (March 31, 2022: '' 34.94 crores).

(vi) Disclosure pursuant to Appendix C of Ind AS 115

The Company was awarded a contract for replacement of existing conventional street/ park lights with LED street/ park lights by a Municipal Corporation in April 2017. As per the agreement, the Company shall also be responsible for the operation and maintenance of LED street/ park lights for a period of 7 years after installation. The consideration received by the Company under the contract is based on the energy savings resulting from the LED street/ park lights. The revenue recognised during the year and the contract assets balance as at year-end from such contract amounts to '' 45.89 Crores (March 31,2022: '' 45.43 crores) and '' 43.57Crores (March 31,2022: '' 56.83 crores) respectively.

31. Commitments and Contingencies		As At March 31,2023	('' in crores) As At March 31,2022
A Contingent liabilities (to the extent not provided for)
a Claims / Suits filed against the Company not acknowledged as debts (Refer point (i))		6.83	7.07
b Disputed tax liabilities in respect of pending litigations before appellate authorities {Amount deposited under protest '' 13.04 crores (March 31, 2022: '' 29.13 crores}, included in "Deposit with Statutory and Government authorities" in note no. 8) {refer point (ii)}		54.74	74.88
Notes: i) Claims / suits filed against the Company not acknowledged as debts which represents various legal cases filed against the company. The Company has disclaimed the liability and defending the action. The Company has been advised by its legal counsel that its position is likely to be upheld in the litigation process and accordingly no provision for any liability has been made in the financial statement. ii) The various disputed tax litigations are as under: ('' in crores)
Sl. Description {refer note below} Period to which relates	Disputed amount As At March 31,2023	Period to which relates	Disputed amount As At March 31,2022
a) Excise / Customs / Service Tax
Demands raised by Excise and 2007-08 to 2009-Custom department. 10, 2015-16 to 2017-18 and 2019-20	16.32	2007-08 to 2009-10, 2015-16 to 2017-18 and 2019-20	16.34
b) Income Tax1
Disallowances / additions made by 2005-06, 2008-09 the income tax department. to 2014-15, 2016-17 to 2017-18 and 2019-20	35.17	2005-06, 2009-10 to 2014-15, 201617,2018-19 and 2019-20	38.78
c) Goods and Service Tax
Demands raised by GST 2017-18 Department and 2019-20	1.23	2017-18 and 2019-20	1.26
d) Sales Tax / VAT
Demands raised by Sales tax / VAT 2003-04 department. to 2016-17	1.87	2005-06 to 2016-17	18.35
e) Others
Demand of local area development 2001-02 tax by the concerned authorities.	0.12	2001-02	0.12
Demand of octroi along with 2010-11 penalty in the state of Maharashtra by the concerned authorities.	0.03	2010-11	0.03
	RA 7A		7/1 ««

The above figures are net off provisions made by the Company. The Company is contesting these demands and the management, believe that its position will likely to be upheld in the appellate process. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

Notes:

B. Commitments		('' in crores)
	As at	As at
	March 31,2023	March 31,2022
Estimated amount of capital contracts remaining to be executed and not provided for (Net of Advances amounting to '' 52.52 crores (March 31,2022: '' 7.45 crores))	476.73	59.27
	476.73	59.27

C Undrawn committed borrowing facility

(a) During the Year, the company has availed fund and non fund based unsecured working capital limit amounting to '' 1382.50 Crores under multiple banking arrangements from IDBI Bank Limited, Yes Bank Limited, Standard Chartered Bank Limited, HSBC Bank, ICICI Bank Limited, IndusInd Bank Limited, HDFC Bank Limited, DBS Bank Limited and CITI Bank N.A. An amount of '' 1102.86 crores remain undrawn as at Mach 31,2023.

D Other Litigations

The Company has some sales tax and other tax related litigation of '' 6.70 crores (March 31,2022: '' 7.28 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same.

E The Company has outstanding obligation amounting to '' 0.51 crores (March 31,2022: '' 0.52 crores) in respect of bonds given to central tax department against import of goods at concessional rate of basic custom duty. The Company expects to fulfil the obligation in due course of time.

F The Company has export obligation of '' 158.68 crores (March 31,2022: '' 34.95 crores) on account of import duty exemption of '' 8.72 crores (March 31, 2022: ''1.50 crore) on capital goods under the Export Promotion Capital Goods (EPCG) and '' 0.15 crores Advance Authorisation scheme laid down by the Government of India. The Company expects to fulfil the obligation in due course of time.

3 Leases

i The Company''s lease asset primarily consist of leases for land and buildings for branch offices and warehouses having the various lease terms. The Company also has certain leases of with lease terms of 12 months or less. The Company applies the ‘short-term lease'' recognition exemptions for these leases. Payment made towards short term leases of low value assets (lease of assets worth less than '' 2 Lacs) other than building and warehouse are recognized in the statement of Profit and Loss as rental expenses over the tenure of such leases.

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 has received the Covid-19-related rent concessions for lessees amounting to '' 0.12 crores (March 31,2022: '' 0.49 crores) and on the basis of practical expedient as per Ind AS 116 “Leases”, the same is not considered to be lease modification, hence the income towards rent concession is recognised in “Other Income” in the statement of profit and loss account.

ix The Company has applied a single discount rate to a portfolio of leases of a similar assets in similar economic environment with similar end date.

Defined Benefit Plan

The employees'' Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust which maintains its investments with Bajaj Allianz Life Insurance Co. Ltd. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn basic salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 21.87 years (March 31,2022: 21.66 years).

k) The Company expects to contribute '' 29.08 crores (March 31,2022 : '' 8.65 crores) to the plan during the next financial year.

l) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

m) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

n) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in an assumptions occurring at the end of the reporting period while holding all other assumption constraint. In practice it is unlikely to occur and change in some of the assumption 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 when calculating the defined benefit liability recognised in the balance sheet.

o) The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period

5 Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, “Operating Segment” (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act). For management purposes, the Company is organized into business units based on its products and services and has six reportable segments as follows:

a) Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (LED, Fixtures) and luminaries.

Electrical Consumer Durables : Fans, Water Heaters, Coolers, and Domestic Appliances Lloyd Consumer : Air Conditioner, Television, Refrigerator and Washing Machine

Others : Industrial motors, Pump, Water purifier, Solar, Personal Grooming

b) Identification of Segments:

The Board of Directors 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 / services and have been identified as per the quantitative criteria specified in the Ind AS.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “unallocable”.

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as “unallocable”.

e) There is no transfer of products between operating segments.

f) There are no customers having revenue exceeding 10% of total revenues

a) The transactions with 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 settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31,2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2022: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) As at March 31,2023, the Company has not granted any loans to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person (March 31,2022: Nil),

c) Transactions with related parties are reported gross of Goods and Service Tax.

7 Share based payments

The Company has in place following employee stock purchase plan approved by shareholders of the Company in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) regulations, 2021 :

(a) Havells Employee Long Term Incentive Plan 2014 : In accordance with this scheme, 41,817 (March 31,2022 : 68,356) share options of Re. 1 each were granted, out of which 41,415 (March 31,2022: 68,356) share options of Re. 1 each were vested and allotted on June 03, 2022 (March 31,2022 : June 05, 2021) to eligible employees at '' 1,289.85 (March 31,2022: '' 1,074.10) per share as contributed by these employees. As per the scheme, 50% of the shares are under lock in period of 13 months and balance 50% for 2 years. Also as per the scheme, the Company is obliged to pay 50% of the contribution made by eligible employees as retention bonus over a period of two years in equal instalments. Accordingly, a sum of '' 2.23 crores (March 31,2022 : '' 2.94 crores) has been recognised as employee stock purchase plan expense (refer note 27).

(b) Havells Employee Stock Purchase Plan 2015 : In accordance with this scheme, 150,000 (March 31,2022: 210,000) share options of Re. 1 each were granted, vested and allotted on June 03,2022 (March 31,2022: June 05, 2021) at '' 1,289.85 (March 31,2022: '' 1,074.10) per share to eligible employees as contributed by the Company. As per the scheme, 78% of the shares are under lock in period of 13 months and remaining 22% are under lock in period for 2 years. Accordingly, a sum of '' 19.35 crores (March 2022 :'' 22.56 crores) has been recognised as employee stock purchase plan expenses (refer note 27).

(c) Havells Employee Stock Purchase Plan 2016 : In accordance with the said scheme, 24,942 (March 31,2022: 8,454) share options of Re. 1 each were granted to eligible employees with graded vesting in three years starting from 2022. During the year, 13534 equity shares of Re. 1 each (March 31,2022 : 11705 equity shares) were allotted at '' 1,289.85 (March 31,2022 : ''1,074.10) per share on June 03, 2022. Accordingly, a sum of ''2.69 crores (March 31,2021: 1.26 crores) has been recognised as employee stock purchase plan expense refer note 29 and balance outstanding of '' 1.48 crores (March 31,2022 : 0.53 crores) (refer note 14).''

(d) Havells Employee Stock Purchase Plan 2022 : In accordance with the said scheme, 17,733 (March 31,2022: NIL) share options of Re. 1 each were granted to eligible employees with graded vesting in three years starting from 2022. During the year, 1722 equity shares of Re. 1 each (March 31,2022 : NIL equity shares) were allotted at '' 1,348.55 (March 31, 2022 : NIL) per share on Nov 03, 2022. Accordingly, a sum of ''1.06 crores (March 31,2021: NIL) has been recognised as employee stock purchase plan expense refer note 27 and balance outstanding of '' 0.82 crores (March 31,2022 : NIL) (refer note 14).''

The fair value at grant date of options granted during the year ended March 31,2023 was within range of '' 1271.53 to '' 1348.16 per share (March 31,2022 was within range of '' 1059.27 to '' 1073.90 per share). The fair value at the grant date is determined using Black Scholes valuation model which takes into account the exercise price, the terms of the options, the share price at grant date and expected price volatility of the underlying shares, the expected dividend yield and the risk free interest rate for the term of the option.

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

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

1) The fair value of unquoted instruments, other non-current financial assets and non-current financial liabilities is estimated by discounting future cash flows (DCF model) using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

2) The fair values of the Company''s interest-bearing borrowings are determined by using DCF method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31,2023 was assessed to be insignificant.

3) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

4) Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets is based on quoted (unadjusted) market prices at the end of the reporting period for identical assets or liabilities

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers among levels 1,2 and 3 during the year.

This section explains the judgement and estimates made in determining the fair value of financial assets that are:

a) Recognised and measured at Fair value

b) Measured at amortised cost and for which fair value is disclosed in financial statements

10 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective. In the event of crisis caused due to external factors such as caused by recent pandemic “COVID-19”, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in cash flow forecast to ensure there is enough liquidity in these situations through internal and external source of funds. These forecast and assumptions are reviewed by board of directors.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk

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

risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments, and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31,2023 and March 31,2022

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company basis their assessment believes that the probability of the occurrence of their forecasted transactions is not impacted by COVID-19 pandemic. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD,EUR, JPY, CNY and other currencies including KES,NPR, CHF, LKR, MWK,AED,SLL and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(ii) Interest Rate Risk

I nterest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligation at floating interest rates. The Company''s borrowings outstanding as at March 31,2023 and March 31,2022 comprise of long term loans.

(iii) 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 and aluminium being the major input used in the manufacturing. To mitigate the risk of supply and price fluctuations, Domestic and overseas sources are bench-marked to Optimize the allocation of business share among various sources. The Company''s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company mitigated the risk of price volatility by entering Long Term & Short term contracts for the Purchase of these commodities basis estimated annual requirements.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) Trade Receivables and Contract Assets

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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s treasury department in accordance with the Company''s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31,2023 is the carrying amounts. The Company''s maximum exposure relating to financial instrument is noted in liquidity table below.

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, short term loans, short term commercial papers and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

11 Capital Management

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company''s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31,2023 and March 31,2022.

15 Fire Incident in Neemrana Plant

There was a fire at Neemrana plant of the Company in July 2022 resulting in destruction/ damage of property, plant and equipment and inventories with book value of '' 47.53 crores and '' 64.99 crores respectively. The loss aggregating to '' 112.52 crores has been accounted for in the books and disclosed as “Exceptional Items” in the standalone statement of profit and loss. The process relating to filing of claim with the insurance company has been completed for property, plant and equipment and subsequent to the year-end, the Company has received interim payment amounting to '' 23.98 crores. The process of filing the surveyor report in respect of claim for inventories is in progress. The Company has adequate insurance coverage for the aforesaid loss and based on its assessment of the loss and the terms and conditions of the insurance policies, the claim is fully admissible. Accordingly, '' 112.52 crores has been disclosed as part of “Exceptional Items” in the standalone statement of profit and loss. Also refer to Note 11 (E).”

16 The Company has not been declared as a Wilful Defaulter by any bank or financial institution or government or any government authority.

19 Additional regulatory information required by Schedule III of Companies Act, 2013

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

(ii) Utilisation of borrowed funds and share premium:

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

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

(iii) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(iv) Compliance with approved scheme(s) of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) 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.

(vi) 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.

(vii) Valuation of PP&E, intangible asset and investment property: The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(viii) The company has not granted any loans or advances in the nature of loans either repayable on demand.

20 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than '' 50,000/-.

21 Note No.1 to 32 form integral part of the Standalone Balance Sheet and Standalone Statement of Profit and Loss.

1

Based on favourable decisions in similar cases, the Company does not expect any liability against these matters in accordance with principles of Ind AS -12 ‘Income taxes’ read with Ind AS -37 provisions, Contingent Liabilities and Contingent Assets’ and hence no provision has been considered in the books of accounts except for provision created in respect of few years {refer note 19(ii)}.

The above amounts contain interest and penalty where included in the order issued by the department to the Company

---

Mar 31, 2022

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

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

(d) Share options outstanding account

The share option outstanding account is used to recognise the grant date fair value of options issued to employees under Employee stock purchase plan.

Net of shares 41,960 (March 31, 2021: 41,960) held by employee welfare trust included in the financial statements

(e) Retained earnings

Retained Earnings are profits that the Company has earned till date less transfer to General Reserve, dividend or other distribution or transaction with shareholders.

(e) As on the Balance sheet date there is no default in repayment of loans and interest.

(f) The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken. In respect of the term loans which were taken in the previous year, those were applied in the respective year for the purpose for which the loans were obtained.

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

(a) The company has availed secured loan of '' 250 crores, carrying interest rate of (3 months TBill rate plus (288-488 base points)) (March 31, 2021: '' 250 crores) against the sanctioned term loan amount of '' 250 crores (March 31, 2021:? 250 crores) from CITI Bank N.A.The current outstanding amount against the loan is '' 203.13 Crores (March 31,2021: '' 250 crores).The loan was obtained for the purpose of fresh capital expenditure and reimbursement of prior capital expenditure incurred by the company during the previous year. The term loan is repayable in 16 equated quarterly instalments commencing from 15^th month from first drawdown date of April 21,2020. This term loan is secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets both present and future situated at (i) SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India (ii) Unit-1 Village Dharampur,Sai Road,Baddi,Dist Solan,Himachal Pradesh,(iii) Unit-II Village Gulerwala,Dist Solan ,Baddi,Himachal Pradesh,(iv) Unit-I,Sector -10,Plot No 2A,BHEL Complex,Haridwar (v) Unit-II, Plot No 2A and 2D/1 Sector-10,Sidcul Industrial Area,Haridwar, Uttarakhand.

(b) The company has availed secured loan of '' 250 Crores carrying interest rate of 4-6 %, (March 31,2021 : '' 250 crores) against the sanctioned amount of '' 350 crores (March 31,2021: '' 350 crores) from HDFC Bank Limited. The current outstanding amount against the loan is '' 190.52 Crores (March 31 ,2021: '' 241 crores).The loan was obtained for the purpose of fresh capital expenditure and reimbursement of prior capital expenditure incurred by the company during 12 months of first drawdown date of May 29, 2020. The term loan is repayable in quarterly instalments over the period of 5 years as per terms of agreement starting from [1^st Loan of '' 120 Crores (June 2020- May 2025) and 2^nd Loan of '' 130 Crores (April 2021 - May 2025)]. This loan is secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets, plant and machinery and all movable properties both present and future situated at (i) A-461/462,SP-215 and 204 & 204A ,Matsya Industrial Area, Alwar, Rajasthan and (ii) SP-1-133,General Zone ,RIICO Industrial Area, Ghiloth.

(c) The Company is required to maintain the Debt Covenants i.e., Fixed assets coverage ratio, Debt service coverage ratio, Gearing Ratio, Leverage Ratio & Interest coverage ratio and Company has complied with all the debt covenants in both the year i.e., March 31, 2022 and March 31,2021.

(d) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The Company has complied with the requirement of filing of monthly/ quarterly returns/statements of current assets with the banks or financial institutions, as applicable, and these returns were in agreement with the books of accounts for the year ended March 31, 2022 and March 31, 2021.

(v) Performance obligation

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery of the goods and payment is generally due as per the terms of contract with customers.

Sales of services: The performance obligation in respect of maintenance services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of maintenance period based on time elapsed and acceptance of the customer. In certain non-standard contracts, where the Company provides warranties in service of consumer durable goods, the same is accounted for as a separate performance obligation and a portion of the transaction price is allocated based on its relative standalone prices. The performance obligation for the warranty service is satisfied over a period of time based on time elapsed.

(vi) Disclosure pursuant to Appendix D of Ind AS 115

The Company was awarded a contract for replacement of existing conventional street/ park lights with LED street/ park lights by a Municipal Corporation in April 2017. As per the agreement, the Company shall also be responsible for the operation and maintenance of LED street/ park lights for a period of 7 years after installation. The consideration received by the Company under the contract is based on the energy savings resulting from the LED street/ park lights. The revenue recognized during the year and the contract assets balance as at year-end from such contract amounts to '' 45.43 Crores (March 31, 2021: '' 44.52 crores) and '' 56.83 Crores (March 31, 2021: '' 67.09 crores) respectively.

C Undrawn committed borrowing facility

(a) During the year, the Company has availed fund and non fund based unsecured working capital limit amounting to '' 902 Crores under multiple banking arrangements from IDBI Bank Limited, Yes Bank Limited, Standard Chartered Bank Limited, HSBC Bank, ICICI Bank Limited, IndusInd Bank Limited, HDFC Bank Limited, DBS Bank Limited and CITI Bank N.A. An amount of '' 598.44 crores remain undrawn as at Mach 31, 2022.

(b) The Company has availed fund based and non fund based working capital limits amounting to '' 235 crores (March 31, 2021 : '' 235.00 crores) from banks under consortium of Canara Bank, IDBI Bank Limited, Standard Chartered Bank, Axis Bank, ICICI Bank Limited, Yes Bank Limited and The Hong Kong and Shanghai Banking Corporation Limited. An amount of '' Nil crores remain undrawn as at March 31,2022 (March 31,2021 : '' 217.12 crores). Further, the limit availed is secured by way of:

i) Pari-passu first charge with consortium banks by way of hypothecation on entire paid stocks consisting of raw material, work in progress, finished goods kept at Company’s godown, factories and book debts along with receivables of the Company, both present and future.

ii) Pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) Pari-passu second charge with consortium banks by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which 1^st charge is held with term lenders.

D Other Litigations

The Company has some sales tax and other tax related litigation of '' 7.28 crores (March 31,2021: '' 12.93 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same.

E The Company has outstanding obligation amounting to '' 0.52 crores (March 31,2021: '' 0.80 crores) in respect of bonds given to central tax department against import of goods at concessional rate of basic custom duty. The Company expects to fulfil the obligation in due course of time.

F The Company has export obligation of '' 34.95 crores (March 31, 2021: '' 10.18 crores) on account of import duty exemption of '' 1.50 crores (March 31, 2021: '' 0.50 crore) on capital goods under the Export Promotion Capital Goods (EPCG) and '' 0.24 crores Advance Authorisation scheme laid down by the Government of India. The Company expects to fulfil the obligation in due course of time.

Defined Benefit Plan

The employees’ Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust which maintains its investments with Bajaj Allianz Life Insurance Co. Ltd. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn basic salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following tables summaries the components of net benefit expense recognized in the statement of profit or loss, the funded status and amounts recognized in the balance sheet for the respective plans:

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 21.66 years (March 31, 2021: 21.98 years)

k) The Company expects to contribute '' 8.65 crores (March 31,2021 : '' 18.25 crores) to the plan during the next financial year.

l) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

m) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

n) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in an assumptions occurring at the end of the reporting period while holding all other assumption constraint. In practice it is unlikely to occur and change in some of the assumption 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 when calculating the defined benefit liability recognized in the balance sheet.

o) The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

b) Identification of Segments:

The Board of Directors 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 / services and have been identified as per the quantitative criteria specified in the Ind AS.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “unallocable”.

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as “unallocable”.

e) There is no transfer of products between operating segments.

f) There are no customers having revenue exceeding 10% of total revenues.

g) No operating segments have been aggregated to form the above reportable operating segments.

a) The transactions with 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 settlement for these balances occurs through payment. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31,2022, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31,2021: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) As at March 31,2022 , the Company has not granted any loans to the promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person (March 31, 2021: Nil),

c) Transactions with related parties are reported gross of Goods and Service Tax.

7 Share based payments

The Company has in place following employee stock purchase plan approved by shareholders of the Company in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) regulations, 2021 :

(a) Havells Employee Long Term Incentive Plan 2014 : In accordance with this scheme, 68,356 (March 31, 2021 : 110,949) share options of Re. 1 each were granted, out of which 68,356 (March 31, 2021: 109,259) share options of Re. 1 each were vested and allotted on June 05, 2021 (March 31, 2021 : April 14, 2020) to eligible employees at '' 1,074.10 (March 31, 2021: '' 467.35) per share as contributed by these employees. As per the scheme, 50% of the shares are under lock in period of 13 months and balance 50% for 2 years. Also as per the scheme, the Company is obliged to pay 50% of the contribution made by eligible employees as retention bonus over a period of two years in equal instalments. Accordingly, a sum of '' 2.94 crores (March 31, 2021 : '' 2.88 crores) has been recognized as employee stock purchase plan expense in note 27.

(b) Havells Employee Stock Purchase Plan 2015 : In accordance with this scheme, 210,000 (March 31, 2021: 90,000) share options of Re. 1 each were granted, vested and allotted on June 05,2021 ( March 31, 2021: April 14, 2020) at '' 1,074.10 ( March 31, 2021: '' 467.35) per share to eligible employees as contributed by the Company. As per the scheme, 78% of the shares are under lock in period of 13 months and remaining 22% are under lock in period for 2 years. Accordingly, a sum of '' 22.56 crores (March 2021 :'' 4.21 crores) has been recognized as employee stock purchase plan expenses in note 27.

(c) Havells Employee Stock Purchase Plan 2016 : In accordance with the said scheme, 8,454 (March 31,2021: 13,157) share options of '' 1 each were granted to eligible employees with graded vesting in three years starting from 2021. During the year, 11705 equity shares of '' 1 each (March 31, 2021 : 10913 equity shares) were allotted at '' 1,074.10 (March 31, 2021 : '' 467.35) per share on June 05, 2021. Accordingly, a sum of '' 1.26 crores (March 31,2021: 0.50 crores) has been recognized as employee stock purchase plan expense in note 27 and balance outstanding of '' 0.53 crores (March 31, 2021 : 0.64 crores) in note 14.

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

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

1) The fair value of unquoted instruments, other non-current financial assets and non-current financial liabilities is estimated by discounting future cash flows (DCF model) using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

2) The fair values of the Company’s interest-bearing borrowings are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk as at March 31, 2022 was assessed to be insignificant.

3) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

4) Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets is based on quoted (unadjusted) market prices at the end of the reporting period for identical assets or liabilities

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers among levels 1, 2 and 3 during the year.

This section explains the judgement and estimates made in determining the fair value of financial assets that are:

a) Recognized and measured at Fair value

b) Measured at amortized cost and for which fair value is disclosed in financial statements

assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31,2022 and March 31, 2021.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company basis their assessment believes that the probability of the occurrence of their forecasted transactions is not impacted by COVID-19 pandemic. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD,EUR, JPY, CNY and other currencies including KES,NPR, CHF, LKR ,MWK,AED,SLL and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognized by the Company that have not been hedged by a derivative instrument or otherwise are as under:

10 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective. In the event of crisis caused due to external factors such as caused by recent pandemic “COVID-19”, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in cash flow forecast to ensure there is enough liquidity in these situations through internal and external source of funds. These forecast and assumptions are reviewed by board of directors.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below: (a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments , and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial

(ii) Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligation at floating interest rates. The Company’s borrowings outstanding as at March 31, 2022 and March 31,2021 comprise of long term loans.

Interest rate Sensitivity of Borrowings

With all other variables held constant, the following table demonstrates the sensitivity to a reasonably possible change in interest rates on floating rate portion of loans and borrowings as on date.

(iii) 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 and aluminium being the major input used in the manufacturing. To mitigate the risk of supply and price fluctuations, Domestic and overseas sources are bench-marked to Optimize the allocation of business share among various sources. The Company’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company mitigated the risk of price volatility by entering Long Term & Short term contracts for the Purchase of these commodities basis estimated annual requirements.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) Trade Receivables and Contract Assets

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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security.

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, short term loans, short term commercial papers and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2022 is the carrying amounts. The Company’s maximum exposure relating to financial instrument is noted in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.

11 Capital Management

For the purposes of Company’s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2022 and March 31, 2021 except for budgeting for cash flow projections considering the impact of ongoing pandemic COVID - 19. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt is calculated as loans and borrowings less cash and cash equivalent.

19 Additional regulatory information required by Schedule III of Companies Act, 2013

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

(ii) Utilisation of borrowed funds and share premium: 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

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

(iii) Compliance with number of layers of companies: The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(iv) Compliance with approved scheme(s) of arrangements: The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(v) 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.

(vi) 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.

(vii) Valuation of PP&E, intangible asset and investment property: The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(viii) The company has not granted any loans or advances in the nature of loans either repayable on demand.

20 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than '' 50,000/-.

21 Note No.1 to 32 form integral part of the Standalone Balance Sheet and Standalone Statement of Profit and Loss.

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Mar 31, 2021

impairment testing of goodwill and intangible assets with indefinite lives

Goodwill of '' 310.47 crores and Trademark of '' 1029.00 crores acquired on acquisition of Lloyd business having indefinite useful lives as assessed by the Management have been allocated to a separate single cash generating unit (CGU) i.e. LLOYD consumer which is also an operating and reportable segment, for impairment testing. The Company has performed an annual impairment test to ascertain the recoverable amount of CGU. The recoverable amount is determined based on value in use calculation. These calculations uses management assumptions and pre tax cash flow projections based on financed budgets approved by management covering generally over a period of 5 years. Cash flow projection beyond 5 years time period are extrapolated using the estimated growth rates which is consistent with forecasts included in industry reports specific to industry in which CGU operates. Further the management have factored the impact of COVID-19 on the cash flow projections used in assessment of recoverable amount of CGU. Management has determined following assumptions for impairment testing of CGU as stated below.

Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The calculations performed indicate that there is no impairment of CGU of the company. Management has performed a sensitivity analysis with respect to changes in assumptions for assessment of value-in-use of CGU. Based on this analysis, management believes that change in any of above assumption would not cause any material possible change in carrying value of unit’s CGU over and above its recoverable amount.

(a) Trade Receivable represents the amount of consideration in exchange for goods or services transferred to the customers that is unconditional.

(b) During the earlier years, the Company had entered in to an agreement with customer wherein the Company had identified multiple performance obligations in contract as per Ind AS 115 “Revenue from contract with customers”. The Company’s right to receive consideration is conditional upon satisfaction of all performance obligations. Accordingly, the Company has recognised contract asset in respect of performance obligation satisfied during the year. Contract assets are in the nature of unbilled receivables, which arises when Company satisfies a performance obligation but does not have an unconditional rights to consideration. Contract assets have decreased in the current year on account of change in the time frame for a” right to consideration” become unconditional.

(c) The Company has entered into the agreements with customers for sales of goods and services. The Company has identified these performance obligations and recognised the same as contract liabilities in respect of contracts, where the Company has obligation to deliver the goods and perform specified services to a customer for which the Company has received consideration. There has been no significant change in the contract liabilities.

(a) Trade receivables are usually on trade terms based on credit worthiness of customers as per the terms of contract with customers.

(b) Neither trade nor other receivables are due from directors or other officers of the company either severally or jointly with any other person, Nor any trade or other receivables are due from firms or private companies respectively in which any director is a partner, a director or a member.

(c) The Company has availed Receivable Buyout facility from banks against which a sum of '' 167.99 crores (March 31, 2020 : '' 404.31 crores) has been utilised as on the date of Balance Sheet. The Company has assigned all its rights and privileges to the bank and there is no recourse on the Company. Accordingly the amount of utilization has been reduced from trade receivables.

(d) The Company has arranged channel finance facility for its customers from banks against which a sum of '' 681.35 crores (March 31, 2020: '' 605.99 crores) has been utilised as on the date of Balance Sheet and correspondingly, the trade receivables stand reduced by the said amount as there is no recourse on the Company.

(a) The Company classified certain items of Property Plant and Equipment retired from active use and are held for sale recognised and measured in accordance with Ind-AS 105 “Non Current Assets Held For Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. The Company expects to complete the sale by September 2020 (previous year :-September 2019) by selling it in the open market.

(b) In the earlier year, the Company and its joint venture partner in respect of their joint venture namely “Jiangsu Havells Sylvania Lighting Co. Limited”, have applied for liquidation and formed a liquidation committee. Accordingly, the investment in joint venture was classified as asset held for sale, recognised and measured in accordance with Ind-AS 105 “Non-Current Assets Held for Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. During the current year, final consideration amounting to USD 2.35 million has been agreed between the co-venturers, accordingly the same has been classified to other financial assets {refer note 11(E)(b)}

d) Terms/rights attached to equity shares

The Company has only one class of issued share capital i.e. equity shares having a par value of '' 1/- per share (March 31, 2020 : '' 1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

(C) Nature and Purpose of Reserves

(a) Capital reserve

During amalgamation/ merger approved by honourable court, the excess of net assets taken over the consideration paid, if any, is treated as capital reserve. This capital reserve has arisen as a result of scheme of amalgamation in the past periods.

(b) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

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

(a) The Company has availed a secured loan of '' 108 Crores against sanctioned amount of '' 300 crores from CITI bank N.A. during financial year 2017-18.The current outstanding and sanctioned amount against the loan is '' Nil (March 31, 2020; '' 40.50 Crores). The loan was

obtained for the purpose of reimbursement of prior capital expenditure incurred by the company during 12 months previous to sanction date. The loan was having 15 months moratorium period and repayable in 8 quarterly instalments thereafter. This loan was secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets both present and future situated at SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India. The Company has complied with all covenants throughout the reporting period. The said loan has been repaid on due date during the year including interest thereon.

(b) The company has availed secured loan of '' 250 crores (March 31, 2020: '' Nil) against the sanctioned term loan amount of '' 250 crores (March 31,2020: '' Nil) from CITI Bank N.A.The current outstanding amount against the loan is '' 250 Crores (March 31,2020: '' Nil).The

loan was obtained for the purpose of fresh capital expenditure and reimbursement of prior capital expenditure incurred by the company during the previous year. The term loan is repayable in 16 equated quarterly instalments commencing from 15^th month from first drawdown. This term loan is secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets both present and future situated at (i) SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India

(ii) Unit-1 Village Dharampur, Sai Road, Baddi, Dist Solan,Himachal Pradesh,(iii) Unit-II Village Gulerwala, Dist Solan, Baddi, Himachal Pradesh, (iv) Unit-I, Sector -10, Plot No 2A,BHEL Complex,Haridwar (v) Unit-II, Plot No 2A and 2D/1 Sector-10, Sidcul Industrial Area, Haridwar, Uttarakhand.

(c) The company has availed secured loan of '' 250 Crores (March 31, 2020 : '' Nil) against the sanctioned amount of '' 350 crores (March 31, 2020: '' Nil) from HDFC Bank Limited. The current outstanding amount against the loan is '' 241 Crores (March 31, 2020: '' Nil). The loan was obtained for the purpose of fresh capital expenditure and reimbursement of prior capital expenditure incurred by the company during 12 months of first drawdown.. The term loan is repayable in 16 quarterly instalments over the period of 5 years as per terms of agreement. This loan is secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets, plant and machinery and all movable properties both present and future situated at (i) A-461/462,SP-215 and 204 & 204A, Matsya Industrial Area, Alwar, Rajasthan and (ii) SP-1-133,General Zone, RIICO Industrial Area, Ghiloth.

(d) The Company has satisfied all debt covenants prescribed in terms of term loan agreements.

(i) The Company has unabsorbed capital loss of '' 342.05 crores as on March 31, 2021 (previous year 368.55 crores) out of which capital loss of '' 219.75 crores will expire in financial year 2023-24 and capital loss of '' 122.30 crores will expire in financial year 2025-26, on which no deferred tax asset has been created by the management due to lack of probability of future capital gain against which such deferred tax assets can be realised. If the Company were able to recognise all unrecognised deferred tax assets, the profit after tax would have increased by '' 78.26 crores (Previous year '' 85.86 crore).

(ii) The union budget presented on February 1, 2021 which got enacted on March 28, 2021, made an important change by disallowing depreciation on goodwill for tax deduction retrospectively from April 01, 2020. Accordingly, the tax base of goodwill as on April 01, 2020 has become Nil. As a result of above amendment, there is difference between book base and tax base of goodwill resulting in recognition of deferred tax liability by '' 32.96 crores with consequential impact on deferred tax expense.

(iii) During the previous year, the Company had opted for reduced tax rate as per section 115BAA of the Income Tax Act, 1961 (introduced by the Taxation Laws (Amendment) Ordinance, 2019). Accordingly, the Company had recognised Provision for Income Tax for that year and re-measured its Deferred tax liability basis the rate prescribed in the said section and unutilised MAT credit entitlement was written off.

(iv) During the previous year, the Company had paid Final dividend to its shareholders for the year ended March 31, 2019 and Interim Dividend for the year ended March 31, 2020. This had resulted in payment of dividend distribution tax (DDT) amounting to '' 109.34 crores to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity in previous year.

(v) Effective tax rate has been calculated on profit before tax.

(i) Trade Payables include due to related parties '' 15.85 crores (March 31, 2020 : '' 4.95 crores) {refer note 33(6)(D)}

(ii) The amounts are unsecured and non interest-bearing and are usually on varying trade term.

(iii) For terms and conditions with related parties. {refer to note 33(6)}

(iv) Trade payables includes acceptances of '' 64.11 crores (March 31,2020: '' 389.71 crores)

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

i) Principal amount and interest due thereon remaining unpaid to any supplier covered under MSMED Act, 2006 as at the end of each accounting year

ii) The amount of interest paid by the buyer 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 -

during each accounting year.

iii) The amount of interest due and payable for the period of delay in making payment -

(which have been paid but beyond the appointed day during the year) but without

adding the interest specified under MSMED Act, 2006

iv) The amount of interest accrued and remaining unpaid at the end of each accounting year. -

v) 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 to the small enterprise for the purpose

of disallowance as a deductible expenditure under section 23 of the MSMED Act, 2006 -

The total dues of Micro and Small Enterprises which were outstanding for more than stipulated period are '' Nil (March 31,2020 : '' Nil)

a) Provision for warranties and E-waste

(i) Warranties

A provision is recognized for expected warranty claims and after sales services on products sold during the last one to seven years, 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 seven years after the reporting date. Assumptions used to calculate the provisions for warranties are based on current sales levels and current information available about defective returns based on one to seven years warranty period for all products sold and are consistent with those in the prior years. The assumptions made in relation to the current year are consistent with those in the prior year.

(ii) E-waste

A provision is recognised for probable e-waste liability based on "Extended Producer Responsibility” as furnished by the Company to Central Pollution Control Board in accordance with E-Waste Management Rules, 2016 notified by Government of India during the year. A provision for the expected costs of management of historical waste is recognised when the costs can be reliably measured. These costs are recognised as ‘Other expenses’ in the statement of profit and loss. As a part of acquisition of Lloyd business in earlier year, the seller company had agreed to ensure compliance with " extended producer responsibility” (EPR) in accordance with E- waste management rules, 2016 in

respect of sales made by the seller company in respect of Lloyd consumer durable business prior to date of business acquisition i.e. May 08, 2017. Further management has assessed liability under E-Waste management rules on year to year basis and same has been accounted for accordingly. Towards this, the seller company has paid an amount of '' 8.09 crore (March 31, 2020: '' 9.46 crore).

(v) Performance obligation

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery of the goods and payment is generally due as per the terms of contract with customers.

Sales of services: The performance obligation in respect of maintenance services is satisfied over a period of time and acceptance of the customer. In respect of these services, payment is generally due upon completion of maintenance period based on time elapsed and acceptance of the customer. In certain non-standard contracts, where the Company provides warranties in service of consumer durable goods, the same is accounted for as a separate performance obligation and a portion of the transaction price is allocated based on its relative standalone prices. The performance obligation for the warranty service is satisfied over a period of time based on time elapsed.

C Undrawn committed borrowing facility

(a) The Company has availed fund based and non fund based working capital limits amounting to '' 235.00 crores (March 31, 2020 : '' 235.00 crores) from banks under consortium of Canara Bank, IDBI Bank Limited, Standard Chartered Bank, Axis Bank, ICICI Bank Limited, Yes Bank Limited and The Hong Kong and Shanghai Banking Corporation Limited. An amount of '' 217.12 crores remain undrawn as at March 31, 2021 (March 31, 2020 : '' 212.28 crores). Further The limit availed is secured by way of:

i) Pari-passu first charge with consortium banks by way of hypothecation on entire paid stocks consisting of raw material, work in progress, finished goods kept at Company’s godown, factories and book debts along with receivables of the Company, both present and future.

ii) Pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) Pari-passu second charge with consortium banks by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which 1^st charge is held with term lenders.

(b) The Company has availed a secured loan of '' 108 Crores against sanctioned amount of '' 300 crores from CITI bank N.A. during financial year 2017-18.The current outstanding and sanctioned amount against the loan is '' Nil (March 31, 2020; '' 40.50 Crores). The said loan has been repaid on due date during the year including interest thereon. The loan is closed during the year and an amount of '' Nil is undrawn as at March 31, 2021 (March 31, 2020: '' 192 crores).{refer note 15 (A) (a)}

(c) The company has availed secured loan of '' 250 Crores (March 31, 2020 : '' Nil) against the sanctioned amount of '' 350 crores (March 31, 2020: '' Nil) from HDFC Bank Limited. The current outstanding amount against the loan is '' 241 Crores (March 31, 2020: '' Nil).An amount of '' 100 crores is undrawn as at March 31, 2021. {refer note 15(A)(c)}

D Other Litigations

The Company has some sales tax and other tax related litigation of '' 12.93 crores (March 31, 2020: '' 13.99 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same.

E Land situated at Ghiloth District, General Zone Industrial Area RIICO in the state of Rajasthan was allotted to the

Company for a consideration of '' 71.21 crores which was to be adjusted by rebate of '' 17.71 crores subject of fulfilment

of certain condition attached to grant. As at March 31, 2021, the Company is reasonably certain that it will fulfil the condition attached to the grant, accordingly grant related to assets has been recognised by the Company by deducting the same from carrying amount of related asset as per Ind AS 20 - "Government Grant”

F The Company has outstanding obligation amounting to '' 0.80 crores (March 31, 2020: '' 1.65 crores) in respect of bonds given to central tax department against import of goods at concessional rate of basic custom duty. The Company expects to fulfil the obligation in due course of time.

G The Company has export obligation of '' 10.18 crore (March 31, 2020: '' Nil) on account of import duty exemption of

'' 0.50 crores (March 31, 2020: '' Nil) on capital goods under the Export Promotion Capital Goods (EPCG) scheme laid

down by the Government of India. The Company expects to fulfil the obligation in due course of time.

The average duration of the defined benefit plan obligation at the end of the reporting period is 21.98 years (March 31, 2020: 22.77 years)

i The plan assets are maintained with Bajaj Allianz Life Insurance Co.Ltd.

The Company expects to contribute '' 18.25 crores (March 31,2020 : '' 19.08 crores) to the plan during the next financial year.

''} The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

I Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in an assumptions occurring at the end of the reporting period while holding all other assumption constraint. In practice it is unlikely to occur and change in some of the assumption 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 when calculating the defined benefit liability recognised in the balance sheet.

I The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, "Operating Segment” (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act). For management purposes, the Company is organized into business units based on its products and services and has six reportable segments as follows:

Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (LED, Fixtures) and luminaries.

Electrical Consumer Durables : Fans, Water Heaters, Coolers, and Domestic Appliances Lloyd Consumer : Air Conditioner, Television, Refrigerator and Washing Machine

Others : Industrial motors, Pump, Water purifier, Solar, Personal Grooming

identification of Segments:

The Board of Directors 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 / services and have been identified as per the quantitative criteria specified in the Ind AS.

Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "unallocable”.

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as "unallocable”.

There is no transfer of products between operating segments.

There are no customers having revenue exceeding 10% of total revenues

No operating segments have been aggregated to form the above reportable operating segments.

Finance income and costs on financial assets are not allocated to individual segments as the underlying instruments are managed on a group basis.

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

Capital expenditure consists of additions of property, plant and equipment, Capital work in progress and intangible assets.

The Company has reviewed its reportable segments effective April 01,2020. The product categories which are not strictly subscribing to a specific product segment has been carved out into a new product segment ‘Others’ consisting of Motor, Pump, Solar, Personal Grooming and Water Purifier businesses. The comparative figures for earlier periods have been accordingly reclassified.

Related party transactions

The related parties as per the terms of Ind AS-24,”Related Party Disclosures”, (under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rules 2015 (as amended from time to time), as disclosed below:-

a) The transactions with 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 settlement for these balances occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2021, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2020: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) All the liabilities for post retirement benefits being ‘Gratuity’ are provided on actuarial basis for the Company as a whole, accordingly the amount pertaining to Key management personnel are not included above.

c) Transactions with related parties are reported gross of Goods and Service Tax.

Share based payments

The Company has in place following employee stock purchase plan approved by shareholders of the Company in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) regulators, 2014 :

i) Havells Employee Long Term incentive Plan 2014 : In accordance with this scheme, 110,949 (March 31, 2020 : 169,597) share options of '' 1 each were granted, out of which 109,259 (March 31, 2020: 169,195) share options of '' 1 each were vested and allotted on April 14,2020 (March 31, 2020 : May 28, 2019) to eligible employees at '' 467.35 (March 31, 2020: '' 733.90) per share as contributed by these employees. As per the scheme, 50% of the shares are under lock in period of 13 months and balance 50% for 2 years. Also as per the scheme, the Company is obliged to pay 50% of the contribution made by eligible employees as retention bonus over a period of two years in equal instalments. Accordingly, a sum of '' 2.88 crores (March 31,2020 : '' 4.89 crores) has been recognised as employee stock purchase plan expense in note 28.

i) Havells Employee Stock Purchase Plan 2015 : In accordance with this scheme, 90,000 (March 31, 2020: 150,000) share options of '' 1 each were granted, vested and allotted on April 14,2020 (March 31, 2020: May 28, 2019) at '' 467.35 (March 31, 2020: '' 733.90) per share to eligible employees as contributed by the Company. As per the scheme, 78% of the shares are under lock in period of 13 months and remaining 22% are under lock in period for 2 years. Accordingly, a sum of '' 4.21 crores (March 2020 : '' 11.01 crores) has been recognised as employee stock purchase plan expenses in note 28.

) Havells Employee Stock Purchase Plan 2016 : In accordance with the said scheme, 13,157 (March 31,2020: 16,273) share options of '' 1 each were granted to eligible employees with graded vesting in three years starting from 2020. During the year, 10913 equity shares of '' 1 each (March 31,2020 : 10729 equity shares) were allotted at '' 467.35 (March 31, 2020 : '' 733.90) per share on April 14,2020. Accordingly, a sum of '' 0.50 crores (March 31, 2020: 1.16 crores) has been recognised as employee stock purchase plan expense in note 28 and balance outstanding of '' 0.64 crores (March 31,2020 : 0.64 crores) in note 14(B).

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

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

1) The fair value of unquoted instruments, other non-current financial assets and non-current financial liabilities is estimated by discounting future cash flows (DCF model) using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

2) The fair values of the Company’s interest-bearing borrowings are determined by using DCF method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk as at 31 March 2021 was assessed to be insignificant.

3) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: The fair value of financial instruments traded in active markets is based on quoted (unadjusted) market prices at the end of the reporting period for identical assets or liabilities.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.

There are no transfers among levels 1, 2 and 3 during the year.

This section explains the judgement and estimates made in determining the fair value of financial assets that are:

a) Recognised and measured at Fair value

b) Measured at amortised cost and for which fair value is disclosed in financial statements

10 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective. In the event of crisis caused due to external factors such as caused by recent pandemic "COVID-19”, the management assesses the recoverability of its assets, maturity of its liabilities to factor it in cash flow forecast to ensure there is enough liquidity in these situations through internal and external source of funds. These forecast and assumptions are reviewed by board of directors.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments, and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2021 and March 31, 2020

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company basis their assessment believes that the probability of the occurrence of their forecasted transactions is not impacted by COVID-19 pandemic. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR, AED, JPY, CNY and other currencies including KES, NPR, CHF, LKR, MWK, SLL and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(ii) interest Rate Risk

I nterest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligation at floating interest rates. The Company’s borrowings outstanding as at March 31, 2021 and March 31, 2020 comprise of long term loans.

(iii) 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 and aluminium being the major input used in the manufacturing. To mitigate the risk of supply and price fluctuations, Domestic and overseas sources are bench-marked to Optimize the allocation of business share among various sources. The Company’s Board of Directors has developed and enacted a risk management strategy regarding commodity price risk and its mitigation. The Company mitigated the risk of price volatility by entering Long Term & Short term contracts for the Purchase of these commodities basis estimated annual requirements.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) Trade Receivables and Contract Assets

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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables and contract assets as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2021 is the carrying amounts. The Company’s maximum exposure relating to financial instrument is noted in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits, short term loans, short term commercial papers and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

Maturity profile of financial liabilities

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

11 Capital Management

For the purposes of Company’s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2021 and March 31,2020 except for budgeting for cash flow projections considering the impact of ongoing pandemic COVID - 19. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt is calculated as loans and borrowings less cash and cash equivalent.

15 The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the changes are applicable is yet to be notified and the final rules are yet to be framed. The Company will carry out an evaluation of the impact and record the same in the financial statements in the period in which the Code becomes effective and the related rules are published.

16 Consequent to the disruption caused due to COVID-19, the Company has made an assessment as at March 31, 2021 of recoverability of the carrying values of its assets such as property, plant and equipment, intangible assets having indefinite useful life, goodwill, inventory, trade receivables, and other current assets giving due consideration to the internal and external factors. Further, on account of continued spread of COVID-19 disease in the country, the Company has made timely and requisite changes in business model which has resulted in consistent growth across the product segments during the year. The Company is continuously monitoring the situation arising on account of COVID-19 and will make appropriate action required, if any.

17 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than '' 50,000/-.

18 Note No.1 to 33 form integral part of the balance sheet and statement of profit and loss.

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Mar 31, 2019

1. Corporate Information

Havells India Limited (‘the Company’) is a public limited Company domiciled in India and incorporated on August 08, 1983 under the provisions of the Companies Act, 1956 having its registered office at 904, 9th Floor, Surya Kiran Building, K.G. Marg, Connaught Place, New Delhi-110001. The Company is listed on BSE Limited and National Stock Exchange of India Limited. The Company is consumer electrical/electronics and power distribution equipment manufacturer with products ranging from Industrial and Domestic Circuit Protection Switchgears, Cables, Motors, Pumps, Fans, Power Capacitors, LED Lamps and Luminaries for Domestic, Commercial and Industrial applications, Modular Switches, Water Heaters, Domestic Appliances, Water Purifier, Air conditioner, Television and washing machine covering the entire range of household, commercial and industrial electrical/ electronics needs. The Company’s manufacturing facilities are located at Faridabad in Haryana, Alwar, Ghiloth and Neemrana in Rajasthan, Haridwar in Uttarakhand, Sahibabad in Uttar Pradesh, Baddi in Himachal Pradesh and Guwahati in Assam. The research and development facilities are located at Head office, Noida (Uttar Pradesh) and also at some of the plant units. These facilities have been approved by Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India, New Delhi.

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

Notes:

1. Investment property represented, land and building being a premise at Greater Noida, Uttar Pradesh given on lease w.e.f May 12, 2016 on a long term basis. During the year Investment property was transferred to property, plant and equipment on premature termination of lease on November 29, 2018. The Company has decided to use the said property for normal business purpose and accordingly the same is transferred to property, plant and equipment.

2. At the end of the previous financial year the Company had obtained independent valuation from certified valuer for its investment property and had reviewed the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility, depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may be reasonably be expected to exchange between a willing buyer and willing seller, with equity or both.

Management has performed a sensitivity analysis with respect to changes in assumptions for assessment of value-in-use of Goodwill and Trademark. Based on this analysis, management believes that change in any of above assumption would not cause any material change in carrying value of unit’s Goodwill/Trademark.

Notes:-

(a) The Company has entered in to an agreement with a customer wherein the Company has identified two performance obligations in contract as per Ind AS 115 “Revenue from contract with customers” . The Company’s right to receive consideration is conditional upon satisfaction of both performance obligation. Accordingly, Company has recognised contract asset in respect of performance obligation satisfied during the year. Contract assets are in the nature of unbilled receivables which arises when Company satisfies a performance obligation but does not have an unconditional rights to consideration.

(b) The Company has entered into the agreements with customers for supply of products with extended warranty and annual maintenance contract. Accordingly, the Company has identified additional performance and recognised the same as contract liabilities in respect of contracts where the Company has obligation to perform specified services to a customer for which the Company has received consideration.

Notes:

(a) Trade receivables are usually non-interest bearing and are on trade terms of 30 to 60 days.

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

(c) The Company has availed Receivable Buyout facility from banks against which a sum of Rs. 649.15 crores (March 31, 2018: Rs. 648.99 crores) has been utilised as on the date of Balance Sheet. The Company has assigned all its rights and privileges to the bank and there is no recourse on the company. Accordingly the amount of utilisation has been reduced from trade receivables. A sum of Rs. 35.21 crores (March 31, 2018: Rs. 28.91 crores) have been charged on account of this facility.

(d) The Company has arranged channel finance facility for its customers from banks against which a sum of Rs. 627.98 crores (March 31, 2018: Rs. 593.37 crores) has been utilised as on the date of Balance Sheet and correspondingly, the trade receivables stand reduced by the said amount as there is no recourse on the Company

Notes:

(a) There are no restrictions with regard to cash and cash equivalents as at the end of the reporting period and prior period.

(b) Short-term deposits are made of varying periods between one date to three months depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposits rates.

(c) Changes in liabilities arising from financing activities

Notes:

(a) Escrow account represents amount held in a fixed deposit with bank under escrow arrangement with “LEEL Electricals Limited” on account of final settlement of Lloyd business acquisition which is closed in current year.

(b) The deposits maintained by the Company with banks comprise of the time deposits which may be withdrawn by the Company at any point of time without prior notice and are made of varying periods between one day to twelve months depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates.

(c) Fixed deposit with original maturity of more than twelve months but remaining maturity of less than twelve months have been disclosed under other bank balances.

(d) The Company can utilise the balance towards settlement of unclaimed dividend.

c) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.1/- per share (March 31,2018 : Rs.1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Notes:

(a) Shareholding of Smt Vinod Gupta as at March 31,2019 is below 5%, however figures have been disclosed for comparative purpose.

(b) Shareholding of ARG Family Trust as at March 31, 2018 is below 5%, however figures have been disclosed for comparative purpose.

e) Shares reserved for issue under Employee Stock purchase plan

I nformation relating to employee stock purchase plan, including details of option issued, exercised and lapsed during the financial year and options outstanding as at end of the reporting period are set out in note 33 (9).

(C) Nature and Purpose of Reserves

(a) Capital reserve

During amalgamation/ merger approved by honourable court, the excess of net assets taken over the consideration paid, if any, is treated as capital reserve.

(b) Securities premium

The amount received in excess of face value of the equity shares is recognised in securities premium reserve. In case equity - settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium reserve. This reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(c) General reserve

The reserve arises on transfer portion of the net profit pursuant to the earlier provisions of the Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.

(d) Share options outstanding account

The fair value of the equity settled “share base payment transactions” is recognised to share options outstanding account.

Notes:

(a) The Company has availed a secured loan of Rs. 94.50 Crores (March 31, 2019: Rs. 108 Crores) against sanctioned amount of Rs. 285.00 crores from CITI bank N.A. as of March 31, 2019. The loan was obtained for the purpose of reimbursement of prior capital expenditure incurred by the company during 12 months previous to sanction date. The loan was having 15 months moratorium period and repayable in 8 quarterly instalments thereafter. This loan is secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets both present and future situated at SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India with an minimum fixed assets coverage ratio of 1.1x. The Company has complied with these covenants throughout the reporting period.

(b) The Company has not defaulted on any loans payable during the year and has satisfied all debt covenants prescribed in terms of term loan.

Notes:

a) There was unabsorbed capital loss of Rs. 368.85 crores as on March 31, 2019 (previous year 369.28 crores) with expiry in financial year 2023-24 on which no deferred tax asset has been created by the management due to lack of probability of future capital gain against which such deferred tax assets can be realised. If the Company were able to recognise all unrecognised deferred tax assets, the profit after tax would have increased by Rs. 85.92 crores (Previous year 86.02 Crore).

b) During the year the Company has paid dividend to its shareholders for the year ended March 31, 2018, This has resulted in payment of corporate dividend tax (CDT) amounting to Rs. 51.43 crores to the taxation authorities. The Company believes that CDT represents additional payment to taxation authority on behalf of the shareholders. Hence CDT paid is charged to equity

c) Effective tax rate has been calculated on profit before tax.

* Trade Payables include due to related parties Rs. 5.11 crores (March 31, 2018 : Rs. 7.10 crores) {refer note 33(8)(D)}

* The amounts are unsecured and non interest-bearing and are usually paid within 30 to 90 days of recognition.

* For terms and conditions with related parties. {refer to note 33(8)}

* Trade payables includes acceptances of Rs. 281.76 Crores (March 31, 2018: Rs. 289.50)

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

a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The Company has transferred Rs. 0.07 crores (March 31,2018: Rs. 0.03 crore) out of unclaimed dividend to Investor Education and Protection Fund of Central Government in accordance with the provisions of section 124 of the Companies Act,2013.

b) Monies collected on behalf of banks and remitted after the balance sheet date.

c) Purchase consideration payable is related to amount payable in respect of acquisition of Lloyd business which was closed in current year.

a) Provision for warranties and E-waste

(i) Warranties

A provision is recognised for expected warranty claims and after sales services on products sold during the last one to five years, 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 sales levels and current information available about defective returns based on one to five years warranty period for all products sold.

(ii) E-waste

A provision is recognised for probable e-waste liability based on “Extended Producer Responsibility” as furnished by the Company to Central Pollution Control Board in accordance with E-Waste Management Rules, 2016 notified by Government of India during the earlier year. A provision for the expected costs of management of historical waste is recognised when the costs can be reliably measured. These costs are recognised as ‘Other expenses’ in the statement of profit and loss. As a part of acquisition of Lloyd business in previous year, The seller company had agreed to ensure compliance with “ extended producer responsibility” (EPR) in accordance with E- waste management rules, 2016 in respect of sales made by the seller company in respect of lloyd consumer durable business prior to date of business acquisition i.e. May 08, 2017. Towards this, the seller company has paid an amount of Rs. 12.02 crore .

b) Provision for litigations

Provision for litigation amounting to Rs. 7.60 Crores (March 31, 2018: ‘7.70 Crores) is created against demands raised in various ongoing litigations under Value Added Tax and Entry Tax in various states. Based on the facts of the case and legal precedents ,the management believes there would be a probable outflow of resources and accordingly, has created a provision in books of account.

The table below gives information about movement in litigation provisions:

Notes:

(a) Sale of products and scrap sales as reported above includes excise duty collected from customers of Rs. Nil (March 2018: Rs. 121.01 crores) and Rs. Nil (March 31, 2018 : Rs. 0.69 crores) respectively. Sale of Products and scrap sales net of excise duty are Rs. 9,959.72 crores (March 31, 2018: Rs. 8,057.30 crores) and Rs. 51.28 crores (March 31, 2018 : Rs. 39.06 crores) respectively. Effective July 01, 2017, the Government of India has implemented Goods and Service Tax (“GST”) replacing Excise Duty, Service Tax and various other indirect taxes. The Company collects GST on behalf of the Government. Hence, GST is not included in Revenue from contract with customers. In view of the aforesaid change in indirect taxes, Revenue from operations for the year ended March 31, 2019 is not comparable with March 31, 2018.

(b) Government assistance for refund of Goods and Service Tax represents benefits provided by the Government to the Company in respect of its manufacturing units in the state of Assam, Himachal Pradesh and Uttarakhand in accordance with the ‘Scheme of budgetary support under Goods and Service Tax Regime’ as notified on October 05, 2017 which were earlier eligible for excise duty exemption. {refer accounting policy 2.16}

(v) Performance obligation

Sale of products: Performance obligation in respect of sale of goods is satisfied when control of the goods is transferred to the customer, generally on delivery of the goods. {refer accounting policy 2.13}.

Sales of services: The performance obligation in respect of installation services is satisfied upon completion of installation and acceptance of customer. In respect of maintenance services, performance obligation is satisfied over a period of time and acceptance of the customer. {refer accounting policy 2.13}.

The transaction price allocated to remaining performance obligation (unsatisfied performance obligation) pertaining to sales of services as at March 31, 2019 is as follows:-

(a) The Company is contesting these demands and the management, including its tax advisors, believe that its favourable position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for these tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

Based on favourable decisions in similar cases and discussions with the advisor, the Company does not expect any liability against these matters and hence no provision has been considered in the books of accounts. Besides the above, show cause notices from various departments received by the Company have not been treated as contingent liabilities, since the Company has adequately represented to the concerned departments and does not expect any liability on this account.

C Undrawn committed borrowing facility

(a) The Company has availed working capital limits amounting to Rs. 195.00 crores (March 31, 2018 : Rs. 200 crores) from banks under consortium of Canara Bank, IDBI Bank Limited, Standard Chartered Bank, ICICI Bank Limited, Yes Bank Limited and The Hong Kong and Shanghai Banking Corporation Limited. An amount of Rs. 195.00 crores remain undrawn as at March 31, 2019 (March 31, 2018 : Rs. 199.87 crores). Further The limit availed is secured by way of:

i) Pari-passu first charge with consortium banks by way of hypothecation on entire stocks of raw materials, semifinished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) Pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) Pari-passu first charge with other consortium lenders by way of hypothecation of plant and machinery generators, furniture and fixtures, electric fans and installations.

(b) The Company has availed a secured loan of Rs. 94.50 Crores (March 31, 2019: Rs. 108 Crores) against sanctioned amount of Rs. 285.00 crores from CITI bank N.A. as of March 31, 2019. The loan was obtained for the purpose of reimbursement of prior capital expenditure incurred by the company during 12 months previous to sanction date. The loan was having 15 months moratorium period and repayable in 8 quarterly instalments thereafter. This loan is secured by way of first exclusive charge by way of a hypothecation over the Company’s all movable fixed assets both present and future situated at SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India with an minimum fixed assets coverage Ratio of 1.1x. The Company has not defaulted on any loans payable during the year and has satisfied all debt covenants prescribed in terms of term loan.

D Other Litigations

The Company has some sales tax and other tax related litigation of Rs. 7.60 crores (March 31, 2018: Rs. 7.70 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same.

E Leases

Operating lease commitments - Company as lessee

a) The Company has taken various residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. The annual increments are expected to be in line with the expected general inflation to compensate the lessor for the expected inflationary cost increase.

b) The Company has also taken few commercial premises under non-cancellable operating leases. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. Normally there are renewal and escalation clauses in these contracts. The total of future minimum lease payments in respect of such leases are as follows:

Operating lease commitments - Company as lessor

a) The Company had entered into a sub-lease agreement to sublet a property situated at Kasna, Noida, which was considered as “Investment Property”. The lease agreement was executed on May 12, 2016. The Company has decided to use the said property for normal business purpose and accordingly, the same was transferred to property, plant and equipment.

b) The total rent recognised as income during the year is Rs. 7.62 crores (March 31, 2018 : Rs. 6.92 crores). Present value of minimum rentals receivable under non-cancellable operating leases as at March 31,2019 are, as follows:

F During the previous year, land measuring 50 acres situated at Ghiloth District , General Zone Industrial Area RIICO in the state of Rajasthan has been allotted to the Company for a consideration of Rs. 71.21 crores. This consideration will be adjusted by way of rebate of Rs. 17.71 crores only after, the Company will incur total investment of Rs. 260.00 crores by November 2019 and an additional amount of Rs. 192.00 crores by March 2022, till March 31,2019 the Company has capitalised Rs. 177.95 crores in property, plant and equipment and Rs. 165.38 crores in Capital work in progress. Till then the Company has considered the rebate as a separate liability

G The Company has given bonds amounting to Rs. 1.09 crores (March 31, 2018: 0.08 crores) to central tax department against import of goods without payment of basic custom duty

2. OTHER NOTES ON ACCOUNTS

1 Change in interest in subsidiaries and joint venture

(a) During the current year wholly owned subsidiary of the Company “Havells Exim Limited” has been placed in to voluntary liquidation on December 04, 2018. Accordingly the Company has recognised impairment of investments in subsidiary Company of Rs. 0.10 Crores as disclosed in note 6 to the financial statements in accordance with Ind AS-27 “Separate Financial Statements”.

(b) During the previous year, the Company and its joint venture partner in respect of Jiangsu Havells Sylvania Lighting Co. Limited, have applied for liquidation and formed a liquidation committee. The Company will receive agreed consideration of USD 2.5 million. Accordingly, the investment in joint venture has been classified as asset held for sale, recognised and measured in accordance with Ind-AS 105 “Non-Current Assets Held for Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. The Company is not liable for losses incurred by the joint venture as the Company will received agreed consideration upon completion of liquidation and accordingly the investment has been measured at lower of its caring amount and fare value less cost to sell.

(c) During the year, the Company has acquired an additional 31.08% equity interest in “Promptec Renewable Energy Solutions Private Limited”, increasing its ownership interest to 100% for a consideration of Rs. 16.66 crore.

(d) During the previous year, Havells Holdings Limited, a wholly owned subsidiary of the Company completed sales of remaining 20% stake in Feilo Malta Limited and 100% stake in Havells Sylvania (Thailand) Limited to Shanghai Feilo Acoustics Company Limited, China based listed Company. Consequent to this, the Company reversed impairment loss recognised on investment in earlier years amounting to Rs. 11.91 Crores on such investments and reported as exceptional item in statement of profit and loss account.

2 Scheme of Amalgamation

During the year, the board of director vide their approval dated September 21, 2018 has approved the Scheme of Amalgamation, accordingly the Company has filed (“the Scheme”) under section 230 to 232 of Companies Act 2013 with National Company law tribunal(“NCLT”), among the Company and its wholly owned subsidiary companies, namely Promptec Renewable Energy Solutions Private Limited. (“Promptec”), Standard Electrical Limited (“Standard Electrical”), Lloyd Consumer Private Limited (“Lloyd Consumer”) and Havells Global Limited (“Havells Global”) which is subject to the approval of NCLT. The Company has received approvals from its shareholders and creditors at their meeting held on January 28, 2019 .The appointed date of the scheme is April 01, 2018. Further the NCLT order is awaited and the effect of the scheme would be recognised on receipt of the statutory approvals and scheme becoming effective in accordance with Appendix “C” of Ind AS 103 “Business combination”. Management has evaluated that synergies created out of such merger shall generate operating benefit to the Company which are estimated to be significantly higher than the carrying value of investments in its books.

3 Investment in subsidiaries and joint ventures

(a) These financial statement are separate financial statements prepared in accordance with Ind AS-27 “Separate Financial Statements”.

(b) The Company ‘s investments in subsidiaries are as under:

(c) The Company’s investment in Joint venture is as under:

4 During the year, the Company has capitalised the following directly relatable cost to the cost of tangible fixed assets, being expenses related to projects and development of Dies and Fixtures. Consequently, expenses disclosed under the respective notes are net of amounts capitalised by the Company.

The Research and Development facilities are located at the Head office, Noida and at some plants of the Company which are approved by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Govt. of India. The Company is entitled to a weighted deduction of 150% of the eligible expenditure incurred at these units under section 35 (2AB) of the Income Tax Act, 1961.

5 Gratuity and other post-employment benefit plans

Disclosures pursuant to Ind AS - 19 “Employee Benefits”(notified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act) are given below :

There are numerous interpretative issues relating to Supreme Court (SC) judgement dated February 28, 2019 on Provident Fund on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The company is evaluating and seeking legal inputs regarding various interpretative issues.

Defined Benefit Plan

The employees’ Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust which maintains its investments with Life Insurance Corporation of India (LIC) . Under the gratuity plan, every employee who has completed at least five years of service usually gets a gratuity on departure @ 15 days of last drawn basic salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following tables summaries the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 23.36 years (March 31, 2018: 23.64 years) k) The plan assets are maintained with Life Insurance Corporation of India (LIC).

l) The Company expects to contribute Rs. 19.38 crores (March 31,2018 : Rs. 12.19 crores) to the plan during the next financial year.

m) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary n) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

o) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

6 Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, “Operating Segment” (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act). For management purposes, the Company is organised into business units based on its products and services and has five reportable segments as follows:

a) Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories, industrial motors, pumps and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (LED, Fixtures), Solar and luminaries.

Electrical Consumer Durables : Fans, Water Heaters, Coolers, Personal Grooming, Water Purifier, and

Domestic Appliances Lloyd Consumer : Air Conditioner, Television and Washing Machine

b) Identification of Segments:

The Board of Directors 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 / services and have been identified as per the quantitative criteria specified in the Ind AS.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Others”.

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as “Others”.

e) There is no transfer of products between operating segments.

f) There are no customers having revenue exceeding 10% of total revenues

7 Related party transactions

The related parties as per the terms of Ind AS-24,”Related Party Disclosures”, (under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time), as disclosed below:-

# Havells International Limited (WOS of Havells Holdings Limited) hold 49% equity interest in Thai Lighting Assets Co. Ltd. However the said Company has majority representation on Board of Directors of the entity and approval of the said Company is required for all major operational decision and the operations are solely carried out for the benefit of the Company. Based on facts and circumstances, management determine that in substance the Company control this entity and therefore reported the same as controlled entities. The company is currently in liquidation.

(ii) Joint Venture

Jiangsu Havells Sylvania Lighting Co. Limited

50% ownership interest held by Company.(Under Liquidation)

(B) Names of other related parties with whom transactions have taken place during the year :

(i) Enterprises in which directors are interested

QRG Enterprises Limited QRG Foundation Guptajee & Company

QRG Central Hospital and Research Centre Ltd QRG Medicare limited

(ii) Post employee benefit plan for the benefitted employees

Havells India Limited Employees Gratuity Trust

(iii) Key Management Personnel

Shri Anil Rai Gupta, Chairman and Managing Director Shri Rajesh Kumar Gupta, Director (Finance) and Group CFO Shri Ameet Kumar Gupta, Director Shri Sanjay Kumar Gupta, Company Secretary

(iv) Non executive Directors

Shri Vijay Kumar Chopra Dr. Adarsh Kishore

Shri Sunil Behari Mathur (Retired on May 24, 2017)

Shri Surender Kumar Tuteja

Smt. Pratima Ram

Shri Vellayan Subbiah

Shri Puneet Bhatia

Shri T V Mohandas Pai

Shri Surjit Kumar Gupta

Shri Jalaj Ashwin Dani (w.e.f August 16, 2017)

Shri U K Sinha (w.e.f March 01, 2018)

a) The transactions with 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 except a loan given to wholly owned subsidiary “Promptec Renewable Energy Solutions Private Limited”. The settlement for these balances occur in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2019, the Company has not recorded any impairment of receivables relating to amounts owed by related parties .This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) All the liabilities for post retirement benefits being ‘Gratuity’ are provided on actuarial basis for the Company as a whole, accordingly the amount pertaining to Key management personnel are not included above.

c) Purchase of goods and sale of goods has been reported gross off Goods and Service Tax.

8 Share based payments

The Company has in place following employee stock purchase plan approved by shareholder of the Company in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) regulators, 2014 :

a) Havells Employee Long Term Incentive Plan 2014 : In accordance with this scheme, 167,135 (March 31, 2018 : 139, 673) shares of Rs. 1 each were granted, vested and allotted on May 10, 2018 (March 31, 2018 : May 11, 2017) to eligible employees at Rs. 553.90 (March 31, 2018 : Rs. 502.15) per share as contributed by these employees. As per the scheme, 50% of the shares are under lock in period of 13 months and balance 50% for 2 years. Also as per the scheme, the Company is obliged to pay 50% of the contribution made by eligible employees as retention bonus over a period of two years in equal installments. Accordingly, a sum of Rs. 3.85 crores (March 31, 2018 : Rs. 3.04 crores) has been recognised as employee stock purchase plan expense in note 28.

b) Havells Employee Stock Purchase Plan 2015 : In accordance with this scheme, 150,000 (March 31, 2018: 150,000) shares of Rs. 1 each were granted, vested and allotted on May 10, 2018 (March 31, 2018 : May 11, 2017) at Rs. 553.90 (March 31, 2018 : Rs. 502.15) per share to eligible employees as contributed by the Company. As per the scheme, 78% of the shares are under lock in period of 13 months and remaining 22% are under lock in period for 2 years. Accordingly, a sum of Rs. 8.31 crores (March 2018 :Rs. 7.53 crores) has been recognised as employee stock purchase plan in note 28.

c) Havells Employee Stock Purchase Plan 2016 : In accordance with the said scheme, 11,533 (March 31, 2018: 10,377) shares of Rs. 1 each were granted to eligible employees with graded vesting in three years starting from 2018. During the year, 7302 equity shares of Rs. 1 each (March 31, 2018 : 3458 equity shares) were allotted at Rs. 553.90 (March 31, 2018 : Rs. 502.15) per share on May 10, 2018. Accordingly, a sum of Rs. 0.67 crores has been recognised as employee stock purchase plan expense in note 28 and balance outstanding of Rs. 0.27 crores in note 14.

The weighted average share price at the date of exercise of options exercised during the year ended March 31, 2019 was Rs. 495.83 per share (March 31, 2018 : Rs. 471.20)

No options expired during the period covered in the above table

The fair value at grant date of options granted during the year ended March 31, 2019 was Rs. 549.12 per share (March 31, 2018 was Rs. 496.74 per share). The fair value at the grant date is determined using Black Scholes valuation model which takes into account the exercise price , the terms of the options , the share price at grant date and expected price volatility of the underlying shares , the expected dividend yield and the risk free interest rate for the term of the option.

(iv) The expected price volatility is based on the historical volatility (based on remaining life of the options), adjusted for any expected change to future volatility due to publically available information.

9 Corporate Social Responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility (“CSR”). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs. 17.44 crores (March 31, 2018: Rs. 14.95 crores) towards this cause and charged the same to the Statement of Profit And Loss. The funds are primary allocated to QRG foundation, a society exempted under section 12A of the Income Tax Act, 1961 for undertaking Mid-Day meal scheme and Aga Khan Foundation India, a private non-profit foundation registered u/s 592 of Companies Act, 1956 engaged in restoration and conservation of various heritage monuments, Kerala relief fund and construction of bio toilets.

10 Fair value measurements

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments and investment property:

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

1) The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

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

3) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

4) The Company had an investment property in current year which was transferred to property, plant and equipment upon termination of lease. In last year, the Company had obtained independent valuation for its investment property as at March 31, 2018 and has reviewed the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility, depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may be reasonably be expected to be exchanged between a willing buyer and a willing seller, with equity or both. The valuation by the valuer assumes that Company shall continue to operate and run the assets to have economic utility. The fair value is on “as is where” basis. All resulting fair value estimates for investment property are included in Level 3.

5) Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data

11 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarised as below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments , and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations, provisions and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2019.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, LKR ,EUR. AED, NPR, JPY,CNY, KES, CHF and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax and equity is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under:

(Ii) Interest Rate Risk

I nterest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligation at floating interest rates. The Company’s borrowings outstanding as at March 31, 2019 comprise of term loan and working capital demand loan.

Interest rate Sensitivity of Borrowings

With all other variables held constant, the following table demonstrates the sensitivity to a reasonably possible change in interest rates on floating rate portion of loans and borrowings.

(iii) 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 and aluminum, being the major input used in the manufacturing. Due to the significantly increased volatility of the price of the copper and aluminum, the Company has entered into various purchase contracts for these 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 mitigated the risk of price volatility by entering into the contract for the purchases of these material considering quantity discounts based on annual achievement of quantity targets.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) 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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security. As at March 31, 2019, the Company had 59.17% (March 31,2018: 65.48%) of its trade receivable discounted from banks under Trade Receivable buyout facility. Out of the remaining debtors, the Company has 10 customers that owed the Company approx. Rs. 198.23 crores(March 31,2018 : 213.02 crores) and accounted for 44.26% (March 31,2018 : 63.38%) of remaining trade receivables.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2019 is the carrying amounts . The Company’s maximum exposure relating to financial instrument is listed in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

Maturity profile of financial liabilities

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

12 Capital Management

For the purposes of Company’s capital management, capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2019 and March 31, 2018. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt is calculated as loans and borrowings less cash and cash equivalent.

13 Events occurring after balance sheet date

Refer to note 33(15) for the final dividend recommended by the Directors which is subject to approval of the shareholders in the ensuing annual general meeting.

14 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than Rs. 50,000/-.

15 Note No.1 to 33 form integral part of the balance sheet and statement of profit and loss.

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Mar 31, 2018

1 Investment property represent, land and building being a warehouse in Greater Noida, Uttar Pradesh given on lease w.e.f May 12, 2016 on a long term basis. Refer note 31(E) for lease disclosure.

2 The Company has obtained independent valuation from certified valuer for its investment property as at March 31, 2018 and has reviewed the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility, depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may be reasonably be expected to be exchanged between a willing buyer and a willing seller, with equity or both. The valuation by the valuer assumes that Company shall continue to operate and run the assets to have economic utility. The fair value is on "as is where" basis. All resulting fair value estimates for investment property are included in Level 3 and disclosed in note 32 (10).

3 There are no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance and enhancements thereof and there are no restriction on remittance of income and proceeds of disposal.

4 The investment Property is a leasehold property and reliability of Investment property is subject to terms and conditions as mentioned under the lease deed entered on November 20, 2009 with Greater Noida Industrial Development Authority, District-Gautam Budha Nagar.

Impairment testing of goodwill and intangible assets with indefinite lives

Goodwill and Trademarks acquired on acquisition of Lloyd business having indefinite useful lives have been allocated to a separate single cash generating unit i.e. LLOYD consumer which is also an operating and reportable segment for impairment testing. The Company has performed an annual impairment test to ascertain the recoverable amount of goodwill and Trademarks. The recoverable amount is determined based on value in use calculation. These calculations uses management assumptions and pre tax cash flow projections based on financed budgets approved by management covering a 5 years period. Cash flow projection beyond 5 years time period are extrapolated using the estimated growth rates which is consistent with forecasts included in industry reports specific to industry in which CGU operates. Management has determined following assumptions for impairment testing of Goodwill and Trademarks as stated below.

Management has performed a sensitivity analysis with respect to changes in assumptions for assessment of value-in-use of Goodwill and Trademark. Based on this analysis, management believes that change in any of above assumption would not cause any material possible change in carrying value of unit''s Goodwill/Trademark over and above its recoverable amount.

(b) The stock of scrap materials have been taken at net realizable value.

(c) Inventories are hypothecated with the bankers against working capital limits. {Refer note 31(C)}

(d) During the year Rs, 15.43 Crores {previous year: Rs, (2.46 Crores)} was recognized as an expense/ (Income) for inventories carried at the net realizable value.

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

(c) The Company has availed Receivable Buyout facility from banks against which a sum of Rs, 648.99 crores (March 31, 2017: Rs, 445.38 crores) has been utilized as on the date of Balance Sheet. The Company has assigned all its rights and privileges to the bank and there is no recourse on the company. Accordingly the amount of utilization has been reduced from trade receivables. A sum of Rs, 28.91 crores (March 31, 2017: Rs, 28.59 crores) on account of charges paid for this facility has been debited to the trade receivables factoring charges account.

(d) The Company has arranged Channel Finance facility for its customers from banks against which a sum of Rs, 593.37 crores (March 31, 2017: Rs, 424.13 crores) has been utilised as on the date of Balance Sheet and correspondingly, the trade receivables stand reduced by the said amount as there is no recourse on the Company.

Notes:

(a) Escrow account represents amount held in a fixed deposit with bank under escrow arrangement with "LEEL Electricals Limited" on account of final settelment of Lloyd business acquisiton which is due for closure subsequent to the year end. Refer note 32(1B) for details of business combination.

(b) The deposits maintained by the Company with banks comprise of the time deposits which may be withdrawn by the Company at any point of time without prior notice and are made of varying periods between one day to twelve months depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates.

(c) Fixed deposit with original maturity of more than twelve months but remaining maturity of less than twelve months have been disclosed under other bank balances.

(d) The Company can utilise the balance towards settlement of unclaimed dividend.

(a) The Company classified certain assets retired from active use and held for sale recognized and measured in accordance with Ind-AS 105 "Non Current Assets Held For Sale and Discontinued Operations" at lower of its carrying amount and fair value less cost to sell. The Company expects to complete the sale by 30^th September, 2018 by selling it in the open market.

(b) During the previous year, both the joint venture partners of Jiangsu Havells Sylvania Lighting Co. Limited, have agreed to liquidate the operations of the joint venture, in respect of which the Company will receive agreed liquidation proceeds of USD 2.5 million. Accordingly, the investment in joint venture has been classified as asset held for sale, recognized and measured in accordance with Ind-AS 105 "Non-Current Assets Held for Sale and Discontinued Operations" at lower of its carrying amount and fair value less cost to sell. Subsequent to the year end, the management of the joint venture have applied for liquidation with relevant authorities.

c) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs, 1/- per share (March 31, 2017 : Rs, 1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend 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 n the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Notes:

a) Shareholding of Smt.Vinod Gupta includes 13,584,000 (March 31, 2017: 13,584,000) equity shares of Rs, 1/- each as a legal heir which are under process of transmission.

b) Share holding of Shri Surjit Kumar Gupta as at March 31 2018 is below 5%, however figures have been disclosed for comparative purposes.

Note : Security premium account balances depicts premium on issue of shares. The reserve is utilised in accordance with provision of Company Act 2013

(a) The Company has availed a secured loan of Rs, 108.00 Crores against sanctioned amount of Rs, 285.00 crores from CITI bank N.A. as of March 31, 2018. The loan was obtained for the purpose of reimbursement of prior capital expenditure incurred by the company during last 12 months. The loan is having 1 year moratorium period and repayable in 8 quarterly installments thereafter. This loan is secured by way of first exclusive charge by way of a hypothecation over the Company''s all movable fixed assets both present and future and immovable properties situated at SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India with an minimum Fixed Assets Coverage Ratio of 1.1x. The registration of charge on immaterial property is under process..

(b) The Company has not defaulted on any loans payable during the year and has satisfied all debt covenants prescribed in terms of term loan.

Limited", which is set off with capital gain of Rs, 24.98 crores on sale of Land and NHAI bonds, resulting in net unabsorbed capital loss of Rs, 122.74 crores. No deferred tax asset has been created on total capital losses of Rs, 369.28 crores by the management due to lack of probability of future capital gain against which such deferred tax assets can be realized. If the Company were able to recognize all unrecognized deferred tax assets, the profit would have increased by Rs, 86.02 crores.

b) During the year the Company has paid dividend to its shareholders for the year ended March 31, 2017, This has resulted in payment of corporate dividend tax (CDT) to the taxation authorities. The Company believes that CDT represents additional payment to taxation authority on behalf of the shareholders. Hence CDT paid is charged to equity

c) Effective tax rate has been calculated on profit before tax.

(a) Working capital limits of Rs, Nil (March 31, 2017: Rs, 50.02 Crores) from consortium banks are secured by way of:

i) Pari-passu first charge with consortium banks by way of hypothecation on entire stocks of raw materials, semi finished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) Pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) Pari-passu second charge with other consortium lenders by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which first charge was held by HSBC Bank (Mauritius) Limited against External Commercial Borrowings.

(b) The Company had issued commercial papers of Rs,150 crores in favour of Yes Bank Limited, which has been re-paid during the year.

* Trade Payables include due to related parties Rs, 7.10 crores (March 31, 2017 : Rs, 12.85 crores) {refer note 32(7)}(d)}

* The amounts are unsecured and are usually paid within 120 days of recognition.

* Trade payables are usually non- interest bearing. In few cases, where the trade payables are interest bearing, the interest is settled on quarterly basis.

a) In the previous year the company had made a provision of excise duty payable amounting to Rs, 17.91 crores on stocks of finished goods and scrap material at the end of the year except units which are exempt from excise duty. In the Current year, the Government of India has implemented Goods and Service Tax (GST) w.e.f July 01, 2017 which has replaced excise duty, service tax and other indirect taxes and accordingly GST payable as at March 31, 2018 is Rs, 46.26 crores.

a) Provision for warranties and E-waste

(i) Warranties

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

(ii) E-waste

A provision is recognized for probable e-waste liability based on "Extended Producer Responsibility" as furnished by the Company to Central Pollution Control Board in accordance with E-Waste Management Rules, 2016 notified by Government of India during the year. A provision for the expected costs of management of historical waste is recognized when the costs can be reliably measured. These costs are recognized as ''Other expenses'' in the statement of profit and loss.

b) Provision for litigations

Provision for litigation amounting to Rs, 7.70 Crores (March 31, 2017: Rs, 24.99 Crores) is created against demands raised in various ongoing litigations under Value Added Tax in various states and Income Tax Act. Management based on existing legal precedents and as advised by its legal counsel expects a probable outflow of resources and accordingly, has created a provision in books of account.

The table below gives information about movement in litigation provisions:

Note:

a) According to the requirements of Ind AS 18 - "Revenue", Sale of products for the current year (period April 01, 2017 to June 30, 2017) and year ended 31^st March 2017, are reported inclusive of Excise Duty of Rs, 121.01 crores and Rs, 448.31 crores respectively. Similarly, excise duty included in scrap sales amounts to Rs, 0.69 crores (March 31, 2017: Rs, 2.39 crores). Effective July 01, 2017, the Government of India has implemented Goods and Service Tax ("GST") replacing Excise Duty, Service Tax and various other indirect taxes. Accordingly, as per Ind AS 18, the revenue for the current year (July 2017 to March 2018) are reported net of GST and hence is not comparable with previous year.

b) Government assistance for refund of Goods and Service Tax represents benefits provided by the Government to the Company in respect of its manufacturing units in the state of Assam, Himachal Pradesh and Uttarakhand in accordance with the Rs,Scheme of budgetary support under Goods and Service Tax Regime'' as notified on October 05, 2017 which were earlier eligible for drawing benefits under the excise duty exemption/refund schemes.

C Undrawn committed borrowing facility

(a) The Company has availed working capital limits amounting to Rs, 200.00 crores from banks under consortium of Canara Bank, IDBI Bank Limited, State Bank of India, Standard Chartered Bank, ICICI Bank Limited, Yes Bank Limited and The Hong Kong and Shanghai Banking Corporation Limited. An amount of Rs, 199.87 crores remain undrawn as at March 31, 2018( Previous year : Rs, 150.00 crores). Further The Company has a debit balance in cash credit accounts as on the date of Balance Sheet except in case of Canara Bank where the Company has availed a working capital Demand loan of Rs, Nil (Previous Year Rs, 50.02 crores). The limit availed is secured by way of:

i) Pari-passu first charge with consortium banks by way of hypothecation on entire stocks of raw materials, semifinished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) Pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) Pari-passu second charge with other consortium lenders by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which first charge was held by HSBC Bank (Mauritius) Limited against External Commercial Borrowings.

(b) The Company has availed a secured loan of Rs, 108.00 Crores against sanctioned amount of Rs, 285.00 crores from CITI bank N.A. as of March 31, 2018. The loan was obtained for the purpose of reimbursement of prior capital expenditure incurred by the company during last 12 months. The loan is having 1 year moratorium period and repayable in 8 quarterly instalments thereafter. This loan is secured by way of first exclusive charge by way of a hypothecation over the Company''s all movable fixed assets both present and future and immovable properties situated at SP 181 to 189 and 191 (A), Industrial Area, Phase II, Neemrana, Alwar, Rajasthan, India with an minimum Fixed Assets Coverage Ratio of 1.1x. The registration of charge on immaterial property is under process.

D Other Litigations

(a) The Company has some sales tax and other tax related litigation of Rs, 7.70 crores (March 31, 2017: Rs, 24.99 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same.

E Leases

Operating lease commitments - Company as lessee

a) The Company has taken various residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. The annual increments are expected to be in line with the expected general inflation to compensate the lessor for the expected inflationary cost increase.

b) The Company has also taken few commercial premises under non-cancellable operating leases. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. Normally there are renewal and

Operating lease commitments - Company as lessor

a) The Company had entered into a sub-lease agreement to sublet a property situated at Kasna, Noida, which is considered as "Investment Property". The lease agreement is executed on May 12, 2016.

b) The said lease is for a term of four years nine months and 18 days w.e.f May 12, 2016 upto February 28, 2021 for the purpose of setting up its manufacturing unit and the annual increments are expected to be in line with the expected general inflation to compensate the lessor for the expected inflationary cost increase.. The lease include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rent recognized as income during the year is Rs, 6.92 crores (March 31, 2017 : Rs, 5.85 crores).

F During the year, Land measuring 50 acres situated at Ghiloth District , General Zone Industrial Area RIICO in the state of Rajasthan has been allotted to the Company for a consideration of Rs, 71.21 crores. This consideration will be adjusted by way of rebate of Rs, 17.71 crores if the Company will be able to fulfil the conditions of total investment of Rs, 260 crores by November 2019 and an additional amount of Rs, 192.00 crores by March 2022. The Company has considered a rebate as a separate liability till all conditions are fulfilled as disclosed in note no. 17 as "creditor for capital goods".

G Contingent Assets

The Government of India vide its office memorandum dated April 01, 2007 has announced fiscal incentives and concessions for North East Region viz. the NEIIP 2007. Incentives were available to all industrial units commencing their operations in this area by specified date. The Company has set up a plant in Guwahati and started production during the year. A subsidy of 30% of total investment in Plant and Equipment was available as capital investment subsidy. Subsidy will be disbursed after fulfilment of specified conditions and submission of application to the Government. Subsidy will be granted once the agency appointed by Government completes its verification and issues order in this regard. The Company has invested total sum of Rs, 7.85 crores in Plant and Equipment and is accordingly eligible for subsidy. The Company has filed claim for subsidy and expects that an amount of Rs, 2.35 crores will be released after completion of procedural formalities by the Government.

32 OTHER NOTES ON ACCOUNTS

1A Divestment of interest in subsidiaries, Joint Ventures and Associates

(a) During the year, Havells Holdings Limited, a wholly owned subsidiary of the Company completed sales of remaining 20% stake in Feilo Malta Limited and 100% stake in Havells Sylvania ( Thailand) Limited to Shanghai Feilo Acoustics Company Limited, China based listed Company for a agreed consideration of Euro 34.50 Million ( INR 263.89 Crores) and Euro 1.60 Million ( INR 12.20 Crores) respectively. Consequent to this, the Company has done partial redemption of 30,023,710 ordinary shares of GBP 1 each, resulting redemption proceeds of Rs, 198.25 Crores. Exceptional items of Rs, 11.91 Crores represents reversal of impairment on investment provided in the previous year.

(c) During the previous year, both the joint venture partners of Jiangsu Havells Sylvania Lighting Co. Limited, have agreed to liquidate the operations of the joint venture, in respect of which the Company will receive agreed liquidation proceeds of USD 2.5 million. Accordingly, the investment in joint venture has been classified as asset held for sale, recognized and measured in accordance with Ind-AS 105 "Non-Current Assets Held for Sale and Discontinued Operations" at lower of its carrying amount and fair value less cost to sell. Subsequent to the year end, the management of the joint venture have applied for liquidation with relevant authorities.

1B Acquisition of Consumer durable business of Lloyd Electric and Engineering Limited and brand of Fedders Lloyd Corporation Limited

On May 08, 2017, the Company has completed acquisition of Consumer durable business of Lloyd Electric and Engineering Limited (LEEL) and trade mark "Lloyd" from Fedders Lloyd Corporation Limited, companies incorporated under the Companies Act 1956. The Consumer durable business of Lloyd consist of business of importing, trading, marketing, exporting, distribution, sale of air conditioners, televisions, WASHing machines, and other household appliances, which has been acquired by the Company on slump sale basis at an enterprise value of Rs, 1547.38 crores on cash free and debt free basis. The acquisition has enabled the Company to enter into Electronic Consumer durable market. Details of purchase price allocation done on composite basis by the Company in accordance with agreement upto closing date is as given below:

a) The fair value and gross amount of acquired trade receivables at acquisition date is Rs, 142.08 crores. None of the trade receivables is credit impaired and it is expected that full contractual amount can be collected.

b) Goodwill of Rs, 310.47 crores comprises the value of expected synergies arising from the acquisition which is not separately recognized. Goodwill is allocated entirely to Lloyd consumer segment.

2 Investment in subsidiaries and joint ventures

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

(i) During the year, the Company has invested a sum of Rs, 0.45 Crores in Havells Guangzhou International Limited which was formed on dated October 17, 2016. The said Company is engaged in wholesale business of electrical goods.

(ii) During the year the Company has invested a sum of Rs, 0.05 crores in Lloyd Consumer Private Limited which was formed on dated December 06, 2017. The said Company is engaged in business of electrical goods.

(iii) During the year the Company has invested a sum of Rs, 0.13 crores in Havells Exim Limited which was formed on dated September 01, 2017. The said Company is engaged in business of electrical goods.

The Company had entered into a Joint Venture agreement with ''Shanghai Yaming Lighting Co. Ltd., Shanghai, China'' on December 26, 2011 for forming a Joint Venture Company for production of lighting lamps and lighting accessories and sales / services of related products. Accordingly, the Company ''Jiangsu Havells Sylvania Lighting Co. Ltd.'' a Jointly Controlled Entity was formed vide certificate of approval dated February 13, 2012 issued by the People''s Government of Jiangsu Province, China. The Company along with its JV partner decided to close down the business and liquidate the JV, accordingly the Board of Directors has been replaced by the Liquidation Committee formed on 30^th June, 2017 and the regular operations have been fully closed in October 2017. The JV reported a turnover of Rs, 49.81 crores and a loss of Rs, 26.32 crores during the financial year on account of write down of certain assets as part of Liquidation process. Accordingly investment has been valued at fair value less cost to sell at Rs, 16.21 based on agreed closure proceed to be received by the company from other joint venture partner and shown as ''Asset classified as held for sale'' in note 12.

3 During the year, the Company has capitalized the following pre operative expenses to the cost of tangible fixed assets, being expenses related to projects and development of Dies and Fixtures. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

The Research and Development facilities are located at the Head office, Noida and some other units of the Company which are approved by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Govt. of India. The Company is entitled to a weighted deduction of 150% of the expenditure incurred at these units under section 35 (2AB) of the Income Tax Act, 1961.

Defined Benefit Plan

The employees'' Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited. Under the gratuity plan, every employee who has completed at least five years of service usually gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following tables summaries the components of net benefit expense recognized in the statement of profit or loss and the funded status and amounts recognized in the balance sheet for the respective plans:

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 23.64 years (March 31, 2017: 24.09 years)

k) The plan assets are maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited.

l) The Company expects to contribute Rs, 12.19 crores (March 31,2017 : Rs, 13.06 crores) to the plan during the next financial year.

m) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

n) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

o) The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

6 Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, "Operating Segment" (specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 (as amended from time to time) and other relevant provision of the Act). For management purposes, the Company is organised into business units based on its products and services and has five reportable segments as follows:

a) Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories, industrial

motors, pumps and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (CFL, LED), Solar and luminaries.

Electrical Consumer Durables : Fans, Water Heaters, Coolers, Personal Grooming,Water Purifier and Domestic

Appliances

Lloyd Consumer : Air Conditioner, Television, WASHing Machine and Domestic Appliances

No operating segments have been aggregated to form above reportable operating segments.

b) Identification of Segments:

The Board of Directors 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 / services and have been identified as per the quantitative criteria specified in the Ind AS.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Others".

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as "Others".

e) There is no transfer of products between operating segments.

f There are no customers having revenue exceeding 10% of total revenues

g) During the year, the Company has re-organised its internal reporting and accordingly, lighting and fixtures project business which was earlier identiifed as separate reporting segment and disclosed under "Others" has been clubbed under "Lighting & Fixtures" segment. The comparative figures for earlier periods have been accordingly restated.

5 Havells Guangzhou International Limited WOS

6 Lloyd Consumer Private Limited WOS

7 Havells Exim Limited WOS Step Down Subsidiary Companies

1 Havells International Limited WOS of Havells Holdings Limited

2 Havells Sylvania (Thailand) Limited Ceased to be subsidiary w.e.f

29th Nov''17

3 Havells Sylvania Brazil Illuminacao Ltd. WOS of Havells International

Limited(Ceased to be susidiary w.e.f. 30th Mar''18)

4 Havells Sylvania Iluminacion (Chile) Ltd. WOS of Havells Holdings Limited

(under liquidation)

5 Havells USA Inc. WOS of Havells Holdings Limited

(Dissolved with effect from 31st Oct 2017)

6 Thai Lighting Asset Co. Ltd.# 49% held by Havells International

Limited(Under Liquidation)

# Havells International Limited (WOS of Havells Holdings Limited) hold 49% equity interest in Thai Lighting Assets Co. Ltd. However the said Company has majority representation on Board of Directors of the entity and approval of the said Company is requited for all major operational decision and the operations are soley carried out for the benefit of the Group. Based on facts and circumstances, management determine that in substance the Group control this entity and therefore reported the same as controlled entities. The company is currently in liquidation.

_(ii) Associate__

Feilo Exim Limited (erstwhile Havells Ceased to be associate Company w.e.f. _Exim Limited)__November 30, 2016_

(iii) Joint Venture

Jiangsu Havells Sylvania Lighting Co. Limited 50% ownership interest held by Company. __(Under Liquidation)_

(B) Names of other related parties with whom transactions have taken place during the year :

(i) Enterprises in which directors are interested

QRG Enterprises Limited

QRG Foundation

Guptajee & Company

The Vivekananda Ashrama

QRG Central Hospital and Research Centre Ltd

QRG MediCARE limited

(ii) Post employee benefit plan for the benefitted employees Havells India Limited Employees Gratuity Trust

(iii) Key Management Personnel

Shri Anil Rai Gupta, Chairman and Managing Director Shri Rajesh Kumar Gupta, Director (Finance) and Group CFO Shri Ameet Kumar Gupta, Director Shri Sanjay Kumar Gupta, Company Secretary

v) Non Executive Directors Shri Vijay Kumar Chopra

Shri Avinash Parkash Gandhi (Retired on 18^th Oct, 2016)

Dr. Adarsh Kishore

Shri Sunil Behari Mathur (Retired on 24^th May, 2017)

Shri Surender Kumar Tuteja Smt. Pratima Ram

a) The transactions with 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 and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) All the liabilities for post retirement benefits being ''Gratuity'' are provided on actuarial basis for the Company as a whole, the amount pertaining to Key management personnel are not included above.

c) Purchase of goods and sale of goods has been reported gross off Value Added tax/Goods and Service Tax

8 Share based payments

(a) The Company had, vide special resolution passed by way of postal ballot on June 9, 2014 and by way of amendment to the "Havells Employees Stock Option Plan 2013" (ESOP 2013 or Plan) included Part B - "Havells Employees Stock Purchase Plan 2014 and renamed the plan as "Havells Employees Long Term Incentive Plan 2014" for granting Employees Stock Options in the form of Equity Shares to eligible employees. The purchase price of the options was approved on May 11, 2016 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company. The options were Granted and vested as on May 16, 2016. In accordance with the terms and conditions of the plan, the said options were exercisable within a period of 30 days from the date of vesting were settled by way of issue of equity shares. During the year 1,39,673 (March 31, 2017: 1,17,562 Equity Shares) of Rs, 1/- each were allotted to eligible employees under the said scheme at price of Rs, 502.15 (March 31, 2017: Rs, 345.65) per share (being market price of shares at close of business day immediately preceding the date of Nomination and Remuneration Committee meeting). As per the scheme, 50% of shares are under lock-in-period of 13 months and remaining 50% are under a lock-in-period of two years.

Further, as per the scheme, the Company shall pay 50% of issue price for differential bonus shares on issue of shares and 50% of employee contribution to eligible employees over a period of two years. Accordingly a sum of Rs, 3.04 crores has been recognized as employee stock option expense during the Financial Year. (Previous Year Rs, 1.78 cores)

(b) The Company had, vide special resolution passed by way of postal ballot on December 4, 2015 "Havells Employees Stock Purchase Plan 2015 for granting Employees Stock Options in the form of Equity Shares to eligible employees. The purchase price of the options was approved on May 11, 2017 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company. The options were Granted and vested as on May 16, 2017. In accordance with the terms and conditions of the plan, the said options were exercisable within a period of 30 days from the date of vesting and settled by way of issue of equity shares. During the year 1,50,000 (March 31, 2017: 1,50,000 Equity Shares) of Rs, 1/- each were allotted to eligible employees under the said scheme at Rs, 502.15 (March 31, 2017: Rs, 345.65) per share (being market price of shares at close of business day immediately preceding the date of Nomination and Remuneration Committee meeting). As per the scheme, 78% of shares are under lock-in-period of 13 months and remaining 22% are under a lock-in-period of two years.

Further, as per the scheme, the Company shall pay 100% of issue price to the eligible employees on issue of shares. Accordingly a sum of Rs, 7.53 crores has been recognized as employee stock purchase plan expense during the Financial year.(Previous Year Rs, 5.18 crores)

(c) The Company had, vide special resolution passed by way of postal ballot on July 13, 2016 "Havells Employees Stock Purchase Plan 2016 for granting Employees Stock Options in the form of Equity Shares to eligible employees. The purchase price of the options was approved on May 11, 2017 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company. The options were Granted and vested in three equal tranche. First tranche was vested on May 17, 2017. In accordance with the terms and conditions of the plan, the said options were exercisable within a period of 30 days from the date of vesting and settled by way of issue of equity shares. During the year First tranche 3,458 Equity Shares of Rs, 1/- each (March 31, 2017: NIL) were allotted to eligible employees under the said scheme at Rs, 502.15 per

share (March 31, 2017: Rs, NIL) (being market price of shares at close of business day immediately preceding the date of Nomination and Remuneration Committee meeting). As per the scheme, these shares are under lock-in-period of 13 months

Further, as per the scheme, the Company shall pay 100% of issue price to the eligible employees on issue of shares. Accordingly a sum of Rs, 0.17 crores has been recognized as employee stock purchase plan expense during the financial year. (Previous Year NIL)

The fair value at grant date of options granted during the year ended March 31, 2018 was Rs, 146.14 per share. The fair value at the grant date is determined using Black Scholes valuation model which takes into account the exercise price , the terms of the options , the share price at grant date and expected price volatility of the underlying shares , the expected dividend yield and the risk free interest rate for the term of the option.

(iv) The expected price volatility is based on the historical volatility (based on remaining life of the options), adjusted for any expected change to future volatility due to publically available information.

9 Corporate Social Responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility ("CSR"). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs, 14.95 crores (March 31, 2017: Rs, 13.37 crores) towards this cause and charged the same to the Statement of Profit And Loss. The funds are primary allocated to QRG foundation, a society registered under section 12A of the Income Tax Act, 1961 for undertaking Mid-Day meal scheme and Aga Khan Foundation India, a private non-profit foundation registered u/s 592 of Companies Act, 2013. it is engaged in restoration and conservation of various heritage monuments.

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

1) The Company had determined classification of quoted bonds invested with National Highway Authority of India as subsequently measured at amortized cost in previous year since the Company expected to hold the investment upto maturity and receive the principal and interest amount as per defined term of investment. However, during the year the Company has prematurely sold the said bonds in open market to fund the acquisition of business. Accordingly, the gain of Rs, 18.49 crores has been recorded in "other income".

2) The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

3) The fair values of the Company''s interest-bearing borrowings and loans are determined by using effective interest rate (EIR) method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk as at 31 March 2018 was assessed to be insignificant.

4) Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

5) The Company has obtained independent valuation for its investment property as at March 31, 2018 and has reviewed the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility, depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may be reasonably be expected to be exchanged between a willing buyer and a willing seller, with equity or both. The valuation by the valuer assumes that Company shall continue to operate and run the assets to have economic utility. The fair value is on "as is where" basis. All resulting fair value estimates for investment property are included in Level 3.

6) The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at March 31, 2018, are as shown below:

Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data

11 Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that are derived directly from its operations.

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company''s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company''s senior management that the Company''s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks , such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments , and foreign currency receivables and payables. The sensitivity analysis in the following sections relate to the position as at reporting date. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item and equity is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2018.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Note: Figures in bracket represents payables

(ii) Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligation at floating interest rates. The Company''s borrowings outstanding as at March 31, 2018 comprise of term loan and working capital demand loan.

Interest rate Sensitivity of Borrowings

With all other variables held constant, the following table demonstrates the sensitivity to a reasonably possible change in interest rates on floating rate portion of loans and borrowings.

(iii) 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 and Aluminum being the major input used in the manufacturing. Due to the significantly increased volatility of the price of the Copper and aluminum, the Company has entered into various purchase contracts for these 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 of for each month.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) 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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major

customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security. As at March 31, 2018, the Company had 65.48% (March 31,2017: 66.37% )of its trade receivable discounted from banks under Trade Receivable buyout facility. Out of the remaining debtors, the Company has 10 customers that owed the Company approx. Rs 213.02 crores( March 31,2017 : 166.90 crores) and accounted for 63.38% (March 31,2017 : 73.00%) of remaining trade receivables.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company''s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018 is the carrying amounts . The Company''s maximum exposure relating to financial instrument is noted in liquidity table below.

Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.

Balances with banks is subject to low credit risks due to good credit ratings assigned to these banks The ageing analysis of trade receivables has been considered from the date the invoice falls due

(c) Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company''s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

Maturity profile of financial liabilities

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

12 Capital Management

For the purposes of Company''s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company''s capital management is to safeguard its ability to continue as going concern and to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2018 and March 31, 2017. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. Net debt is calculated as loans and borrowings less cash and cash equivalent.

16 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than Rs, 50,000/-.

17 The comparative figures have been regrouped/ rearranged wherever considered necessary to make them comparable with current year numbers.

18 Note No.1 to 32 form integral part of the balance sheet and statement of profit and loss.

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Mar 31, 2017

Notes:

(a) The deposits maintained by the Company with banks comprise of the time deposits which may be withdrawn by the Company at any point of time without prior notice and are made of varying periods between one day to twelve months depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates.

(b) Fixed deposit with original maturity of more than twelve months but remaining maturity of less than twelve months have been disclosed under other bank balances.

(c) The Company can utilize the balance towards settlement of unclaimed dividend.

(a) On March 31, 2017, the Company classified certain plant and machinery retired from active use and held for sale recognized and measured in accordance with Ind-AS 105 “Non Current Assets Held For Sale and Discontinued Operations” at lower of its carrying amount and fair value less cost to sell. The Company expects to complete the sale by 30th September 2017 by selling it in the open market.

(b) Refer to note 32(1) for information of investment in associate and joint venture held for sale.

(c) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of '' 1/- per share (March 31, 2016 : '' 1/- per share) (April 1, 2015: '' 1/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

* Shareholding of Smt. Vinod Gupta includes Nil equity shares ofRs,1/- each (March 31, 2016 :1,33, 20,000) (April 1, 2015 :1,33, 20,000) for and behalf of M/s Uptake & Company, a firm in which she is a partner and 1,35,84,000 (March 31, 2016 :1,35,84,000) (April 1, 2015 :1,35,84,000) equity shares ofRs,1/- each as a legal heir, which are under process of transmission.

a) There was unabsorbed capital loss ofRs,265.54 crores as on April 1, 2016 with expiry in financial year 2023-24. During the year there was a capital gain ofRs,19.06 crores on sale of shares of Feilo Exim Limited (erstwhile Havells Exim Limited) and acquisition of part of land at Faridabad. No deferred tax asset has been created on net capital loss ofRs,246.48 crores by the management due to lack of probability of future capital gain against which such deferred tax assets can be realized. If the Company were able to recognize all unrecognized deferred tax assets, the profit would have increased byRs,56.87 crores.

b) During the year the Company has paid dividend to its shareholders for the year ended March 31, 2016, This has resulted in payment of corporate dividend tax (CDT) to the taxation authorities. The Company believes that CDT represents additional payment to taxation authority on behalf of the shareholders. Hence CDT paid is charged to equity.

c) Effective tax rate has been calculated on profit before tax and exceptional items.

(a) Working capital demand loan has been availed from Canara bank for a minimum period of 7 days and maximum period upto 1 year and the same is secured by way of:

i) Pari-passu first charge with consortium banks by way of hypothecation on entire stocks of raw materials, semi-finished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) Pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) Pari-passu second charge with other consortium lenders by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which first charge was held by HSBC Bank (Mauritius) Limited against External Commercial Borrowings.

(b) The Company has issued commercial papers ofRs,150 crores in favour of Yes Bank Ltd, which are due for repayment on 16th June 2017. The same have been shown at mortised cost.

* Trade Payables include due to related partiesRs,12.85 crores (March 31, 2016 :Rs,8.67 crores) (April 1, 2015 :Rs,19.46 crores)

* The amounts are unsecured and are usually paid within 120 days of recognition.

* Trade payables are usually non- interest bearing. In few cases, where the trade payables are interest bearing, the interest is settled on quarterly basis.

* For terms and conditions with related parties, refer to Note 32(7)

a) Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the year ended March 31, 2017 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

The total dues of Micro and Small Enterprises which were outstanding for more than stipulated period are Nil (March 31, 2016 :Rs,Nil) (April 1, 2015 :Rs,Nil)

a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The Company has transferredRs,0.06 crore (March 31, 2016Rs,0.04 crore) (April 01, 2015:Rs,0.03 crore) out of unclaimed dividend pertaining to the financial year 2008-09 and 2009-10 to Investor Education and Protection Fund of Central Government in accordance with the provisions of section 205C of the Companies Act,1956.

b) Monies collected on behalf of banks and remitted after the balance sheet date.

a) The Company has made a provision of excise duty payable amounting toRs,17.91 crores (March 31, 2016 :Rs,15.65 crores) (April 1, 2015 :Rs,12.12 crores) on stocks of finished goods and scrap material at the end of the year except units which are exempt from excise duty. Excise duty is considered as an element of cost at the time of manufacture of goods.

a) Provision for warranties

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

b) Provision for litigations

i) During the financial year 2010-11, the Central Excise Department, Jalandhar raised a penalty demand forRs,0.10 crore (March 31, 2016 :Rs,0.10 crore) (April 1, 2015 :Rs,0.10 crore) towards differential excise duty on finished goods sold by the branches at higher selling price. The Company is contesting the same before the Central Excise and Service Tax Appellate Tribunal (CESTAT). A provision ofRs,0.10 crore (March 31, 2016:Rs,0.10 crore) (April 1, 2015 :Rs,0.10 crore) has been made towards the liability on this account.

ii) During the year the Company has made a provision ofRs,3.97 crores including interest ofRs,0.98 crore on account of disallowance of input tax credit on consumables and packing material in respect of financial years 2008-09 to 2016-17 for ongoing litigation in the state of Uttarakhand.

iii) During the year the Company has made a provision ofRs,3.48 crores towards disputed credit taken in respect of entry tax for the period from 2008-09 to 2015-16 for ongoing litigation in the state of Bihar.

iv) The Company has challenged the constitutional validity of levy of entry tax in few states which are pending before the respective high courts. During the year a provision ofRs,5.84 crore (March 31, 2016:Rs,6.66 Crores) (April 1, 2015Rs,6.32 Crores) has been made on this account and the liability as on March 31, 2017 isRs,17.42 Crores (March 31, 2016:Rs,20.17 Crores) (April 1, 2015:Rs,13.51 Crores)

v) A demand ofRs,0.06 crore (March 31, 2016 :Rs,0.06 crore) (April 1, 2015 :Rs,0.06 crore) was raised by the Income Tax Department for the financial year 2003-04. The same is being contested before the ITAT, New Delhi. However, the Company expects the liability ofRs,0.02 crore (March 31, 2016 :Rs,0.02 crore) (April 1, 2015 :Rs,0.02 crore) and the provision has been made accordingly.

Note: Excise duty collected from customers included in sale of products amounted toRs,448.31 crores (March 31, 2016:Rs,394.83 crores) and scrap sales amounts toRs,2.39 crores (March 31, 2016:Rs,2.27 crores). Sales of product net of excise duty isRs,6,083.03 crores (March 31, 2016:Rs,5,338.73 crores) and scrap sale net of excise duty isRs,37.36 crores (March 31, 2016:Rs,31.85 crores)

i) a) The Company has availed Receivable Buyout facility from banks against which a sum ofRs,445.38 crores (March 31, 2016:Rs,438.35 crores) (April 1, 2015 :Rs,418.77 crores) has been utilised as on the date of Balance Sheet. The Company has assigned all its rights and privileges to the bank and there is no recourse on the Company. Accordingly the amount of utilization has been reduced from trade receivables. A sum ofRs,28.59 crores (March 31, 2016: 29.42 crores) on account of charges paid for this facility has been debited to the trade receivables factoring charges account.

b) The Company has arranged Channel Finance facility for its customers from banks against which a sum ofRs,424.13 crores (March 31, 2016:Rs,370.64 crores) (April 1, 2015 :Rs,371.94 crores) has been utilised as on the date of Balance Sheet and correspondingly, the trade receivables stand reduced by the said amount as there is no recourse on the Company.

The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company’s financial position and results of operations.

iii) a) The Company has fulfilled its obligation to export goods within a period of eight years from the date of issue of EPCG licenses issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of balance sheet, the Company is yet to file Export Obligation Discharge Certificates (EODC) worthRs,64.05 crores (March 31, 2016:Rs,64.05 crores) (April 1, 2015:Rs,68.39 crores) with the Director General Foreign Trade (DGFT) within the stipulated time. Custom duty payable against said obligation isRs,8.00 crores (March 31, 2016:Rs,8.00 crores) (April 1, 2015:Rs,8.55 crores).

b) The Company has fulfilled its obligation to export goods in respect of duty free imports made by the Company against Advance Licenses. As on the date of balance sheet, the Company is yet to file Export Obligation Discharge Certificates (EODC) worthRs,9.76 crores (March 31, 2016:Rs,13.23 Crores) (April 1, 2015:Rs,55.48 crores) with the Director General Foreign Trade (DGFT) within the stipulated time. Custom duty payable against said obligation is ''

0.57 crore (March 31, 2016:Rs,0.88 crore) (April 1, 2015:Rs,3.59 crores).

C Undrawn committed borrowing facility

(a) The Company has availed working capital limits amounting toRs,200 crores from banks under consortium of Canara Bank, IDBI Bank Limited, State Bank of India, Standard Chartered Bank, ICICI Bank Limited, Yes Bank Limited and The Hong Kong and Shanghai Banking Corporation Limited. An amount ofRs,150 crores remain undrawn as at March 31, 2017.

(b) Working capital limits from consortium banks are secured by way of:

i) pari-passu first charge with consortium banks by way of hypothecation on entire stocks of raw materials, semifinished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) pari-passu second charge with other consortium lenders by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which first charge was held by HSBC bank (Mauritius) Limited against external commercial borrowings.

(c) The Company has a debit balance in cash credit accounts as on the date of Balance Sheet except in case of Canara bank where the company has availed working capital demand loan ofRs,50 crores represented under borrowings {refer note no. 18(A)}.

D Other Litigations

The Company has some entry tax and other tax related litigation ofRs,24.99 crores (March 31, 2016:Rs,20.29 crores) (April 1, 2015 :Rs,13.69 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same. {refer note no. 20(b)}

E Leases

Operating lease commitments-Company as lessee

a) The Company has taken various residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases. The annual increments are expected to be in line with the expected general inflation to compensate the less or for the expected inflationary cost increase.

Operating lease commitments-Company as less or

a) During the year, the Company has entered into a sub lease agreement to sublet a property situated at Kasna, Noida which is considered as “Investment Property”. The lease agreement was executed on May 12, 2016.

b) The said lease is for a term of four years nine months and 18 days w.e.f 12.05.2016 upto 28.02.2021 for the purpose of setting up its manufacturing unit and the annual increments are expected to be in line with the expected general inflation to compensate the less or for the expected inflationary cost increase.. The lease include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rent recognized as income during the year isRs,5.85 crores (March 31, 2016 :Rs,Nil).

d) As per the terms of the agreement, the lessee shall restore the leased premise to its original custodian on termination of the agreement.

F Contingent Assets

The Government of India vide its office memorandum dated April 01, 2007 has announced fiscal incentives and concessions for North East Region viz. the NEIIP 2007. Incentives were available to all industrial units commencing their operations in this area by specified date. The Company has set up a plant in Guwahati and started production during the year. A subsidy of 30% of total investment in Plant and equipment was available as capital investment subsidy. Subsidy will be disbursed after fulfillment of specified conditions and submission of application to the Government. Subsidy will be granted once the agency appointed by Government completes its verification and issues order in this regard. The Company has invested total sum ofRs,5.85 crores (Excluding Pre-Operative expenses) in Plant and equipment and is accordingly eligible for subsidy. The Company is in process of making an application for claim of subsidy and expects that an amount ofRs,1.76 crores will be sanctioned by Government in this regard on submission of application and approval accorded by the competent authority.

1. OTHER NOTES ON ACCOUNTS

Divestment of interest in Subsidiaries, Joint Ventures and Associate

1. (a) Pursuant to the shareholders agreement entered on January 18, 2016 between INESA UK Limited and Havells Holding Limited (a Company’s subsidiary) for divestment of stake in Feilo Malta Limited (earlier known as Havells Malta Limited); both the parties have reached to a consensus to divest remaining stake of 20% in Feilo Malta Limited (FML) and accordingly the Board of Directors of the Company have approved the following transaction:

(i) Divest the remainder 20% stake of FML for a consideration of Euro 34.5 million ('' 238.90 crores)

(ii) Divest 100% stake in Havells Sylvania Thailand Limited for a consideration aggregating to Euro 1.6 Million ('' 11.08 crores)

(iii) Terminate joint venture agreement with Jiangsu Havells Sylvania Lighting Company (JV) Limited, a 50:50 joint venture of the Company and Shanghai Yaming Lighting Company Limited, an affiliate of FEILO and liquidation of its business as agreed between both partners, it is expected that liquidation of JV would realise Euro 2.3 Million ('' 16.21 crores) for 50% of Company share.

(iv) An orderly closure of its remaining international operations of Sylvania business.

Consequently, the recoverable amount of Company’s investment in wholly owned subsidiary; Havells Holdings Limited (HHL) stands reduced toRs,187.52 crores as against the book value ofRs,249.62 crores representing closure cost of international operations, estimated by the management on best effort basis taking into account observable fair value of the residual investments held through HHL in worlwide Sylvania business in respect of which both parties have reached a consensus to conclude the sale of the remaining 20% equity stake. Accordingly, the Company has recognized impairment loss ofRs,62.10 crores on its investments in Havells Holdings Limited and disclosed in “Exceptional Items” in Statement of profit and loss . Further, consequent to above, the Company has also recognized loss ofRs,14.66 crores being difference between carrying value and fair value less cost to sell (being agreed sale price between both the parties) on account of termination of JV agreement in Jiangsu Havells Sylvania Lighting Company.

(b) During the current year, the Company completed the sale of 100% stake in its wholly owned subsidiary Feilo Exim Limited (erstwhile Havells Exim Limited), Hong Kong for a total sale consideration ofRs,94.84 crores to Shanghai Feilo Acoustics Co. Ltd. (FEILO), of which 80% was completed during the year ended March 31, 2016. Pursuant to aforesaid sale of shares, the Company has recorded a profit on sale of Long term Investment as aforesaid, amounting toRs,18.95 crores during current year (March 31, 2016:Rs,75.81 crores) being the difference

between consideration received (net of expenses) and historical cost of investments which has been disclosed as an exceptional item in accordance with the requirement of Ind AS-1 - “Presentation of Financial Statements” (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015).

2. Investment in subsidiaries, associates and joint ventures -

(i) During the year, the Company has further acquired 4,67,737 number of shares in Promptec Renewable Energy Solutions Private Limited, having its registered office at Bengaluru, Karnataka for a consideration ofRs,10.67 crores (March 31, 2016 :Rs,29.12 crores) as per the share subscription cum purchase agreement dated June 08, 2016 . The said Company is engaged in marketing and manufacturing of LED products including street lighting, office lighting and solar lighting.

(ii) During the year, Havells Guangzhou International Limited was incorporated on October 17, 2016. The said Company is engaged in wholesale business of electrical goods. The Company is yet to make investment in share capital as per laws prevailing in The Republic of China.

(iii) During the year, Standard Electrical Limited was incorporated on September 12, 2016. The said Company is engaged in business of electrical goods.

(iv) During the year, Havells Global Limited was incorporated on July 04, 2016. The said Company is engaged in business of export of electrical goods.

The Company had entered into a Joint Venture agreement with ‘Shanghai Yaming Lighting Co., Ltd., Shanghai, China’ on December 26, 2011 for forming a Joint Venture Company for production of lighting lamps and lighting accessories and sales / services of related products. Accordingly, the Company ‘Jiangsu Havells Sylvania Lighting Co., Ltd.’ a Jointly Controlled Entity was formed vide certificate of approval dated February 13, 2012 issued by the People’s Government of Jiangsu Province, China. The Company has an investment ofRs,30.87 crores (RMB 33.00 millions) {April 1, 2015:Rs,30.87 crores (RMB 33.00 millions)} towards 50% of capital contribution in the said Joint Venture Company as on the date of balance sheet. During the current year, both the parties have agreed to liquidate operations of the JV and accordingly, the same has been valued at fair value less cost to sell atRs,16.21 crores and shown as ‘Asset classified as held for sale’ in note 12.

3. During the year, the Company has capitalized the following pre operative expenses to the cost of tangible fixed assets, being expenses related to projects and development of Dies and Fixtures. Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.

The Research and Development facilities are located at the Head office, Noida and some other units of the Company and are approved by Department of Scientific and Industrial Research, Ministry of Science and Technology, Govt. of India. The Company is entitled to a weighted deduction of 200% of the expenditure incurred at these units under section 35 (2AB) of the Income Tax Act, 1961.

5. Disclosures pursuant to Ind AS-19 “Employee Benefits”(specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are given below :

Defined Benefit Plan

The employees’ Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited. Under the gratuity plan, every employee who has completed at least five years of service usually gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following tables summaries the components of net benefit expense recognized in the statement of profit or loss and the funded status and amounts recognized in the balance sheet for the respective plans:

j) The average duration of the defined benefit plan obligation at the end of the reporting period is 24.09 years (March 31, 2016: 24.27 years)

k) The plan assets are maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited.

l) The Company expects to contributeRs,13 crores (March 31, 2016 :Rs,12 crores) to the plan during the next financial year.

m) The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

n) Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

o) The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

6. Segment Reporting

The segment reporting of the Company has been prepared in accordance with Ind AS-108, “Operating Segment” (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015). For management purposes, the company is organized into business units based on its products and services and has four reportable segments as follows:

a) Operating Segments

Switchgears : Domestic and Industrial switchgears, electrical wiring accessories, industrial motors, pumps and capacitors.

Cables : Domestic cables and Industrial underground cables.

Lighting and Fixtures : Energy Saving Lamps (CFL, LED), Solar and luminaries.

Electrical Consumer Durables : Fans, water heaters, coolers, personal grooming and domestic appliances

No operating segments have been aggregated to form above reportable operating segments.

b) Identification of Segments:

The Board of Directors 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 / services and have been identified as per the quantitative criteria specified in the Ind AS.

c) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Others”.

d) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as “Others”.

e) There is no transfer of products between operating segments.

f) There are no customers having revenue exceeding 10% of total revenues.

7. Related party transactions

The related parties as per the terms of Ind AS-24,”Related Party Disclosures”, (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2015) are disclosed below:-

(A) Names of related parties and description of relationship:

(i) Related party where control exists

Subsidiary Companies Relationship

1. Havells Holdings Limited Wholly Owned Subsidiary (WOS)

2. Promptec Renewable Energy Solutions Subsidiary Private Limited

3. Standard Electrical Limited WOS

4. Havells Global Limited WOS

_5. Havells Guanzhou International Limited_WOS_

Step Down Subsidiary Companies

1. Havells International Limited WOS of Havells Holdings Limited

2. Havells Sylvania (Thailand) Limited 49% held by Havells International Limited and 51%

held by Thai Lighting Asset Co. Ltd.

3. Havells Sylvania Brazil Illuminacao Ltd. WOS of Havells International Limited

4. Havells Sylvania Iluminacion (Chile) Ltd. WOS of Havells Holdings Limited

5. Havells USA Inc. WOS of Havells Holdings Limited

6. Thai Lighting Asset Co. Ltd.# 49% held by Havells International Limited #

(ii) Related party where control exists upto December 31, 2015 (ceased to be Subsidiary Company w.e.f. January 1, 2016) (Refer Note 32(1))

1. Feilo Exim Limited (erstwhile Havells Exim WOS Limited)

2. FEILO Malta Limited (earlier known as WOS Havells Malta Limited)

# Havells International Limited (WOS of Havells Holding Limited) hold 49% equity interest in Thai Lighting Assets Co. Ltd. However they said Company has majority representation on Board of Directors of the entity and approval of the said Company is required for all major operational decision and the operations are solely carried out for the benefit of the Group. Based on facts and circumstances, management determine that in substance the Group control this entity and therefore reported the same as controlled entities.

(iii) Joint Venture

Jiangsu Havells Sylvania Lighting Co., Ltd 50% ownership interest held by Company.

(B) Names of other related parties with whom transactions have taken place during the year :

(i) Enterprises in which directors are interested

QRG Enterprises Limited QRG Foundation Guptajee & Company

QRG Investments and Holdings Limited (formerly known as Ajanta Mercantile Limited)

The Vivekananda Ashrama

(ii) Associates (w.e.f. 01-01-2016)

Feilo Exim Limited (erstwhile Havells Exim Limited)

FEILO Malta Limited (earlier known as Havells Malta Limited)

(iii) Post employee benefit plan for the benefitted employees

Havells India Limited Employees Gratuity Trust

(iv) Key Management Personnel

Shri Anil Rai Gupta, Chairman and Managing Director Shri Rajesh Kumar Gupta, Director (Finance) and Group CFO Shri Ameet Kumar Gupta, Director Shri Sanjay Kumar Gupta, Company Secretary

(v) Non Executive Directors

Shri Vijay Kumar Chopra Shri Avinash Parkash Gandhi Dr. Adarsh Kishore Shri Sunil Behari Mathur Shri Surender Kumar Tuteja Smt. Pratima Ram Shri Vellayan Subbiah Shri Puneet Bhatia Shri T V Mohandas Pai Shri Surjit Kumar Gupta

a) The transactions with 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 and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties .This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

b) All the liabilities for post retirement benefits being ‘Gratuity’ are provided on actuarial basis for the Company as a whole, the amount pertaining to Key management personnel are not included above.

8. Share based payments

(a) The Company, vide special resolution passed by way of postal ballot on January 23, 2013, had approved “Havells Employees Stock Option Plan 2013” (ESOP 2013 or Plan) for granting Employees Stock Options in the form of Equity Shares to eligible employees. The plan is administered by Havells Employees Welfare Trust (“EW Trust”) under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company (“Committee”) in compliance with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 and other applicable provisions for the time being in force. The first grant date of the options under the approved ESOP 2013 Plan was 8th April, 2013. The options are vested equally over a period of 2 years after the date of grant, and the said options can be exercised any time within a period of 30 days from the date of vesting and will be settled by way of equity shares in accordance with the aforesaid plan. Under the said scheme, the Company had granted 45,939 options atRs,677/- per share and exercise price wasRs,338.50 per share ofRs,5 each ('' 67.70 per share ofRs,1 each) which was sub-divided into equity shares fromRs,5 toRs,1 per share. As of March 31, 2016 and as at March 31, 2017, there are no outstanding options in respect of this scheme.

The weighted average remaining contractual life for the stock option outstanding as at March 31, 2017 is Nil (March 31 2016 is Nil) (April 1, 2015: 0.05 year).

There were no options granted during year ended March 31, 2017 and March 31, 2016 and accordingly disclosures as required under Ind AS 102 w.r.t weighted average fair value of stock option granted during the year is not applicable.

(b) The Company had, vide special resolution passed by way of postal ballot on June 9, 2014 and by way of amendment to the “Havells Employees Stock Option Plan 2013” (ESOP 2013 or Plan) included Part B-“Havells Employees Stock Purchase Plan 2014 and renamed the plan as “Havells Employees Long Term Incentive Plan 2014” for granting Employees Stock Options in the form of Equity Shares to eligible employees. The purchase price of the options was approved on May 11, 2016 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company. The options were Granted and vested as on May 16, 2016. In accordance with the terms and conditions of the plan, the said options were exercisable within a period of 30 days from the date of vesting were settled by way of issue of equity shares. During the year 1,17,562 (March 31, 2016: 99,745 Equity Shares) of Re. 1/- each were allotted to eligible employees under the said scheme at price ofRs,345.65 (March 31, 2016:Rs,293.90) per share (being market price of shares at close of business day immediately preceding the date of Nomination and Remuneration Committee meeting). As per the scheme, 50% of shares are under lock-in-period of one year and remaining 50% are under a lock-in-period of two years.

Further, as per the scheme, the Company shall pay 50% of issue price for differential bonus shares on issue of shares and 50% of employee contribution to eligible employees over a period of two years. Accordingly a sum ofRs,1.78 crores has been recognized as employee stock option expense during the Financial Year. (Previous YearRs,1.70 crores).

(c) The Company had, vide special resolution passed by way of postal ballot on December 4, 2015 “Havells Employees Stock Purchase Plan 2015” for granting Employees Stock Options in the form of Equity Shares to eligible employees. The purchase price of the options was approved on May 11, 2016 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company. The options were Granted and vested as on May 16, 2016. In accordance with the terms and conditions of the plan, the said options were exercisable within a period of 30 days from the date of vesting and settled by way of issue of equity shares. During

the year 1,50,000 (March 31, 2016: Nil Equity Shares) of Re. 1/- each were allotted to eligible employees under the said scheme atRs,345.65 (March 31, 2016:Rs,Nil) per share (being market price of shares at close of business day immediately preceding the date of Nomination and Remuneration Committee meeting). As per the scheme, 78% of shares are under lock-in-period of 13 months and remaining 22% are under a lock-in-period of two years. Further, as per the scheme, the Company shall pay 100% of issue price to the eligible employees on issue of shares. Accordingly a sum ofRs,5.18 crores has been recognized as employee stock option expense during the Financial year. (Previous YearRs,Nil)

9. Corporate Social Responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility (“CSR”). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum ofRs,13.37 crores (March 31, 2016:Rs,11.48 crores) towards this cause and debited the same to the Statement of Profit And Loss. The funds are primary allocated to QRG foundation, a society registered under section 12A of the Income Tax Act, 1961 for undertaking Mid-Day meal scheme, Ashoka University, sponsored by International Foundation for Research and Education (IFRE) which is a “Not for Profit” Company incorporated under the provisions of section 25 of the erstwhile Companies Act, 1956 for the promotion of education and to the Vivekananda Ashramaa for providing free education to underprivileged students.

10. Fair value measurements

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

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

11. The Company has determined classification of quoted bonds invested with National Highway Authority of India as subsequently measured at mortised cost since the Company expect to hold the investment upto maturity and receive the principal and interest amount as defined under the term of investment. The fair values of the quoted bonds are based on price quotations near to the reporting date.

12. The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other noncurrent financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

13. The fair values of the Company’s interest-bearing borrowings and loans are determined by using Discounted cash flow method using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own non-performance risk as at 31 March 2017 was assessed to be insignificant.

4. Long-term receivables/payables are evaluated by the Company based on parameters such as interest rates, risk factors, individual creditworthiness of the 1counterparty and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

15. The Company has obtained independent valuation for its investment property as at March 31, 2017 and has reviewed the fair valuation based on best evidence of fair value determined using replacement cost of an asset of equivalent utility, depreciation and obsolescence. Fair market value is the amount expressed in terms of money that may be reasonably be expected to be exchanged between a willing buyer and a willing seller, with equity or both. The valuation by the valuer assumes that Company shall continue to operate and run the assets to have economic utility. The fair value is on as is where basis. All resulting fair value estimates for investment property are included in Level 3.

16. The significant unobservable inputs used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2017, are as shown below

Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

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

Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data

17. Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade and other receivables and cash and cash equivalents that are derived directly from its operations.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company is exposed to market risk, credit risk and liquidity risk.

The Company’s senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance framework for the Company are accountable to the Board of Directors and Audit Committee. This process provides assurance to Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risk are identified, measured and managed in accordance with Company policies and Company risk objective.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized as below:

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits, investments and foreign currency receivables and payables. The sensitivity analyses in the following sections relate to the position as at March 31 2017. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities held as of March 31, 2017.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EUR, AED, NPR, JPY and GBP exchange rates, with all other variables held constant. The impact on the Company profit before tax is due to changes in the fair value of monetary assets and liabilities. Foreign currency exposures recognized by the Company that have not been hedged by a derivative instrument or otherwise are as under:

Note: Figures in bracket represents payables

(ii) Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long term debt obligation at floating interest rates. The Company’s borrowings outstanding as at March 31, 2017 comprise of fixed rate loans and accordingly, are not expose to risk of fluctuation in market interest rate.

Interest rate Sensitivity of Borrowings

With all other variables held constant, the following table demonstrates the sensitivity to a reasonably possible change in interest rates on floating rate portion of loans and borrowings.

(iii) 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 and Aluminum being the major input used in the manufacturing. Due to the significantly increased volatility of the price of the Copper and aluminum, the Company has entered into various purchase contracts for these 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 of for each month.

(b) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation 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, foreign exchange transactions and other financial instruments.

(i) 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. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by Trade Receivable buyout facility without recourse, letters of credit and other forms of security. As at March 31, 2017, the Company had 66.37 % (March 31, 2016: 73.54%) of its trade receivable discounted from banks under Trade Receivable buyout facility. Out of the remaining debtors, the Company has 10 customers that owed the Company approx.Rs,166.90 crores and accounted for 73% (March 31, 2016 : 58.33%) of remaining trade receivables.

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made in bank deposits and other risk free securities. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counter party’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at 31 March 2017 is the carrying amounts . The Company’s maximum exposure relating to financial is noted in liquidity table below. Trade Receivables and other financial assets are written off when there is no reasonable expectation of recovery, such as debtor failing to engage in the repayment plan with the Company.

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company’s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate source of financing through the use of short term bank deposits and cash credit facility. Processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. The Company assessed the concentration of risk with respect to its debt and concluded it to be low.

Maturity profile of financial liabilities

The table below provides the details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.

18. Capital Management

For the purposes of Company’s capital management, Capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Company’s capital management is to ensure that it maintains an efficient capital structure and maximize shareholder value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders or issue new shares. The Company is not subject to any externally imposed capital requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2017, March 31, 2016 and as at April 1, 2015.

19. Events occurring after balance sheet date

Acquisition of Consumer durable business of Lloyd Electric and Engineering Limited and brand of Fedders Lloyd Corporation Limited

Subsequent to the year end, the Company has completed acquisition of Consumer durable business of Lloyd Electric and Engineering Limited, a listed Company and trade mark “Lloyd” from Fedders Lloyd Corporation Limited, a Company incorporated under the Companies Act 1956. The Consumer durable business of Lloyd consist of business of importing, trading, marketing, exporting, distribution, sale of air conditioners, televisions, washing machines and other household appliances and assembling of televisions, which has been acquired by the Company on slump sale basis at an enterprise value ofRs,1600 crores on free cash and free debt basis.

20. Disclosures as required by Indian Accounting Standard (Ind AS 101) first time adoption of Indian Accounting Standards

These are Company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet as at April 1, 2015 (The Company’s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

A.1 Ind-AS optional exemptions :

I nd 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.1.1 Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company has availed the said exemption and elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Accordingly business combinations occurring prior to the transition date have not been restated.

A.1.2 Deemed cost

Ind AS 101 permits a first time adopter to elect to fair value of its property, plant and equipment as recognized in financial statements as at the date of transition to Ind AS, measured as per previous GAAP and use that as its deemed cost as at the date of transition or apply principles of Ind AS retrospectively. Ind AS 101 also permits the first time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS. This exemption can be also used for intangible assets covered by Ind-AS 38.

The Company has elected to consider fair value of its property, plant and equipment other than land and capital work in progress as its deemed cost on the date of transition to Ind AS. The Company has used depreciated replacement cost technique to compute the fair value on the date of transition. For Land and CWIP and Intangible assets the Company has applied principles of Ind AS 16 and Ind AS 38 retrospectively from the date of acquisition of tangible and intangible assets respectively.

A.1.3 Share based payment transactions

Ind AS 101 permits a first time adopter to elect not to apply principles of Ind AS 102 to liabilities arising from share based payment transactions that were settled before the date of transition.

The Company has elected not to apply Ind AS 102- “Share based payment” on stock options that vested before date of transition.

A.1.4 Leases

Appendix C to Ind AS 17-” Leases” 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. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind-AS except where the effect is expected to be not material.

The Company has elected to apply this exemption for such contracts/arrangements.

A.1.5 Investments in subsidiaries, associates and joint ventures

Ind AS 101 permits the first time adopter to measure investment in subsidiaries, joint ventures and associates in accordance with Ind AS 27 at one of the following:

a) cost determined in accordance with Ind AS 27 or

b) Deemed cost:

(i) fair value at date of transition

(ii) previous GAAP carrying amount at that date.

The Company has elected to consider previous GAAP carrying amount of its investments in Subsidiaries, Joint ventures and Associates on the date of transition to Ind AS as its deemed cost for the purpose of determining cost in accordance with principles of IND AS 27- “Separate financial statements”.

A.2 Ind AS mandatory exceptions

A.2.1 Estimates

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

Ind AS estimates at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

(i) Investments in debt instruments carried at amortised cost; and

(ii) Impairment of financial assets based on expected credit loss model.

A.2.2 Derecognition of financial assets and financial liabilities

Ind AS 101 requires a first time adopter to apply the derecognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. Accordingly, the Company has applied the derecognition requirement for financial assets and financial liabilities in Ind AS 109 prospectively for transactions occurring on or after date of transition to Ind AS.

A.2.3 Classification of financial assets and liabilities

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of facts and circumstances that exist on the date of transition to Ind AS. Accordingly, the Company has applied the above requirement prospectively.

A.2.4 Impairment of financial assets

I nd AS 101 requires an entity to assess and determine the impairment allowance on financial assets as per Ind AS 109 using the reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments which were initially recognized and compare that to the credit risk at the date of transition to Ind AS. The Company has applied this exception prospectively.

Note: The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

Notes to the reconciliation of Balance Sheet as at April 1, 2015 and March 31, 2016 and the total comprehensive income for the year ended March 31, 2016. A. Property, Plant and Equipment (PPE)

The Company has elected the option of fair value as deemed cost for property, plant & equipment other than Land and Capital work in progress and intangible assets on the date of transition to Ind AS. This has resulted in increase ofRs,137.33 crores as at April 01, 2015 andRs,126.61 crores as at March 31, 2016 in the value of PPE with corresponding in deferred tax liability ofRs,47.53 crores.

This lead to additional depreciation ofRs,12.69 crores during the year ended March 31, 2016. Further, the Company has sold some of the assets which were fair valued as on the transition date. Under Ind AS, such sale has resulted into reduction of loss on sale of assets byRs,1.97 crores. The Company has also separately disclosed the non-current held for sale amounting toRs,0.39 crores as on April 1, 2015 andRs,0.10 crores as on March 31, 2016 which were shown in the schedule of Property, plant & equipment in the previous GAAP.

B Amortized cost of financial assets and financial liabilities

(i) Under the previous GAAP, interest free security deposit (that are refundable in cash on completion of lease term) are recorded at their transaction value. Under Ind AS all financial assets are required to be recognized at fair value. Accordingly the Company has fair valued the security deposit retrospectively. Difference between the transaction value and fair value is recognized as prepaid rent as on the date of transition. Due to this security deposit is decreased byRs,1.42 crores andRs,1.80 crores, prepaid rent is increased byRs,1.32 crores andRs,1.68 crores as at April 1, 2015 and March 31, 2016 respectively with corresponding decrease in total equity byRs,0.08 crores as on transition date. Profit for the year ended March 31, 2016 is decreased byRs,0.04 crores due to amortization of prepaid rent byRs,0.43 crores which is partially set off with the notional interest income ofRs,0.39 crores. {refer note (b), (c), (f), and (g)}

(ii) Under the previous GAAP, interest free retention money (that are refundable in cash on completion of lease term) are recorded at their transaction value. Under Ind AS all financial liabilities are required to be recognized at fair value. Accordingly the Company has fair valued the security deposit received during the year. Difference between the transaction value and fair value is recognized as rent received in advance during the year ended March 31, 2016. Due to this security deposit is decreased byRs,0.26 crores andRs,1.44 crores as on April 1, 2015 and March 31, 2016 respectively and rent received in advance is increased by 1.25 crores as at March 31, 2016 with corresponding increase in equity byRs,0.26 crores on transition date. Profit for the year ended March 31, 2016 is decreased byRs,0.06 due to amortization of rent in advance byRs,0.02 crores which is set off with the notional interest expense ofRs,0.08. crores. (refer note (j), (k) and (l)}

(iii) Under the previous year, interest accrued on investment in NHAI bonds was shown as interest accrued in other current assets. Under Ind AS investment in Bonds are financial assets and are qualified to be recognized at mortised cost at reporting date as per Ind AS 109. Accordingly the Company has measured investment in bonds at amortised cost at reporting date. Due to this investment is increased byRs,2.44 crores with corresponding decrease in interest accrued by same amount as at March 31, 2016. There is no impact on total equity and profit. {refer note (a) and (g)}

(iv) Under the previous GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. Accordingly long term borrowing is increased byRs,0.15 crore and Rs, Nil, current maturities of long term borrowing is increased by 0.12 crores andRs,0.18 crores with the corresponding decrease in interest accrued on borrowing byRs,0.32 crores andRs,0.18 crores as at date of transition and as at March 31, 2016 respectively. The profit the year ended March 31, 2016 is reduced byRs,0.05 crores as a result of additional interest expense. {refer note (i), (k) and (l)}

(v) Under the previous year, interest accrued on Fixed deposit was shown as interest accrued in other current assets. Under Ind AS fixed deposits are financial assets and are qualified to be recognized at amortized cost at reporting date as per Ind AS 109. Accordingly the Company has measured them at amortized cost at reporting date. Accordingly amortised cost of fixed deposit is increased byRs,9.94 crores andRs,21.44 crores as at the date of transition and March 31, 2016 respectively with the corresponding decrease in interest accrued on fixed deposit. There is no impact on total equity and profit. {refer note ((b), (d), (e), and (g)}

C Provision

Under the previous GAAP, the Company has accounted for provisions, including long-term provision, at the undiscounted amount. In contrast, Ind AS 37 requires that where the effect of time value of money is material, the amount of provision should be the present value of the expenditures expected to be required to settle the obligation. The discount rate should not reflect risks for which future cash flow estimates have been adjusted. Ind AS 37 also provides that where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognized as borrowing cost. Discounting of provisions led to decrease in warranty provision byRs,0.55 crores as at the date of transition and byRs,0.76 crores as on March 31, 2016. Profit for the year ended March 31, 2016 has been increased byRs,0.21 crores.

D Deferred Tax

Under the previous GAAP, deferred tax is

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Mar 31, 2015

CORPORATE INFORMATION

Havells India Limited (''the Company'') is a public limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is listed on BSE Limited and National Stock Exchange of India Limited. The Company is electrical and power distribution equipment manufacturer with products ranging from Industrial and Domestic Circuit Protection Switchgears, Cables, Motors, Pumps, Fans, Power Capacitors, CFL Lamps and Luminaries for Domestic, Commercial and Industrial applications, Modular Switches, Water Heaters and Domestic Appliances covering the entire range of household, commercial and industrial electrical needs. The Company alongwith its subsidiary companies owns some of the prestigious global brands like Crabtree, Sylvania, Concord, Luminance, Linotile and Standard. The Company''s manufacturing facilities are located at Faridabad in Haryana, Alwar and Neemrana in Rajasthan, Haridwar in Uttarakhand, Sahibabad and Noida in Uttar Pradesh and Baddi in Himachal Pradesh. The research and development facilities are located at Head office, Noida (Uttar Pradesh) and at some of the units which have been approved by Department of Scientific & Industrial Research, Ministry of Science & Technology, Government of India, New Delhi.

a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 1/- per share (previous year Rs. 5/- per share). Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. A final dividend of Rs. 3/- per share of Rs. 1/- each (previous year Rs. 10/- per share of Rs. 5/-each) has been recommended by the Board subject to approval of shareholders in the ensuing Annual General Meeting.

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

b) Shares reserved for issue under Stock Option

90,550 Equity shares of Rs. 1/- each ( Previous Year 39,345 equity shares of Rs. 5/- each) are reserved for the issue under Employees Stock Option Plan (ESOP) of the Company. {refer note no. 31(10)(a)}

c) External commercial borrowing is from HSBC Bank (Mauritius) Limited. The said loan is repayable in 12 equal quarterly instalments of Rs. 10.43 crores (USD 1,666,667) starting from 26th April, 2014 carrying an interest rate of LIBOR 195 bps per annum, and is secured by way of :-

i) first charge on movable fixed assets acquired out of the said loan and

ii) equitable mortgage over land and building situated at Plot no. 2A, sector 10, BHEL Industrial Estate, Haridwar, Uttarakhand.

b) Current maturities of long-term borrowings is Rs. 41.73 crores (Previous Year Rs. 40.07 crores)

c) Deposit from public are in respect of dealers for the amount payable under QRG Growth incentive Scheme, out of which a sum of Rs. 52.67 crores has been invested in Mutual Fund on behalf of dealers, Rs. 1.06 crores has been paid to dealers and remaining amount of Rs. 9.22 crores has been transferred to current liabilities under sales incentive payable.

a) Trade payables include acceptances of Rs. 25.83 crores (previous year Rs. 22.65 crores).

b) Trade payables include Rs. 18.51 crores due to subsidiary companies (previous year Rs. 13.27 crores) {refer note no. 31(13)(c)}

c) Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) for the period ended 31st March, 2015 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

a) Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. The Company has transferred Rs. 0.03 crores (previous year Rs. 0.03 crores) out of unclaimed dividend pertaining to the financial year 2006-07 to Investor Education and Protection Fund of Central Government in accordance with the provisions of section 205C of the Companies Act,1956.

b) The Company has made a provision of excise duty payable amounting to Rs. 12.12 crores (previous year Rs. 10.99 crores) on stocks of finished goods and scrap material at the end of the year except units which are exempt from excise duty. Excise duty is considered as an element of cost at the time of manufacture of goods.

c) Other liabilities include expenses payable, bonus payable, retention money, liabilities towards banks for receivable buyout facilities and other miscellaneous deposits.

2 SHORT TERM PROVISIONS

a) Provision for warranties

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

i) During the financial year 2010-11, the Central Excise Department, Jalandhar raised a penalty demand for Rs. 0.10 crores (previous year Rs. 0.10 crores) towards differential excise duty on finished goods sold by the branches at higher selling price. The Company is contesting the same before the Central Excise and Service Tax Appellate Tribunal (CESTAT). A provision of Rs. 0.10 crores (previous year Rs. 0.10 crores) has been made towards the liability on this account.

ii) The Company has challenged the constitutional validity of Entry Tax in Rajasthan, Himachal Pradesh, Orissa and West Bengal before the Hon''ble High Courts in respective states. During the year 2014-15, a provision of Rs. 6.32 crores (previous year Rs. 5.13 crores) has been made on this account and the liability as on date is Rs.13.51 crores (previous year Rs. 7.21 crores).

iii) During the financial year 2011-12, a demand of Rs. 0.21 crores (previous year Rs 0.21 crores) has been raised by the Excise and Taxation officer, Jalandhar. The Company is contesting the same before the Deputy Excise & Taxation Commissioner, Jalandhar Division. However, the Company expects the liability of Rs. 0.06 crores (previous year Rs 0.06 crores) on account of input tax credit on diesel and provision has been made accordingly.

iv) That a demand of Rs. 0.03 crores (previous year Rs. 0.03 crores) has been raised by the Income Tax Department for the financial year 2003-04. The same is contested before the Hon''ble Income Tax Appellate Tribunal. However, the Company expects the liability of Rs. 0.02 crores (previous year Rs. 0.02 crores) and the provision has been made accordingly.

c) Provision for dividend

The Board of Directors has recommended a final dividend of Rs. 3/- per share of Rs. 1/- each (previous year of Rs. 10/- per share of Rs. 5/- each). The payment of final dividend is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.



(Rs. in Crores)

2014-15 2013-14

A Contingent liabilities (to the extent not provided for)

a Claims / Suits filed against the Company not acknowledged as debts 5.21 14.09

b Liability towards banks against receivable buyout facilities {refer point (i)} 106.30 86.80

c Bonds to excise department against export of excisable goods / purchase of 3.30 18.57 goods without payment of duty (to the extent utilised)

d Disputed tax liabilities in respect of pending cases before appellate authorities 100.80 70.54

{Amount deposited under protest Rs. 20.65 crores (previous year Rs. 8.35 crores)} {refer point (ii)}

e Demand raised by Uttarakhand Power Corporation Limited contested before 1.00 1.00 electricity Ombudsman, Dehradun {Amount deposited under protest Rs. 1.00 crore (previous year Rs. 1.00 crore)}

f Corporate Guarantees given on behalf of subsidiary companies (to the extent - 143.13 of outstanding obligation) {refer point (iii)}

g Custom duty payable against export obligation {refer point (iv)} 12.14 19.18

Notes:

i) a) The Company has utilised a receivable buyout facility of Rs. 210.98 crores (previous year Rs. 227.69 crores) from IDBI Bank Limited against insurance backed trade receivables with a recourse of 10% of facility amount. Accordingly, the trade receivables stand reduced by the said amount. A sum of Rs. 14.18 crores (previous year Rs. 13.78 crores) on account of charges paid for this facility has been debited to trade receivables factoring charges account.

b) The Company has utilised a receivable buyout facility of Rs. 70.38 crores (previous year Rs. 72.82 crores) from Axis Bank Limited against insurance backed trade receivables with a recourse of 10% of the facility amount. Accordingly, the trade receivables stand reduced by the said amount. A sum of Rs. 5.11 crores (previous year Rs. 5.31 crores) on account of charges paid for this facility has been debited to trade receivables factoring charges account.

c) During the year, the Company has arranged a receivable buyout facility of Rs. 137.41 crores (previous year Rs. 40.47 crores) from The Hongkong and Shanghai Banking Corporation Limited against insurance backed trade receivables with a recourse of 10% of the facility amount. Accordingly, the trade receivables stand reduced by the said amount. A sum of Rs. 6.31 crores (previous year Rs. 4.68 crores) on account of charges paid for this facility has been debited to trade receivables factoring charges account.

d) The Company has arranged channel finance facility for its customers of Rs. 371.94 crores (previous year Rs. 356.46 crores) from Yes Bank Limited and Axis Bank Limited against insurance backed trade receivables with a recourse of 10% of the facility amount.

Besides the above, show cause notices from various departments received by the Company have not been treated as contingent liabilities since the Company has adequately represented to the concerned departments and does not expect any liability on this account.

iii) a) The Company has given a corporate guarantee of Rs. 31.30 crores (USD 5 millions) {previous year Rs. 109.98 crores (USD

18.30 millions)} to Standard Chartered Bank (Hong Kong) Limited in respect of the credit facilities sanctioned to its subsidiary Company ''Havells Exim Limited''. The outstanding amount of the said credit facility as on the date of the balance sheet is Rs. Nil (previous year Rs. Nil).

b) The Company had given an irrevocable and unconditional corporate guarantee to Standard Chartered Bank Limited, London for Rs. 175.53 crores (Euro 26 millions) {previous year Rs. 214.70 crores (Euro 26 millions)} in respect of facility sanctioned to its subsidiary Company ''Havells Holdings Limited'' as per Deed of Guarantee executed between the Company and Standard Chartered Bank Limited, London on 29th March 2013. The outstanding amount of the said credit facility as on the date of the balance sheet is Rs. Nil {previous year Rs. 143.13 crores (Euro 17.33 millions)}. The bankers have released the corporate guarantee during the year.

iv) a) The Company is under obligation to export goods within a period of eight years from the date of issue of EPCG licenses issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of balance sheet, the Company is under obligation to export goods worth Rs. 68.39 crores (previous year Rs. 95.47 crores) within the stipulated time as specified in the respective licenses. Out of the said amount, the Company has fulfilled the export obligation of Rs. 65.63 crores (previous year Rs. 82.65 crores) in respect of which application for Export Obligation Discharge Certificates (EODC) will be filed with the Director General Foreign Trade (DGFT) within the stipulated time. Custom duty payable against the said obligation is Rs. 8.55 crores (previous year Rs. 13.89 crores)

b) Further the Company is under obligation to export goods worth Rs. 55.48 crores (previous year Rs. 70.46 crores) in respect of duty free imports made by the Company against Advance Licenses. Out of the said amount, export obligation of Rs. 54.32 crores (previous year Rs. 60.65 crores) has been fulfilled by the Company as at the end of the year in respect of which application for Export Obligation Discharge Certificates (EODC) will be filed with the Director General Foreign Trade (DGFT) within the stipulated time. Custom duty payable against the said obligation is Rs. 3.59 crores (previous year Rs. 5.29 crores)

D Other Litigations

i) One of the customer of the Company had raised claims against the Company relating to supply of switchgear products. The Company and the customer, considering their long-term relationship with each other and without admission of liability on part of either party, have settled their respective claims. The full and final settlement of the claim have been arrived at and the Company has agreed to pay an amount of Rs. 69.69 crores to the customer, which have appropriately accounted for in the financial statements.

ii) Additionally, the Company has some entry tax and other tax related litigation of Rs. 13.69 crores (previous year Rs. 7.39 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same. {refer note no. 11(b)}

3 The Company has entered into a Joint Venture agreement with ''Shanghai Yaming Lighting Co., Ltd., Shanghai, China'' on 26th December, 2011 for forming a Joint Venture Company for production of lighting lamps and lighting accessories and sales / services of related products. Accordingly, a Company ''Jiangsu Havells Sylvania Lighting Co., Ltd.'' a Jointly Controlled Entity has been formed vide certificate of approval dated 13th February, 2012 issued by the People''s Government of Jiangsu Province, China. The Company has an investment of Rs. 30.87 crores (RMB 33.00 millions) {previous year Rs. 30.96 crores (RMB 33.00 millions)} towards 50% of capital contribution in the said Joint Venture Company as on the date of balance sheet.

The Company''s interest in Joint Venture is reported as a Non-Current Investment (refer note no. 13) and is stated at cost. The disclosure in respect of Company''s Joint Venture''s assets and liabilities are given on the basis of audited financial statements of the joint venture Company as at 31st December, 2014.

4 Depreciation

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

(b) Till 31st March, 2014, the assets for a value not exceeding Rs. 5000/- were written off in the year of purchase as per Schedule XIV of the Companies Act, 1956. Schedule II of the Companies Act, 2013 does not recognize such practice. The depreciation on assets for a value not exceeding Rs. 5000/- has been provided on the basis of their useful lives in the manner as prescribed in the Schedule II of the Companies Act, 2013.

5 (a) The Company has availed working capital limits from banks under consortium of Canara Bank, IDBI Bank Limited, State Bank of India, Standard Chartered Bank, ICICI Bank Limited, Yes Bank Limited and Hongkong and Shanghai Banking Corporation Limited.

(b) Working capital limits from consortium banks are secured by way of:

i) pari-passu first charge by way of hypothecation on stocks of raw materials, semi-finished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) pari-passu first charge by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad.

iii) pari-passu second charge by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations.

(c) The Company has a debit balance in cash credit accounts as on the date of Balance Sheet.

5 The Company''s manufacturing units at Village Gularwala, Baddi Distt.-Solan (Unit-II) (Himachal Pradesh) and Haridwar (Uttarakhand) are exempted from excise duty vide Notification No. 49 and 50/2003 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, New Delhi and the profits of the said units are eligible for deduction as per the provisions under section 80-IC of the Income Tax Act, 1961.

Defined Benefit Plan

The employees'' Gratuity Fund Scheme, which is a defined benefit plan, is managed by the trust maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

i) The plan assets are maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianze Life Insurance Company Limited.

j) The Company expects to contribute Rs. 11.00 crores (previous year Rs. 5.00 crores) to the plan during the next financial year.

The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for the plan assets management.

6 Employee Stock Option Scheme

(a) The Company, vide special resolution passed by way of postal ballot on 23rd January 2013, had approved "Havells Employees Stock Option Plan 2013" (ESOP 2013 or Plan) for granting Employees Stock Options in the form of Equity Shares to eligible employees. The plan is administered by Havells Employees Welfare Trust ("EW Trust") under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company ("Committee") in compliance with the provisions of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (SEBI Guidelines) and other applicable provisions for the time being in force. The first grant date of the options under the approved ESOP 2013 Plan was 8th April, 2013. The options are vested equally over a period of 2 years after the date of grant, and the said options can be exercised any time within a period of 30 days from the date of vesting and will be settled by way of equity shares in accordance with the aforesaid plan.

During the financial year 2013-14, the Company had granted 45,939 options at Rs. 677/- per share and the exercise price was Rs. 338.50 per share.

The weighted average remaining contractual life for the stock option outstanding as at 31st March, 2015 is 0.05 year (previous year 0.60 year). The exercise price for options outstanding at the end of year is Rs. 67.70 per share. The average market share price of ESOP exercised during the year is Rs. 254.80 per share.

The weighted average fair value of stock option granted during the year is Rs. 237.48 per share. The Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

(b) The Company had, vide special resolution passed by way of postal ballot on 9th June, 2014 and by way of amendment to the "Havells Employees Stock Option Plan 2013" (ESOP 2013 or Plan) included Part B - "Havells Employees Stock Purchase Plan 2014 and renamed it as "Havells Employees Long Term Incentive Plan 2014" for granting Employees Stock Options in the form of Equity Shares to eligible employees. The purchase price of the options was approved on 26th June, 2014 under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company. The options were vested as on 15th July, 2014 after the grant date and in accordance with the terms and conditions of the plan, the said options can be exercisable within a period of 30 days from the date of vesting and settled by way of equity shares. Accordingly during the year, Equity Shares of Rs. 1/- each were allotted to eligible employees at Rs. 223.17 per share. As per the scheme, 50% of shares are under lock-in-period of one year and remaining 50% are under lock-in-period of two years.

Further, as per the scheme, the Company shall pay 50% of issue price for differential bonus shares to eligible employees as exgratia / bonus for the said amount.

In respect of stock options granted pursuant to the Company''s stock options scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as expense and accounted as employee compensation over the vesting period and will be paid in two equal instalments annually.

(c) The Company has debited an expense of Rs. 3.73 crores (previous year Rs. 0.99 crores) to the statement of profit and loss under Employee Stock Option Scheme during the financial year.

7. Corporate Social Responsibility

As per provisions of section 135 of the Companies Act, 2013, the Company has to provide at least 2% of average net profits of the preceding three financial years towards Corporate Social Responsibility ("CSR"). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs. 9.79 crores towards this cause and debited the same to the statement of profit and loss. The funds are primary allocated to QRG foundation, a society registered under section 12A of the Income Tax Act, 1961 for undertaking Mid-Day meal scheme, Ashoka University, sponsored by International Foundation for Research and Education (IFRE) which is a "Not for Profit" Company incorporated under the provisions of section 25 of the erstwhile Companies Act, 1956 for the promotion of education and to the Vivekanand Ashram for providing free education to underprivileged students.

8. Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard-17, "Segment Reporting" ( specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014 ).

Segment Reporting Policies

a) Identification of Segments:

Primary- Business Segment

The Company has identified four reportable segments viz. Switchgears, Lighting and fixtures, Cables and Electrical Consumer Durables on the basis of the nature of products, the risk and return profile of individual business and the internal business reporting systems. The products included in each of the reported business segments are as follows:

(i) The switchgear segment comprises of domestic and the industrial switchgears, electrical wiring accessories, industrial motors, pumps and capacitors.

(ii) The cable segment comprises of flexible cables and industrial underground cables.

(iii) The lighting and fixture segment comprises of energy saving lamps (CFL) and luminaries.

(iv) The electrical consumer durable segment comprises of fans, water heaters and domestic appliances.

Secondary- Geographical Segment

The analysis of geographical segment is based on geographical location of the customers.

b) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocated".

c) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as "Unallocated".

9 a) The Company has taken various residential / commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

10 Subsequent Event

The Company has acquired 51% stake in Promptec Renewable Energy Solution Private Limited, having its registered office at Bengaluru, Karnataka for a consideration of Rs. 29.08 crores as per the share subscription cum purchase agreement dated April 21, 2015 . The said Company is engaged in marketing and manufacturing of LED products including street lighting, office lighting and solar lighting.

11 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than Rs. 50,000/-.

12 Previous year figures has been regrouped/reclassiffed wherever necessary to make them comparable with the current year figures.

13 Note No.1 to 31 form integral part of the balance sheet and statement of profit and loss.

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Mar 31, 2014

A) terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The Board of Directors at its meeting held on 14th March, 2014 declared an interim dividend of Rs. 5/- per equity share of Rs. 5/- each. A Final dividend of Rs. 10/- per share (previous year Rs. 7.50/- per share) has been recommended by board subject to the approval of shareholders in the ensuing Annual General Meeting.

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

b) Shares reserved for issue under options :

39,345 shares are reserved for the issue under Employee Stock Option Plan (ESOP) of the Company {refer note no. 31(10)}

c) aggregate number of shares issued as fully paid up pursuant to contract without payment being received in cash or by way of bonus shares during the period of five years immediately preceding the date of Balance Sheet:

d) Provision for litigations

i) During the FY 2010-11, the Central Excise Department, Jalandhar raised a penalty demand for Rs. 0.10 crore (previous year 0.10 crore) towards differential excise duty on finished goods sold by the branches at higher selling price. The Company is contesting the same before the Central Excise and Service Tax Appellate Tribunal (CESTAT). A provision of Rs. 0.10 crore (previous year 0.10 crore) has been made towards the liability on this account.

ii) The Company has challenged the constitutional validity of Entry Tax in Rajasthan, Himachal pradesh, Orissa and West Bengal before the Hon''ble High Courts in respective states. During the year 2013-14, a provision of Rs. 5.13 crores (previous year Rs. 1.57 crores) has been made on this account and the liability as on date is Rs. 7.21 crores (previous year Rs. 2.82 crores).

iii) During the FY 2011-12, a demand of Rs. 0.21 crore (previous year 0.21 crore) has been raised by the Excise and Taxation officer, Jalandhar. The Company is contesting the same before the Deputy Excise & Taxation Commissioner, Jalandhar Division. However, the Company expects the liability of Rs. 0.06 crore (previous year 0.06 crore) on account of input tax credit on diesel and provision has been made accordingly.

iv) A demand of Rs. 0.03 crore (previous year 0.03 crore) has been raised by the Income Tax Department for the FY 2003-04. The same is contested before the Hon''ble Income Tax Appellate Tribunal. However, the Company expects the liability of Rs. 0.02 crore (previous year 0.02 crore) and the provision has been made accordingly.

e) Provision for dividend

The Board of Directors has recommended a final dividend of Rs. 10/- (previous year Rs. 7.50/-) per equity share of Rs. 5/- each in addition to an interim dividend of Rs. 5/- each (previous year nil) already paid for the year ended March 31, 2014. The payment of final dividend is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company.

Based on favorable decisions in similar cases, legal opinions taken by the Company and discussions with the solicitors, the Company does not expect any liability against these matters and hence no provision has been considered in the books of accounts.

Besides the above, show cause notices from various departments have been received by the Company have not been treated as contingent liabilities since the Company has adequately represented to the concerned departments and does not expect any liability on this account.

iv) a) The Company has given a corporate guarantee of Rs. 109.98 crores (USD 18.30 millions) {previous year Rs. 99.53 crores (USD 18.30 millions)} to Standard Chartered Bank (Hong Kong) Limited in respect of the credit facilities sanctioned to its subsidiary company ''Havells Exim Limited''. The outstanding amount of the said credit facility as on the date of the balance sheet is Rs. Nil {(previous year Rs. 97.24 crores (USD 17.88 millions)}. Subsequent to the date of balance sheet, the said guarantee has been reduced to Rs. 30.05 crores (USD 5 millions).

b) The Company has given an irrevocable and unconditional corporate guarantee to Standard Chartered Bank Limited, London for Rs. 214.70 crores (Euro 26 millions) {previous year Rs. 180.81 crores (Euro 26 millions)} in respect of facility sanctioned to its subsidiary company ''Havells Holdings Limited'' as per Deed of Guarantee executed between the Company and Standard Chartered Bank Limited, London on 29th March, 2013. The outstanding amount of the said credit facility as on the date of the balance sheet is Rs. 143.13 crores (Euro 17.33 millions) {previous year Rs. 180.81 crores (Euro 26 millions)}.

v) a) The Company is under obligation to export goods within a period of eight years from the date of issue of EPCG licenses issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of balance sheet, the Company is under obligation to export goods worth Rs. 95.47 crores (previous year Rs. 125.80 crores) within the stipulated time as specified in the respective licenses. Out of the said amount, the Company has fulfilled the export obligation of Rs. 82.65 crores (previous year Rs. 86.44 crores) in respect of which application for Export Obligation Discharge Certificates (EODC) will be fled with the Director General Foreign Trade (DGFT) within the stipulated time.

b) Further the Company is under obligation to export goods worth Rs. 70.46 crores (previous year Rs. 60.46 crores) in respect of duty free imports made by the Company against Advance Licenses. Out of the said amount, export obligation of Rs. 60.65 crores (previous year Rs. 49.70 crores) has been fulfilled by the Company as at the end of the year in respect of which application for Export Obligation Discharge Certificates (EODC) will be fled with the Director General Foreign Trade (DGFT) within the stipulated time.

1. The Company has entered into a Joint Venture agreement with ''Shanghai Yaming Lighting Co., Limited, Shanghai, China'' on 26th December, 2011 for forming a Joint Venture Company for production of lighting lamps and lighting accessories and sales/services of related products. Accordingly, a Company ''Jiangsu Havells Sylvania Lighting Co., Limited'' a Jointly Controlled Entity has been formed vide certificate of approval dated 13th February, 2012 issued by the People''s Government of Jiangsu Province, China. The Company has invested a sum of Rs. 30.96 crores (RMB 33.00 millions) {previous year Rs. 16.85 crores (RMB 19.19 millions)} towards 50% of capital contribution in said Joint Venture Company as on the date of balance sheet.

The Company''s interest in Joint Venture is reported as a Non-Current Investment (refer note 13) and is stated at cost. The disclosure in respect of Company''s Joint Venture''s assets and liabilities are given on the basis of audited financial statements of the joint venture company as at 31st, December, 2013.

(b) Working capital limits from consortium banks are secured by way of:

i) pari-passu first charge by way of hypothecation on stocks of raw material, semi-finished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.

ii) pari-passu first charge by way of Equitable Mortgage on land and building at 14/3, Mathura Road, Faridabad

iii) pari-passu second charge by way of hypothecation on plant and machinery, generators, furniture and fixtures, electric fans and installations.

(c) The Company has a debit balance in cash credit accounts as on the date of Balance Sheet.

2. The Company had created a Business Reconstruction Reserve Account( "BRR") in the FY 2009-10 by transfer of Rs. 400 crores from securities premium account for the purpose of adjustment of certain expenses as per the scheme of arrangement entered into by the Company with its subsidiary and associate company as approved by the Hon''ble High Court of Delhi vide their order dated 19.08.2010. As per the scheme of arrangement, as and when the Board of Directors of the Company determines that a part or whole of the balance remaining in BRR is no longer required, then such unutilised amount can be transferred to the General Reserve. Accordingly, during the year, the Company has transferred unutilised amount of BRR of Rs. 398.46 crores to General Reserve pursuant to resolution passed by the Board of Directors.

3. Companies (Accounting Standards) (Second Amendment Rules), 2011 issued by the Ministry of Corporate Affairs vide Notification dated December 29, 2011, had amended Accounting Standard - 11 "The Effect of Changes in Foreign Exchange Rates" and given an option to the companies to adopt the treatment prescribed in the said notification in reference to exchange differences arising on reporting of long term foreign currency monetary items. The Company has, consistently following the provisions of AS-11 as in the past, chosen not to adopt the alternate treatment prescribed under the above notification. In accordance with the accounting policy of the Company, a sum of Rs. 11.42 crores has been recognised as exchange loss in respect of the long term foreign currency monetary items during the year (previous year exchange loss Rs. 5.86 crores).

Out of the said loss, Rs. 10.73 crores (previous year Rs. 2.25 crores) has been treated as finance cost being the exchange difference arising from foreign currency borrowings to the extent they can be regarded as an adjustment to interest costs as per Accounting Standard -16, " Borrowing Costs" notified under the Companies (Accounting Standards) Rules, 2006 (as amended).

Research and development facilities located at Head offce, Noida (Uttar Pradesh) and other manufacturing units have been approved by Department of Scientific & Industrial Research, Ministry of Science & Technology for In-house Research & Development Facility and are eligible for deduction under section 35(2AB) of the Income Tax Act,1961.

4. The Company''s manufacturing units at Baddi, (Himachal Pradesh) and Haridwar (Uttarakhand) are exempted from excise duty vide Notification No. 49 and 50/2003 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, New Delhi and the profits of the said units are eligible for deduction as per the provisions under section 80-IC of the Income Tax Act,1961.

j) The plan assets are maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianze Life Insurance Company Limited

k) The Company expects to contribute Rs. 5.00 crores (previous year Rs. 3.75 crores) to the plan during the next financial year.

The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for the plan assets management.

5. employee Stock Option Scheme

a) The Company had, vide special resolution passed by way of postal ballot on 23rd January 2013 approved "Havells Employees Stock Option Plan 2013" (ESOP 2013 or Plan) for granting Employees Stock Options in the form of Equity Shares to eligible employees. The plan is administered by Havells Employees Welfare Trust ("EW Trust") under the supervision of the Nomination and Remuneration Committee of the Board of Directors of the Company ("Committee") in compliance with the provisions of SEBI (Employee Stock Option Scheme and Employee Stock purchase Scheme) Guidelines, 1999 (SEBI Guidelines) and any other applicable provisions for the time being in force. The first grant date of the options under the approved ESOP 2013 Plan was 8th April, 2013. The options are vested equally over a period of 2 years after the date of grant, and the said options can be exercised any time within a period of 30 days from the date of vesting and will be settled by way of equity shares in accordance with the aforesaid plan.

During the year, the Company has granted 45,939 options at Rs. 677/- per share and the exercise price is Rs. 338.50/- per share.

In respect of stock options granted pursuant to the Company''s stock options scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as expense and accounted as employee compensation over the vesting period.

Expense on Employee Stock Option Scheme debited to the Statement of Proft and Loss during the FY 2013-14 is Rs. 0.99 crore.

b) During the year, financial statements of ''Havells Employee Welfare Trust'' have been consolidated in the Standalone financial statements of the Company, in accordance with the opinion of Expert Advisory Committee (EAC) issued by the Institute of Chartered Accountants of India. Accordingly, investments held by trust in the shares of the Company and loan received by trust from the Company has been eliminated with the issued share capital and securities premium and loan given by the Company. Further, bank balance of Rs. 2.74 crores, advance received by trust from Company''s employees of Rs. 4.21 crores has been consolidated in respective account heads in the financial statements of the Company.

6. Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard-17, "Segment Reporting", notified under the Companies (Accounting Standards) Rules, 2006 (as amended).

Segment Reporting Policies

a) identification of Segments:

Primary- Business Segment

The Company has identified four reportable segments viz. Switchgears, Lighting and fixtures, Cables and Electrical Consumer Durables on the basis of the nature of products, the risk and return profile of individual business and the internal business reporting systems. The products included in each of the reported business segments are as follows:

(i) The switchgear segment comprises of domestic and the industrial switchgears, electrical wiring accessories, industrial motors, pumps and capacitors.

(ii) The cable segment comprises of flexible cables and industrial underground cables.

(iii) The lighting and fixture segment comprises of energy saving lamps (CFL) and luminaries.

(iv) The electrical consumer durable segment comprises of fans, water heaters and domestic appliances.

Secondary- Geographical Segment

The analysis of geographical segment is based on geographical location of the customers.

b) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocated".

c) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets, borrowings and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as "Unallocated".

7. a) The Company has taken various residential/commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no restrictions placed upon the Company by entering into these leases and there are no subleases.

8. The figures have been rounded off to the nearest crore of rupees up to two decimal places. The figure 0.00 wherever stated represents value less than Rs. 50000/-.

9. Previous year figures has been regrouped/reclassified wherever necessary to make them comparable with the current year figures.

10. Note No.1 to 31 form integral part of the balance sheet and statement of profit and loss.

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Mar 31, 2011

B CONTINGENT LIABILITIES (Rs.in crores)

2010-11 2009-10

a Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) 23.13 32.65

b Bank guarantees and letter of credits opened with bank (net of margin money) 115.82 87.38

c Bonds to excise department against export of excisable goods/ purchase of goods without payment of duty (to the extent utilised) 15.86 24.64

d Custom duty payable against export obligation 24.46 19.75

e Suits filed against the Company not acknowledged as debts 3.46 0.45

f Liability towards banks against debtors buyout facilities 35.23 27.08

g Disputed tax liabilities in respect of pending cases before Appellate Authority (amount deposited under protest Rs. 4.22 crores (previous year Rs. 4.44 crores) 14.27 13.24

h Corporate Guarantee given on behalf of subsidiary companies (to the extent of outstanding obligation) 100.72 113.19

i Export bills discounted with banks 26.04 40.45



2 The Company has issued and allotted 6,23,87,406 fully paid-up equity shares of Rs. 5/- each as fully paid up bonus shares in the ratio of 1:1 ranking pari passu with the existing equity shares of the Company as approved in the Annual General Meeting held on 29th September 2010 by capitalisation of Rs. 21.68 crores from securities premium account and Rs. 9.52 crores from General Reserve account.

3 The Company has been sanctioned a term loan of Rs. 140 Crores by Canara Bank with an option to avail the same by way of foreign currency loan for the purpose of expansion of manufacturing facilities at Baddi (H.P), Haridwar (Uttarakhand) , Alwar (Rajasthan) and Neemrana(Rajasthan) units. Out of the said loan, the Company has availed a term loan of Rs. 130.18 crores (USD 28 Million) and utilised the same for the purpose for which it was sanctioned. The same is due for repayment in 16 (sixteen) equal quarterly instalments commencing from 01.04.2011.

4 a) The IDBI Bank Limited has sanctioned a receivable buyout facility of Rs. 250 crores to the Company. As per the terms with the bankers, the debtors are insured and the bankers have recourse on the Company to the extent of 5% of claim amount or Rs.0.02 crore, whichever is higher. As on the date of Balance Sheet, total debtors assigned to the bankers are at Rs. 241.04 crores (previous year Rs.199.30 crores). With the result, the debtors at the end of the year stand reduced by the said amount. A sum of Rs. 14.92 crores (previous year Rs.11.23 crores) on account of charges paid for this facility has been debited to debtors factoring charges account.

b) The Company has arranged channel finance facility for its customers from Yes Bank Limited and Axis Bank Limited . As per the terms of the bankers, the debtors are insured and the bankers have recourse on the Company to the extent of 5% of claim amount or Rs.0.02 crore, whichever is higher. As on the balance sheet date, the total debtors who have availed this facility were at Rs. 116.73 crores (Previous year Rs. 42.28 crores).

5 The Company has been sanctioned a Packing Credit Facility of Rs. 50 crores by the Canara Bank. The outstanding bills discounted with the Bank at the end of the year are at Rs. 26.04 crores (USD 5832855) {Previous year Rs. 39.50 crores (USD 8750763)}. The sundry debtors have been reduced by the amount of bills discounted with the bank.

6 The CENVAT credit and VAT credit in respect of Capital Goods has been adjusted @ 100% to the cost of Fixed Assets. The CENVAT credit has been availed @ 50% during the year and the balance will be claimed in the subsequent year subject to the conditions as per Excise Rules. The VAT credit has been availed as per the VAT rules applicable in the respective states.

7 In respect of Baddi (other than 100% EOU unit) and Haridwar units, the cenvat credit against fixed assets has not been availed and provision for excise duty payable on finished goods and scrap materials has not been made since the units are exempted from payment of excise duty.

8 The Companys manufacturing units at Baddi (Himachal Pradesh) and Haridwar (Uttarakhand) are exempted from excise duty vide Notification No. 49 and 50/2003 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, New Delhi and the profit of the said units are eligible for deduction as provided under section 80 IC of the Income Tax Act,1961.

9 Interest and other borrowing costs amounting to Rs. 1.00 crore (previous year Rs.0.62 crore) have been capitalised to the carrying cost of fixed assets being financing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

10 The Company has invested a sum of Rs. 184.02 crores in its wholly owned subsidiary Company Havells Holdings Limited during the year. The total investment in the said subsidiary Company as at the end of the year is Rs. 715.42 crores and there is an accumulated loss of Rs. 710.93 crores in the consolidated financial statements of the said subsidiary company. The accumulated loss includes one time non recurring expenses incurred by the subsidiary companies towards severance and other restructuring costs to the tune of Rs. 495.81 crores which have started to yield tangible benefits.

a) The control over Sylvania group of Companies was acquired in April,2007 with a long term view and was a strategic decision. A sum of Rs. 335.42 crores (Euro 53.04 millions) was paid as premium towards the said acquisition in the light of tangible and intangible benefits accruing to the Company in the future.

b) The group companies have been provided with funding from a banking group led by Barclays Capital in the form of a term loan of Rs. 479.99 crores (Euro 75.90 million) and a revolving facility of Rs. 235.25 crores (Euro 37.2 million). The terms of these loan agreements include covenants related to the group companies performance. The management constantly monitors the financial performance with respect to compliance with the associated bank covenants. As on the date of the Balance Sheet, the Company is in compliance with all financials covenants.

c) The group companies experienced a positive trend in sales growth and margin improvement during the year 2010-11 due to successful implementation of restructuring plans, improvement in operational efficiencies and better price realisation etc. During the year, the Sylvania Group of Companies earned a net profit after tax of Rs. 43.73 crores as against a loss of Rs. 463.85 crores during the corresponding previous year. The EBITDA (Earning Before Interest, Tax, Depreciation and Amortisation) before exceptional expenses and other income of these companies is Rs.190.86 crores as against a negative EBIDTA of Rs. 6.32 crores during the corresponding previous year.

d) Management is of the opinion that the Net Enterprise Value (EV) of the Sylvania group of companies exceeds the amount of investment made and hence there is no impairment in the value of investment in these companies.

11 The electrical business of Standard Electricals Limited (SEL) was transferred to Seven Wonders Holidays Limited, a subsidiary company (Name changed to Standard Electrical Limited) with effect from 01.04.2009 pursuant to Scheme of Arrangement u/s 391, 392 of the Companies Act, 1956 and as approved by the Honble High Court of Judicature at Delhi vide their order dated 19.08.2010. In accordance with the scheme:

a) 2219000 fully paid up equity shares of Rs. 5/- each were allotted to the shareholders of the demerged company (SEL) on 27th August 2010.

b) Professional charges incurred during the year for the purpose of scheme of arrangement to the tune of Rs. 0.18 crore have been adjusted against the Business Reconstruction Reserve.

12 The Company had entered into a Business Transfer Agreement, on 16th March2010 with HSIL Limited, Kolkata for sale of its Bath Fitting Business Division situated at Bhiwadi, Rajasthan as a going concern on as is where is basis for a consideration of Rs. 16.44 crores. The sale of the division was approved by Shareholders through postal ballot on 23rd April 2010. The legal and physical possession of the division was transferred to HSIL Limited on 1st May2010.

The requirements for disclosures of Accounting Standard 24 Discontinuing Operations, issued by the Institute of Chartered Accountants of India does not apply to the said transaction as the sale of Bathfitting division does not constitute a separate major line of business or geographical area of operations of the Company.

13 The Company, as a Settlor, has established irrevocable determinate contributory trust known as Havells Business Partner Trust vide Deed of Indenture executed on 07.10.2010 with the object for holding the distribution commission/sales incentive accrued to the Participating Dealers, for a period of at least three years from the date of such contribution to the Trust and to make investment in permitted securities for the benefit of Participating Dealers. A sum of Rs. 13.25 crores accrued to the Trust on behalf of the Participating Dealers as on the date of the Balance sheet.

14 The Company has started commercial production of Printed Circuit Board (PCB) at its unit at Noida (Uttar Pradesh) during the year. Pre-operative expenses till the date of start of commercial production amounting to Rs. 0.39 crore has been capitalised to the carrying cost of fixed assets on a pro-rata basis.

15 The Company has a system of obtaining periodic confirmations from debtors and creditors. Necessary entries have been passed on reconciliation of accounts wherever required.

16 a) Information as required to be furnished as per Section 22 of the Micro, Small and Medium Enterprises

Development Act, 2006 (MSMED Act) for the year ended 31st March, 2011 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

b) The total dues of Micro and Small Enterprises which were outstanding for more than stipulated period were at Rs. 1.30 Crores (Previous year Rs. 2.95 Crores) as on the balance sheet date.

17 The Company has made a provision of excise duty amounting to Rs. 6.45 crores (previous year Rs. 4.17 crores) payable on stocks of finished goods and scrap material at the end of the year except at Baddi and Haridwar units which are exempt from excise duty. Excise duty is considered as an element of cost at the time of manufacture of goods.

18 a) The Company has given a corporate guarantee of Rs. 215.02 crores (Euro 34 millions) {Previous Year Rs. 205.90 crores (Euro 34 millions)} for and on behalf of wholly owned subsidiary company Havells Netherlands Holding B.V., in respect of Asian Terms Facility Agreement entered with Barclays Capital and State Bank of India on 13th March, 2007, against the loan taken by the said subsidiary. The outstanding loan as on the date of the Balance sheet is Rs. 63.24 crores (Euro 10 Millions) {Previous Year Rs. 100.95 crores (Euro 16.67 Million)}. The Company has further provided security by way of first pari-passu charge on the moveable fixed assets of the Company (except for those charged against working capital limits and excluded moveable and immovable assets ), by way of first pari-passu charge by way of mortgage over the immovable fixed assets situated at A-461/462, MIA Alwar (Rajasthan), SP - 215, MIA Alwar (Rajasthan), Land at Village Dharampur, Tehsil Nalagarh, District Solan (Himachal Pradesh) and Plot no. 2A, Sector - 10, IIE Ranipur, Haridwar and subservient charge on land and building at 14/3, Mathura Road, Faridabad (first pari passu charge to working capital bankers).

b) The Company has given an irrevocable and unconditional corporate guarantee of Rs. 31.62 crores (Euro 5 millions) {previous year Rs. 30.28 crores (Euro 5 millions)} to Deutsche Bank in respect of credit facilities and other financial accommodation sanctioned to the step down subsidiary company Havells Sylvania Europe Limited. The outstanding amount of the said credit facility as on the date of the Balance sheet is Rs. 11.88 crores (Euro 1.88 Million) {Previous year Rs.12.23 crores (Euro 2.02 Million)}.

c) The Company has given a corporate guarantee of Rs. 100 crores to Yes Bank Limited in respect of standby letter of credit facility sanctioned to its subsidiary company Havells Exim Limited. The outstanding amount of the said credit facility as on the date of the Balance sheet is Rs. 25.60 crores.

19 a) The Company is under obligation to export goods within a period of eight years from the date of issue of EPCG licenses issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of Balance Sheet, the Company is under obligation to export goods worth Rs. 127.34 crores (previous year Rs. 95.55 crores) within the stipulated time as specified in the respective licenses. Out of the said amount, the Company has fulfilled the export obligation of Rs. 85.44 crores (Previous Year 30.75 crores) against which export obligation discharge certificates (EODC) are yet to be obtained from Director General Foreign Trade (DGFT).

b) Further the Company is under obligation to export goods worth Rs. 109.83 crores (previous year Rs. 88.80 crores) in respect of duty free imports made by the Company against advance licenses. Out of the said amount, export obligation of Rs. 91.68 crores (previous year Rs. 86.08 crores) has been fulfilled by the Company as at the end of the year against which export obligation discharge certificates (EODC) are yet to be obtained from Director General Foreign Trade (DGFT).

20 The Company has not made any provision for cess payable u/s 441A of the Companies Act, 1956. The said provision shall be made as and when the requisite notification is issued by the Central Government in this regard.

21 The Company has transferred and deposited a sum of Rs. 0.02 crore (previous year Rs. 0.005 crore) out of unclaimed dividend pertaining to the financial years 2002-03 and 2003-04 to Investor Education and Protection Fund of Central Government in accordance with the provisions of Section 205C of the Companies Act, 1956.

