Note 6.2 :Disclosure as per Ind-AS 36, on Impairment of Investments in Joint Venture

The Company's investment in Finolex J Power Systems Limited (FJPS) is long term and strategic in nature. FJPS is engaged in

manufacturing and sale of extra high voltage power cables. The operations of FJPS has continued to incur losses, resulting in its net worth being partially eroded. The management expects improvement in operations of FJPS in coming years and along with the Joint Venture partner, continues to support FJPS operations by infusion of equity as required.

Considering above, the Company had in accordance with Ind AS - 36 ""Impairment of Assets"" carried out an impairment assessment of its investment in FJPS by comparing its recoverable amount (enterprise value) with its carrying amount as at 31^st March, 2023.

The recoverable amount of the investment in FJPS is assessed based on future discounted cash flows of FJPS (enterprise value).

During the year ended 31^st March, 2023, the Company has infused further equity of Rs. 10.78 crores and impaired Rs. 16.00 crores (previous year Rs. 9.81 crores) leading to a total impairment of Rs. 188.57 crores upto 31^st March, 2023.

Key assumptions used for value in use to determine the recoverable value are:

1- Discount rate - Weighted Average Cost of Capital (WACC) 15.00 % (Previous year 17.00%)

2- Terminal growth rate 4.00% (Previous year 4.00%)

Note 6.3: Corning Finolex Optical Fibre Private Limited: Discontinuation of JV Agreement

The Joint Venture partners of Corning Finolex Optical Fibre Private Limited ("Corning") in their extra ordinary general meeting

held on 30^th March, 2022 had approved the "Voluntary Liquidation" of Corning and appointed an insolvency professional duly registered under the Insolvency and Bankruptcy Code, 2016 as the "Liquidator" of the Corning. Corning is currently under

liquidation and the financial statements of Corning has been prepared on the liquidation basis and not on going concern basis. Considering Corning is in process of liquidation and disposal of the same is other than through sale transaction, accordingly investment in Corning do not qualify as held for sale.

Note 12.1

Trade Receivables :

The average credit period for the Company's receivables is in the range of 30 to 60 days in respect of institutional sales and upto 180 days in case of sales to government owned entities. No interest is charged on trade receivables. Trade receivables balance as at 31^st March, 2023 includes Rs. 36.92 crores due from Bharat Sanchar Nigam Limited, Bharat Broadband Nigam Limited, Southern Railway, Eastern Railway and Telecommunication Consultants India Limited (31^st March, 2022 included Rs. 65.82 crores due from Bharat Sanchar Nigam Limited, Bharat Broadband Nigam Limited and Telecommunication Consultants India Limited), Rs. 138.35 crores due from Minda Corporation Limited, D-Link India Limited, Bharti Airtel Limited and Telesonic Networks Limited (31^st March, 2022 included Rs. 52.40 crores due from Minda Corporation Limited, D-Link India Limited and Logenix Services Private Limited) which represents Company's large customers. Apart from the above there are no customers who individually represents more than 5% of the total balance of trade receivables.

Expected credit loss

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

The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. Movement in the expected credit loss allowance:

(b) Terms/ rights attached to equity shares

The Company has issued only one class of equity shares having a par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.

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.

On 26^th May, 2023, the Board of Directors of the company have proposed a final dividend of Rs. 7.00 per share in respect of the year ended 31^st March, 2023 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 107.06 crores.

Nature and purpose :

Securities Premium :

Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the

Companies Act, 2013.

Capital Reserve

The Company recognises the difference on purchase, sale, issue or cancellation of Company's own equity instruments to

Capital Reserve. Capital Reserve is utilised in accordance with the provisions of the Companies Act, 2013.

General Reserve:

General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the

general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss.

Share buy back reserve

During the earlier years, the Company had bought back its own equity out of free reserves. Share buy back reserve (Capital Redemption Reserve) represents amount set-aside in respect of nominal value of the shares bought back as per the Companies Act, 2013.

Retained Earnings:

Retained Earnings are the profits of the Company earned till date net of appropriations.

Equity Instruments through Other Comprehensive Income

This Reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through Other Comprehensive Income, net of amounts reclassified to retained earnings when those assets are disposed off.

Note 28.1

Salaries, wages and bonus includes Rs. 11.07 crores (previous year Rs. 9.92 crores) paid/ payable to the executive director, during the year, subject to the below.

The resolutions for the reappointment and remuneration of the executive directors were placed before the Annual General

Meeting of the Company held on 25^th September, 2018. The Hon'bie High Court of Bombay had in respect of an appeal filed in respect of reappointment and remuneration of the executive directors, stated that the results of the voting shall be subject to the Order to be passed by the Hon'bie High Court of Bombay in this Appeal. The matter remains pending.

Total remuneration paid/payable to the executive directors for the period 1^st July, 2018 (being the date of proposed reappointment) upto 31^st March, 2023 is Rs. 49.97 crores. (previous year Rs. 38.90 crores)

III Gurantees

(a) During the previous year the Company had given the counter corporate guarantee to J-Power System Corporation (JPS), Joint venture Partner of Finolex J Power System Limited (FJPS), Joint Venture to the extent of 49% of Rs. 50 crores (upto

maximum of Rs. 24.50 crores). Whereas, the JPS had given 100% corporate guarantee to the bankers of FJPS towards the credit facility of Rs. 50 crores taken by FJPS to meet its working capital requirements and the same has been withdrawn during the year.

