(vi) The Company had total cash outflows for leases of ' 595.75 Lakhs for the year ended March 31, 2023 (March 31, 2022 ' 509.38 Lakhs).

(vii) Extension and termination options : Extension and termination options are included in property lease agreements. These are used to maximize operational flexibility in terms of managing the assets used in the Company’s operations. Extension and termination options held are exercisable only by the Company and not by the lessor.

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

(ix) Refer note 47C for maturity analysis of contractual undiscounted cashflows in respect of lease recognized under Ind AS 116.

’During the previous year, a Subsidiary Company of Lumax Integrated Ventures Private Limited (LIVE) was voluntarily strike off and during currnet year a Joint Venture Company of LIVE was under process of voluntary liquidation (liquidated before board meeting date) with National Company Law Tribunal (NCLT). Accordingly, the Investment made by LIVE in these Companies has been considered impaired of ' 24.11 Lakhs (March 31, 2022: ' 22.64 Lakhs)

"Optionally convertible redeemable debentures (OCRD) are convertible at the option of the issuer of the instrument and the coupon rate is 0.01%. At the expiry of 10 years, each OCRD shall be mandatorily converted i nto 1 equity share. However, LIVE (issuer) may, at any time prior to expiry of 10 years convert the OCRDs in the ratio of 1:1 (i.e. one (1) equity share for each OCRD issued by LIVE) or redeem the OCRDs at the fair market value or at par value, whichever is higher. The resulting shares upon conversion shall rank pari-passu in all respect with the existing equity shares. Accordingly, OCRDs has been classified as an equity instrument both in books of issuer and holder.

During the year, wholly-owned subsidiary company Lumax Mettalics Private Limited has been merged with the Company with appointed date as April 01, 2022 (Refer note 54). Accordingly, the investment in this subsidiary company and figures for the corresponding year have been restated.

Non-current investments

’Investment in equity instrument where the business model of the Company is not for trading, the Company has opted for irrevocable option to present subsequent changes in the fair value of an investment in an equity instrument through Other Comprehensive income (FVTOCI).

Current investments

"Investment in current investments, the Company has opted irrevocable option to present subsequent changes in the fair value of an investment in an financial instrument through profit or loss (FVTPL).

c) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Further no trade or other receivable are due from firms or private companies in which any director is a partner, a director or a member.

d) Trade receivables are non-interest bearing and are generally on terms of not more than 30-120 days.

e) For terms and conditions relating to related party receivables, refer Note 41.

d) Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of ' 2 per share. Each holder of equity is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend, if proposed by the Board of Directors, is subject to the approval of the shareholders in the Annual General Meeting.

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

g) The Company does not have any equity shares issued as bonus, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.

18.1 Nature and purpose of reserves

a) 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.

b) FVTOCI Reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVTOCI Reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.

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. 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) Retained Earnings

Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss.

e) Capital reserve

Capital reserve are the reserve created for gain on bargain purchase related to business combinations.

*Term loan amounting ' 7,140.24 Lakhs (after netting off ' 359.76 Lakhs outstanding upfront fees to be charged off over the period of loan through Effective Interest Rate (EIR) method) (March 31, 2022: NIL) from banks carrying interest @ 8.85% per annum are secured by way of first pari pasu equitable/registered mortgage charge on immovable properties of the Company both present and future. This loan is repayable in equal quarterly installment of ' 375 Lakhs each over a period of five years after one year of moratorium from the date of availment.

**Term loan amounting ' 4,779.68 Lakhs (after netting off ' 220.32 Lakhs outstanding upfront fees to be charged off over the period of loan through Effective Interest Rate (EIR) method) (March 31, 2022: NIL) from financial institution carrying interest @ 9.60% per annum are secured by way of first and exclusive charge in favour of the security trustee (inter se first pari pasu charge with Kotak Mahindra Bank Limited) (by way of registered/equitable mortgage) on identified land and building and structures thereon of the immovable assets and by way of hypothecation on all the moveable fixed assets of the Company, both present and future. This loan is repayable in equal quarterly installment of ' 250 Lakhs each over a period of five years after one year of moratorium from the date of availment.

#Vehicle loan amounting ' 521.03 Lakhs (March 31, 2022: ' 44.02 Lakhs) from banks carrying interest @ 7.60%-8.85% per annum are secured by way of hypothecation of the respective vehicles acquired out of proceeds thereof. These loans are repayable over a period of thirty nine months from the date of availment.

’Working capital demand loan ' 8,500 Lakhs (March 31, 2022: ' 6,000 Lakhs) from Bank is repayable in 90-180 days from respective drawdown and carries interest @ 4.40% to 8.85% per annum, secured by way of Pari-passu first charge on entire current assets of the Company both present and future.

‘Working capital demand loan ' 1,500 Lakhs (March 31, 2022: ' NIL) from financial institution is repayable in 90-180 days from respective drawdown and carries interest @ 5.75% to 8.05% per annum secured against the first pari pasu charge on current assets of the Company.

’Working capital demand loan ' 1,300 Lakhs (March 31, 2022: ' 1,500 Lakhs) from financial institution is repayable in 90-180 days from respective drawdown and carries interest @ 5.75% to 8.25% per annum secured against the exclusive charge on current and moveable fixed assets of the Company.

’’Working capital demand loan ' 2,000 Lakhs (March 31, 2022: ' 2,000 Lakhs) from Bank is repayable in 90-180 days from respective drawdown and carries interest @ 5.25% to 9.25% per annum, unsecured.

’’’Cash Credit ' 112.62 Lakhs (March 31, 2022: NIL) secured by way of Pari-passu charge on stocks and book debts of the Company and carries interest @ 6.50% to 9.00% per annum.

Undrawn committed borrowing facility

The Company has availed fund based and non fund based working capital limits amounting to ' 24,200.00 Lakhs (March 31, 2022: ' 22,200.00 Lakhs) from banks and financial institutions. An amount of ' 10,228.67 Lakhs remain undrawn as at March 31, 2023 (March 31, 2022: ' 12,153.32 Lakhs).

Loan covenants

The Company has satisfied all debt covenants prescribed in the terms of loans.

The Company has not defaulted on any loans payable.

Wilful defaulter

The Company have not been declared wilful defaulter by any bank or financial institutions or government or any government authority.

The Company has been sanctioned working capital limit in excess or ' 500 Lakhs in aggregate from banks and financial institutions during the year on the basis of security or current assets of the Company. The quarterly returns/statements filed by the Company with such banks are in agreement with the books of accounts of the Company.

Term loans have been applied for the purpose for which they were obtained.

Terms and conditions of the above financial liabilities:

- Trade payables are non-interest bearing and are normally settled on 30 to 90 day terms.

For explanations on the Company’s credit risk management processes, refer note 47.

For terms and conditions with related parties, refer to Note 41.

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, 2023 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

"Investor Education and Protection Fund is being credited by the amount of unclaimed dividend after seven years from the due date. Accordingly, the Company has transferred ' 1.67 Lakhs during the current year (March 31, 2022: ' 1.54 Lakhs) to the Investor Education and Protection Fund.

#Represents liabilities towards incentives/discounts payable to dealers of the Company.

26.3 Performance obligation

The performance obligation is satisfied upon delivery of the goods to the customer and payment is generally due within 30 to 120 days from delivery.

The performance obligation is satisfied over time and payment is generally due upon completion of service as per the contract with customers.

The Code on Social Security 2020 (Code), which received the Presidential Assent on September 28, 2020, subsumes nine laws relating to social security, retirement and employee benefits, including the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972. The effective date of the Code is yet to be notified and related rules are yet to be framed. The impact of the change, if any, will be assessed and recognized post notification of the relevant provisions.

1 EARNINGS PER SHARE (EPS)

a) Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Basic and diluted EPS are same as there are no convertible financial instruments outstanding as on March 31, 2023

c) There has not been any transactions involving equity shares or potential equity shares between the reporting date and the date of authorization of these standalone financial statements.

38. During the current year, the Company (through one of its subsidiary companies Lumax Integrated Ventures Private Limited “LIVE”) has acquired 75% stake in IAC International Automotive India Private Limited (IAC India). For this acquisition, the Company borrowed ' 12,500 Lakhs from banks/financial institutions and invested ' 18,500 Lakhs in LIVE in the form of Optionally Convertible Redeameable Debentures. Exceptional item amounting ' 880 Lakhs for the year ended March 31, 2023 represents certain transaction cost related to the acquisition of stake in IAC India.

B) Defined Benefit Plans

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age. The scheme is funded with an insurance company in the form of qualifying insurance policy.

E3| COMMITMENTS AND CONTINGENCIES

a) Capital and other commitments

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

Capital commitments are ' 274.05 Lakhs (As at March 31, 2022'1,862.27 Lakhs), net of advances.

(c) The Company entered into an agreement with the Bhosari Unit Workmen Union on September 13, 2003, vide which option for VRS was given to the workers of the Company. Accordingly, benefits under the said scheme were paid to 27 workmen who opted for the scheme. Out of these 27 workmen, 20 workmen later filed a case against the Company on the grounds of Unfair Labour Practices at the Labour court. The Court has passed an order in the favour of the workmen on June 26, 2019. Further, the Company has challenged the said order and filed revision application dated July 26, 2019 in the Industrial Court, Pune on the grounds that the said order is defective and bad at law. Out of those 20 cases, the matter has been decided by the Industrial court in favour of the Company for 17 cases vide order dated March 28, 2022. For remaining 3 cases, the Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts.

(d) In regard to the bill discounting of invoices with bank by one of the Company’s vendor (Transporter), the bank had filed an application under Section 19 of the Recovery of Debts due to Banks and Financial Institution Act, 1993 before the Ld. DRT-II, Chandigarh for recovery of ' 999.76 Lakhs and interest thereon @ 13.75% p.a. from Company, vendor and other parties. The Company and other parties including vendor has received an order dated February 25, 2019 from Debts Recovery Tribunal- II, Chandigarh for demanding the above amount jointly and severally. The Company has filed an appeal before Debt Recovery Appellate Tribunal (DRAT) dated March 13, 2020 against ' 782.24 Lakhs (decretal amount to which the Company is a defendant party) along with interest 13.75% p.a. and deposited 50% of decretal amount in previous/earlier years. The Company is of the view, based on the advice of the advocate, that the final outcome of the case would be in the favour of the Company and hence, no provision has been made in the books of accounts.

(e) During the year ended March 31, 2023 the Company has provided corporate guarantee to financial institutions against loan taken by one of the subsidiary companies “Lumax Integrated Ventures Private Limited” amounting ' 25,000 Lakhs (March 31, 2022: Nil).

H EVENT AFTER THE REPORTING DATE

The Board of Directors of the Company has proposed dividend subsequent to the Balance Sheet date, which is subject to shareholder’s approval in forthcoming annual general meeting (Refer note 18.2).

j| SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

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

I Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:

a) Operating lease commitments - Company as lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an valuation of the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of the economic life of the commercial property, and that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

b) Assessment of lease term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

c) Revenue from contracts with customers

The Company applied the following judgments that significantly affect the determination of the amount and timing of revenue from contracts with customers:

• Determining method to estimate variable consideration and assessing the constraint

Certain contracts for the sale of products include a right of price revision on account of change of commodity prices/ purchase price that give rise to variable consideration. In estimating the variable consideration, the Company is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled.

II. Estimates and assumptions

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

a) Property, plant and equipment

The useful lives and residual values of property, plant and equipment are determined by the management based on technical assessment by the management. The Company believes that the derived useful life best represents the period over which the Company expects to use these assets.

b) Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships and the longterm nature and complexity

of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.

Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

c) Gratuity benefit

The cost of defined benefit plans (i.e. Gratuity benefit) 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 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 the specific countries. Future salary increases and pension increases are based on expected future inflation rates for the respective countries. Further details about the assumptions used, including a sensitivity analysis, are given in Note 39.

d) Fair value measurement of financial instrument

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 (DCF) 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.

e) Impairment of financial assets

The impairment provisions of financial assets are based on assumptions about risk of default and expected loss rates. the Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

f) Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use.

The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are also relevant to other intangibles. During the year the Company has done the impairment assessment of non-financial assets and have concluded that there is no impairment in value of non-financial assets as appearing in the financial statements.

g) Lease incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore its Incremental Borrowing Rate (IBR) is used to measure lease liability. The IBR is the rate of interest that the Company would have to pay to borrow over similar term, and with a similar security, the fund necessary to obtain an asset of a similar value to the Right-to-use assets

in as similar economic environments. The IBR therefore effects what the Company “would have to pay” which requires estimates when no observable rates are available or when they need to be adjusted to reflect the term and conditions of the lease. The Company estimates the IBR using observable inputs such as market interest rates when available.

h) Revenue recognition - Estimating variable consideration for returns and volume rebates

The Company estimates variable considerations to be included in the transaction price for the sale of traded goods (in after-market) with volume rebates.

The Company’s expected volume rebates are analyzed on a per customer basis for contracts that are subject to a single volume threshold. Determining whether a customer will be likely entitled to rebate will depend on the customer’s historical rebates entitlement and accumulated purchases to date. The Company applied a statistical model for estimating expected volume rebates for contracts with more than one volume threshold. The model uses the historical purchasing patterns and rebates entitlement of customers to determine the expected rebate percentages and the expected value of the variable consideration. Any significant changes in experience as compared to historical purchasing patterns and rebate entitlements of customers will impact the expected rebate percentages estimated by the Company.

Q4I CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, all equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholders’ value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if any. To maintain or adjust the capital structure, the Company reviews the fund management at regular intervals and take necessary actions to maintain the requisite capital structure. The Company monitors capital using geraing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and March 31, 2022.

Q6I FAIR VALUE HIERARCHY

All financial instruments for which fair value is recognized or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole.

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

Level 2: Valuation techniques for which the lowest level input that has a significant effect on the fair value measurement are observable, either directly or indirectly.

Level 3: Valuation techniques for which the lowest level input which has a significant effect on the fair value measurement is not based on observable market data.

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities.

| FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise of trade and other payables, borrowings, lease liabilities, security deposits and payables for property, plant and equipment. 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, cash, fixed deposits and security deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by Finance department that advises on financial risks and the appropriate financial risk governance framework for the Company. The Finance department provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised 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 risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instrument effected by market risk include loans and borrowings, deposits, FVTOCI instrument.

The sensitivity analyzes in the following sections relate to the position as at March 31, 2023 and March 31, 2022.

The following assumptions have been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022 including the effect of hedge accounting.

(i) Interest rate risk

I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s interest bearing financial liabilities includes borrowings with fixed interest rates.

The Company’s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Interest rate risk exposure

The Company’s variable rate borrowing is subject to interest rate fluctuations. Below is the overall exposure of the borrowing.

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

The Company transacts business in local currency as well as in foreign currency. The Company has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in foreign exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives.

(iii) Equity price risk

The Company’s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to listed equity securities at fair value was ' 9,313.35 Lakhs. A decrease of 10% on the NSE market index could have an impact of approximately ' 931.33 Lakhs on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

At the reporting date, the exposure to unlisted equity securities at fair value was ' 1,125.24 Lakhs. A decrease of 10% in fair value could have an impact of approximately ' 112.52 Lakhs on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have an effect on profit or loss.

B. Credit risk

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

Trade receivables

Customer credit risk is managed by the Company 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. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of financial assets (trade receivable). The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located and being operated in India. Further, the Company’s customer base majorly includes Original Equipment Manufacturers (OEMs), Large Corporates and Tier-1 vendors of OEMs and dealers. Based on the past trend of recoverability of outstanding trade receivables, the Company has not incurred material losses on account of bad debts. Hence, no adjustment has been made on account of Expected Credit Loss (ECL).

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including loans from banks at an optimised cost.

D. Commodity risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchases of steel & plastic granuals which are volatile products and are major component of end product. The prices in these purchase contracts are linked to the price of raw steel & plastic grannuals and demand supply matrix. However, at present, the Company do not hedge its raw material procurements, as the price of the final product of the Company also vary with the price of underlying commodity which mitigate the risk of price volatility.

48. The management has analyzed that no significant warranty claim is received by the Company in earlier years against the goods manufactured by the Company and further, the seller of traded goods warrants the Company that products will be free from defects in materials and workmanship under normal use and service and agrees to replace any defective parts under the conditions of standard warranty accompanying the products. Therefore, the Company has not made any provision for warranties and claims in its books of accounts for the year ended March 31, 2023.

49. Revenue from contracts with customers is measured by the Company at the transaction price i.e. amount of consideration received/ receivable in exchange of transferring goods or services to the customer In determining the transaction price for the sale of goods, the Company considers the effect of price adjustments, to be claimed/ passed on to the customers, based on various cost parameters like raw material and other costs.

The Company is required to pass on the savings in variable cost from the billed sales price for which the final negotiations with the customer is ongoing and will be settled in near future. The total estimated liabilities outstanding as at March 31, 2023 is ' 2,404.62 Lakhs (March 31, 2022: ' 3,064.67 Lakhs), which management believes is sufficient to discharge liabilities.

50. During the previous year, the Company amended the joint venture agreement with “Lumax Ituran Telematics Private Limited (LITPL)”, wherein the casting vote has been given to the Chairman of the LITPL appointed by the Company. By virtue of this, the Company has acquired management control of LITPL and therefore, LITPL has become subsidiary of the Company w.e.f. January 01, 2022.

H OTHER STATUTORY INFORMATION

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

(ii) The Company does not have transactions with struck off companies.

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

(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

(v) 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

(vi) 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

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

| SCHEME OF ARRANGEMENT (THE “SCHEME”)

On May 03, 2022, the Company had filed the Scheme of Amalgamation and Merger (“Scheme”) with Hon’ble National Company Law Tribunal, New Delhi Bench (NCLT) of its wholly owned subsidiary Lumax Mettalics Private Limited (transferor) with the Company for efficient utilization & synergy of resources. The aforesaid scheme, inter-alia envisaged merger of the transferor into the Company. The Scheme was approved by NCLT on March 01, 2023. Consequent to the amalgamation and merger prescribed by the Scheme, all the assets and liabilities of the transferor were transferred to and vested in the Company with effect from April 01, 2022 (“the Appointed Date”). The amalgamation was accounted under the “pooling of interest” method prescribed under Ind AS 103 - Business Combinations, as prescribed by the Scheme. Accordingly all the assets, liabilities, and other reserves of the transferor as on April 01, 2022 were transferred to the Company as per the Scheme. As prescribed by the Scheme, no consideration was paid as the transferor is a wholly owned subsidiary of the Company. Previous year figures have been restated to give effect to the above merger in comparative years reported.

Pursuant to the Scheme:

• All the assets, rights, power, liabilities and duties of the Transferor Company vested / transferred in the Transferee Company as going concern from the appointed date and the Transferor Company was dissolved without the process of winding up;

• The identity of reserves of the Transferor Company is incorporated in the books of the Transferee Company in the same form as they appeared in the financial statements prior to the Scheme coming into effect;

• The carrying value of investment held by the Transferee Company in equity of the Transferor Company is cancelled and the amount of investment is reduced by the book value of net assets of the Transferor Company as reduced by reserves accounted for in accordance with the Scheme. Since the Transferor Company was wholly owned subsidiaries of Transferee Company, no shares have been issued as a consideration of the amalgamation; and

• The inter-company balances between the Transferee Company and the Transferor Company, appearing in the books of the Transferee Company have been eliminated.

Accordingly, all the debts, liabilities, duties and obligations present and future pertaining to the Transferor Company transferred

and vested in the Transferee Company.

Further in accordance with the scheme, the authorised share capital of the Company has been increased by merging the

authorised share capital of transferor Company, resulting in increase in authorised equity share capital by ' 1,000 Lakhs.

Accordingly, the Authorized Capital of the Company post merger stands to ' 4,610 Lakhs divided into 2,305 Lakhs equity

Shares of ' 2/- each.

The Scheme will benefit both, the Transferor Company and Transferee Company. The rational and reasons for the

Scheme, inter alia are summarized below:

• Better, efficient and economical management, cost savings, pooling of resources, reduction of corporate tiers, creating better synergy, optimum utilization of resources, rationalization of administrative expenses/services, control and running of businesses and further development and growth of the business;

• Enable pooling of financial, commercial and other resources and considerable synergy of operations would be achieved from business and administrative point of view and conserve administrative resources and cost overheads; and

• To achieve better financial and business prospects.

55. The Company’s business activity falls within a single business segment i.e. manufacturing and trading of Automotive Components and therefore, segment reporting in terms of Ind AS 108 on Segmental Reporting is not applicable.