22 The Company is entitled for incentive under status holder incentive scrip @ 1% of FOB value of exports (except exports made from EOU unit) in terms of para 3.16 of Foreign Trade Policy 2009-2014. A provision of Rs. 1.33 crores (previous year Rs. 1.21 crores) has been made on this account which is to be utilised for duty free import of capital goods.

No provision in respect of the above amount has been made since the Company expects no liability on these accounts.

Besides the above, show cause notices from various departments have been received by the Company in respect of which provisions have not been made since the Company has adequately represented to the concerned departments.

23 Companies (Accounting Standards) Amendment Rules, 2009 issued by the Ministry of Corporate Affairs vide Notification no.G.S.R.225 (E) dated March 31, 2009, had amended the Accounting Standard - 11 on "The Effect of Changes in Foreign Exchange Rates" and given an option to the companies to adopt the treatment prescribed in the said notification in reference to its foreign currency transactions. The Company has, consistently following the provisions of AS-11 as in the past, chosen not to adopt the alternate treatment prescribed under the above notification. In accordance with the accounting policy of the Company, a sum of Rs. 10.30 crores (previous year Rs. 9.68 crores) has been recognised as exchange gain (net) and credited to the profit and loss account.

24 During the year the Company had entered into a forward contract with Yes Bank Limited in order to hedge its exposure for movements in foreign exchange rates in case of underlying assets being imports in case of the Company. As on the Balance sheet date, there are no outstanding derivative contracts. The Company has recognised a profit of Rs. 0.11 crore in the profit and loss account (Previous year loss of Rs. 0.08 crore) on this account.

25 The Company has proposed dividend for the year @ 50% on its equity capital and a provision for corporate dividend tax including surcharge and education cess thereon has been made. The said amount is not subject to deduction of tax at source (TDS).

26 Current Tax and Deferred Tax Current Tax

The Company has made a provision for current tax in accordance with the provisions of the Income Tax Act 1961

Deferred Tax

Deferred tax resulting from timing differences between book profit and taxable income is accounted for using the current tax rate. In respect of the Companys units under tax holiday period u/s 80 IC of the Income Tax Act, 1961, deferred tax assets/liabilities for timing differences which are capable of reversal after the tax holiday period have been recognised during the year in accordance with The Accounting Standard Interpretation (ASI 3)(Revised) issued by The Institute of Chartered Accountants of India. The break-up of deferred tax assets and deferred tax liabilities is as under:

27 Disclosures required by Accounting Standard (AS- 29) relating to Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised such as sales incentives, bad debts, warranty and other expenses of commercial nature. The provisions are recognised on the basis of past events and the probable settlement of the present obligation during the year as a result of the past events.

Defined Benefit Plan

The Employees Gratuity Fund Scheme, which is defined benefit plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for compensated absences is recognized in same manner as gratuity.

g) The plan assets are maintained with Life Insurance Corporation of India Gratuity Scheme. The details of investment maintained by Life Insurance Corporation of India are not available with the Company and have not been disclosed.

h) The Company expects to contribute Rs. 2.00 crores to the plan during the next financial year.

The estimates of rate of escalation in salary considered in actuarial valuation after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Companys policy for the plan assets management. The Company has no unfunded obligation as on the Balance sheet date.

28 In accordance with accounting standard - AS-28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India and made applicable w.e.f 1st April 2004 , the Company has identified its divisions into cash generating units. The cash generating units have been identified on the basis of group of assets that includes the asset that generates cash inflows from continuing use that are largely independent of other assets or group of assets. As on 31st March 2011, the Company has identified its principal cash generating units into Switchgear Divisions (Faridabad, Haryana and Sahibabad, Uttar Pradesh) , EOU Division and Switchgear Divisions (Baddi, Himachal Pradesh), Cable Division (Alwar, Rajasthan), Fan Divisions at Haridwar (Uttarakhand), Electric Motor and CFL Division at Neemrana (Rajasthan), Printed Circuit Board division (Noida, Uttar Pradesh) and Companys Head Office and branches at various locations.

Each of the aforesaid cash generating units have been assessed at the balance sheet date and tested for impairment. The Company has generally considered external factors influencing impairment of assets such as significant changes in market value of the assets, changes in technological, market, economic or legal environment, return on investment etc. and internal factors such as obsolescence, physical damage, changes at operation level etc. for assessment of impairment conditions existing in the cash generating units as on the Balance Sheet date. Further, where production line itself is not impaired, impairment conditions are not recognised in individual machine if any. After due consideration to above factors it is established that no impairment conditions exist in any of the cash generating units as on the Balance Sheet date.

29 In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

30 Segment Reporting

The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), "Accounting for Segment Reporting" issued by the Institute of Chartered Accountants of India.

Segment Reporting Policies

a) Identification of Segments:

Primary- Business Segment

The Company has identified four reportable segments viz. Switchgears, Cable, Lighting and fixtures and Electrical Consumer Durables on the basis of the nature of products, the risk return profile of individual business and the internal business reporting systems.

Secondary- Geographical Segment

The analysis of geographical segment is based on geographical location of the customers.

b) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocated".

c) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investment, tax related assets and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as "Others".

62387406 Bonus shares issued during the year have been considered in the computation of Basic and Diluted earning per share from the beginning of the reporting period i.e. 1st April 2010. Previous year figures have been adjusted for the bonus issue and restated accordingly.

2219000 equity shares allotted on 19.08.2010 had been considered in the computation of basic and diluted earning per share during the last year in terms of the scheme of arrangement approved by the Honble High Court of Delhi vide their order dated 19.08.2010, with effect from 1st April 2009 being the appointed date as per the scheme of arrangement.

31 a) The Company has taken various residential/ commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry.

b) The Company has also taken few commercial premises under non-cancellable operating leases. The total of future minimum lease payments in respect of such leases as on 31.03.2011 is as follows:

– not later than one year Rs. 3.10 crores (previous year Rs. 2.60 crores)

– later than one year and not later than five years Rs. 4.98 crores (previous year Rs. 3.04 crores)

– later than five years Rs. Nil

Lease payments recognised in the statement of profit and loss as an expense for the year is Rs. 27.28 crores (Previous year Rs. 23.26 crores)

32 That the figures for the previous year have been regrouped/rearranged wherever necessary.

33 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated represents value less than Rs. 50000/-.

34 Schedule No.1 to 18 form integral part of the balance sheet and profit and loss account.

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Mar 31, 2010

A CONTINGENT LIABILITIES

(Rs.in crores)

2010 2009

a Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) 32.65 15.60

b Bank guarantees and letter of credits opened with bank (net of margin money) 87.38 66.07

c Bonds to excise department against export of excisable goods/purchase of goods without payment of duty (to the extent utilised) 24.64 21.95

d Custom duty payable against export obligation 17.12 19.46

e Suits fled against the Company not acknowledged as debts 0.45 2.10

f Liability towards banks against debtors buyout facilities 27.08 14.33

g Disputed tax liabilities in respect of pending cases before Appellate Authority 13.24 7.71

h Corporate Guarantee given on behalf of subsidiary companies (to the extent of outstanding obligation) 113.19 251.94

i Export bills discounted with banks 40.45 Nil

C NOTES

2 The Company had, on a preferential basis issued and allotted 2600000 Warrants to Seacrest Investment Limited, a Warburg Pincus group Company convertible into equity shares on or before 25th day of May2009. Seacrest Investment Limited exercised their right to convert 2250000 Warrants into equity shares on 4th February, 2009 and had opted not to convert the remaining 350000 warrants into equity shares. Consequently, a sum of Rs. 2.42 crores representing 10% of the subscription amount paid by the said investor has been forfeited by the Company and transferred to Capital Reserve Account during the year.

3 The Company has been sanctioned a term loan of Rs. 140 Crores by Canara Bank with an option to avail the same by way of foreign currency loan for the purpose of expansion/extension of manufacturing facilities at Baddi (H.P), Haridwar (Uttarakhand), Alwar (Rajasthan) and Neemrana(Rajasthan) Works. Out of the said loan, the Company has availed foreign currency term loan of Rs. 112.85 crores (USD 25 Million) and utilised the same for the purpose for which it was sanctioned. The same is due for repayment in 16 (sixteen) equal quarterly installments commencing from 01.04.2011.

4 a) The IDBI Bank Limited has sanctioned a receivable buyout facility of Rs.250 crores to the Company. As per the terms with the bankers, the debtors are insured and the bankers have recourse on the Company to the extent of 5% of claim amount or Rs.0.02 crore, whichever is higher. As on the date of Balance Sheet, total debtors assigned to the bankers are at Rs. 199.30 crores (previous year Rs.188.45 crores). With the result, the debtors at the end of the year stand reduced by the said amount. A sum of Rs. 11.23 crores (previous year Rs.16.64 crores) on account of charges paid for this facility has been debited to debtors factoring charges account.

b) The Company has arranged channel finance facility for its customers from Yes Bank Limited, Axis Bank Limited and Federal Bank Limited. As per the terms of the banks, the debtors are insured and the bankers have recourse on the Company to the extent of 5% of claim amount or Rs.0.02 crore, whichever is higher. As on the balance sheet date the total debtors who have availed this facility were Rs. 42.28 Crores (Previous year Rs. 22.05 crores).

5 a) The Company has been sanctioned a Foreign Currency Packing Credit Facility limit of Rs. 45 crores (USD 10 Million) out of the working capital limits sanctioned by Canara Bank. The outstanding bills discounted with the Bank at the end of the year are at Rs. 39.50 Crores (USD 8750763). The exchange loss of Rs. 0.75 crore on account of bills discounted with the bank has been debited to the Profit and loss account.

b) The sundry debtors have been reduced by the amount of bills discounted with the bank.

6 The Company had imported a plant for its motor unit at Neemrana from Spain (Europe) in the financial year 2007-08 against which the Company has obtained a Buyers Credit facility from Canara Bank, London for Euro 3.70 millions (Rs.22.41crores). The said facility is secured by way of hypothecation of said plant and machinery, stocks, furniture, computers and other moveable assets awarded in the public auction and is due for repayment on 10th August, 2010.

7 The Company has started commercial production of Electrical Switchgears and Electrical Fans at its new units at Baddi (Himachal Pradesh) and Haridwar (Uttarakhand) respectively during the year. Pre-operative expenses till the date of start of commercial production amounting to Rs. 0.50 crore and Rs. 1.10 crores respectively have been capitalised to the carrying cost of fixed assets on a pro-rata basis.

8 The CENVAT credit and VAT credit in respect of Capital Goods has been adjusted @ 100% to the cost of Fixed Assets. The CENVAT credit has been availed @ 50% during the year and the balance will be claimed in the subsequent year subject to the conditions as per Excise Rules. The VAT credit has been availed as per the VAT rules applicable in the respective states.

9 In respect of Baddi (other than 100%EOU unit) and Haridwar units, the cenvat credit against fixed assets has not been availed and provision for excise duty payable on finished goods and scrap materials has not been made since the units are exempted from payment of excise duty.

10 The Companys manufacturing units at Baddi, (Himachal Pradesh) and Haridwar ( Uttarakhand) are exempted from excise duty vide Notification No. 49 and 50/2003 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, New Delhi and the profit of the said units are eligible for deduction as provided under section 80 IC of the Income Tax Act,1961.

11 Interest and other borrowing costs amounting to Rs. 0.62 crore (previous year Rs.1.57 crores) have been capitalised to the carrying cost of fixed assets being financing costs directly attributable to the acquisition, construction or installation of the concerned qualifying assets till the date of its commercial use.

12 The Company has invested a sum of Rs. 143.70 crores in its wholly owned subsidiary Company Havells Holdings Limited during the year which includes a sum of Rs. 83.33 crores (Euro 12 Million) invested in accordance with the lending Banks revised covenants executed with the subsidiary Company/Step-down subsidiary Companies. The total investment in the said subsidiary Company as at the end of the year is Rs. 531.40 crores and there is an accumulated loss of Rs. 751.74 crores in the consolidated financial statements of subsidiary Company (Sylvania Group of Companies). The decline in the value of investments, in the opinion of the management, is temporary due to the following reasons:

a) The control over Sylvania group of Companies was acquired in April,2007 with a long term view and was a strategic decision. A sum of Rs. 303.49 crores (Euro 53.04 millions) was paid as premium towards the said acquisition in the light of tangible and intangible benefits accruing to the Company in the future.

b) The accumulated loss of Rs. 751.74 Crores includes one time non recurring expenses incurred by the subsidiary companies towards severance and other restructuring costs to the tune of Rs. 492.21 crores which will yield tangible benefits in future. The subsidiary Companies generally experienced good market conditions till June, 2008, and the period thereafter being more challenging following the beginning of the World recession in second half of year 2008 more particularly in European economy. The total market shrunk due to recession, which adversely affected the operating results of the Company. As a result, the Group has implemented a variety of fixed cost reduction measures to manage the costs effectively and offset this trend. These initiatives include rationalization of fixed overheads, partial outsourcing of manufacturing to low cost countries and further cost reduction initiatives on materials costs. The restructuring measures taken during the year are primarily focused in Europe and Latin America regions. So far, the Company is able to execute the restructuring plan in line with the expectation. The expected recurring annualised savings on account of these restructuring plans is Rs. 221.04 crores.

c) On 28th August 2009, the Group Subsidiary Company re-negotiated the loan agreement with the banking group led by Barclays bank. As part of the revised loan agreement clause 4(d) of Schedule - 1 and clause 7(a), the Company had agreed to increase the share capital of the Group Subsidiary Company by Rs. 83.32 crores (Euro 12 million) in two parts i.e. first part of Rs. 41.66 crores (Euro 6 million) at the time of signing the agreement in August 2009 and second part of Rs. 41.66 crores (Euro 6 million) within 90 days from signing the agreement. The parent undertaking has already invested a sum of Rs. 83.32 crores (Euro 12 million) as per the agreement. The banks have agreed to re-schedule the amortization plan of the loans and have reset the covenants in line with the revised projections made by the Group. The Company continues to meet the revised covenants and there are no defaults on repayments.

d) That, with the signs of improvement in global economy, there are signs of business improvement too. The Group has experienced trading in line with projections and the management has further plans in place to ensure that the Group continues to trade in line with expectations. The Directors of the Group Companies are satisfied that, provided the current facilities remain in place, the Group Companies have sufficient levels of cash to operate the business on a going concern basis for the foreseeable future.

In view of all above factors i.e. benefits of restructuring plans, revised bank agreement and signs of economic recovery, the management is of the opinion that no provision for impairment in the value of its investments in subsidiary companies, is required.

13 The Company has invested a sum of Rs. 0.01 Crore in a wholly owned subsidiary Seven Wonders Holidays Private Limited (SWHPL) during the year. The Company , its Subsidiary (SWHPL) and Standard Electricals Limited (SEL), a Company under the same management, have entered in a Scheme of Arrangement u/s 391, 392 and 394 of The Companies Act, 1956 which has been approved by the Honble High Court of Delhi vide their order dated 19.08.2010 and fled with the Registrar of Companies on 21.08.2010. In accordance with the aforesaid scheme of arrangement:

a) The electrical business of SEL has been transferred to SWHPL on a going concern basis.The assets and liabilities have been transferred at respective book values and surplus of assets over liabilities acquired has been transferred to the General Reserve in the books of SWHPL.

b) 2219000 fully paid up equity shares of Rs. 5/- each are to be issued to the shareholders of the demerged company (SEL) as a consideration for demerger, in the exchange ratio of 7 shares of the Company for every 10 shares held in SEL. Since allotment of shares stated above has not been effected before 31.03.2010, a sum of Rs. 1.11 crore has been transferred from Business Reconstruction Reserve account to Equity Shares pending allotment account.

c) Business Reconstruction Reserve Account has been created by the Company by transfer of Rs. 400 crores from Securities Premium Account for the purpose of adjustment of certain expenses and allotment of equity shares as per the aforesaid scheme.

d) Professional charges of Rs. 0.25 crore paid in connection with the scheme of arrangement has been adjusted against the Business Reconstruction Reserve.

14 The Company has entered into a Business Transfer Agreement, on 16th March2010 with HSIL Limited ,Kolkata for sale of its Bath Fitting Business Division situated at Bhiwadi, Rajasthan as a going concern on as is where is basis for a consideration of Rs. 16.87 crores. The sale of the division was approved by Shareholders through postal ballot. The legal and physical possession of the division was transferred to HSIL Limited on 1st May2010.

15 The Company has a system of obtaining periodic confrmations from debtors and creditors. Necessary entries have been passed on reconciliation of accounts wherever required.

16 The Company has made a provision of excise duty amounting to Rs. 4.17 crores (previous year Rs. 1.85 crores) payable on stocks of finished goods and scrap material at the end of year except at Baddi and Haridwar units which are exempt from excise duty. Excise duty is considered as an element of cost at the time of manufacture of goods.

17 (a) The Company has given a corporate guarantee of Rs. 205.90 crores (Euro 34 millions) {Previous Year Rs. 229.43 crores (Euro 34 millions)} for and on behalf of wholly owned subsidiary company Havells Netherlands Holding B.V., Netherlands in respect of Asian Terms Facility Agreement entered with Barclays Capital and State Bank of India on 13th March, 2007, against an outstanding loan of Rs. 100.95 crores (Euro 16.67 Million) taken by the said subsidiary. The Company has further provided security by way of pari-passu charge on all the moveable fixed assets of the company (except for those charged against working capital limits) and further secured by way of first pari-passu charge by way of mortgage over the immovable fixed assets situated at A-461/462, MIA Alwar (Rajasthan), SP - 215, MIA Alwar (Rajasthan), Land at Village Dharampur, Tehsil Nalagarh, District Solan (Himachal Pradesh) and Plot no. 2A, Sector - 10, IIE Ranipur, Haridwar.

(b) The Company has also given an irrevocable and unconditional corporate guarantee to Deutsche Bank in respect of credit facilities and other financial accommodation availed by step down subsidiary company Havells Sylvania Europe Limited upto the amount of Rs. 30.28 crores (Euro 5 millions) {previous year Rs. 80.98 crores (Euro 12 millions)}. The outstanding obligation against the said guarantee was Rs. 12.23 crores (Euro 2.025 Million) as at the end of the year.

22 (a) The Company is under obligation to export goods within a period of eight years from the date of issue of EPCG licenses issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of Balance Sheet, the Company is under obligation to export goods worth Rs. 95.55 crores (previous year Rs.82.21 crores) within the stipulated time as specified in the respective licenses. Out of the said amount, the Company has fulfilled the export obligation of Rs. 30.75 crores (Previous Year 22.18 crores) against which export obligation discharge certificates (EODC) are yet to be obtained from Director General Foreign Trade (DGFT).

(b) Further the Company is under obligation to export goods worth Rs. 69.78 crores (previous year Rs. 73.14 crores) in respect of duty free imports made by the Company against advance licenses. Out of the said amount , export obligation of Rs.67.07 crores has been fulfilled by the Company as at the end of the year against which export obligation discharge certificates (EODC) are yet to be obtained from Director General Foreign Trade (DGFT).

18 The Company has not made any provision for cess payable u/s 441A of the Companies Act, 1956. The said provision shall be made as and when the requisite notification is issued by the Central Government in this regard.

19 The Company has transferred and deposited a sum of Rs. 0.005 crore (previous year Rs. 0.006 crore) out of unclaimed dividend pertaining to the year 2001-02 to Investor Education and Protection Fund of Central Government in accordance with the provisions of Section 205C of the Companies Act, 1956.

20 The Company is entitled for incentive under status holder incentive scrip @ 1% of FOB value of exports (except exports made from EOU unit) during the year. A provision of Rs. 1.21 crores has been made on this account which is to be utilised for duty free import of capital goods.

21 Companies (Accounting Standards) Amendment Rules, 2009 issued by the Ministry of Corporate Affairs vide Notification no.G.S.R.225 (E) dated March 31, 2009, has amended the Accounting Standard - 11 on "The Effect of Changes in Foreign Exchange Rates" and given an option to the companies to adopt the treatment prescribed in the said notification in reference to its foreign currency transactions. The Company has, consistently following the provisions of AS-11 as in the past, chosen not to adopt the alternate treatment prescribed under the above notification. In accordance with the accounting policy of the Company, a sum of Rs. 9.68 crores (previous year Rs. 0.51 crore) has been recognised as exchange gain (net) and credited to the profit and loss account.

22 a) Foreign Currency Loan from ICICI Bank Limited, Singapore has been repaid during the year. The Company has recognised a sum of Rs. 1.35 crores as exchange gain and has credited the same to the Profit and Loss account

b) Buyers Credit Facility from Canara Bank, London has been translated at the prevailing rate of exchange as on the date of balance sheet. Consequent to realignment, the value of credit facility is reduced by Rs. 2.56 crores (previous year increase of Rs. 1.62 crores). The exchange gain on the said realignment has been credited to the Profit and loss account.

c) The Company has entered into a forward contract with Yes Bank Limited in order to hedge its exposure for movements in foreign exchange rates in case of underlying assets being imports in case of the Company. As on the Balance sheet date, all outstanding derivative contracts were fair valued at Mark-to-Market basis and the Company has recognised a loss of Rs. 0.08 crores in the profit and loss account (Previous year gain of Rs. 0.17 crore) on this account .

d) The Foreign currency term loan of USD 25 Million from Canara Bank referred in note no. 3 has been restated at prevailing rate of exchange as at the end of the year resulting in exchange gain of Rs. 3.42 crores which has been credited to the Profit and Loss account .

23 Loss on sale/discard of assets charged to Profit and Loss account include a sum of Rs. 2.75 crores (Previous Year Nil) written off on account of plant and machinery discarded by the Company with a view to modernise its existing plants at Neemrana (Rajasthan) and Alwar (Rajasthan) for the manufacture of Compact Fluorescent Lamps (CFL) and Cables respectively.

24 The Company has proposed dividend for the year @ 50% on its equity capital and a provision for corporate dividend tax including surcharge and education cess thereon has been made. The said amount is not subject to tax deducted at source (TDS).

25 Current Tax and Deferred Tax

Current Tax

The Company has made a provision for current tax in accordance with the provisions of the Income Tax Act 1961.

26 Disclosures required by Accounting Standard (AS-29) relating to Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised such as sales incentives, bad debts, warranty and other expenses of commercial nature. The provisions are recognised on the basis of past events and the probable settlement of the present obligation during the year as a result of the past events.

27 In accordance with accounting standard - AS-28 "Impairment of Assets" issued by the Institute of Chartered accountant of India and made applicable w.e.f 1st April 2004 , the Company has identified its divisions into cash generating units. The cash generating units have been identified on the basis of group of assets that includes the asset that generates cash inflows from continuing use that are largely independent of other assets or group of assets. As on 31st March 2010, the Company has identified its principal cash generating units into Switchgear Division and CFL Division (Faridabad, Haryana), Switchgear Division (Sahibabad, Uttar Pradesh) , EOU Division and Switchgear Divisions (Baddi, Himachal Pradesh), Cable Division (Alwar, Rajasthan),Fan Divisions at Haridwar (Uttarakhand), Capacitor Division at Noida (Uttar Pradesh), Electric Motor and CFL Division at Neemrana (Rajasthan) and Companys Head Office and branches at various locations.

Each of the aforesaid cash generating units have been assessed at the balance sheet date and tested for impairment. The Company has generally considered external factors influencing impairment of assets such as significant changes in market value of the assets, changes in technological, market, economic or legal environment, return on investment etc. and internal factors such as obsolescence, physical damage, changes at operation level etc. for assessment of impairment conditions existing in the cash generating units as on the Balance Sheet date. Further, where production line itself is not impaired, impairment conditions are not recognised in individual machine if any. After due consideration to above factors it is established that no impairment conditions exist in any of the cash generating units as on the Balance Sheet date.

28 In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

29 Segment Reporting The segment reporting of the Company has been prepared in accordance with Accounting Standard (AS-17), “ Accounting for Segment Reporting” issued by the Institute of Chartered Accountants of India.

Segment Reporting Policies

a) Identification of Segments: Primary- Business Segment

The Company has identified four reportable segments viz. Switchgears, Cable , Lighting and fixtures and Electrical Consumer Durables on the basis of the nature of products, the risk return profile of individual business and the internal business reporting systems.

Secondary- Geographical Segment

The analysis of geographical segment is based on geographical location of the customers.

b) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as " Unallocated".

c) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investment, tax related assets and other assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as " Others".

Notes:

a) WOS refers to Wholly Owned Subsidiary

b) *In Havells Sylvania (Thailand) Limited minorities hold 51% of ordinary shares ( representing 11000 Euro as at 31st March,2010) and in Havells Sylvania Argentina S.A. minorities hold 1% of ordinary shares ( representing 22000 Euro as at 31st March, 2010) but the majority of voting rights are held by Sylvania Group. The beneficial ownership of both the entities lies with the Sylvania Group.

c) During the year Precision Materials SARL (WOS of Havells Sylvania Lighting France SAS) has amalgamated with its holding Company.

d) Four UK based Dormant Companies namely Linolite Limited, Marlin Lighting Limited, Concord Lighting Limited and Badalex Limited were closed during the year.

e) Havells Sylvania Poland S.P.Z.O.O was incorporated during the year

f) Seven Wonders Holidays Private Limited was acquired during the year.

2 Associates

QRG Enterprises Limited

Standard Electricals Limited

Guptajee & Company

QRG Foundation

QRG Central Hospital and Research Centre Limited

3 Key Management Personnel

Shri Qimat Rai Gupta Shri Surjit Gupta Shri Anil Gupta Shri Rajesh Gupta

30 a) The Company has taken various residential/ commercial premises under cancellable operating leases. These lease agreements are normally renewed on expiry.

b) The Company has also taken few commercial premises under non-cancellable operating leases. The total of future minimum lease payments in respect of such leases as on 31.03.2010 is as follows:

- not later than one year Rs. 2.60 crores

- later than one year and not later than fve years Rs. 3.04 crores

- later than five years Rs. Nil

Lease payments recognised in the statement of profit and loss as an expense for the year is Rs. 23.26 crores (Previous year Rs. 19.03 crores).

31 That the figures for the previous year have been regrouped/ rearranged wherever necessary.

32 The figures have been rounded off to the nearest crore of rupees upto two decimal places.

33 Schedule No.1 to 20 form integral part of the balance sheet and profit and loss account.