(b) The Company has given guarantee of Rs. 106.75 crores to the bankers of Finolex J Power Systems Limited (FJPS), Joint

Venture of the Company for the purpose of working capital facility availed by the FJPS.

Note:-

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

ii Other Commitment

In respect of Finolex J Power Systems Limited (FJPS), Joint Venture of the Company whose net worth has been substantially eroded, the Company along with its joint venture partner has provided unconditional financial support.

NOTE 33 :EMPLOYEE BENEFIT PLAN33.1 Defined Contribution plan

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law/scheme are paid to the Government administered Provident

fund and in case of Superannuation to the Scheme set up as trust by the Company-Insurer. The Company is liable only for annual contributions.

The Company has recognised Rs. 6.14 crores (31^st March, 2022 - Rs. 5.90 crores) for provident fund contributions.

Contribution for superannuation funds Rs. 2.00 crores (31^st March, 2022 - Rs. Nil crores) in the Statement of Profit and Loss

because the earlier surplus contribution are available for utilisation.

The contributions payable to these plans by the Company are at rates specified in the rules of the schemes."

33.2 Defined Benefit plan Gratuity-Funded

The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided

depends on the member's length of service and salary at the separation date. The gratuity plan is funded plan. The Company has formed a trust and is governed by Trustees appointed by the Company. The Trustees are responsible for administration of the plan assets and investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India.

The sensitivity results above determine their individual impact on Plan's end of year Defined Benefit Obligation. In reality, the plan is subject to multiple external experience items which may move the Defined Benefit Obligation in similar or opposite directions, while the Plan's sensitivity to such changes can vary over time.

Risk exposure:

Through the defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below: Asset Volatility:

The plan Habiltles are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk plan assets have been deployed in high

grade insurer managed funds.

Inflation rate risk:

Higher than expected increase in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straightforward and depends upon

the combination of salary increase, discount rate and vesting criterion.

1.2. Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities and mutual funds (includes FMP) that have quoted price.

Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) such as derivative financial instruments. The Company

does not have any Level 2 instruments as at 31^st March, 2023 and 31^st March, 2022.

Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. This includes unquoted equity shares.

Valuation technique(s) and key input(s):

Level 1 The fair value of mutual funds (includes FMP) and quoted equity shares is based on net assets value (NAV) and quoted price.

Level 2 The Company does not have any Level 2 instrument as at 31^st March, 2023 and 31^st March, 2022.

Level 3 The fair value of unquoted equity shares is determined using market approach. This approach involves the application of multiples, derived from market prices of comparable listed companies, to the parameters of the subject company in order to derive a value for the subject company.

2. Capital Management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company monitors the return on capital as well as the level of dividends

on its equity shares. The Company's objective when managing capital is to maintain an optimal structure so as to maximize shareholder value.

(i) Debt is defined as long-term borrowings (including current maturities) and short-term borrowings (excluding

contingent considerations, if any).

(ii) Equity is defined as Equity share capital and other equity including reserves and surplus.

The Company is predominantly equity financed which is evident from the capital structure table. Further, the Company

has always been a cash surplus Company with cash and bank balances along with investment. The Company's investment is predominantly in liquid and short term mutual funds being far in excess of debt.

3. Financial risk management

The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit, liquidity, which may adversely

impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

3.1 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency

exchange rates, interest rates, credit, liquidity and other market changes. The Company's exposure to market risk is primarily on account of foreign currency exchange rate risk.

3.1.1 Foreign currency risk management

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from

fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar and Euro against the respective functional currency of the company. The Company enters into derivative financial instruments such as

foreign exchange forward contract to mitigate the risk of changes in exchange rates on foreign currency exposures.

ii Derivative financial instruments

The Company holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank or a Financial Institution. These derivative financial instrument are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the market place.

3.1.2 Interest rate risk management

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Considering borrowing amount outstanding as at 31^st March, 2023 and as at 31^st March, 2022, Company is not exposed to significant interest rate risk.

3.2 Credit risk management

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness

of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units (including FMP).

Notes:

1) Total Debt includes current as well as non current lease liabilities and borrowings

2) Earnings available for debt service includes Net Profit after taxes Finance Cost Depreciation and amortisation Impairment on financial assets Allowances for doubtful debts and advance Net Loss on disposal of property, plant and equipment.

3) Debt Service includes Interest and lease Payments Borrowing repayment

4) Capital Employed includes Tangible Net worth deferred tax liabilities Total Debt

NOTE 39 (B)

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with

the understanding that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding

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

NOTE 39 (C)

The Company has been sanctioned working capital limits in excess of Rs. 5 crores, in aggregate, from banks on the basis of security of current assets of the Company. The Company has been regularly filling quarterly returns or statements, provisional/ final containing, inter alia, amount of inventory and trade receivable with such banks and are in agreement with the unaudited books of account of the Company of the respective quarters.

NOTE 40: SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed.